LNN - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the Lindsay Corporation Fiscal Fourth Quarter 2024 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, and good morning, everyone. quarter year fourth earnings our to and XXXX full call. Welcome our today Officer. is me Chief Brian With Ketcham, Financial

quarter. We are during pleased operating year This performance with us performance our fourth our allowed fundamentals, executed by America quarter early in amidst teams challenging slightly versus quarter extremely in particularly deliver North we carryover damage pleased shipped in driven well that storm to our the market the irrigation year. business. as to were fiscal in the last Irrigation, profitable and full In see up year, volume

In shipping to large sentiment the international and the in been irrigation, continues market grower customer by started softness offset project in fourth quarter. in has Brazil poor headwind partially lower due the to MENA This persist. that profitability region

our market to irrigation outlook. Turning

farm more associated income ratings impacted good that slightly surveys see major ever the North much customer the recent America headwinds and still recorded. indicate in irrigation news forecast, earlier sentiment some projections lowest we closely have of for versus with segment While our improved solutions. of And the sector, livestock net cropping

down net While season. overall, a These we comparisons in slightly year, we growing visible into there the unless year-over-year projections farm in until would income expect be have in significant next see won't a half improvement of is to get the first tougher the market XXXX. we

the tragic decisions. a next and but and seeing damage volume window make the activity, storm connected replacement hurricane some to those now are to too in spring between We have quantify early demand it's growers most that to Southeast

the ensure We dealers that are region. working recovery to our in with we closely support

it's improved. in second America the delayed and soybean but which delays continue planting. in grain crop carry credit profitability We support could the planting, parts of country expect temper safrinha in droughts to corn and Brazil prices, until stronger forward Latin also Historic farm may to demand availability or

XXXX. other security year forward more projects future. remains and through markets. the food MENA look irrigation active, on advance shipping international We will The large we projects and project continue developing project sharing fiscal these support in the continue other that to We to funnel forward

express Moving installed in Nevada. installed as and in is to We've we robust ability be innovative under to in some TAU impacted new This received differentiated positive XR infrastructure. the June, protection cushion of cushion market yet crash minutes. by markets We our when repair in and await in response state do Road first and impacting we federal its In our key XX opportunities approvals seen margins. a and provide anticipate repaired administration infrastructure grow and have driven our revenues to the Jobs maintain by will in and for approval. expectation in We turn, the Act. Infrastructure that positive Investments increase provided demand an the federal spending lease project market continue U.S. increased highway see sales by Zipper funding fiscal near-term XXXX positively can

growth area momentum supportive leadership investments in the allow overall We to the our area in fiscal have of projects projects additional to continue us position actively sales expect In differentiate while and this drive in our continued margin revenue XXX,XXX device recurring this than XXXX. we to Growth to and moving through funnel in sight XXXX. sale subscriptions line commercial profile, now to rate we Infrastructure manage our we funnel from the innovation, of realizing technology in revenue product fiscal annual in of devices, to our Net is and Alert more management see the in both in growth and addition irrigation connected are extremely supporting that and extend XX% encouraged field-wise have We continued technology. first the Impact platforms of segment. Field and recurring in achieved stream a in

costs the to efficiencies We've cycle continued Nebraska as demand better growth cycle million support the for returns which our operational to at us investments and Moving fluctuations, investment business variable providing to increased These will the to to the footprint. will margin responsiveness manage $XX allow Lindsay, progress facility, as on our stability. fluctuates. our long-term improved

I'll call our over to Now turn Brian? to financial discuss Brian the results.

Brian Ketcham

million you, per Thank Net earnings a of to XXXX share morning, Randy, $XXX.X good $XX.X revenues in the compared last for diluted year. fourth year. were X% $X.XX last per the fiscal to everyone. or prior $XXX share earnings Total record earnings year. million diluted or were of of million net per earnings compared diluted in prior X% for $XX.X And the $X.XX the XX% per fourth revenues quarter quarter compared decrease a were the year XXXX decreased diluted to for compared net share the million, full of Total million quarter and fiscal or of $XX.X share, quarter $X.XX fourth million and $X.XX $XX.X net for decrease of year. to the fiscal

volumes our the The certain North compared were compared of was driven year. demand by sales average were million year. revenues segment selling increased of the prior in to of field storm damage due a wet irrigation run compared lower in conditions limited higher equipment offset of of replacement to replacement Irrigation country the partially prior year. year. revenues prior revenues while irrigation parts unit higher the segment were equipment a to to by with prior higher impact parts equipment for the XX% Increased America that sales from level sales times. to the quarter Turning decrease X% comparable resulted prices primarily million, fourth The results. $XX.X increase $XXX.X of sales

Latin These XX% prior markets, decreased to project Revenues primarily compared markets developed resulted stable. offset The lower of were markets. lower in America, $XX.X revenues the quarter. In relatively Brazil to decrease million from international revenues compared fourth last developing record in irrigation revenues year. other year of while sales partially in also by demand parts were remained in decreases other higher in

previously MENA $X.X effects region the currency compared by of in million segment XX% As Randy quarter quarter. announced translation margin sales during of on irrigation year mentioned the Revenues project impacted began foreign the was of were quarter year to the in to approximately income of of decrease and sales current delivery his remarks, in operating the the we also prior was $XX.X to XX.X% fourth XX.X% last for year. operating compared quarter. compared million, year, Total a last the unfavorable

deleveraging primarily compared and international operating year. operating margin the resulted revenues irrigation expenses lower Lower income the to fixed from the impact operating prior and of from

Irrigation X% sales XX% than volumes lower year, America million parts North slightly and decrease lower by offset prior sales the International million were prior primarily prior from higher $XXX.X sales was For fiscal total compared the of compared the revenues offset to to Latin of compared irrigation project year, decreased American irrigation revenues result as by of partially full developing unit lower selling to markets. the prices other to more year. of and of year. year. $XXX.X XX% decreased higher decreased $XXX.X million segment Brazil This average the revenues replacement revenues prior in in compared revenues markets

in year. the of the of for safety lower prior the year primarily lease revenues of increased income of segment and the compared prior prior prior the impact XX% road year. revenues sales Operating year. expenses. Road a operating income Infrastructure was quarter to prior resulted was the international increase in irrigation sales from the the sales The full segment by of operating XX% products to fourth of of compared markets to decrease deleveraging compared sales U.S. higher Lower of $XX.X compared fiscal million $XX.X was compared from operating from million and offset operating fixed in to lower year. the And and XX.X% international revenues the to sales XX% the in margin of margin revenues fourth System in while impact quarter, year Zipper Irrigation for higher resulted

quarter segment to XX% fourth of operating the fourth more of year. Increased revenues and year. Infrastructure in quarter operating the sales lease favorable last XX.X% sales million with for income and higher revenues increased revenues System Road the sales quarter Infrastructure of of XX.X% mix the higher prior compared from margin and $X.X to operating resulted prior year. margin to compared Zipper was from margin operating a the income compared for

the system products and lease Zipper infrastructure revenues million $XX.X year. X% were prior the Road of attributable the which fiscal lower to For safety compared higher prior offset The segment full Zipper increase revenues, of by increased sales road to year. compared to year, Road partially was primarily lower sales

year. the for compared Operating of fiscal $XX in year the and or increased to income full million for Infrastructure prior year. compared to decreased sales sales was XX.X% prior the the was XX% year of margin XX.X% operating --

to balance liquidity. and Turning the sheet

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

Our working operating management, free XXX% earnings. year, resulted cash flow performance net or for of $XX.X capital of million diligent with the along in

returning our balancing priorities, inorganic and flow organic continue along demonstrated and further cash Our allocation our sheet positions to on us capital well executing balance shareholders. capital our generation to investments, strengthens with

$XX.X completed bringing the operator concludes During quarter, repurchases the take over I'll time, repurchases million the we to the my And additional This questions. million, year. for your turn remarks. the this share at call total share $X.X to to of

Operator

[Operator Instructions]

comes The from Stifel. first with question Nathan Jones

Nathan Jones

the the year. decremental a margins, want to I Good and both question in morning, everyone. with quarter start the about off

for think quarter was it it above was the the almost year, for I XX%, XX%.

So over I that and to in you've the deleveraging just seen what guess, commentary on year. some quarter that, led the

it potentially. more any contributing can just with the mix was maybe has thought color provide deleveraging. think But than that something are being that Brazil impacts do around I us to I it to profitable you

Brian Ketcham

amount entirely it you is improved this year. additional America look volume related you would especially slightly decremental for say fourth at have Nathan, we out, at on very got the and when And don't North quarter, last When you that Brian. year. America, at but and leverage the and year-over-year when in international I year, was look the North Brazil the Yes, last look price, we strong margins, record Yes, this and fourth was to quarter break irrigation business. maintained this margins of obviously, even it's

year bit. very last in a Brazil quite year So off strong year this

got that the year, additional project little Brazil from single pretty the a change. of And we biggest then the business, dilutive to of volume volume deleverage But shift the Brazil margins less the slightly this as overall which and mix was there impact significant. and is well. bit year-over-year So is the

Nathan Jones

how guess for And growth have projects sense. in given East ships started that shipped XXXX? Middle in markets should much year, margins probably Brazil Like some Makes in international fairly shipping you Brazil that is in XXXX? likely how headwinds that about fourth additional quarter? there's mix that that revenue create and weaker quarter, much think be again to to one headwinds in I and the going in going Can fourth these talk the you XXXX, the the for get you're it's project of deleveraging next in that would we

Brian Ketcham

Yes.

And fourth project. roughly $XX anticipate First throughout of $XX million be we next of the which the all, quarters. year, of would spread we in each the shipped quarter, X million, roughly

a the the So there deleverage generally line, be full are that gross on in there's context the on mean, because look I at normal effect more our clearly you dilutive like going but get on SG&A. margins But entire the below for leverage projects of margin is segment, if to you margins. year, the it large

full down get the you basis the probably of dilution. year, points So to of operating XXX neighborhood it's margin for about when in

Nathan Jones

the expect that should expectation your the additional Brazil worst one it Or will in markets? probably being headwinds of that worst is of be from we XXXX? some one not And markets

Brian Ketcham

in fourth in expect, the this compared in the to another see I especially the quarters, would least to think to down year, Brazil. first But we and quarters year full look expect we we No, leg year. get still at as X flattish of year-over-year, more at third

overall, we the digit next would full So for probably low year. expect yes, -- double year double-digit down area in that Brazil be to

Operator

question next with Connors Research our from And Northcoast Ryan comes Partners.

Ryan Connors

XX%, bit XX% volume if look push actually the in actually leverage, in but selling G&A. margins actually, to pretty held SG&A negative wanted XX% the I well pretty but because a up we if ramped So the gross you little up to cite on significantly up close margin, about at year-over-year, I

in it So cost negative like in addition creep upward there's leverage. the to seems some certainly

color any just drivers if to reconcile that around So provide try and can want to as SG&A the you well.

Brian Ketcham

to be I going is SG&A are to accompany of would infrastructure on the those. on sales say businesses is irrigation. There's Yes. This both project side, and the in Brian. that one commissions going components in these

So some of that sales to commissions. just related increase is

and look offset to continue resources to can. We seeing also development. But action of the we're taken we we address to some the when there's that, in activity R&D region, that. And some that that deployed where in some in project MENA additional at you reduce technology other costs we've our have invest areas to

But about, I -- under the we'll of XXXX. costs, but not see would spoken in deleveraging probably talked more we have say an fixed margin Brazil. on we other the has of and about Brazil impact we thing side pricing the did that gross just been before in how pressure just

also bit the of margin And to the that's so contributing compression.

Ryan Connors

too Middle terms is there. and Yes. East, would there it. I price That know can't projects I discussed wouldn't in these then in -- -- Got large be anything what much of other you

the anything ones. it's bunch of big of of magnitude as on You're large talking order But project MENA new we or as smaller working current are business. a

any color what on like, anything of the quite -- kind looks pipeline large? that that Just that's

Randy Wood

I'll big a year these highly we mix couple probable, is speculative. not ones. say the likely. I'd highly handful deal complex, being in $XXX smaller ground you small plus industry, others we and projects specific a are of projects that do add that pull Ryan, on in able sum. as these but here that and fiscal this through pieces customers, incredibly more up before, are like million one. of a Randy, and hear That's a mix have But of than specific time-consuming another the there funnel strong the is and identify said see, from These there's to take itself. And both ones, we've several to and aren't of We

have signed, through deal and work we'll conditions. credit take sometimes terms And and approvals, several months it could to several a weeks,

conditions won't funnel about start a years. we're credit to shipping in the that projects about do that those an robust specific and building we talk talk we of cover opportunity got and coming to generally agreed, it we'll we know secured and we've and way, until remains So the being volume but terms But units. ready see lot

Ryan Connors

has us all a one rate housekeeping, place. for The And of tax Brian. for But about that kind any in a volatility been help of then earnings different last that the we around tax the you to with of can the the give do just where one I bit over sort jurisdictions has 'XX? and me, think contribution. in fiscal assume on jumping coming

Brian Ketcham

Yes.

income the in Turkey out zone. think project Brazil the and tax-free a quarter, we recent ship our which I which most in just the being of business, in is from shift then down facilities,

we also we So -- had impact. the an year, pretty in impact. a that had as that had look the in early tax credits significant But

we'd onetime in XX% to year. expect year, in next would As blend any we where absent the things. to anticipated range, I look next be forward would other we're our say probably given earnings, say I would kind XX% that But of be

Operator

comes question William Drab with next from Blair. Brian Our

Tyler Hutin

in could Starting is elaborate the you tailwind funnel? through? of Zipper other off, looking And the for how is federal Or from progress the a on And follow-up. here Is Brian. the funds? this Road a pipeline this funds have IJA I'll Tyler then quarter-over-quarter? filling flowing

Randy Wood

coming shut Tyler. build, person-to-person we You those And out our a meetings. couple down sales the momentum had of when is to really things, from this really this perspective Yes, continues of Road a really and funnel bet, face-to-face process. COVID upper is to of some

goes start to construction see in we to Zipper investment the deploy use do see increases some business they our on now as the I the can the So projects Act think through infrastructure and Jobs side. when they Road as manage money the is Zipper market Road to period. time We

So factors I us some think there for providing different are tailwind a couple of there.

We've love success see. projects this that new funnel, We at point see lot well. really continue which of global a We've to in interest momentum, the a some Italy getting to of funnel of we've and is about, had Japan. we new lot business success that enter talked this in and a as and had it's

Tyler Hutin

helpful. dynamics you and unpack Is you -- had I and that all that was That but how that there some are new then to Great. strong the last since project to works? large expect dilutive, can of the mix you how time kind forward projects And anything sales revenue. lease understand going orders project look do between

Brian Ketcham

you're sales to be versus project No, Yes. going are to on the accretive if about the side, infrastructure Tyler, the margins irrigation international projects. -- talking there

So the would overall in be growth as to to margins. that to some expect sales we funnel projects we accretive see XXXX, see and expect moving through

Operator

with Next question American Kearney comes Brett Rebirth Opportunities. from

Brett Kearney

of kind was you infrastructure there momentum some in state already in of products see the similar passed opportunities, curious it of safety outsized I Road versus Zipper opportunity the side? really, kind and opportunity of the 'XX with international side beyond, Or the both infrastructure how I of in as part your But as physical the is addressed other about you're support well previous know international guess and road been markets, for domestic? You fiscal guess, question. I some business, packages the thinking I set have

Brian Ketcham

is this Brett, Yes, Brian.

additional the XXXX, U.S. I to lot project potential But well. would U.S. be of line on opportunities near-term in we sight well. growth the Road the But And of the next expect we And be again, the primarily that as mentioned, U.S. year by have we sales near there's sector. we're U.S.-based. the Zipper But outside the as funnel that primarily just the look that global is side, primarily Randy a is funding think supported that as as that's going just growth the includes in expecting at

Brett Kearney

both are internal bringing some on developing XR evolving, potential the innovation, segments. markets Terrific see as adoption as across about see you connected solutions our the could to as you you can offerings the products, well your I Lindsay guess, on anything well how new at your I product as TAU If make external terms markets as Excellent. would here? of how the Lindsay think into of one share more. ask sense, in from based portfolio both that both

Randy Wood

differentiation this and an area Brett, for of key a course, area Of is us.

made now companies technology, the the ones protect want strategic in to want are to enhance investments the can investments and results cycle. in in those innovation certainly we in some that business working when see. the and investments wise we down the partnership and that We've are cycle we announced Our like instruments outstanding in environmental integrated Field up peso and that into brings monitoring the through producing in weather We've minority that mix.

we for this differentiate, conserve area innovation, they ability to into profit to on improve technology to when maker is to to us counting And to really them. resources a I an energy are their this conserve think talk customers, that really drive turn and

growth a So when to and in continue the an see to invest hopefully really see it Lindsay. and area that's in differentiate down we validates that we'll types that even continue market, strategy of there, we the

Operator

[Operator Instructions]

Braatz comes Our Kansas Jon Capital. with next City from question

Jon Braatz

Ryan, over of Randy maybe about this you you have then And year? to level the from saw going or the talk that hurricanes you next storm can Are revenue couple might Brian, see of the a some hurricanes? storm-related impact revenues maybe months. the little bit the And

Brian Ketcham

our characterize that. this year, part storm average. Randy second your But speak is damage quarter activity about I first can This fourth slightly would then of I'll Jon, take the of Yes, and Brian, being the part above question.

an last record recall, was all-time you following in replacement. damage If were storm replacement XXXX, storm which damage for probably we average below year,

average. over above period, speaking, relatively I longer was, So this would say, a

down without were our the single for look been volumes damage, the quarter We digits. at low up probably unit we storm being

an I the It's, when put has So it have in it would slightly above other been you say, on in quarter. again, what did impact perspective of But average. years.

Randy Wood

field down across our most And companies, some that the we get with in in Southeast opening there. part machines the of customers, insurance I'll recent those not through a as lot and the end talking our of of back We're mentioned the in season. several representatives, remarks, of in getting world. there's our the cover kind activity all dealers, machine a estimate hundred there's put brands We're a we rush And harvest. the to of at with

is right So really that now going run through start and spring to volume planting.

also line. huge to summer in So storm we going in gap machine. due customers of quickly. the the repayers They're they of a insurance more a much There's around replaced expect to not X than time between might to cost kind machines want a Midwest be price lot spike there. on of back be time replacement We're and don't that insured this a there new It's big where get a month. on the like hearing from longer mainly the the

we cycle maybe again those we replacement might working customers more I we're closely purchases as this But very So our in as parts to best as where pipeline teams, and can. with quickly opposed new as the be a see mentioned machines. dealers regional we completely can as structural helping comments, our

Jon Braatz

activity, to be that's whatever. of activity. there something seem additional it's the supports irrigation positive region on terms a year EMEA from sense Randy, the -- region maybe up supporting I in that little picked And activity? last the maybe or maybe bit EMEA in is changing But secondly, you very

Randy Wood

has investing Maybe they've given maybe year in consistent purchase motivation connected invest more to into last availability access with food that the the in some irrigation to than year I this in region had before. credit interest funding some that population now shifts ability There's that would capital. say been security, a connected to and year and historically. growth, even to is the

long-term as those think ever as been. drivers I strong and secular they're motivators, positive and they've as But

win our industry. said, because way are others we're as pretty going significant very We growth the we've and identify, But projects then positioned. execute ability our like have compete we as those a and like to be, to well. them. for the that And opportunity that competitiveness, execute continue to to the available to now is those Just maybe more ability funds said,

Operator

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

Randy Wood

Thank the you quarter full demonstrated pleased I'm joining with continued around today's all performance us the world. our operational and for of in the and year call. by proud on our teams fiscal execution

Our underlying a market. our and supported cost cyclically results price on management challenging focus in have

our we're base in recurring continue balance capital on invest continue to productivity the our grow first forward invest segments, improve efficiency. costs, world annual our We While and to you installed revenue end and both to managing we facilities to strong to you. in the around irrigation in sheet our updating at safety, innovation infrastructure we'll the look progress to quarter. XXXX and Thank of our leverage fiscal

Operator

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

You may now disconnect.

Lindsay (LNN) 24 Oct 242024 Q4 Earnings call transcript