LNN - Earnings call transcript Q4 2019

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Operator

Good morning. My name is Lexi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lindsay Corporation Fourth Quarter and Fiscal Year 2019 Earnings Call.

During this call, management may make Forward-Looking Statements that are subject to risks and uncertainties, which reflects management's current beliefs, 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.

claim contained of Litigation in of we for Safe Reform statements, XXXX. statements forward-looking the these the the protection Harbor Act For Private Securities Instructions]. [Operator

Hassinger call would ahead. go to I turn Chief the to Mr., Officer. like Tim President Please and Executive over

Tim Hassinger

is thank Zarkowski, call results. our this Officer. objective Ketcham, Good Chief on morning, call. call me Officer; of discuss four for Accounting you and Chief our is our Financial joining With today's Brian Lori quarter to and The

to Before will a go I we that make few overview, introductory comments.

put unresolved to For with farmer pressure irrigation third seeing the business, the end along we what domestic trade the disputes sentiment the compared continue to our at downward lower were prices commodity of on quarter.

for what uncertainty potential given there be. is final will commodity on upside the prices, yields However,

region. Middle in irrigation the mentioned to our last international On we order. growing call a a be to Middle we on business, continue order we that Africa are illustrated working Currently earnings fulfill active that that East large East

a to in prospects developing the continue of project healthy We markets. amount see

delay does seen to eventual during in However, date start fiscal linger this this push their in that risk a several start to of we the And year. past bring have more quarter delay them will date. their

area the on funnel. continue be based bullish to in to although there opportunity waiting we approvals, this have orders Brazil. market other highlight One And our orders on is financial been delays for in potential in sales the

in great million direction. we increased Zipper points the leasing to the strategy and the examples Zipper last the that grow successfully business. Road this infrastructure For Road positive in new aligned provided good were The moving addressing in increase Japan is business, the order $XX projects the of and road to proof need shift-left there two that business use business our call are construction a were

associated with the have this we before, can two business. lumpiness addressing by objectives, these said we As reduce

Our is at rate. moving two objectives an business these accelerated this focus on forward

probability Our of been. overall sales XX% highest the at a it ever is level success funnel projects based on has

these As announce we to updates. them signed stage, status agreement projects will on progress future the

Another development Federal repealed using year a state rule from XXth that Administration on Zipper or September federal old for funding. business change source. removes proprietary dollars projects positive the funding has receive and the historical Zipper local was the Highway federal federal a when products a Road announcement roadblock XXX on and that patented highway the of procurement Road consideration were that prohibited bridge inhibited our that solution This governments

that example. and On quarter, new Watch to significant innovation, American said as irrigation last I products to Pivot Lindsay the innovation on our Watch progress Pivot we strategies. launched in latest the marketplace make North been was market and has bringing continue mentioned the

at were FieldNET new means Our which our farm fall technology, factory the FieldNET now the shows. machines control panels that of ship computer from All embedded will panels launched enabled. have XXX%

with Farmers quarter. access now partnership in to satellite detection. high stress Edge also through and our resolution customers customers daily We imagery mutual All enabling access access have satellite anomaly the FieldNET satellite can released to images, imagery and our Advisor

to subscription. interest the in the are had number year-over-year XX% FieldNET the available Advisor a introduced, these build subscriptions. to increase their users into been we are With platform have part Images they where in as that of FieldNET directly imported improvements Advisor FieldNET as continues of all

fiscal our this been margin projects year to realize the regarding beginning $XX in we goal million as Lastly, we improvement these been previously enter $XX we from to for work has four have Since that that initiative, journey, expect transformational Growth have our the margin to implemented improvement of Foundation million streams XXXX. stated have highlighted.

impact implemented. to confirm an is have for have I While been achieve XX% to these a projects we clear Growth XX% goal that of our our improvement can ability conditions to change What Lindsay. Foundation transformational recognize margin income, has led market will to on operating the our initiatives for us,

results. move So over the for that, let's call to And now our I turn QX Brian. will to

Brian Ketcham

Tim. you, morning, would To the everyone. begin, two cover Thank I good items for quarter. our reported like that impacted And to results

in completed the for First, professional of we final which engagement Growth represent expenses expense with was our incurred for $X.X connection initiative, August million XXst. consulting for Foundation this fees that

jurisdiction. these one-time diluted evaluation to applied of million, share. of expense $X.X a tax amounted connection in $X.X in to non-cash adjustment or The foreign million incurred we two with impact items Second, after-tax per carried a indirect credits $X.XX

The my press adjusted of at results detailed and year and for the Foundation comparisons are the based evaluation quarter fourth regarding results, on the release. Regulation comments adjustment remainder are disclosure costs of of and the exclude in Growth G end which full

Total compared $X.X to revenues diluted $XX.X year. $XXX.X earnings quarter were quarter Net prior for net $X.XX or million, $X.XX year. for the or million fourth or decrease million XX% quarter same diluted per the compared to the of XXXX $X.X in earnings of million, per of fiscal last were share the a share

decrease or The fiscal for year. a Total revenues approximately $XXX.X or full revenues, the $X.XX year per XXXX were divestitures million in $XX.X accounted to fiscal XX% business of with a decrease million, net million, earnings announced the of of $X.X compared for diluted $XXX.X impact previously the of million, share. prior

approximately $X.XX decline Net per earnings earnings a $X.XX compared diluted with of million $X.X of million business earnings net million, the $X.XX or The $XX.X revenues fiscal diluted $XX.X share. million to prior of for or impact accounted or fiscal share, year. share in net per in diluted the were per XXXX for $XX.X divestitures

million, decrease same Irrigation the fourth for $XX.X XX% million, compared quarter $XX.X were or a revenues quarter segment of the last year. to

the of compared the million year. the $XX.X divestitures, flat revenues North Excluding prior were relatively America irrigation of to impact

low irrigation fourth quarter, equipment offset unit and point lower activity. impact seasonal Higher volume. engineering primarily by selling revenue is equipment from our is the irrigation project average by prices Demand replacement during higher for and services at a driven of were

lower year's approximately international mentioned, quarter. translation Sales farmers revenues in delays fourth impacted of $X.X activity compared financing markets, markets, from million million, was Tim prior by to the receiving also compared year. were Brazil, negatively impacted or million the approvals. in in by as currency was last government including In several which decreased $X rates Revenues $XX XX%, foreign differences to

compared decrease $X.X last was in same Total million, irrigation quarter X.X% segment year. the $X.X the compared of of quarter X.X% fourth sales year. prior And to $X.X operating operating income to - sales was for the of million million or a margin

the while was income, irrigation improved lower The equipment impact pricing the divestitures operating performance. accounted volume decrease for sales approximately $X.X of offset of by partially in and million costs

of year, the fiscal $XX.X fiscal or For to full the million, prior a million $XXX.X segment were revenues decrease XX% year. compared total irrigation

Excluding to X% of divestitures, the America revenues the impact fiscal the compared year. $XXX.X million North irrigation prior increased of

X% year. operating of fiscal sales the or translation International full decreased compared the or million million, for income to fiscal with the irrigation sales XX.X% in to of foreign $XX.X year year, rates. $XXX.X approximately currency X% in compared of fiscal X.X% of revenues was attributable million, prior the to Irrigation prior differences decrease $XX.X

and same safety increase and lower of to revenues of the slightly increase primarily fourth The for revenue, higher the while products road quarter resulted Road million, compared $X.X year. million, last lease sales $XX.X the segment XX% other from or system year. were Infrastructure an were quarter to sales compared Zipper prior

from year. to Infrastructure compared quarter the million, more compared XX.X% XX.X% increase million sales the $X.X year. was higher of of Infrastructure segment operating an the for mix income in a lower compared for to prior prior prior operating favorable fourth revenue operating and revenue, expenses quarter $X.X sales the the resulted was increase year. to This margin

year, was sales, Road prior repeat fiscal revenues compared to XXXX. operating projects compared by were a did the year. prior was that a $XX.X of Zipper large fiscal compared For the operating to XX.X% year, to the million, XX.X% decrease of of prior for Infrastructure million, XX% the decrease sales in results full $XX.X in year. of XX% fiscal the in were segment driven margin fiscal Record not income year infrastructure XXXX and

$XXX.X share made fiscal and the $XX.X of cash at $XXX.X available equivalents compared our of were the and remains of were during at the total quarter, No end prior million the share repurchase to million quarter under a Cash year. repurchases million end the authorization.

over At call this I the to to time, operator take to your questions. the turn like would

Operator

you. Thank

Your question from comes William Please go ahead. first Brian Blair. Drab with

Brian Drab

commitment I think heard now on sure. that So XX% the I operating to to XXXX. I XX% Where want to you Is just make margin fiscal do the in on still table? this, stand but

Tim Hassinger

the growth laid being project key Brian, out that. as we foundation, Tim. mentioned still a we are Hey And was we initiative that. the it's for implemented. for And driver that targeting have Obviously, Foundation for Growth are initiatives, yes,

out to take And the years good one starting laid a Zipper and hold to Road that. shift-left the milestones We A is have the related strategy. hit that half are financial example we results ago.

actions key throughout that market that this are there. terms been is taking clear the a to to update continuing real similar - in said Having of market here we XXXX have that, we have hold. conditions truly the you are we on So been journey need

now. that So are of where status is at right the we

Brian Drab

over doing What comment has few to was that maybe And Tim, can channel the of of quarters? G&A also of around mean specific And a how that And optimization? - you reduction? what can other granularity of of last mentioned are give the you like on, in initiatives progressed then exactly? to terms with you component - sourcing are XX%. any commercial know, the where XX% that and some does you you the getting How sort detail I big

Tim Hassinger

Yes.

of Brian let have that the here, So some highlight we way along me achievements had. key the just

infrastructure one We have had the closing. plant

mentioned sourcing We And reduction integration in several business as created and moving initiatives underway. growth been has several centralized sales cost had centralized from there shared a to four have you We service a locations Omaha. just also here had We divestments. team.

have team, commercial infrastructure the say that there the the is I been is highlight would several mentioned ship-left. I On has big projects.

Zipper, has is taking the really hold. that are the pleased with that, Road there, We and what happening strategy fact

and the now been more channel management actions implemented right it for of are fiscal all those of On process being irrigation, XXXX year in season. the has

Brian Drab

on - that would be no and there able dollar is you financial amounts these, you press been any previously? you was in looking that put that, I cost accomplished. what are of way around talked for that you hitting I cutting There any don't kind sourcing to is is, savings Is but much to like too of want the targets about the is that

Brian Ketcham

Brian of this that Yes, Ketcham. take I have think hold year. a during Brian, we is the seen Yes, some

margins, improve impact of we irrigation, saw well of initiatives that what QX say that not sourcing infrastructure. think also QX in initiatives some saw I only as we in was I operational in helped our would some results. the as but

And And the implementation and we mentioned of projects all earlier, to to burn realization inventories that that as course realization next stage had get to reached end existing Tim the when the get those target an by kinds year. of starts of and us step that that had of the being example have now through sourcing you is identified things.

Brian Drab

got it. I

Okay. the will and last I it And then one, then turn just over.

the question. in is replacement? within in the of conversion Just What a housekeeping regulation sort quarter fourth dry of land the breakdown

Tim Hassinger

so conversion a it other replacement. than percentage year higher dry Fourth typically is placement Yes, fourth this XX% land the was and quarter in of quarters. XX% quarter XX%

Brian Drab

there any by driven specific there that Is well? just that seasonality as you typical more driver was mentioned just weather related that or

Tim Hassinger

its seasonality this replacement, last our than driven a I it No planted crops was would year. of of lot storm are was level typically by the activity say being year lower after storm that the and

Brian Drab

Got it.

Okay. Thank you much. very

Tim Hassinger

Brian. Thanks

Operator

Thank you.

Jones Nathan Stifel. ahead. go with from comes question next Please Your

Nathan Jones

everyone. morning Good

Tim Hassinger

Good morning Nathan.

Nathan Jones

up following Brian's there. couple Just a to questions of

are of than pretty XXXX. - to XXXX Firstly through have XXXX. targets revenues needed I a a infrastructure a from start through volumes lower in irrigation to and down market price that they XX% on But that are on the the pretty about clear were revenues XX% XX%, in lot operating guys comes you margin flat. are think similar since XXXX you been Clearly

to seem doesn't XXXX. that is to XXXX it actually be similar is a like going So market

to you expectations set conditions? able market So be would XXXX, margins the can get help to for where you level in think given current

Brian Ketcham

Brian. is this Nathan, Yes,

just pointed think, point the I think the you clearly on was business as I conditions, market lower out. to infrastructure

be XXXX would with for potentially XXXX, outlook infrastructure get to that our would at infrastructure. back we least type level think I

addressed. So we that headwind we good is have pretty that feel a that

it irrigation think I side. comes to the back

want to to think to I I speculate last we the And, still similar what on give the on headwind market, don't to that. a the But of firm don't chances to that a XX. without recovery, minus you high year nobody knows what market are without the creates it the got be XX. market get you help, clearly, additional we to see because fall going what might I number obviously, do. short want is But If exactly

Nathan Jones

predict is ship might is international irrigation XXXX hard some and fiscal later possibly on your potentially fairly uncertainty Yes, fiscal projects or you sounds to know there those when to like in XXXX.

Tim Hassinger

this is projects. we there. are prospects is say that We good profile continue a Nathan out to of Yes, There Tim. would good seeing

just However, been mentioned, obviously the uncertainty we active a there but when that brings and as And you delays, potential, has are always the is projects by risk delays. encouraged factor. there but still some there is is more

Nathan Jones

and owner yet be doesn't where that the go So kind you into order committed have and for been you? production waiting the of on the won in we the project, what is financing awarded it are in those released at place for to but have are projects project, kind point of

Tim Hassinger

Nathan, There is dates when process, range but different one give that the a scenarios been date would there when be. uncertain is finalized decision selected of tender start haven't answer final isn't I or company tender is could the making, and from you. in in wide the here

different So range is scenarios there of a wide here.

Nathan Jones

with where to revenue And the try year-to-year rather business. and shift-left kind strong here and up? have business. and now Road the Clearly, we had of a stuff I'm down over on the level years still quarter-to-quarter of should just Zipper about few we a initiatives significant strategy bit smooth the than a you consistent work that more to kind XQ last in guys, for the you Okay. that do little up it a lumpy see is for or of to of or was amount then business quarter XXXX XQ maybe that Are point more those talking

Tim Hassinger

to - Yes, in and a ship-less projects strategy we and Nathan Road for interest last continue viewed for year the on is opportunities. our Zipper we basis past this launch year increased see leasing global

opportunities there in the that in earnings strong in ship-less process point I positive finding a success call about. that direction. the lot last was We earlier advancing strategy have a quarter's buying are proof talked a we announced that is

there begun Japan think that was I be also order has large mentioned to in fulfilled.

new is also fiscal strong that the year XXXX that and So strategy sales proof most throughout of point occurring a one the is working.

you specifically increase as to increase and referenced, sales. lease So demand focus just the is our our overall

year is look we couple are There both good points make here to in sales areas. a I see that for continue our at want really and beyond, critical, fiscal I to funnel XXXX progress when

more optimism is been. than leased for is best ever Zipper our being sales forward. Road funnel ever have machines That before it's have We going the why I and

Nathan Jones

to intellectual you removed made funds regulation being that then could And the comment that meaningful Federal about the be buy of to patented the using there? that how property, business to

Tim Hassinger

but it's much yet, and is now I that been is, that you just repealed. how that has Nathan existed number the give on a can't barrier

with only are that this. So able big will enough to be potential But far an along for how of we upside not years it opportunity to we frame see be.

Nathan Jones

for much it the very Thanks help. will on. I Okay. pass

Tim Hassinger

Thanks You bet. Nathan.

Operator

you. Thank

Your Braatz with City comes Please next question Jon Capital. go from Kansas ahead.

Jon Braatz

morning Good everyone.

Tim Hassinger

Hi Jon.

Brian Ketcham

Hi Jon.

Jon Braatz

for do you pricing prices but any for in see bit. of What a steel competitive pricing see year? segment XXXX terms what little of next have irrigation Tim, in do come issues, the down independent you for

Tim Hassinger

Yes.

months. correct, decreased So Jon, the steel you past have are specifically prices few

other However, materials steel tariffs in purchase associated are still than with from place.

market. these cost to be continue goal to to the pass increases our So on

surcharge the of As prior the discussed the led in their we to address have needs. implementation and we industry calls,

of is the with have course, continue remain at to time. got the same competitive strategy. we And our So to intention

still all materials pass balance, intention these is to finding steel our other it place that we than as So but about tariffs in that attempting are on on. are

Jon Braatz

you. Thank Alright. Okay.

I the specific Secondly, again any But at in you this and those strong those maybe geographically year, fairly not geographical that wrong. States, have that there West would strong, reason the last obviously, case be why was United speaking markets out you be markets look year, maybe here that Southeast. markets? within some changes seen were think I were any may when

Tim Hassinger

is jumps out. agreement U.S., look strong is potatoes you are if seeing one we that. for Japan trade demand, Well West the that And definitely in crop supportive

extremes, So be the in overall, right say extreme the to situation say two in would market cotton and we to were the would difficult give more encouraging looks other seems are the one I if that I potatoes on Southeast. the South, now on growers

Jon Braatz

Okay, okay. you, Alright. Thank Tim.

Tim Hassinger

You bet. Thanks.

Operator

[Operator Your from Crispi. ahead. question Monness Please instructions] comes with you. Thank Chris Shaw go next

Christopher Shaw

are doing? How Hey you everyone. good morning,

Brian Ketcham

morning. Good

Tim Hassinger

Hey, Chris.

Christopher Shaw

balance question just mean, were happening inflation are a sort the up My XX% Is is. something it I before is had or about we first the cost about what they and that of I I just, year-over-year think else question. there inventories sheet. talking that there.

is the on how income so it And through later going to into flow the statement?

Brian Ketcham

Brian. is biggest this that would Yes, of a not part has is say Chris, But Yes, it. part. the inflation I

of the one particularly the to into and we us. I barriers, for is for seeing there projects Zipper that we around the are things that in bigger of lot think, barriers so front is have brought a that the support probably got build in of infrastructure are components the activity Road

say irrigation. is levels other irrigation, in inventory domestic area I the would in

I issues of with think, of is supply we China. tariffs Some export. from some that components coming to challenged some have and with the support But been chain

more result inventory as So we of a probably bit carried a that. little

levels to for down. irrigation come expect I inventory So,

the as is know to related unknown infrastructure develop. as Zipper continue at inventory I think you projects what is to this Road point

Christopher Shaw

down I year. lumpy, Is think opportunity of customers to sense. that or makes down leasing it curious as well an was was in is is convert that I to there for that in to And That this something kind there wouldn’t work double-digits, up double-digit market? irrigation double-digits, international similarly thing infrastructure

Tim Hassinger

or are irrigation? Chris, on talking the the talking And, you you just international are Zipper on

Christopher Shaw

No similar lumpy it's international to as And infrastructure. well. pretty it's irrigation. Because

Tim Hassinger

It is more by the driven large obviously, lumpy than project driven domestic that markets. is

I - as dynamic describe just that market. So that is would I a of that more think

to is lose whether be be that going win to just it fact difficult tend think I that smooth to large, them. these you or projects out, given the

Christopher Shaw

the have in either model you that anywhere leasing of of no that irrigation there for Is every sort domestic international, or equipment seen? world

Tim Hassinger

very business. There is the big done not a of leasing, countries where some certain piece we is have it

I think, installations like it field. permanent area done more said, countries, put that or once a just them But, you as the an but less a nature on of something large opportunity in not look at these is have being some we I overall. that some we

Christopher Shaw

irrigation I breakdown, for And us I was knew not but have fourth basis, and full-year. on dry the and the replacement here the the land, then the quarter, annual do you just all, that give

Tim Hassinger

Full-year is XX% about XX% XX% dry and replacement. land. conversion

Christopher Shaw

Thanks. Alright.

Operator

this at There turn I be you. to Thank questions call no you closing for appears Mr. Hassinger, back time. to remarks. will more the

Tim Hassinger

the we Well, appreciate interest.

earnings So in this concludes participation call. our your and for fourth today's Thank call. you interest quarter

Lindsay (LNN) 29 Oct 192019 Q4 Earnings call transcript