LNN - Earnings call transcript Q1 2025

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Operator

Good day, and welcome to the Lindsay Corporation Fiscal First Quarter 2025 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. XXXX earnings fiscal our to first call. quarter Welcome Ketcham, Financial Officer. me today Chief Brian is With our I'm our resilience our commercial results and pleased quarter team's execution. continue first with our to company's performance demonstrate operational the collective of business the our and during as growth markets. earnings fundamentals This revenue irrigation and mature share the reflected weaker earnings headwinds delivered clearly expansion in global meaningful was our results per a execution we to and the as in year-over-year and our net overcoming

Our delivered sales supported of and project business and early international by our primarily of Europe MENA Western observed the regions record growth irrigation positive Latin revenue year-over-year XX% in sales announced the region, volume additional also in trends we've previously America.

Turning Infrastructure to segment. our

decline of another in ability and a have delivered to operating strong slight continued management additional line, expansion a we focus operational top see driven quarter our our capture and did income margin by cost we on While efficiencies.

we $XX-plus shift and left the of go the a road process our Northeast. of recently in large On in projects. the result upstream finalized way This project these for side, million a strategy Road system a decision-making commercial is Zipper large design contract to

net the and fully commodity will potential mid- income expect low this some as second costs. we to quarter. Shifting continues in gears outlook. by in We project to input term. tempered prices In to slightly farm to deliver the There weaker term in tailwinds near our expect market be continue America, North high are longer market conditions

connected given the the December. help aid farmers federal over and The to in low markets, financing passed wildfires agricultural These irrigation half billion to order X Parana and disaster ranchers $XX recent seen stabilized, federal volumes regional approximately also bill years. In Paulo international billion $XX the states. the and should We generate X remains of of and the affected an spending sentiment hurricanes from for in to with key in second past programs low the drought, X we've stronger strong This ability elections mechanized growth Brazil natural per prices. by in penetration launched ROI includes commodity and irrigation Sao Brazil adds long-term offset to programs customer bill year package with support announced recently has their to a a connected market have seen A government crops the uptick year. volume in irrigation. late and market degree U.S. the

international specifically region We continue positive continue to developing markets, and our MENA as in food the water expect scarcity demand security strong in performance be drivers. to

project timing While is are be to to predict. projects and robust, competitive the very these difficult always funnel continues

and We projects sight line win expect the that have additional our these we we on region proven to identify, deliver and of this ability have move projects, to forward complex large year. to in fiscal

to Moving infrastructure.

in which QX. growth segment, expect System large to by supported the Zipper the delivered in is We expected be Road project,

the are changes IIJA office. We expecting new as administration the any not to material takes

federal it increase difficult this have positive estimate actual the cost making the to of offset of benefits the some legislation by funding However, the inflation in from impact stage. been at

bolster along Zipper Our revenues operational mix the segment by improved manufacturing in expected supported profitability and continued near efficiencies segment solid this Infrastructure margin reductions These processes. higher Road in to performance term. in from in expense has improvements, our the be are with to improved

an This by Austria-based base recurring opportunity annual devices. and installed peso announced closed minority instruments. technology. of grow announce I'm and innovation partnership interest in to capabilities to their previously that deal Field-wide to to the Turning platforms significant incremental net revenue adds acquire to Field leveraging a we and pleased the creates global

in annual connected XXX,XXX investment, access long-term growth have now devices, will With recurring we over revenue. to the support peso which

to already have the turn collaborating discuss world. I'd Brian? the call and begun to financial like customers over results. first our creates to now excited the around we're teams this Our Brian opportunities for our about quarter

Brian Ketcham

the revenues everyone. to compared $XXX.X XXXX an driven revenues, $XXX.X increased quarter increase fiscal the Randy, first for the was you, partially X% year. to Consolidated good of Thank in was by international million and prior growth morning, million in offset which earnings million Revenue or revenues irrigation in North the and $X.XX lower earnings prior infrastructure $X.XX per or $XX.X compared million diluted XX% per irrigation for net the Net by diluted America to of to compared $XX prior increased quarter share share year. year. to

benefited tax to rate was from results prior an the compared the current a other operating lower year in and prior to While increase similar income year, income income effective year.

quarter project segment operating irrigation to Turning prior year. million and to near The international quarter. efficiency increased sales after compared the remarks a unfavorable was lower However, and machines mentioned with for been and certain resulted to his liquidity. Revenues prior equipment as from lower compared margin Infrastructure of signed of quarter $XX.X in expenses was year, in segment to XX% increase difference million large increase of project for approximately safety by to our compared the And of prior profitability were that have in year. also year. The margin compared lower our foreign year. year lower to region, was grower the revenues to resulted compared was markets, compared sales to of and had million contemplated segment The segment commodity of segment and resulted was Latin X% of primarily revenue million irrigation North of of impacted sales income offset $XXX.X increased decreased year. lower and by from to the irrigation Irrigation compared operating in irrigation the compared project in to in sales year revenues increased the international well clear revenue of segment currency revenues XX.X% income $XX.X the our to year, This resulted for prior opening Road the to translation the sales income A term. margin. Infrastructure the regions demand prior X% the to full primarily Irrigation prior remained for dilutive a operating This where compared to the fiscal increase road slightly sales lease along in effects operating market the that operating contract America of the compared the prior our $X.X year. income million quarter the In quarter the operating proportion compared and million Brazil, results. revenues resulted to larger than operating overall the lower first revenues the activity current operating Road income compared in due timing MENA Europe of lower temper products quarter prices of year. XXXX shorter the for XX.X% of improved related mix unit operating the sales Zipper in the America of a compared prior year. calendar selling X% of margin of equipment partially quarter higher manufacturing revenues XX% for System Lower favorable were compared continues in the which timing of to XX.X% the less end farm the prior from margin to to Randy $XX.X as prior from primarily available million were in primarily until Infrastructure and year. reduction large lower XX.X% outlook year. The year. was for not in year $X.X volume prior decrease primarily million $XXX.X year. prior in prior the prices to Zipper average net $XX.X the decrease from prior to the XXXX XX% prior lower pressured

been quarter. machine at million deliver entire project. this barrier than project fiscal have the our for building more we second We valued to the in and $XX expect and required

and Turning to balance the sheet liquidity.

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

sheet as the my remarks. concludes as we a enhanced our liquid strategy Lindsay asset this capital to over balance our allocation to take at strong Our for access to execute create your turn to I'll shareholders. This strategic ample for call serve And continue capital resources and value time, questions. operator and sustained the to

Operator

Coast Instructions] Ryan with Research. will come [Operator Connors North first the And question from

Ryan Connors

driving Can -- magnitude you for exactly and systems smaller I've of might comment had of regarding me. is the heard make that what out that? shorter be or That's systems a you effect that you new mix comment what and call on irrigation there a So or irrigation. the one that before. regarding

Brian Ketcham

more is this Yes, a regional Ryan, driven generally basis. on Brian. It's

larger they've And say, adding shaped into places, there's get You installed the to. odd filling pieces they're machines where like over Pacific let's irrigation that time. or of then they're some the corners of in other maybe ground Northwest,

just volume. mix the in breakdown the the overall quarter-to-quarter, that really for in the from really would main like say terms was decrease varies of it's So I But but driver regional. mean, quarter, revenue I

Ryan Connors

Yes.

Okay.

it was So then. the margin on

Brian Ketcham

Yes.

Ryan Connors

Yes.

I Okay. infrastructure one And on have more then well. on irrigation. one as

something that, the and project Once where done, the into to something done a find basis? look component, of Is be needle service Or supplying have it's to have Middle one. parts next magnitude? if the what's can large any, move and it's of go that go-forward East. this follow-on service like is sort it So we that's completed, for on in that it you on once just -- you'll -- the that

Randy Wood

it's part one. world made. Ryan, Certainly, of the that you've around significant this machines And both take the number Randy. a in hours. I'll combination They're a irrigating almost this comments the all think year. of clock operating I of is

maintenance I away. the some be parts these not to going some aftermarket. initial more of there will items, So think for of going Generally, there. consumption purchase some the to right revenue-generating long-term fast-moving include may we deals, parts see those stock But potential include is it so on certainly

all side, in machines. dealer on necessarily their generally care they've markets particular, contracts, they the and take generally of not On in own is military that been Lindsay the revenue those revenue, service trained,

So service really the for to be long-term there going is parts revenue us.

Ryan Connors

Got it.

on in my of lumpy the of I actually the on line we headwinds one had then infrastructure, less of ship revenue it's there. mentioned lease was than model mean, that that as timing And the past. volatile, understanding the Brian, book the leasing revenue the Okay. less you

what you can cause that drive kind exactly of explain So the to revenue timing the can on lease are volatility. dynamics

Brian Ketcham

immediately. got kinds change we've there. the But of dollars as about mean of we're of for Yes. ending I it. there's sight a the the I drives starting it's project It's It's beginning, I really other the continuing what talking things. and think then scope couple one line revenue. really new in just that's mean one the those of not projects to a add and gap And projects small portfolio. to lease But probably. to sometimes just some million

Ryan Connors

Yes.

is an immediately, annuity But and much projects -- there's no not necessarily it a a fair just it's Okay. be that stream Is running. so with no really you're but there's basis. associated rolling volatility on revenue just that? of off lease characterization when pretty book There's system so lease up signed, once and to real to leased ship that replace saying clear, go-forward becomes there's project a

Brian Ketcham

the to is some Obviously, construction be XX-month a project it going other But that We if lease. could multiyear one projects. very where do to situations it's stable. are ones going they're a X-month tied a or a project, -- to be have

again, come at it you And over there so when before basis, an if be a it's gap a then stable. could some to project end, new timing But ... a there quarter-to-quarter, look year be full But with starts. can those very

Ryan Connors

Got it.

it's -- see. I So

specific installation. It's a project. So it's a permanent not on just

Brian Ketcham

tied lot -- over we've lot leases incremental A of construction of have yes. the been A more last year added to that directly projects.

Operator

Blair. The next Brian from question come Drab with William will

Tyler Hutin

Brian. Tyler on for

with the irrigation starting international business. Just

of was supposed about East year. North million project? recognize be I for revenue spread kind know $XX you the through evenly to did that African Middle the in So and

the cadence that is same. if wondering Just

Brian Ketcham

general, the is Tyler, In Yes. the same. cadence

I is think a quarter. we for the what slightly $XX were we million million year And expecting had were roughly said into quarter. the above we $XX coming

Tyler Hutin

Got irrigation. And international one more it. for then

year? stronger, for said, half international American expectations your Your the European does the kind as Latin are of Irrigation that you in change the business first base sales of and

Brian Ketcham

don't expectations. I No, think changes our it

change think in of the full point, had outlook into green think it, regions. I regions coming positive those in for this doesn't at to year. I some have we don't seen the growth both But the see it's that of opportunities those shoots year. some we

Tyler Hutin

the segment. And for Okay. infrastructure more Great. just one

activity savings with kind in and expect quarters? Were do had the Or some like savings I'm these that onetime future just like wondering, you the up, efficiency roll clearly OpEx occurrence? project this quarter. a through You cost to of picking

Brian Ketcham

operational Yes, will our continue. savings expectation is cost these

I also some to increase building flow our we're in done we've think factory I line mentioned lot the to is, as through that's our Road absorbing order a capacity new machines, barrier costs, our new improvements project as the the big building in but in of comments, it as relates improvement part factory -- Zipper fixed my overall it of product line. and a also

Operator

Nathan Jones will question from Stifel. Next come with

Adam Farley

continue the markets expectation looking to the is there? at the Brazil. of Maybe a Are is What's bottom stabilize year reaching This Adam Nathan. irrigation here? for on sizes Farley first for

Randy Wood

on and this a strong further maybe lot add We're Randy. Yes, start and we lap Brazil. necessary. can there don't I'll deterioration see seen of we've starting on the then growth of upside Brian -- that soy the if is things all regression some kind to in And at as has kind we prices, well. leveling in limiting of point. of factor access market off those to of coming been see credit this back particular kind a And with

rolled would So to either. term, not in we've they're worse, the programs not quite maybe our X near that view potential not projection how better be sure in significantly I credit we're seen, some And uplift consumed. think out, we in to worse But quickly but better how don't significantly that the get get going do getting are going term. we it the see market. or as quickly near again, significantly But those funds the significantly

Adam Farley

irrigation, about neutral price then domestic is think on slightly And pressure. aggregate, cost seeing the it negative? then you positive, think are out you the quarter. And in presentation lower Okay. Where I called pricing if or in ASPs

Brian Ketcham

prices. Yes, have I it's whatever. would What changed maybe is neutral not we it's Adam, discounting selling our this seen certain on would this say and or it's maybe is Brian. selective I at say we've regional, margin been point. orders

raw we've steel on same in We coil the But softened. prices other materials. have -- inflation seen still got have token,

stable, So would overall, cost on but been but I environment, line, margin some really not would I overall. say, top on say has impact ASPs, neutral

Operator

John from Braatz City question with Next Kansas will come Capital.

Jon Braatz

change the issues and the at a any we've you at a fall, up up the but we've little that less. look account demand board, price you of recovery nonetheless, prices, when prices bit seen, this bit. Randy, the move the a corn since they do seen Any some But lot less, some up, least on of XX%, these -- and sense might improvement? little about soybeans ideas? recovered guess for affecting supply in what I

Randy Wood

Are as moves Anything know on generally approval a aren't is that here issues. in package certainly like we this a in there on a done, the were kind passed movers at demand of maybe next least I I seasonally now, been pattern disruptions Hemisphere, a Northern we're of John, exports -- supply we say, holding demand-side That be driver. Right on would that we of to of and ethanol time. side. intentions watching the EXX The significant didn't think and get have. get that planting better there's trade until be the for certainly is year-round to I part recently. the tariff-related have in harvest would window, view year, at there the we going side. lot going

those significantly we'll in try it way down one nothing next on nothing understand sell always significant right I side, speculation market John. or to other look But until or moving intentions some to don't supply we drivers. maybe demand either around. the think see spring closer to and supply-demand There's now. moved There's and pure very supply-demand that's the economic it those planning anything the what in like, and So there's I get

Jon Braatz

Okay. trend in What's of the prices? What been about there? soybean Brazil in terms

Randy Wood

slide, highs, I we bottomed than threshold. on past seen And where customer lower dropping that guess more going been And think to go historically. stop? the what view you're the stable, maybe It's from stable know and the we've I we're going the not probably is when getting we've to it is out,

So don't get comment the I is that term, earlier. either. in not progressively not I comments my think but going stability in better it's adds to again, that to to our progressively view same, get it's made near customers, the the going worse

Jon Braatz

forward? Brian, going How talked see income. some And the tax in quarter, Okay. you a lower about and other that bit do you little positive rate a

Brian Ketcham

Yes.

the a project our of we're primary for zone. a of have I earnings a driver significant think that And in Turkey providing shift rate. for large pretty the is equipment rest the Turkey, Turkey, the the we free to into Brazil from year, really which expect lower is in in trade

tax have don't a XX% we So in there rate. Brazil

probably forward, in going range. somewhere that XX% So

Jon Braatz

Okay.

the And anything other Okay. there? income,

Brian Ketcham

would Other at Yes. and when interest interest expense to income, think expect I trend you look continue. that I income,

side On to an is impact the obviously predict. the and that nations one really that is have hard other currency

Jon Braatz

And Yes, nice million the typically project? it. Yes. a Brian, this do absolutely. have you margin the had infrastructure in past, $XX projects to How view large

Brian Ketcham

should that we've some other be had. the to This of projects similar

be and to the to operating for overall for margin it expect company, accretive We segment actually. the

Jon Braatz

there has XX% been something past, that? like the in Well, Right. over or

Brian Ketcham

Yes. definitely It's XX%. been over

Operator

American will question from Kearney River Brett Partners. Opportunity come with next Our

Brett Kearney

well you the the facility, going CapEx the projects procurement, the have as fiscal planning, I on guys underway. processes going for initiatives Nebraska was I at a the this year. as at are Lindsay, to underway around guys just how largest being this know expansion just ask you quick have update stage other that one

Randy Wood

we we've any issues pretty real the with short-term but and had We've all something, closely here. some don't point, red at to deal reviews this part that's see Brett, of time flags. Yes, got the they're line. Nebraska, we're tracking obviously, weather

still track. to on concerned we're nothing So that be with appears everything

Operator

further turn questions, concludes to Wood this the our for Randy no With closing remarks. like any I to question-and-answer conference back would session. over

Randy Wood

joining all us in look we're and fiscal even this value you Thank with Thank XXXX. our customers opportunities for delivering we we're today's encouraged and optimistic of while to us, front the our more in for financial And call. about shareholders resource forward resilient on you. quarter,

Operator

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

disconnect. You may now

Lindsay (LNN) 7 Jan 252025 Q1 Earnings call transcript