lnn-10q_20190228.htm

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10‑Q

 

(MARK ONE)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2019

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-13419

 

Lindsay Corporation

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

47‑0554096

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

18135 Burke Street, Suite 100, Omaha, Nebraska

 

68022

(Address of principal executive offices)

 

(Zip Code)

 

402‑829-6800

(Registrant's telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:  

 

Large accelerated filer

    

 

Accelerated filer

    

Non‑accelerated filer

    

 

Smaller reporting company

    

Emerging growth company

    

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No 

As of April 5, 2019, 10,786,339 shares of the registrant’s common stock were outstanding.

 

- 1 -


Table of Contents

 

Lindsay Corporation

INDEX FORM 10-Q

 

 

 

 

 

Page

 

 

 

 

 

Part I – FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

ITEM 1 – Financial Statements

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the three and six months ended February 28, 2019 and February 28, 2018

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended February 28, 2019 and February 28, 2018

 

4

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of February 28, 2019, February 28, 2018, and August 31, 2018

                                                  

 

5

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the six months ended February 28, 2019 and February 28, 2018

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended February 28, 2019 and February 28, 2018

 

7

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

 

 

ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

20

 

 

 

 

 

 

 

ITEM 3 – Quantitative and Qualitative Disclosures about Market Risk

 

27

 

 

 

 

 

 

 

ITEM 4 – Controls and Procedures

 

27

 

 

 

 

 

Part II – OTHER INFORMATION

 

 

 

 

 

 

 

 

 

ITEM 1 – Legal Proceedings

 

28

 

 

 

 

 

 

 

ITEM 1A – Risk Factors

 

28

 

 

 

 

 

 

 

ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds

 

28

 

 

 

 

 

 

 

ITEM 3 – Defaults Upon Senior Securities

 

28

 

 

 

 

 

 

 

ITEM 4 – Mine Safety Disclosures

 

28

 

 

 

 

 

 

 

ITEM 5 – Other Information

 

28

 

 

 

 

 

 

 

ITEM 6 – Exhibits

 

29

 

 

 

 

 

SIGNATURES

 

30

 

- 2 -


Table of Contents

 

Part I – FINANCIAL INFORMATION

ITEM 1 - Financial Statements

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three months ended

 

 

Six months ended

 

($ and shares in thousands, except per share amounts)

 

February 28,

2019

 

 

February 28,

2018

 

 

February 28,

2019

 

 

February 28,

2018

 

Operating revenues

 

$

109,182

 

 

$

130,339

 

 

$

221,133

 

 

$

254,865

 

Cost of operating revenues

 

 

84,708

 

 

 

95,023

 

 

 

168,011

 

 

 

187,152

 

Gross profit

 

 

24,474

 

 

 

35,316

 

 

 

53,122

 

 

 

67,713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expense

 

 

8,437

 

 

 

10,020

 

 

 

16,419

 

 

 

20,245

 

General and administrative expense

 

 

16,832

 

 

 

14,086

 

 

 

31,890

 

 

 

26,004

 

Engineering and research expense

 

 

3,665

 

 

 

3,919

 

 

 

7,233

 

 

 

7,972

 

Total operating expenses

 

 

28,934

 

 

 

28,025

 

 

 

55,542

 

 

 

54,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

(4,460

)

 

 

7,291

 

 

 

(2,420

)

 

 

13,492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,178

)

 

 

(1,095

)

 

 

(2,383

)

 

 

(2,331

)

Interest income

 

 

751

 

 

 

311

 

 

 

1,405

 

 

 

686

 

Other (expense) income, net

 

 

(181

)

 

 

(831

)

 

 

11

 

 

 

(1,379

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

 

(5,068

)

 

 

5,676

 

 

 

(3,387

)

 

 

10,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

(1,628

)

 

 

3,941

 

 

 

(1,159

)

 

 

5,548

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

(3,440

)

 

$

1,735

 

 

$

(2,228

)

 

$

4,920

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.32

)

 

$

0.16

 

 

$

(0.21

)

 

$

0.46

 

Diluted

 

$

(0.32

)

 

$

0.16

 

 

$

(0.21

)

 

$

0.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

10,786

 

 

 

10,743

 

 

 

10,776

 

 

 

10,724

 

Diluted

 

 

10,786

 

 

 

10,765

 

 

 

10,776

 

 

 

10,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.31

 

 

$

0.30

 

 

$

0.62

 

 

$

0.60

 

 

See accompanying notes to condensed consolidated financial statements.

- 3 -


Table of Contents

 

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

 

 

Three months ended

 

 

Six months ended

 

($ in thousands)

 

February 28,

2019

 

 

February 28,

2018

 

 

February 28,

2019

 

 

February 28,

2018

 

Net earnings (loss)

 

$

(3,440

)

 

$

1,735

 

 

$

(2,228

)

 

$

4,920

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defined benefit pension plan adjustment, net of tax

 

 

38

 

 

 

37

 

 

 

67

 

 

 

69

 

Foreign currency translation adjustment, net of hedging activities and tax

 

 

852

 

 

 

1,814

 

 

 

1,958

 

 

 

780

 

Total other comprehensive (loss) income, net of tax

     expense (benefit) of $75, ($306), $301 and ($274),

     respectively

 

 

890

 

 

 

1,851

 

 

 

2,025

 

 

 

849

 

Total comprehensive income (loss)

 

$

(2,550

)

 

$

3,586

 

 

$

(203

)

 

$

5,769

 

 

See accompanying notes to condensed consolidated financial statements.

- 4 -


Table of Contents

 

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

($ and shares in thousands, except par values)

 

February 28,

2019

 

 

February 28,

2018

 

 

August 31,

2018

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

102,778

 

 

$

102,211

 

 

$

160,787

 

Receivables, net of allowance of $3,224, $7,736, and $3,585,

   respectively

 

 

88,576

 

 

 

96,738

 

 

 

69,107

 

Inventories, net

 

 

99,984

 

 

 

102,975

 

 

 

79,233

 

Prepaid expenses

 

 

4,948

 

 

 

5,339

 

 

 

3,883

 

Assets held-for-sale

 

 

2,744

 

 

 

 

 

 

10,837

 

Other current assets

 

 

18,196

 

 

 

6,092

 

 

 

7,204

 

Total current assets

 

 

317,226

 

 

 

313,355

 

 

 

331,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment:

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

181,644

 

 

 

192,898

 

 

 

171,450

 

Less accumulated depreciation

 

 

(116,338

)

 

 

(120,220

)

 

 

(114,202

)

Property, plant, and equipment, net

 

 

65,306

 

 

 

72,678

 

 

 

57,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangibles, net

 

 

25,853

 

 

 

40,677

 

 

 

27,376

 

Goodwill

 

 

64,591

 

 

 

77,296

 

 

 

64,671

 

Deferred income tax assets

 

 

6,484

 

 

 

5,773

 

 

 

6,645

 

Other noncurrent assets

 

 

20,645

 

 

 

12,575

 

 

 

13,265

 

Total assets

 

$

500,105

 

 

$

522,354

 

 

$

500,256

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

37,419

 

 

$

46,599

 

 

$

30,530

 

Current portion of long-term debt

 

 

207

 

 

 

203

 

 

 

205

 

Liabilities held-for-sale

 

 

 

 

 

 

 

 

2,424

 

Other current liabilities

 

 

44,825

 

 

 

57,720

 

 

 

46,935

 

Total current liabilities

 

 

82,451

 

 

 

104,522

 

 

 

80,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension benefits liabilities

 

 

5,732

 

 

 

6,152

 

 

 

5,874

 

Long-term debt

 

 

116,466

 

 

 

116,673

 

 

 

116,570

 

Deferred income tax liabilities

 

 

991

 

 

 

1,179

 

 

 

1,083

 

Other noncurrent liabilities

 

 

22,622

 

 

 

20,768

 

 

 

19,769

 

Total liabilities

 

 

228,262

 

 

 

249,294

 

 

 

223,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock of $1 par value -

 

 

 

 

 

 

 

 

 

 

 

 

Authorized 2,000 shares; no shares issued and outstanding

 

 

 

 

 

 

 

 

 

Common stock of $1 par value - authorized 25,000 shares;

   18,870, 18,841, and 18,841 shares issued, respectively

 

 

18,870

 

 

 

18,841

 

 

 

18,841

 

Capital in excess of stated value

 

 

69,772

 

 

 

66,625

 

 

 

68,465

 

Retained earnings

 

 

477,027

 

 

 

476,091

 

 

 

484,886

 

Less treasury stock - at cost, 8,083 shares

 

 

(277,238

)

 

 

(277,238

)

 

 

(277,238

)

Accumulated other comprehensive loss, net

 

 

(16,588

)

 

 

(11,259

)

 

 

(18,088

)

Total shareholders' equity

 

 

271,843

 

 

 

273,060

 

 

 

276,866

 

Total liabilities and shareholders' equity

 

$

500,105

 

 

$

522,354

 

 

$

500,256

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

- 5 -


Table of Contents

 

 

 

 

Lindsay Corporation and Subsidiaries

 

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

 

($ and shares in thousands, except per share amounts)

 

 

 

Shares of

common

stock

 

 

Shares of

treasury

stock

 

 

Common

stock

 

 

Capital in

excess of

stated

value

 

 

Retained

earnings

 

 

Treasury

stock

 

 

Accumulated

other

comprehensive

(loss) income,

net

 

 

Total

shareholders’

equity

 

Balance at August 31, 2018

 

 

18,841

 

 

 

8,083

 

 

$

18,841

 

 

$

68,465

 

 

$

484,886

 

 

$

(277,238

)

 

$

(18,088

)

 

$

276,866

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,228

)

 

 

 

 

 

 

 

 

(2,228

)

     Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,025

 

 

 

2,025

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(203

)

Cash dividends ($0.62) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,688

)

 

 

 

 

 

 

 

 

(6,688

)

Issuance of common shares under share compensation plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Proceeds from exercise of

     stock options

 

 

29

 

 

 

 

 

 

29

 

 

 

148

 

 

 

 

 

 

 

 

 

 

 

 

177

 

     Common stock withheld for

     payroll tax obligations

 

 

 

 

 

 

 

 

 

 

 

(1,124

)

 

 

 

 

 

 

 

 

 

 

 

(1,124

)

Share-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

2,283

 

 

 

 

 

 

 

 

 

 

 

 

2,283

 

Cumulative impact of ASC 606

   adoption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

532

 

 

 

 

 

 

 

 

 

532

 

Cumulative impact of ASU

   2018-02 adoption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

525

 

 

 

 

 

 

(525

)

 

 

 

Balance at February 28, 2019

 

 

18,870

 

 

 

8,083

 

 

$

18,870

 

 

$

69,772

 

 

$

477,027

 

 

$

(277,238

)

 

 

(16,588

)

 

$

271,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at August 31, 2017

 

 

18,780

 

 

 

8,083

 

 

$

18,780

 

 

$

63,006

 

 

$

477,615

 

 

$

(277,238

)

 

$

(12,108

)

 

$

270,055

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,920

 

 

 

 

 

 

 

 

 

4,920

 

     Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

849

 

 

 

849

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,769

 

Cash dividends ($0.60) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,444

)

 

 

 

 

 

 

 

 

(6,444

)

Issuance of common shares under share compensation plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Proceeds from exercise of

     stock options

 

 

61

 

 

 

 

 

 

61

 

 

 

2,727

 

 

 

 

 

 

 

 

 

 

 

 

2,788

 

     Common stock withheld for

     payroll tax obligations

 

 

 

 

 

 

 

 

 

 

 

(833

)

 

 

 

 

 

 

 

 

 

 

 

(833

)

Share-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

1,725

 

 

 

 

 

 

 

 

 

 

 

 

1,725

 

Balance at February 28, 2018

 

 

18,841

 

 

 

8,083

 

 

$

18,841

 

 

$

66,625

 

 

$

476,091

 

 

$

(277,238

)

 

$

(11,259

)

 

$

273,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 6 -


Table of Contents

 

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Six months ended

 

($ in thousands)

 

February 28,

2019

 

 

February 28,

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

(2,228

)

 

$

4,920

 

Adjustments to reconcile net earnings (loss) to net cash provided by operating

   activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,889

 

 

 

8,599

 

Loss on sale of business

 

 

67

 

 

 

 

Provision for uncollectible accounts receivable

 

 

(315

)

 

 

228

 

Deferred income taxes

 

 

(105