Lindsay Corporation announced results for its second quarter ended February 28, 2015. Revenues were $141.1 million versus $152.8 million of revenues in the same prior year period.
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Net earnings were $9 million or $0.75 per diluted share compared with $13.5 million or $1.04 per diluted share in the prior year.
Total irrigation equipment revenues decreased 20 percent to $108.3 million from $135.9 million in the prior fiscal year’s second quarter. U.S. irrigation revenues of $68 million, which includes $3.5 million of revenues from the newly acquired Elecsys Corporation, decreased 27 percent primarily due to a decline in the number of irrigation systems sold as a result of the reduction in commodity prices.
International irrigation revenues of $40.3 million decreased 6 percent most notably in the Middle East and Europe. Excluding the effect of currency translation, international irrigation sales were approximately equal to the same period in the prior year.
Infrastructure revenues increased 94 percent to $32.8 million with the completion of the Golden Gate Bridge Road Zipper project and increases in road safety product sales.
Gross margin was 28 percent of sales compared to 27.9 percent of sales in the prior year’s second quarter. Gross margin in irrigation decreased by approximately 3 percentage points and infrastructure gross margin increased by approximately 14 percentage points.
The decrease in irrigation gross margins is primarily a result of pricing pressure and cost deleverage from lower sales. The increase in infrastructure gross margin was primarily due to sales mix from increases in Road Zipper and road safety product sales.
Operating expenses increased $3.3 million to $25 million compared to the second quarter of the prior fiscal year. The increase includes $1 million of Elecsys Corporation operating expenses, $1 million of acquisition and integration expenses, $0.7 million in incremental health benefit expenses and $0.3 million of commissions related to increased infrastructure project sales.
Operating expenses were 17.7 percent of sales in the second quarter of fiscal 2015 compared with 14.2 percent of sales in the prior year period. Operating margins were 10.3 percent in the second quarter, versus 13.7 percent in the prior year period.
Cash and cash equivalents of $167.2 million were $1.7 million higher compared to the prior year second quarter. During the quarter the company completed a $115 million private placement of long term debt, expanded its revolving credit agreement with Wells Fargo Bank from $30 million to $50 million, and completed the acquisition of Elecsys Corporation for $67.2 million, net of cash acquired. The long term debt is due for payment in February 2030 and bears interest at 3.82 percent.
The company also repurchased 224,307 shares for $19.4 million during the second quarter and a total of 605,926 shares for $49.4 million during the first six months of fiscal 2015.
Since the initiation of the share repurchase plan, the company has purchased a total of 1.1 million shares for $90.4 million, with $59.6 million remaining authorized as of February 28, 2015 for additional repurchases.
Backlog of unshipped orders at February 28, 2015 was $74.3 million compared with $89.3 million at February 28, 2014 and $68.3 million at November 30, 2014.
The backlog at February 28, 2014 and November 30, 2014 included $12.7 million for the Golden Gate Bridge project, now completed. The current period includes $7.9 million of backlog from Elecsys Corporation. ■