LNN - Earnings call transcript Q3 2024

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Operator

Hello, and welcome to the Lindsay Corporation Fiscal Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this event is being recorded.

I would now like to turn the conference over to Randy Wood, President and CEO of Lindsay Corporation. Please go ahead.

Randy Wood

Thank you, and good morning, everyone. XXXX Earnings Fiscal our to Third Call. Quarter Welcome Ketcham, Financial Officer. me today Chief Brian is With our

execution. Our teams quarter headwinds and Zipper in project pleased strong I'm line fiscal with which infrastructure. We lease win operational and execution, third revenue. of of continue proud performance business was and highlighted the irrigation and despite to a growth sales market announced that their and top steady impacted our key by be resulted Road our

volume to markets. see on the market sentiment, softness, We April growth Northeast regions. Turning of in end Midwest conditions lower storm the sales continue higher-than-expected and wet resulting demand contributed irrigation in that equipment key irrigation replacement experienced parts West did North America the and year-over-year and activity early our May. late in In Midwest overall conditions levels to that farmer damage and high across to field hit we weigh region, precipitation in while

However, of that delays our conditions shifted into quarter. and most approvals fiscal fourth in demand fuel wet insurance

to Tragic we've South growth irrigation also region. July. value That Brazil American coming tempering activity International We underpenetrated funding this by farm region. shows to customer hindered and mechanized set season. early and demand recent South activity other strong and ultimately turnout expect support year's agriculture will due and short and will limited see commodity created quotation remain the agriculture at key continued in a access to see capital, decline and Irrigation, the overall dramatically the long-term irrigated in plan for Brazil in finance this from that in levels to markets rates this flooding In in suppressed term. in prices order has did see crop

to investigate We Africa country state the of several continue contract $XXX Middle and the were This the technologies irrigation In to technology in company's officials to with efficiency to Grosso expand the regions the North production efficient host that we've and Mato region, at scarce over and production our X improve in farmers largest valuable center-pivot They're awarded are history. that ways conserve in delegation solutions irrigation government from FieldNET. the announce and quarter. of like and potential. management maximize a water East, million, pleased will resources we been region's and provide valued pleased

in example executed the of projects complex a that with ability record and repeat our needs the customer large-scale as our execute project This critical address and of builds customers. great a serves upon track Lindsay's region to

timing moving strategy of still While expect is and an funnel forward. part managing of our projects difficult these be to we're types will predict, of active important an opportunities growth

to Moving infrastructure.

in strength momentum As the I are opening this encouraged by remarks, mentioned growing we business. and my in

Our from strong a Road overall shift profitability outcome resulting our the positive benefit growth left leasing System revenues, our Zipper of strategy. to continues sales and from

to flow promising stages benefit spending Jobs funding under As we market multiyear globally. U.S. only business Investments in discussed and infrastructure increases growth opportunities believe with of as anticipate additional the spending infrastructure infrastructure and domestic we're We've seen the recently will over the a trajectory early Act. previously, time for our Infrastructure this

significant innovation enhancements industry-leading In Turning we and May, to released technology. to FieldNET. our

that in were yield. insights the pleased The with additional resources their experience. collect pilot upgraded digital This We platform on water resulted can provides of Bayer water with of while feedback importance a tools growers development platform. agronomic to the data Our optimize the planning and their from conserve tools. in energy pilot growers management process Generative accelerates an that highlights features resources the allow to will be AI-driven integrate AI also used the part This of these serve of also Global Bayer. to maximizing and developed FieldNET to including by seamlessly and Voice was and Customer water customer

started, I'm we capabilities value team's operational $XX our to intentions Shifting very more Nebraska expanding look proud progress. of That to Earlier our our and million to announced excellence part in as to footprint. by facility efforts solutions. the of year, work forward maximize invest of our modernize partnerships our mechanized continued on our you updating irrigation over practices our to Lindsay, strategy. to operational sustainable support our farming our this we has and enhancing

to to Brian? I'd turn to results. third financial the call over now like quarter Brian discuss our

Brian Ketcham

and XXXX for in million revenues translation increase net Consolidated in lower operating in the an Randy, or revenues segment lower fiscal and was compared per credit earnings were million, tax was the the million third year. interest prior year. $XXX.X of Infrastructure morning, offset $X.XX prior than in you, the the share impact compared a to and of quarter in XX% of compared year currency share An of third revenues $XXX.X earnings by segment to irrigation increase the The offset to $XX.X quarter good more foreign were quarter. along income favorably by $X.X Net for year, recognition revenues. Thank everyone. diluted prior favorable an of diluted decrease $X.XX the results or million income Brazil million current lower $XX.X of in per income with

a markets compared compared year. markets, in in segment international resulted volume other $XX.X American revenues a stable international of prior demand Latin year. segment revenues remained selling of prior year. of year. North and revenues of compared decrease XX% million lower Irrigation of lower the our irrigation $XX to $XX.X equipment, resulted sales to replacement compared lower compared of decreased overall slightly million combination for parts $XX.X million prior $XXX.X Brazil in America from XX% to irrigation the decreased Turning to prior while and sales million In of The $XXX.X The revenues the quarter the were a irrigation primarily the decrease lower million revenues in price prior X% average markets, in other to the unit decrease to results. from million, year.

mainly Lower to XX% and the margin of deleverage margin lower compared impact activity operating of which due to order irrigation term. prior income income lower prices reducing operating to profitability the quarter operating compared the on in sales and the grower constrained Brazil, available a equipment from of year, the Irrigation impact and prior operating operating was have in segment resulting resulted is invest remains sales the in for revenues expenses. In XX% of to was growers' from near liquidity, decrease ability XX.X% and fixed million, of year. commodity $XX.X

for increase to sales to was increase higher were the the of prior Zipper operating increase year. compared quarter XX% margin higher prior XX% $XX year. higher an revenues The quarter compared for income compared million, revenues increase of mix quarter the million Zipper the compared Infrastructure in sales XX.X% System prior to the prior margin the The $XX.X segment from higher lease and an Road and in System Infrastructure year. resulted of the in $X.X more year. prior lease international impact a lower Road The revenues of to markets by favorable operating the compared segment offset margin was for with operating sales revenues sales year. resulted from to operating higher of $X.X of and road compared and of sales year. was income the in U.S. million, Infrastructure revenues products safety sales the to prior in XX.X% in million

Turning balance sheet the to and liquidity.

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

Our capital create as strong for and strategic allocation resources strategy we to and to enhanced balance sustained to asset continue value our access a Lindsay shareholders. our for liquid execute as sheet our ample capital serve

During $XX.X the share quarter, completed repurchases we million. of

organic opportunistic Going capital will This remarks. regard capital inorganic along we in returning shareholders. with balancing be to continue our my and investments, forward, concludes to to deployment,

And time, take turn the questions. at over to your call this operator the I'll to

Operator

Ryan with The [Operator Northcoast is Connors question first from Research. Instructions]

Ryan Connors

there versus decline little give on volume breakdown dynamics irrigation. be start discussing and there the Was of aware top us International any that there to wanted volume side? as well? pricing. with America both are can some really a you side on with on to the to I pricing line in And North Or off bit all regard is the

Brian Ketcham

I smaller Yes, it say parts and Ryan. Starting say machines. probably and the by selling of is decline. to with did average that we price X% mix. volume machines, have would of I'd a X% mix these and North that too of year-over-year driven somewhat price the X% the America rest would be pivot irrigation, of volume. combination is And

year-over-year. And down down the in more Brazil, So but would when most opportunities side, look Brazil that impact I pricing was is we in big just -- at the going seeing quarter. that domestic would is during most just but say you project International XX% aggressive say volume. wasn't price irrigation decline on of is especially I there slightly than it When larger year-over-year. -- that probably of a volume, more are

Ryan Connors

say aggressive like then price that is there's term more And they're being that offered actual pricing, Or changes? sort short Okay. when you list nature? in discounts of

Brian Ketcham

would in I a project, X we say those changes. say, seen when aggressive price X list situations. No quoting, or pricing just let's Yes. have system it's you're

say look but wouldn't case, where is Brazil so obviously, you we're the but aggressive that And I'd I in at total most we widespread, respond, pricing. business, our will say irrigation it's seeing when

Ryan Connors

benefit Understood. is Lindsay, recovery of a we we return the months? margin words, improvements from volume XX do need volumes to investments? on what terms of expect standpoint the on both those One some what me next in trend more in do those for other in and should operational timing the from margin regardless investments unlock Or see the benefit that? where we In

Brian Ketcham

will have to that. biggest for say productivity working and is the pressure because down like really react we margin actual lot additional to depreciation the than think as without stable market XX to in inefficiencies additional to capital count like investments more the we I the got flex the just of say improvements. there. and probably incur head past that mid-term, I the with up is the overtime of a offset and would in -- on ability the of thing changes, deal But of through the the and we've some the situation would both things us, improvement some more next XX I in a of months labor margins Yes. the having

things provides the and additional just through it the less labor So on automation like that. . reliance

Operator

is Jon next The Capital. from Kansas question City Braatz with

Jon Braatz

And XXXX if look operating that in might addition how this impact or sort international segment? revenue, So we that tax into North influence the -- forward? might of rate ahead how excess margins irrigation we irrigation that, revenues as the see big revenues for the we international might to domestic with in XXXX, revenues, of order, the American margins irrigation of look

Brian Ketcham

Yes, Brian. Jon, is this

is As I'd domestic have said operating project in X aside, nature announced be just the margins we've of the to a closer. large past, margins generally dilutive to going because and like that. of a that lot the competitive international gotten setting say, the we

international dilutive the business growth have But the effect. a project shouldn't So some. have would

Jon Braatz

Okay. front tax rate international on with about the What more revenues?

Brian Ketcham

This a business Yes. tax-free in out of which a bag. mixed zone. Tax is a Turkey, our facility bit is of in coming project

or benefits at tax the we the what higher U.S. other a we that Brazil than have in in that definitely be rate markets to rate, going tax have growth So anything

Jon Braatz

Okay.

was was what was what And the that income Okay. credit. What of front that? -- Brian, the tax behind nature

Brian Ketcham

Yes, I'm the specifics complexity get because of not just the taxation. going of to into

Jon Braatz

please. Sure,

Brian Ketcham

were -- regarding would uncertainties some a I was the result benefit it that in a during a retroactive quarter. say that There resolved had. as the it was deduction it past were But of

So during really to more carried onetime that's it's the anything quarter. not a forward issue as be going of

Jon Braatz

Or this Okay. some bit there's a flooding in about you equipment prices while? think is now on. the in and question. a point their sentiment over you're sort capital Obviously, One sentiment the difficulties Randy, the lower year with -- might in just near Brazil. you sentiment, depressed talked for purchases farm sentiment term? -- seeing, and of shows guess, improve for do is the so I last Brazil. farmer little some this there's And at And

Randy Wood

at really those in see expect there of based the July, plan Yes, on what discussion Jon, a but this year's growers in that our they're it previous optimistic a some it activity work we year. rush the a sidelines like. And on the set big that year, know crop to quarter I of to be do fourth quarter market see what and to saw think got last there's until the a I last early quotation to shows, lot going like. customers, was of of to we looks themselves we government waiting if as It's in looks also years, has going look the system. revenue they at And they through be the there's fourth that of program record if operates applications lot

between rate much SELIC be market the to we're that the be But about year? rate this the going decline like exceed for that what's really based that significant finance it's what we've of and think gap it's sentiment. is sure I their think for moving the quarters. see to seeing bouncing allocated, to tough seen rate. that I in crop not I'm further now, match what's going of along on maybe plan program public right kind I quarter. last seen at rate How But They're the does kind stability. the into look in farmer rate, what funding total we've the that or

are that available, investing we've pieces fiscal of that And think is it's and how got money but we'll quickly know So working customers we're how kind we of I consumed, here. we more end irrigation. got in specific in quickly of a on. customers, year matter our that We've interested know as it's program land quotations

Jon Braatz

announced think in will the be funding this program you year. Randy, Brazilian June

was June year, I last it think wasn't -- it? last

Randy Wood

and of first hopefully it July. expect the We'd in half

Operator

is Stifel. with next question from The Jones Nathan

Adam Farley

sales Road seems provide This that's project pipeline? additional near like sales System any infrastructure, time. Do on you up the trending term? is on Adam over It in Road On update project for you expect Zipper convert Farley Zipper Nathan. could System an the to

Brian Ketcham

Yes, Adam, this is Brian.

do have those exiting say line into next before, projects As I X would and I quarters. see the and we X say, it's over more some better of sight see we've the we would of we talked or funnel projects. active, projects,

Adam Farley

And you entering summer in the you projects in flow? funding Okay. IIJ for Are starting then road Are roads? the funding for uptick broader an months. any funding seeing to seeing

Randy Wood

are. we Yes,

of roadway now. early the but time, kind road usually space that's Zipper lease customers. that has in we inflation. of we project some talking significant But her unfortunately, from We're finishes some others involved road the perspective, and getting is assets think by hearing portion It time indication in of the construction. in eaten mentioned it are up. some I we're that, It come that same took our happening, that taken work opening kind safety A that comments. seeing the up from growth to Road even in behind is a the good of that as seeing

us . as is So due hoped maybe to predictability and that impactful pleased we're as but revenue in infrastructure money making It's have that it up would market. not inflation, give stability to the does stream. some we

Operator

The next question Blair. with is from William Brian Drab

Blake Keating

demand quarter. from storm from into Can you your I line Brian. pushed had typically remind North you how quarter-to-quarter in that wanted storm next activity Blake top This your us impact ask, base on just for is business perspective? activity in just mentioned America the a to fiscal

Randy Wood

would variable And on storm really North It It's I this describe it season. in was the the storm depending to start season. a the say was slow of to severity -- it America, hate I way.

around of storms the Omaha Eastern of didn't those significant right worthy kind went that other we parts Nebraska of did mention, see Kansas and have we So anything through Midwest. and

in a years. So window that what higher it we've little was than during seen previous

customers, and aggressively it's with the the are goes adjusters insurance storm through, working are And once dealers out companies the really the out.

dealers' of time really out those ability on working. like some our delay early get there and get to up customers did lot get our is but a and there and So and we

terms we'll clarity have about more we I when or the So talk of through quarter. think we more in storm trends in what down get fourth activity. up specifically can We saw

Blake Keating

projects how in or and Understood. And to rates. works? FieldNET. projects, lastly for compares maybe Got just do irrigation FieldNET to the And going they for the to domestic it. that rate wanted us, -- just international how trying I just big then attach the these what And mechanized pivots about just are ask attachment usually FieldNET they then to it your field understand attachment for

Randy Wood

Yes.

-- FieldNET domestic. So new now, start pivot ship I'll and with we every is Right ready.

and season are with machine new rented every rate or rotation. in north the the no that use on it's customers with stop goes longer that So FieldNET the retention farming complementary customers we are had that first lose platform, XX% and of really fields

more those the of So rate XXX% and the keeping attach on it leaves factory, is customers when the XX% platform. than we're

recent projects, size these being it's would and seen, changed a I and say, back motivated go hundreds or in of include years, and lot really really they're didn't game of conservation XX of scope manage some of years have we but lot thousands I or scale those the you form with and really shift those tough projects seeing and the a X to think water Internationally, automation without now a pivots if the has projects. by energy technology, of

tools it's now, we operating projects. in that type FieldNET, start a impossible Advisor, you see of right with like nearly So to And FieldNET being again, farming back. do it give applied once tool, those growing

projects, ability differentiator So and expect us key our see and it's we'd manage our think for growth customers to continued a these to I help large there.

Operator

American is question next Brett Rebirth Kearney Partners. The Opportunity Instructions] with from [Operator

Brett Kearney

on well? some infrastructure comments the through participate the on leasing the mentioned provide Great their Randy, Road project funds as Any to opportunities you starting way you potential as internationally Zipper in. pickup think funnel see could of international as in markets you IIJ system. to I make well side opportunities the

Randy Wood

maybe are doesn't where traffic in specific couple there's traffic say Sure. congestion. think the matter congestion And markets. you of world. is I And I'd a It

your to zone, where you matter safe want in the are a in you keep If it construction world. workers doesn't

visible, the we've that more those value, about I the what different we're placed do. resources the international time and parts in from benefits, think to America, of that more seen same world, spend I of here same So demonstrate Zipper markets. Road can our value long-standing value strategic we've be now North talk that extend where key into in the and able with And penetration our think, customers really

in project and lot about talked We've talked That lot the times, different of in road a a installation of their big We the got bridge management projects. big visibility. Japan in U.K. with us

Road penetrated got lot We've of with in start Italy. a pilot it again, the So the work there. like make just the the they a FieldNET once on of it's we're lot safety improvements to a heavily understand small these going flow, in what there. from And now we Zipper manage And concept. kind customers traffic of markets, does, grows of can ability proof

demonstrated So we a internationally, to resources growth that's pleased, internationally, contributor the we forward. going we've the going are to again, success be put big

Brett Kearney

then Excellent. repurchases the And I Great opportunistic in sneak in. X could if quarter. share to X see last the

think understand the me can value businesses, purchasing front in opportunity hurdles the of your you If clear help shares? multiyear of kind own relative potential your the about to robust both of have M&A would in you that any to inherent

Brian Ketcham

did was just like it a that other and make for our look the opportunities I'll looked first and where good position we really share look we of cash deploy with and had at the cash, start, we trading during buying been we at us. felt price we to at quarter share opportunity Yes. our all, repurchase

of able we've to allocation do various execute obviously, -- be our capital all priorities. got balance to -- -- and the sheet So the

past. investment the don't mean of the growth is present at talked and is and in investments go organic to that forward, opportunities on as all. eye But about we Lindsay again, an itself, we Brazil off we the anticipate growth from But is an one, M&A share strategy, we've definitely part that, have continue Turkey opportunity that as presents also do as what backing the in that. area our we repurchases So I would something

Operator

to This I to Wood the for conference any Randy remarks. back question-and-answer closing over session. concludes our like turn would

Randy Wood

performance. is a on strategy complex to working, us of strong Thank you irrigation, for progress we're strength, team's today's all and project joining sales winning the We're with to and our Latin recent infrastructure, business we're softness markets. pleased year-to-date is and helping in of international strong delivering opportunities offset investment look North a our our growth our us forward by in the FieldWise company global and projects. remainder margin Being actively leasing of year. sheet American call. balance this is execution for growing In revenue acquisition strategic to and as evidenced funnel American technology, our and and in the investing In Instruments. continue and see Pessl managing allows In continued our contributing to

enhance recent to exemplified buybacks. share ability been shareholder returns our quarter Our also has this by

This look joining third on earnings our for Thanks you quarter. following us. progress our fiscal close to concludes quarter our of XXXX the continued updating forward We call. fourth

Operator

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

disconnect. now may You

Lindsay (LNN) 27 Jun 242024 Q3 Earnings call transcript