Omaha, Neb. — Lindsay Corporation has announced results for its second quarter of fiscal 2020, which ended on Feb. 29, 2020.

Second Quarter Financial Summary

Operating revenues for the three months ended Feb. 29, 2020 were $113.8 million, an increase of 4% compared to $109.2 million for the three months ended Feb. 28, 2019. Irrigation segment revenues decreased 4% to $92.1 million and infrastructure segment revenues increased 62% to $21.7 million.

Net earnings for the three months ended Feb. 28, 2019 were reduced by after-tax costs of $3.7 million, or $0.34 per diluted share, related to the Company’s "Foundation for Growth” initiative. These costs primarily consisted of professional consulting fees and severance costs and were not incurred during the fiscal quarter ended Feb. 29, 2020. 

Second Quarter Segment Results

Irrigation revenues decreased $3.7 million and infrastructure revenues increased $8.3 million during the three months ended Feb. 29, 2020. The irrigation segment provided 81% of the Company’s revenue during the three months ended Feb. 29, 2020 as compared to 88% for the three months ended Feb. 28, 2019.

North America irrigation revenues for the three months ended Feb. 29, 2020 of $65.7 million increased $8.0 million, or 14%, from $57.7 million for the three months ended Feb. 28, 2019. The increase resulted primarily from higher sales of replacement parts, increased irrigation equipment unit volume and higher revenue from engineering project services.  

International irrigation revenues for the three months ended Feb. 29, 2020 of $26.4 million decreased by $11.7 million, or 31%, from $38.1 million for the three months ended Feb. 28, 2019. The decrease was due primarily to a large project sale in a developing market in the prior year that did not repeat in the current year period. Additionally, international irrigation revenues decreased $1.1 million, or 3%, due to differences in foreign currency translation rates compared to the same prior year period.

Infrastructure segment revenues for the three months ended Feb. 29, 2020 of $21.7 million increased $8.3 million, or 62%, from $13.4 million for the three months ended Feb. 28, 2019. The increase resulted from higher Road Zipper System sales and lease revenues and an increase in sales of road safety products compared to the prior year.

Last Six Months Segment Results

Operating revenues for the six months ended Feb. 29, 2020 increased 1% to $223.2 million from $221.1 million for the six months ended Feb. 28, 2019, as infrastructure revenues increased $11.0 million while irrigation revenues decreased $8.9 million. The irrigation segment provided 78% of the Company’s revenue during the six months ended Feb. 29, 2020 as compared to 83% for the six months ended Feb. 28, 2019.

North America irrigation revenues for the six months ended Feb. 29, 2020 of $118.3 million increased $4.2 million, or 4%, from $114.1 million for the six months ended Feb. 28, 2019. The impact of increased irrigation system unit volume and higher revenue from engineering project services was partially offset by a decrease of approximately $3.3 million attributable to a business divestiture completed in the first quarter of fiscal 2019.

International irrigation revenues for the six months ended Feb. 29, 2020 of $56.1 million decreased $13.1 million, or 19%, from $69.2 million for the six months ended Feb. 28, 2019.  The decrease resulted primarily from a lower level of project activity in developing markets compared to the prior fiscal year. Additionally, international irrigation revenues decreased $2.2 million, or 3%, due to differences in foreign currency translation rates compared to the same prior year period.  

Infrastructure segment revenues for the six months ended Feb. 29, 2020 of $48.8 million increased $11.0 million, or 29%, from $37.8 million for the six months ended Feb. 28, 2019. The increase resulted from higher Road Zipper System sales and lease revenues and an increase in sales of road safety products compared to the prior year.

Analysis

Lindsay, which belongs to the Zacks Manufacturing - Farm Equipment industry, posted revenues of $113.79 million for the quarter ended February 2020, surpassing the Zacks Consensus Estimate by 0.11%. This compares to year-ago revenues of $109.18 million. The company has topped consensus revenue estimates just once over the last four quarters.

"Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well," said Zacks analysts. "In terms of the Zacks Industry Rank, Manufacturing - Farm Equipment is currently in the bottom 12% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1."