Lindsay Reports 2Q Earnings
Lindsay Corporation announced results for its second quarter ended February 28, 2013. Second quarter fiscal 2013 revenues were a record $175.5 million, increasing 33% from $132.1 million in the same prior year period. Net earnings were $19.4 million compared with $12.8 million in the prior year.
Total irrigation equipment revenues increased 39% to $162.6 million from $117.0 million in the prior fiscal year’s second quarter. Domestic irrigation revenues of $117.1 million increased 41%, while international irrigation revenues of $45.5 million increased 34% due to increased demand resulting from higher commodity prices and farm incomes along with drought conditions in the United States. Infrastructure revenues decreased 15% to $12.9 million.
Gross margin was 28.7% compared to 27.6% in the prior year’s second quarter. The increase is primarily due to an increase in irrigation gross margins of approximately 1% due to a strong pricing environment combined with increased productivity and cost leverage. Operating expenses were $20.9 million compared to $17.5 million in the prior fiscal year.
Six Month Results: Total revenues for the six months ended February 28, 2013 were $322.9 million, a 28% increase from $251.3 million in the same prior year period. Net earnings were $34.1 million, compared with $15.7 million in the prior year.
Total irrigation equipment revenues increased 36% to $296.9 million from $217.7 million during the first six months of the prior fiscal year. Domestic irrigation revenues of $213.6 million increased 49%, while international irrigation revenues of $83.3 million increased 12% due to sales increases in South America and Russia. Infrastructure revenues decreased 23% to $26.0 million.
Outlook: Rick Parod, president and chief executive officer, said, “Record backlog at the end of the quarter resulted from continued robust irrigation order volumes in the second quarter along with the award of a large irrigation project in the Middle East. While contracts of this type generally generate below average gross margins, the award demonstrates the success that we are having in developing Lindsay Corporation’s position around the world.”
Parod added, “Positive farmer sentiment along with historically high farm incomes and commodity prices provide a solid backdrop for strong irrigation sales. However, expectations of record crop planting and improved yields are leading to projections of lower commodity prices, which could lead to reduced demand over the balance of 2013 and into 2014. The environment for infrastructure sales remains difficult, so we are focused on operating efficiencies and expense controls to position the segment for improved profitability as the market strengthens.”