LNN - Earnings call 4 2023 | Lindsay Corporation

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Operator

Hello, and welcome to the Lindsay Corporation Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Randy Wood, President and CEO. Please go ahead.

Randy Wood

Thank you, Anne. everyone. morning, Good fourth our full earnings year Welcome quarter call. to and is With significant Chief Brian Financial today achievements Officer. Fiscal Lindsay. of our year Ketcham, me a XXXX for marked

segments, well earnings which net earnings recorded in revenue by per quarter of of executed strong full Fourth and across and results. record was teams deliver record levels extremely our Our operating Brazil, business performance which share irrigation helped year specifically both income. highlighted results,

efficiency margins including initiatives international strong efforts, Our XXXX. irrigation despite price comps a achieved in record with the difficult business. were organic management, our to and and commercial lower regions operating coupled growth income within These drive line helped top results compared year-over-year and income operating our when

to I our comments market Turning markets made business and Similar to outlook market positive key outlook. term. quarter, remains near segments end Lindsay's for the last in the

irrigation projections our it to our commodity income farm we as American relates fiscal prices to net begin XXXX. end As should healthy markets, demand U.S. current North support continue and

the income to slightly growers levels we be dipped this when compared growers year. for profitable saw, While will record

did approach seeing of based we're America. the during strong across and wait-and-see spring, particularly Brazil evidence irrigation season trends. Within take South on experienced fall customers selling our order growth strong a a year-over-year international this we While markets, fourth quarter,

supported by for the address where and in markets international levels expansion enhancement emerging significant in fundamentals We XXXX to weather strong security volume presents and opportunities developing sales and mature robust irrigation and expect in uncertainty. food the to markets remain the potential project continued yield and fiscal

infrastructure. to Turning

pipeline. infrastructure Investments funding the our continues in to will and in and positive opportunities roadway investments long-term see broaden States. believe leasing driven infrastructure, be This Infrastructure by to it provided federal Jobs market will sales ultimately distributed necessary as and United the continue support we Act funding near-term by and this We

While from our were in where non-repetitive difficult we benefited did project comparisons prior on XXXX. wins, generate growth the focus management of year, number Zipper a funnel relative to Road leasing

forward, of and leasing Going line products. expect both see for road our solid to Road and support safety strength earnings from demand we Zipper sales secular

and to Moving innovation technology.

their leader over FieldWise delivering pleased customer set full position able This solutions. trust quarter to on our I'd of accessing opportunities first our to the customers discuss infrastructure quarter record be Brian? growth now markets an irrigation allows during also continued a set Lindsay core like market our continues loyal of focus progress profile technology year enhancing to fourth segments. customers to focus irrigation to dedication overall year. our around while ability ongoing the Lindsay's delivered. I'd expanded the will of thank projections. life. complete and were edition deliberate I'd customers in strengthen previously our of mission team products the but our team employees were governance natural quality technology continue irrigation contributing our strengthen Our and thank our report area their to our ESG FieldWise world. achieve the goals for also results. Without and globally. In providers vision and results leader sustainability, turn to service and irrigation our which agricultural and the on channels, and expanding FieldWise, with of and of to fourth work the acquisition a technology and integrated to innovation, advancing market highlights of we fourth capabilities of conserving and a reach hard dedicated precision in our like growth to We we've potential to fifth social market and to dealers pleased reach is in This this innovation subscription-based advance resources, our the and untapped world's become environmental, to broader annual like call financial sales to quarter. our release Brian and members of like our

Brian Ketcham

year diluted million per full Thank in of per $XX.X $XX.X for decreased you, share Performance more compared earnings record Net last million million each the XXXX of $XX.X respectively. compared same than earnings Randy, were were million. $XXX.X $XX.X per diluted for to to $XXX.X fiscal and that fiscal million prior of fiscal year the quarter year. Total everyone. or revenues decreased million of to XX% $XXX.X good revenues for growth $X.XX to net Net the in share, revenues prior quarter of compared in $X.XX the fourth morning, growing the share fiscal to diluted earnings $X.XX year-over-year $XXX.X net share or per XX% X%, in XX%, Total million compared $X.XX prior year. XXXX the quarter or XX% respectively, diluted to or million the earnings year. and marked for

earnings efforts enhance this profitability have taken our mentioned, made company, record which irrespective hold, we've level top of for lower performance. is to is the Randy line of a As significant year-over-year as

of an sales $XXX.X average the America sales volumes, the revenues sales to to replacement America million last North quarter more year $XXX.X exceptional segment reflected year X% demand profile. in damage in attributable the quarter decreased Turning compared in to irrigation year's The with volumes were quarter. fourth while prices XX% same is results. to decreased Unit volumes million lower current fourth unit level while quarter segment a prior primarily comparable seasonal year in for $XX.X our unit million the decrease fourth Irrigation quarter. compared North storm prior the selling last of normal demand, year. fourth revenues to reflected

increased fourth sales fourth increase volumes of primarily Brazil, compared revenue previously incremental estimated markets, The compared last million XX% the quarter. million. from impact Middle damage prior last irrigation As demand Argentina higher storm $XX.X was year's $XX in at year's from international was replacement the noted, and the to East approximately In revenues to quarter. year

Brazil. Brazil we $XX.X operating the compared year fourth level sales quarter. call, prior compared June. Total operating improved sales This for of the prior profitability year quarter in performance XX.X% to the income and third bolstered price volumes government input operating the The in prior our on of on million, compared new increase financing the irrigation anticipated in from quarter fourth announced an increase in XX.X% indicated and improved was segment we operating the of inflationary driven was to reduced quarter supported quarter. to operating also by was XX% margin and income increase costs margin was record by record the that performance expansion plan As in quarter, impact fourth fourth in gross sales resulted of margin in year. to in our factories realization, by fourth and

a Total year, driven segment factors year margin the income prior of to same in increase from in quarter prior revenues compared $XXX.X to from the decrease the resulted Zipper in operating year. irrigation fiscal decreased in XX% year. in international decreased quarter. prior XX% did and the previously to to of the for resulted year million number full cost an the to the increase higher sales safety international of $XXX repeat the of And loss Road prior of $XXX.X decrease the fourth million partially million XX% income year. to sales delivered revenues road fourth quarter sales margin revenue year. compared for and irrigation XX% to $XX.X operating quarter year sales prior the $X.X segment $XXX.X the For fixed compared sales XX.X% in the that $XX impact compared compared to compared segment of lower resulting million last current sales not Operating $XX.X particular as of quarter. North expansion operating from the decreased with leverage. The sales mix the the Zipper XX% gross irrigation by the fourth resulted lease system XX.X% The revenues fiscal operating segment compared decreased more $XX.X and Infrastructure to million in America year. in operating favorable quarter prior and that Irrigation approximately XX.X% amounted One the The million. million from compared income year's in decreased last in the to of for fourth compared as project fourth lower prior products by quarter well a revenues margin was in in fiscal compared Road margin was margin including of to of sales prior of year prior $XXX compared the million project million, growth year noted was the The lower project same fourth year. Infrastructure prior to year. was Infrastructure year. the revenues to to in full million revenues year quarter, was offset last XX.X% quarter for to XX%

full operating prior fiscal in $XX.X of compared decreased XX% the for the Infrastructure $XXX.X sales XX.X% sales For was $XX.X year, the margin income to year. And million of fiscal the segment for to year. million prior year revenues million year prior compared $XX.X full million Infrastructure was the operating in the year. compared to in XX.X% to

and sheet liquidity. balance to Turning the

Our at equivalents end and was revolving in and the liquidity million, securities marketable under available which million cash, facility. our $XXX available total $XXX cash million year fiscal includes the of credit $XX

resulted strengthens cash earnings. flow like cash for balance the the flow management, with million strategy. In our improved Our investors to operating targets. longer-term view capital of of and performance along financial strong company's goals free to closing, I'd positions XXX% with working further of executing well us in This and effective capital $XXX.X our allocation year, provide net or continue an updated sheet

highlighted X to and results marked And presentation. is greater annually. backdrop. than Over X-year Over past financial XX the for financial of solid have years, revenue macroeconomic X% this growth earnings Page across our as delivered variable we average updated period, organic Lindsay growth goals a goal has on our the

growth the both greater we've Additionally, to X-year by invested trends our are greater positive over goals earnings businesses. That take deliver our at infrastructure are on These momentum capital goals like the supported to growth able and concludes XX% your XX%, to and share operating XX%. across alignment performance than and irrigation return questions. secular than per remarks. operator our this I'd been to the to than time, my margins And to greater call deliver turn annual

Operator

Nathan Instructions] Today's [Operator question Jones first comes with Stifel. from

Nathan Jones

financial with operating start on to than I I to goals. I have And I start a margin have guess question these with guess, greater specifically, X-year XX%.

like XX%? looks when just it's did did from are XX%. just think the I than Can mean come X-year up about XX% just operating for you at It I than you expectations XX% already with you -- at there? -- you greater you target and margin how XXXX. greater talk

Brian Ketcham

Yes.

I you at when where of, think at look today. kind we're again,

feeling but did new this benefit I LIFO on some and technology we regular that's I think some this and is our But year what that basis going the of then XX% above our reinvesting XX%. plan operating raw benefit of we thoughts the on greater year, kind forward. a product also are into than had behind the development, our business with guess wouldn't material from softening, I

Nathan Jones

seen a go a negative And in bullish mean I demand. I your Okay. fairly growth guess irrigation pretty near-term then commentary domestic despite we've was I'll business. you of talked domestic some irrigation. of growth, strong negative of in here fact the mean few row quarters to that about I

in term negative year-over-year year-over-year likely revenue quarter. a still going from you're bullish talked some But far in irrigation. rates quarter this domestic You a was than would so in storm I short to impact comps 'XX. that negative commentary there maybe it's understand It positive bit have order your the about sounded more seem Randy, fourth that there the that.

you more the of on domestic irrigation near-term expectations So color maybe around the side can the just some us give if business.

Randy Wood

Sure.

they've consistent when improve investments yields, improve they capital is about think this about Nathan. money, where the invest we those we are demonstrated we've today enhance that to talked we And wait-and-see profitable make to make this earlier we that operations, we I money, bet, talked for And year, we be going know battle and talked what can we approach You consistency, win know with customers year. and know what about they and to dollars. get yield when they their can in

strong of a this with the some didn't quotation results. the And orders. did demand. So see way spring, of I we think taking but truncated to we kind saw We a customers see quotations we season. little disappointed were all those just

And this make in of was they're our on again, customers feedback investments. from So to channel. when expected profitable, based these going they're some

what demand crop So based they're order see is we buying selling in on or This and we year. good year selling this this about feel right customers profits now. generated

next forward into starts new. As we I season, every move think year

does to going -- customers money, think for not they record saw benefits us this we still maybe are again, confidence But customers last So a next into us. we be that's a of I are yield given lot I levels still be that really think enhancement the market, profit make I in invest Nathan. tailwind profitable, do money, year. carry optimism think going to spring?

Nathan Jones

would question, revenue in in be guys know you fiscal 'XX? -- but don't able business domestic you to organic generate expect the ask you the give guidance, growth I to do I'll

Brian Ketcham

Yes, this is Nathan, Brian.

is that think I our expectation.

Randy some being of saw deferred. demand as this think we about, talked I

far that so of kind playing fall, the way. And it's into out

-- we we So quarters, second do our then and into and third easier get and comps. have

So growth in it's America. I expect volume unit realistic North year-over-year think to

Operator

The Brian comes ROTH next question Wright Capital with Partners. from

Brian Wright

up follow allocation. 'XX? international that quarterly Brazilian in on seasonality the release just And -- switching in to the wanted how to the about in comment on to about impact just the press think financing any sales having I

Randy Wood

amount tranche. increase was published the is is did money X finance the that was frame. I'll the And in increase see this June, of Randy. the We the Yes. see level, that Brian, macro All a this applications and how change one. historically, were July was aggressive and the But announced Brazil. will an there a XX.X%. It program. into take money did And at we was in allocated. rates entered, fundamental the go administered all -- time program

very down that the X is and managing tranches of we of lot throughout backlog remainder quarterly tranches, a through year. it's administered saw differently, And we it This the early. year, government generally the then So order burned being year. the now

an metered get there'll So different will out money but process, year. application that the across for be then times

So is continues good it news be year. and shipped it recognized. government projects to this region. going will going in our and how fundamentals Brazil. change the in the and the that are it's order pattern. revenue but change in to wait our out year going to staged market. in support market generate historical going having still the is But we'll It's And The timing and look to tough and these view, different more backlog And agriculture, to being being Overall, view, in work, really quarterly to spread see does how on have into to over corresponds very the any invest there the predict. not tranches it's still growth reference strong point for

Brian Wright

the that, visibility part that potentially? of business get we improve year that you Over the actually think term, long time your after through this will, do on transition, first over

Randy Wood

think It a you've is of maybe immediate or is year, visibility could won't program and of demand. administered can't it once demand I got couldn't. when the kind And market I

that for to times these as just programs throughout administered quarterly, Now single going see are year time a in year. we're opposed demand the as different the to

went this how you've nice they I government So program would rather the I quarter-over-quarter, a to If and the continue think support guarantee no it. expect easier of see in efficiently that have with what see, our going older that could. the But I to factory, way, be efficient good but know wouldn't issues operate safe factory, But they material be back lot flat surprised administered run it's that's they can is backlog -- to think also they month-over-month, we I'd year. think And front and If to flow what to I administrative they will got managing an ability way. efficiency this this I volume the customers, as well. there's the like way is way it's you. certainly through planning, more run for other with if the see

Brian Wright

any color. Or nice that flow in that cash like also pretty can inventory. that there inventory, to could seen be a benefit in That's help you us normalization way Is helpful with complete? a Okay. 'XX? for reduction we've Is really much

Brian Ketcham

we also of dedicated all a say Yes, would board. it really a reduced lot and things year. the I inventories lot And Brian. And focus in reflective Yes, pandemic of but afterwards Turkey. more carried it other and on was we we really our like had had than this very Brazil it across inventory out plant, with and the chain mean, came companies normally a carried of supply during inventory we was U.S. issues of I would.

just manageable reflective inventories is this level. to more a So getting primarily of the down

we And -- think think but not there's the there, we so to I saw still yes, opportunity XXXX. that level in

Brian Wright

one, one And for and help to tax us rate how in you Can out think sneak quarter the last 'XX? just rate about then it Great. the I Great. in. with if could tax

Brian Ketcham

the Yes. Good U.S. in for credit place there quarter Prior -- change question. we allows In regulations in had the global That that to fourth was that Brazil. U.S. took the tax transfer a tax during earnings foreign to disallow pricing tax was that quarter, quarter. the Brazil foreign the wasn't now the going rules, -- compliant worldwide the or got because with changed credit. in

then for we can a taking happens that year, is the that now. adjustment credit account cumulative what take So it's tax into

for a XX the -- XX% it little over So quarter.

our And to 'XX. on 'XX, be But rate. basis about year-over-year Going growth U.S., stronger is 'XX the in effective a say you would expectation saw probably for forward versus for going probably does before tax around year. it's I the in inside though, being outside than shift a it U.S. the the with as talked the that higher XX% we drive

Operator

next comes Brian The Drab question from Blair. William with

Brian Drab

first know that wanted being -- down on pretty you was previously said look expect the do could material near be had long-term operating just call, I benefit I is you margin, start term? then? at guess, the but I you the asked to the goal and margin the LIFO XXXX I what XX% operating in margin recently. plus. mean discussion XXXX around of with fiscal some

Brian Ketcham

irrigation project me expect any wouldn't to And there the we case, either Brian. volume let in state No, in significant infrastructure. really in also that XXXX, be wasn't just or

independent And we've so the those where margin be on can at And we're those some said large on accretive. projects irrigation side, operating of some today projects. the that dilutive of going of be -- to infrastructure generally are projects side, is the

of what at it of So of But development this money reinvest operate And depending that and kind the project opportunity having level. comfortable have. to we able we those being are obviously, kinds can to on business things. new in vary with no, and product R&D kind

Brian Drab

Yes. I how has in mean, that that guidance. that is, is guess main end the some the confidence just long-term guess since growth? of X Okay. might margin maybe revenue organic walking -- does away and I EPS of I'm question XX% up I a about growth people if does find just are model XX% -- guidance, flat -- than to that you slightly ], trending around Where model I'm operating than the capable thinking greater it greater I [ that's with in above towards

Brian Ketcham

then incremental other EPS. the the if from of combining thing that Well, following potentially that policy, revenue comes influence be that that's aspect our comes another margin I could think allocation play, the if that share -- the repurchase, would think I growth, again, into capital and that,

Brian Drab

Yes, sure.

maybe more guess, one now. I And Okay. just for

relative irrigation in strength terms about Where Brazil in of international talked strong some business? regions. internationally the You else

Randy Wood

business. talked some East business that seeing that the notes Brian. but I is that -- another we're in large Middle where contracts, some region the The take one, military and growth think I'll a also as about the we smaller of is project type of

markets is well. Some the in business of as private that

smaller see to in continue conclusion Africa. We coming projects to Sub-Saharan

those tailwinds broad markets. some to seeing unpredictable in enhancements, widespread goes And tail our quarter. in be pretty of food They're of going yield So lumpy. ensuring project, just a opportunities. it weather, to project-oriented not view, to getting we really opportunities. those little us terms strong see, all They're factors, all come strong closing security, risk a the in do the those number credit support back X again, in is place. They're are But of And a longer-term which some across a place, geographies, in we right it's again, funnel little optimism. gives financing a going

Brian Drab

quickly give and notes, that just at I'm remember, deal can can sense And then brings organic that what for us revenue my did any FieldWise, close? And I Great. inorganic on you revenue? looking so we model can't

Brian Ketcham

Brian. is this Yes,

is growing haven't traditional disclosed competitive small, accretive would reasons. it's the some the We smaller the but the I margins, margins, It's a more haven't for fairly but what thing It's to SaaS-type been business, it's revenue. significantly. other it's disclosed and rapidly. it guess And say for we of I is revenue

Operator

question [Operator The next Instructions] Kearney from Funds. Gabelli comes Brett with

Brett Kearney

guess, this technology. how X years, that Brian, I development generate. the supportive mentioned next continue to think about guys opportunities the know business cash in I With product will new you and invest you over do the outlook

anything can Just and guess, that inorganically. I front, elaborate organically you on

Brian Ketcham

Yes. Yes.

being capacity Turkey. with expansion opportunities. in about supporting places So our potentially And part capital growth we've talked that starts Brazil of and it organic like

in we're X.X, modernizing also looking improvements productivity factories. modernization, investments at think I Industry in our globally really

we dividend the we're of repurchase that. our increasing our through order of can at annual value kind increase and shareholder that is for then a million in geographical for But opportunities we're actively So allocation. million other there's and at opportunities we to things is longer our that expansion. look a clearly then expand capabilities Russia, and -- Right share between as in term, example, going we're we as from capital anticipating down $XX estimating are where leverage we $XX small FieldWise But And looking there, Ukraine, then CapEx. increase there's an priority. the XXXX example is now, capital through go M&A M&A, And expenditures. settle when

Operator

session. Mr. I call question-and-answer like the our for Wood would to now to concludes Randy back closing remarks. hand This

Randy Wood

Thank I'm performance the our strong our joining full top conference you profitability commercially improved returns both all ability execute and for despite for fiscal operationally revenues. to softer demonstrated to and line year, call. proud particularly and of today's deliver quarter

Lindsay. I'm However, for opportunities about ahead excited more the that lie

irrigation the installed our opportunities. and Our infrastructure competitive quarter. both growth base and in established multiple unique first We end including look and globally, 'XX capitalize Thank fiscal expanding updating with you growing of to technology, at leadership forward a look opportunity, you. the as domestically us to advantage on sustainable we provide on our progress our

Operator

Thank The attending presentation, now conference concluded. may you has for you today's now disconnect.

Lindsay (LNN) 19 Oct 232023 Q4 Earnings call transcript