LINDSAY CORP - Quarter Report: 2009 November (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended November 30, 2009
OR
o | 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.) |
2222 N 111th Street, Omaha, Nebraska | 68164 | |
(Address of principal executive offices) | (Zip Code) |
402-829-6800
(Registrants telephone number, including area code)
(Registrants 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 þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
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 and post such files). Yes
o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act:
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
Yes o No þ
As of January 4, 2010, 12,475,448 shares of the registrants common stock were outstanding.
Lindsay Corporation
INDEX FORM 10-Q
INDEX FORM 10-Q
Page No.
Part I FINANCIAL INFORMATION |
||||
ITEM 1 Financial Statements |
||||
Condensed Consolidated Statements of Operations for the three months
ended November 30, 2009 and 2008 |
3 | |||
Condensed Consolidated Balance Sheets, November 30, 2009 and 2008 and
August 31, 2009 |
4 | |||
Condensed Consolidated Statements of Cash Flows for the three months
ended November 30, 2009 and 2008 |
5 | |||
Notes to Condensed Consolidated Financial Statements |
6-17 | |||
ITEM 2 Managements Discussion and Analysis of Financial Condition
and Results of Operations |
18-24 | |||
ITEM 3 Quantitative and Qualitative Disclosures about Market Risk |
24-25 | |||
ITEM 4 Controls and Procedures |
25 | |||
Part II OTHER INFORMATION |
||||
ITEM 1 Legal Proceedings |
25-26 | |||
ITEM 1 A Risk Factors |
26 | |||
ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds |
26 | |||
ITEM 6 Exhibits |
26 | |||
SIGNATURE |
27 |
- 2 -
Part I
FINANCIAL INFORMATION
ITEM 1 Financial Statements
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(unaudited)
Three months ended | ||||||||
November 30, | ||||||||
(in thousands, except per share amounts) | 2009 | 2008 | ||||||
Operating revenues |
$ | 85,970 | $ | 113,121 | ||||
Cost of operating revenues |
60,166 | 84,472 | ||||||
Gross profit |
25,804 | 28,649 | ||||||
Operating expenses: |
||||||||
Selling expense |
5,523 | 6,763 | ||||||
General and administrative expense |
7,336 | 8,349 | ||||||
Engineering and research expense |
1,784 | 1,741 | ||||||
Total operating expenses |
14,643 | 16,853 | ||||||
Operating income |
11,161 | 11,796 | ||||||
Other income (expense): |
||||||||
Interest expense |
(461 | ) | (625 | ) | ||||
Interest income |
83 | 316 | ||||||
Other income (expense), net |
145 | (1,706 | ) | |||||
Earnings before income taxes |
10,928 | 9,781 | ||||||
Income tax provision |
4,251 | 3,459 | ||||||
Net earnings |
$ | 6,677 | $ | 6,322 | ||||
Basic net earnings per share |
$ | 0.54 | $ | 0.52 | ||||
Diluted net earnings per share |
$ | 0.53 | $ | 0.51 | ||||
Weighted average shares outstanding |
12,380 | 12,250 | ||||||
Diluted effect of stock equivalents |
161 | 235 | ||||||
Weighted average shares outstanding assuming dilution |
12,541 | 12,485 | ||||||
Cash dividends per share |
$ | 0.080 | $ | 0.075 | ||||
The accompanying notes are an integral part of the condensed consolidated financial
statements.
- 3 -
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) | (Unaudited) | |||||||||||
November 30, | November 30, | August 31, | ||||||||||
($ in thousands, except par values) | 2009 | 2008 | 2009 | |||||||||
ASSETS |
||||||||||||
Current Assets: |
||||||||||||
Cash and cash equivalents |
$ | 91,750 | $ | 28,298 | $ | 85,929 | ||||||
Receivables, net of allowance, $2,097, $1,241, and $1,864, respectively |
51,552 | 84,089 | 42,862 | |||||||||
Inventories, net |
44,327 | 72,488 | 46,255 | |||||||||
Deferred income taxes |
6,877 | 7,754 | 6,881 | |||||||||
Other current assets |
6,660 | 6,627 | 7,602 | |||||||||
Total current assets |
201,166 | 199,256 | 189,529 | |||||||||
Property, plant and equipment, net |
59,949 | 55,669 | 59,641 | |||||||||
Other intangible assets, net |
29,045 | 29,195 | 29,100 | |||||||||
Goodwill, net |
24,530 | 23,333 | 24,174 | |||||||||
Other noncurrent assets |
5,646 | 4,973 | 5,453 | |||||||||
Total assets |
$ | 320,336 | $ | 312,426 | $ | 307,897 | ||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||
Current Liabilities: |
||||||||||||
Accounts payable |
$ | 26,291 | $ | 33,300 | $ | 20,008 | ||||||
Current portion of long-term debt |
6,171 | 6,171 | 6,171 | |||||||||
Other current liabilities |
31,958 | 33,767 | 33,008 | |||||||||
Total current liabilities |
64,420 | 73,238 | 59,187 | |||||||||
Pension benefits liabilities |
6,407 | 5,606 | 6,407 | |||||||||
Long-term debt |
17,912 | 24,082 | 19,454 | |||||||||
Deferred income taxes |
10,510 | 12,197 | 10,391 | |||||||||
Other noncurrent liabilities |
4,598 | 3,572 | 4,800 | |||||||||
Total liabilities |
103,847 | 118,695 | 100,239 | |||||||||
Shareholders equity: |
||||||||||||
Preferred stock, ($1 par value, 2,000,000 shares authorized, no shares
issued and outstanding) |
| | | |||||||||
Common stock, ($1 par value, 25,000,000 shares authorized,
18,173,896, 18,093,191 and 18,128,743 shares issued at November 30, 2009
and 2008 and August 31, 2009, respectively) |
18,174 | 18,093 | 18,129 | |||||||||
Capital in excess of stated value |
29,240 | 26,818 | 28,944 | |||||||||
Retained earnings |
255,273 | 245,019 | 249,588 | |||||||||
Less treasury stock (at cost, 5,763,448, 5,813,448 and 5,763,448 shares
at November 30, 2009 and 2008 and August 31, 2009, respectively) |
(91,998 | ) | (92,796 | ) | (91,998 | ) | ||||||
Accumulated other comprehensive income, net |
5,800 | (3,403 | ) | 2,995 | ||||||||
Total shareholders equity |
216,489 | 193,731 | 207,658 | |||||||||
Total liabilities and shareholders equity |
$ | 320,336 | $ | 312,426 | $ | 307,897 | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
- 4 -
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended | ||||||||
November 30, | ||||||||
($ in thousands) | 2009 | 2008 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net earnings |
$ | 6,677 | $ | 6,322 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
2,681 | 2,686 | ||||||
Provision for uncollectible accounts receivable |
149 | 27 | ||||||
Deferred income taxes |
(447 | ) | 338 | |||||
Stock-based compensation expense |
613 | 457 | ||||||
Other, net |
(93 | ) | 67 | |||||
Changes in assets and liabilities: |
||||||||
Receivables, net |
(7,813 | ) | 1,507 | |||||
Inventories, net |
2,222 | (22,684 | ) | |||||
Other current assets |
(437 | ) | (44 | ) | ||||
Accounts payable |
5,916 | 2,128 | ||||||
Other current liabilities |
(3,452 | ) | (6,489 | ) | ||||
Current taxes payable |
4,276 | (867 | ) | |||||
Other noncurrent assets and liabilities |
(769 | ) | 225 | |||||
Net cash provided by (used in) operating activities |
9,523 | (16,327 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchases of property, plant and equipment |
(1,436 | ) | (2,275 | ) | ||||
Proceeds from sale of property, plant and equipment |
92 | 6 | ||||||
Acquisition of business, net of cash acquired |
(132 | ) | | |||||
Proceeds from settlement of net investment hedge |
| 859 | ||||||
Net cash used in investing activities |
(1,476 | ) | (1,410 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Exercise of stock options and issuance of other stock awards |
(507 | ) | 116 | |||||
Principal payments on long-term debt |
(1,543 | ) | (1,543 | ) | ||||
Net payments on revolving line of credit |
| (1,630 | ) | |||||
Excess tax benefits from stock-based compensation |
310 | 328 | ||||||
Dividends paid |
(992 | ) | (920 | ) | ||||
Net cash used in financing activities |
(2,732 | ) | (3,649 | ) | ||||
Effect of exchange rate changes on cash |
506 | (1,076 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
5,821 | (22,462 | ) | |||||
Cash and cash equivalents, beginning of period |
85,929 | 50,760 | ||||||
Cash and cash equivalents, end of period |
$ | 91,750 | $ | 28,298 | ||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
- 5 -
Lindsay Corporation and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
(1) Condensed Consolidated Financial Statements
The condensed consolidated financial statements are presented in accordance with the requirements
of Form 10-Q and do not include all of the disclosures normally required by U.S. generally accepted
accounting principles for financial statements contained in Lindsay Corporations (the Company)
annual Form 10-K filing. Accordingly, these condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes thereto included in the
Companys Form 10-K for the fiscal year ended August 31, 2009.
In the opinion of management, the condensed consolidated financial statements of the Company
reflect all adjustments of a normal recurring nature necessary to present a fair statement of the
financial position and the results of operations and cash flows for the respective interim periods.
The results for interim periods are not necessarily indicative of trends or results expected by
the Company for a full year.
Notes to the condensed consolidated financial statements describe various elements of the
financial statements and the accounting policies, estimates, and assumptions applied by management.
While actual results could differ from those estimated by management in the preparation of the
condensed consolidated financial statements, management believes that the accounting policies,
assumptions, and estimates applied promote the representational faithfulness, verifiability,
neutrality, and transparency of the accounting information included in the condensed consolidated
financial statements. Certain reclassifications have been made to prior financial statements and
notes to conform to the current year presentation. These reclassifications were not material to
the Companys condensed consolidated financial statements.
(2) Net Earnings per Share
Basic net earnings per share is computed using the weighted-average number of common shares
outstanding during the period. Diluted net earnings per share is computed using the
weighted-average number of common shares outstanding plus dilutive potential common shares
outstanding during the period. Dilutive potential common shares consist of stock options and
restricted stock units to the extent they are not anti-dilutive. Performance stock units are
excluded from the calculation of dilutive potential common shares until the performance conditions
have been satisfied. At November 30, 2009, the performance conditions for the Companys
outstanding performance stock units had not been satisfied for the units granted on November 16,
2007, November 3, 2008 and November 12, 2009.
Employee equity share options, nonvested shares and similar equity instruments granted by the
Company are treated as potential common shares outstanding in computing diluted net earnings per
share. The Companys diluted common shares outstanding reported in each period include the dilutive
effect of restricted stock units, in-the-money options, and performance stock units for which
performance conditions have been satisfied and is calculated based on the average share price for
each fiscal period using the treasury stock method. Under the treasury stock method, the amount the
employee must pay for exercising stock options, the amount of compensation cost for future service
that the Company has not yet recognized, and the amount of excess tax benefits that would be
recorded in additional paid-in capital when exercised are assumed to be used to repurchase shares.
There were 571 restricted stock units excluded from the calculation of diluted earnings per
share for the three months ended November 30, 2009, since their inclusion would have been
anti-dilutive. There were no options or restricted stock units excluded from the calculation of
diluted earnings per share as a result of being anti-dilutive for the three months ended November
30, 2008.
- 6 -
(3) Comprehensive Income
The accumulated other comprehensive income, net, shown in the Companys consolidated balance sheets
includes the unrealized gain (loss) on cash flow hedges, changes in the transition obligation and
net actuarial losses from the defined benefit pension plan and the accumulated foreign currency
translation adjustment, net of hedging activities. The following table shows the difference
between the Companys reported net earnings and its comprehensive income:
Three months ended | ||||||||
November 30, | ||||||||
$ in thousands | 2009 | 2008 | ||||||
Comprehensive income: |
||||||||
Net earnings |
$ | 6,677 | $ | 6,322 | ||||
Other comprehensive income(1): |
||||||||
Defined benefit pension plan, net of tax |
28 | 27 | ||||||
Unrealized gain (loss) on cash flow hedges, net of tax |
(167 | ) | 530 | |||||
Foreign currency translation, net of hedging activities |
2,944 | (9,053 | ) | |||||
Total comprehensive income (loss) |
$ | 9,482 | $ | ( 2,174 | ) | |||
(1) | Net of tax (benefit) expense of ($33) and $437 for the three months ended November 30, 2009 and 2008, respectively. |
(4) Income Taxes
It is the Companys policy to report income tax expense for interim periods using an estimated
annual effective income tax rate. However, the tax effects of significant or unusual items are not
considered in the estimated annual effective tax rate. The tax effects of such discrete events are
recognized in the interim period in which the events occur.
The Company recorded income tax expense of $4.3 million and $3.5 million for the three months
ended November 30, 2009 and 2008, respectively. The effective tax rate used to calculate income tax
expense before discrete items was 35.1% and 35.4% for the three month periods ended November 30,
2009 and 2008, respectively. The Companys effective tax rate was slightly higher than the U.S.
federal statutory tax rate primarily due to foreign, state and local taxes. These items were
partially offset by the domestic production activities deduction and other tax credits.
For the three months ended November 30, 2009, the Company recorded a discrete item resulting
in $0.4 million of additional tax expense in the current quarter. In fiscal 2004, the European
Commission (EC) overturned a tax deduction previously allowed by the French Tax Authorities and
taken by the Companys French subsidiary in a period prior to being owned by the Company. In the
current period, the Company determined it had not previously recorded the tax obligation resulting
from the EC ruling. The Company corrected the error and recorded an immaterial adjustment of $0.4
million to increase tax expense to reflect the correction of the tax obligation incurred during
fiscal 2004. The Company has concluded that the impact of this correction is not material to its
previously issued financial statements.
(5) Inventories
Inventories are stated at the lower of cost or market. Cost is determined by the last-in,
first-out (LIFO) method for the Companys Lindsay, Nebraska inventory and two warehouses in Idaho
and Texas. Cost is determined by the first-in, first-out (FIFO) method for inventory at the
Companys Omaha, Nebraska warehouse, its wholly-owned subsidiaries, Barrier Systems, Inc. (BSI)
and Watertronics, LLC, China and non-U.S. warehouse locations. Cost is determined by the weighted
average cost method for inventory at the Companys other operating locations in Washington State,
France, Brazil, Italy and South Africa. At all locations, the Company reserves for obsolete, slow
moving, and excess inventory by estimating the net realizable value based on the potential future
use of such inventory.
- 7 -
November 30, | November 30, | August 31, | ||||||||||
$ in thousands | 2009 | 2008 | 2009 | |||||||||
Inventory: |
||||||||||||
FIFO inventory |
$ | 32,828 | $ | 42,164 | $ | 16,561 | ||||||
LIFO reserves |
(6,283 | ) | (9,581 | ) | (7,190 | ) | ||||||
LIFO inventory |
26,545 | 32,583 | 9,371 | |||||||||
Weighted average inventory |
17,251 | 19,845 | 14,762 | |||||||||
Other FIFO inventory |
2,611 | 21,304 | 23,765 | |||||||||
Obsolescence reserve |
(2,080 | ) | (1,244 | ) | (1,643 | ) | ||||||
Total inventories |
$ | 44,327 | $ | 72,488 | $ | 46,255 | ||||||
The estimated percentage distribution between major classes of inventory before reserves is as
follows:
November 30, | November 30, | August 31, | ||||||||||
2009 | 2008 | 2009 | ||||||||||
Raw materials |
11 | % | 13 | % | 7 | % | ||||||
Work in process |
8 | % | 8 | % | 8 | % | ||||||
Finished goods and purchased parts |
81 | % | 79 | % | 85 | % |
(6) Property, Plant and Equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization,
as follows:
November 30, | November 30, | August 31, | ||||||||||
$ in thousands | 2009 | 2008 | 2009 | |||||||||
Operating property, plant and equipment: |
||||||||||||
Land |
$ | 2,297 | $ | 2,195 | $ | 2,271 | ||||||
Buildings |
29,198 | 23,140 | 28,622 | |||||||||
Equipment |
63,222 | 57,726 | 60,717 | |||||||||
Other |
5,666 | 7,202 | 6,863 | |||||||||
Total operating property, plant and equipment |
100,383 | 90,263 | 98,473 | |||||||||
Accumulated depreciation |
(56,667 | ) | (51,079 | ) | (55,077 | ) | ||||||
Total operating property, plant and equipment, net |
$ | 43,716 | $ | 39,184 | $ | 43,396 | ||||||
Leased property: |
||||||||||||
Machines |
4,280 | 3,522 | 4,248 | |||||||||
Barriers |
16,756 | 15,694 | 16,253 | |||||||||
Total leased property |
$ | 21,036 | $ | 19,216 | $ | 20,501 | ||||||
Accumulated depreciation |
(4,803 | ) | (2,731 | ) | (4,256 | ) | ||||||
Total leased property, net |
$ | 16,233 | $ | 16,485 | $ | 16,245 | ||||||
Property, plant and equipment, net |
$ | 59,949 | $ | 55,669 | $ | 59,641 | ||||||
Depreciation expense was $2.0 million and $1.9 million for the three months ended November 30,
2009 and 2008, respectively.
- 8 -
(7) Credit Arrangements
Euro Line of Credit
The Companys wholly-owned European subsidiary, Lindsay Europe, has an unsecured revolving
line of credit with Societe Generale, a European commercial bank, under which it could borrow up to
2.3 million Euros, which equates to approximately USD $3.4 million as of November 30, 2009, for
working capital purposes (the Euro Line of Credit). As of November 30, 2009 and 2008 and August
31, 2009, there were no borrowings outstanding on this credit agreement. Under the terms of the
Euro Line of Credit, borrowings, if any, bear interest at a floating rate in effect from time to
time designated by the commercial bank as the Euro Interbank Offered Rate plus 150 basis points
(1.97% at November 30, 2009). Unpaid principal and interest is due by January 31, 2010, which is
the termination date of the Euro Line of Credit.
BSI Term Note
The Company entered into an unsecured $30.0 million Term Note and Credit Agreement, effective
June 1, 2006, with Wells Fargo Bank, N.A. (the BSI Term Note) to partially finance the
acquisition of BSI. Borrowings under the BSI Term Note bear interest at a rate equal to LIBOR plus
50 basis points. The Company has fixed the rate at 6.05% through an interest rate swap as
described in Note 8, Financial Derivatives. Principal is repaid quarterly in equal payments of
$1.1 million over a seven-year period that began in September of 2006. The BSI Term Note is due in
June of 2013.
Snoline Term Note
The Companys wholly-owned Italian subsidiary, Snoline S.P.A. (Snoline) has an unsecured
$13.2 million seven-year Term Note and Credit Agreement with Wells Fargo Bank, N.A. that was
effective on December 27, 2006 (the Snoline Term Note). Borrowings under the Snoline Term Note
are guaranteed by the Company and bear interest at a rate equal to LIBOR plus 50 basis points. The
Snoline Term Note is due in December of 2013. On the same day, the Company entered into a cross
currency swap transaction obligating the Company to make quarterly payments of 0.4 million Euros
per quarter over the same seven-year period as the Snoline Term Note and to receive payments of
$0.5 million per quarter over a seven year period commencing March 27, 2007. This is approximately
equivalent to converting the $13.2 million seven-year Snoline Term Note into a 10.0 million Euro
seven-year term note at a fixed rate of 4.7% as described in Note 8, Financial Derivatives.
Revolving Credit Agreement
The Company entered into an unsecured $30.0 million Revolving Credit Note and Credit
Agreement, each effective as of January 24, 2008, with Wells Fargo Bank, N.A. (the Revolving
Credit Agreement). The borrowings from the Revolving Credit Agreement will primarily be used for
working capital purposes and funding acquisitions. At November 30, 2009 and 2008 and August 31,
2009, there was no outstanding balance on the Revolving Credit Agreement.
Borrowings under the Revolving Credit Agreement bear interest at a rate equal to LIBOR plus 50
basis points. Interest is paid on a monthly to quarterly basis depending on loan type. The
Company also pays an annual commitment fee of 0.125% on the unused portion of the Revolving Credit
Agreement. Unpaid principal and interest is due by January 23, 2010, which is the termination date
of the Revolving Credit Agreement.
The BSI Term Note, the Snoline Term Note and the Revolving Credit Agreement (collectively, the
Notes) each contain the same covenants, including certain covenants relating to the Companys
financial condition. Upon the occurrence of any event of default of these covenants specified in
the Notes, including a change in control of the Company (as defined in the Notes), all amounts due
thereunder may be declared to be immediately due and payable.
- 9 -
Outstanding long-term debt consists of the following:
November 30, | November 30, | August 31, | ||||||||||
$ in thousands | 2009 | 2008 | 2009 | |||||||||
BSI Term Note |
$ | 16,072 | $ | 20,357 | $ | 17,143 | ||||||
Snoline Term Note |
8,011 | 9,896 | 8,482 | |||||||||
Less current portion |
(6,171 | ) | (6,171 | ) | (6,171 | ) | ||||||
Total long-term debt |
$ | 17,912 | $ | 24,082 | $ | 19,454 | ||||||
Interest expense was $0.5 million and $0.6 million for the three months ended November 30,
2009 and 2008, respectively.
Principal payments due on long-term debt are as follows:
Due within: | ||||
1 year |
$ | 6,171 | ||
2 years |
6,171 | |||
3 years |
6,171 | |||
4 years |
5,099 | |||
5 years |
471 | |||
Thereafter |
| |||
$ | 24,083 | |||
(8) Financial Derivatives
The Company uses certain financial derivatives to mitigate its exposure to volatility in interest
rates and foreign currency exchange rates. The Company uses these derivative instruments to hedge
exposures in the ordinary course of business and does not invest in derivative instruments for
speculative purposes. Each derivative is designated as a cash flow hedge, a hedge of a net
investment, or remains undesignated. The Company records the fair value of these derivative
instruments on the balance sheet. For those instruments that are designated as a cash flow hedge
and meet certain documentary and analytical requirements to qualify for hedge accounting treatment,
changes in the fair value for the effective portion are reported in other comprehensive income
(OCI), net of related income tax effects, and are reclassified to the income statement when the
effects of the item being hedged are recognized in the income statement. Changes in fair value of
derivative instruments that qualify as hedges of a net investment in foreign operations are
recorded as a component of accumulated currency translation adjustment in accumulated other
comprehensive income (AOCI), net of related income tax effects. Changes in the fair value of
undesignated hedges are recognized currently in the income statement as other income (expense).
All changes in derivative fair values due to ineffectiveness are recognized currently in income.
- 10 -
Financial derivatives consist of the following:
Fair Values of Derivative Instruments | ||||||||||||||
Asset (Liability) Derivatives | ||||||||||||||
November 30, | November 30, | August 31, | ||||||||||||
$ in thousands | Balance Sheet Location | 2009 | 2008 | 2009 | ||||||||||
Derivatives designated as hedging
instruments: |
||||||||||||||
Foreign currency forward contracts |
Other current liabilities | $ | | $ | (10 | ) | $ | | ||||||
Interest rate swap |
Other current liabilities | (568 | ) | (709 | ) | (602 | ) | |||||||
Interest rate swap |
Other noncurrent liabilities | (721 | ) | (1,120 | ) | (732 | ) | |||||||
Cross currency swap |
Other current liabilities | (519 | ) | | (425 | ) | ||||||||
Cross currency swap |
Other noncurrent liabilities | (1,071 | ) | | (847 | ) | ||||||||
Cross currency swap |
Other noncurent assets | | 13 | | ||||||||||
Total derivatives designated as hedging
instruments1 |
$ | (2,879 | ) | $ | (1,826 | ) | $ | (2,606 | ) | |||||
Derivatives not designated as hedging
instruments: |
||||||||||||||
Foreign currency forward contracts |
Other current assets | $ | | $ | 97 | $ | | |||||||
Foreign currency forward contracts |
Other current liabilities | | (49 | ) | | |||||||||
Total derivatives not designated as
hedging instruments |
$ | | $ | 48 | $ | | ||||||||
1 | Accumulated other comprehensive income included losses (gains), net of related income tax effects, of $0.7 million, ($0.1) million and $0.5 million at November 30, 2009 and 2008, and August 31, 2009, respectively, related to derivative contracts designated as hedging instruments. |
Cash Flow Hedging Relationships
In order to reduce interest rate risk on the BSI Term Note, the Company entered into an
interest rate swap agreement with Wells Fargo Bank, N.A. that is designed to convert the variable
interest rate on the entire amount of this borrowing to a fixed rate of 6.05% per annum. Under the
terms of the interest rate swap, the Company receives variable interest rate payments and makes
fixed interest rate payments on an amount equal to the outstanding balance of the BSI Term Note,
thereby creating the equivalent of fixed-rate debt (see Note 7, Credit Arrangements). Changes in
the fair value of the interest rate swap designated as a hedging instrument that effectively offset
the variability of cash flows associated with variable-rate, long-term debt obligations are
reported in AOCI, net of related income tax effects.
Similarly, the Company entered into a cross currency swap transaction with Wells Fargo Bank,
N.A. fixing the conversion rate of Euro to U.S. dollars for the Snoline Term Note at 1.3195 and
obligating the Company to make quarterly payments of 0.4 million Euros per quarter over the same
seven-year period as the Snoline Term Note and to receive payments of $0.5 million per quarter. In
addition, the variable interest rate was converted to a fixed rate of 4.7%. This is approximately
equivalent to converting the $13.2 million seven-year Snoline Term Note into a 10.0 million Euro
seven-year term note at a fixed rate of 4.7%. Under the terms of the cross currency swap, the
Company receives variable interest rate payments and makes fixed interest rate payments, thereby
creating the equivalent of fixed-rate debt (see Note 7, Credit Arrangements). Changes in the fair
value of the cross currency swap designated as a hedging instrument that effectively offset the
hedged risks are reported in AOCI, net of related income tax effects.
In order to reduce exposures related to changes in foreign currency exchange rates, the
Company, at times, may enter into forward exchange or option contracts for transactions denominated
in a currency other than the functional currency for certain of our operations. This activity
primarily relates to economically hedging against foreign currency risk in purchasing inventory,
sales of finished goods, and future settlement of foreign denominated assets and liabilities.
Changes in the fair value of the forward exchange contracts or option contracts designated as
hedging instruments that effectively offset the hedged risks are reported in AOCI, net of related
income tax effects. At November 30, 2008, the Company had one forward exchange contract outstanding
designated as a cash flow hedging relationship with a value of less than $0.1 million. The Company
had no forward exchange contracts or option contracts with cash flow hedging relationships
outstanding at November 30, 2009 and August 31, 2009.
- 11 -
Derivatives Designated as Cash Flow Hedging
Relationships
Amount of Gain/(Loss) | ||||||||
Recognized in OCI on | ||||||||
Derivatives | ||||||||
Three months ended | ||||||||
November 30, | ||||||||
$ in thousands | 2009 | 2008 | ||||||
Interest rate swap |
$ | 64 | $ | (251 | ) | |||
Cross currency swap |
(231 | ) | 788 | |||||
Foreign currency
forward contracts |
| (7 | ) | |||||
Total1 |
$ | (167 | ) | $ | 530 | |||
(1) | Net of tax (benefit) expense of ($50) and $141 for the three months ended November 30, 2009 and 2008, respectively. |
Amount of (Loss) | ||||||||||
Reclassified from AOCI | ||||||||||
into Income | ||||||||||
Location of Loss | Three months ended | |||||||||
Reclassified from | November 30, | |||||||||
$ in thousands | AOCI into Income | 2009 | 2008 | |||||||
Interest rate swap |
Interest Expense | $ | (236 | ) | $ | (229 | ) | |||
Cross currency swap |
Interest Expense | (142 | ) | (104 | ) | |||||
Foreign currency
forward contracts |
Revenue | | | |||||||
Foreign currency
forward contracts |
Other income (expense) | | | |||||||
$ | (378 | ) | $ | (333 | ) | |||||
Gain/(Loss) Recognized in | ||||||||||||
Income on Derivatives | ||||||||||||
(Ineffectiveness) | ||||||||||||
Gain/(Loss) | Three months ended | |||||||||||
Recognized in Income | November 30, | |||||||||||
$ in thousands | (Ineffectiveness) | 2009 | 2008 | |||||||||
Interest rate swap |
Other income (expense) | $ | | $ | 7 | |||||||
Cross currency swap |
Other income (expense) | | | |||||||||
Foreign currency
forward contracts |
Other income (expense) | | | |||||||||
$ | | $ | 7 | |||||||||
- 12 -
Net Investment Hedging Relationships
During fiscal 2008, the Company entered into Euro foreign currency forward contracts to hedge
its Euro net investment exposure in its foreign operations. During the first quarter of fiscal
2009, the Company settled its only outstanding Euro foreign currency forward contract for a gain of
$0.5 million, net of related income tax effects, which was included in other comprehensive income
as part of the currency translation adjustment. This foreign currency forward contract qualified
as a hedge of net investments in foreign operations. At November 30, 2009 and 2008 and August 31,
2009, accumulated currency translation adjustment in AOCI reflected after-tax gains of $1.2
million, net of related income tax effects of $0.8 million related to settled foreign currency
forward contracts. For the three months ended November 30, 2009 and 2008, there were no amounts
recorded in the consolidated statement of operations related to ineffectiveness of Euro foreign
currency forward contracts. At November 30, 2009, the Company had no outstanding Euro foreign
currency forward contracts with net investment hedging relationships.
Derivatives Not Designated as Hedging Instruments
In order to reduce exposures related to changes in foreign currency exchange rates, the
Company, at times, may enter into forward exchange or option contracts for transactions denominated
in a currency other than the functional currency for certain of the Companys operations. This
activity primarily relates to economically hedging against foreign currency risk in purchasing
inventory, sales of finished goods, and future settlement of foreign denominated assets and
liabilities. Changes in the fair value of undesignated hedges are recognized currently in the
income statement as other income (expense). At November 30, 2009 and August 31, 2009, the Company
had no undesignated hedges outstanding.
Derivatives Not Designated as Hedging
Instruments
Amount Gain/(Loss) | ||||||||||||
Recognized in Income on | ||||||||||||
Derivatives | ||||||||||||
Location of | Three months ended | |||||||||||
Gain/(Loss) | November 30, | |||||||||||
$ in thousands | Recognized in Income | 2009 | 2008 | |||||||||
Foreign currency
forward contracts |
Other income (expense) | $ | | $ | 277 |
(9) Fair Value Measurements
Fair Value Measurements, which defines fair value, establishes a framework for measuring fair
value, and expands disclosures about fair value measurements was adopted by the Company for its
financial assets and liabilities, effective September 1, 2008. In addition, the Company adopted
this guidance for its nonfinancial assets and liabilities effective September 1, 2009. These
nonfinancial assets and liabilities requiring nonrecurring fair value measurements include
long-lived assets, goodwill and certain other intangible assets. These items are recognized at
fair value when they are considered other than temporarily impaired. There were no required fair
value adjustments for assets and liabilities measured at fair value on a non-recurring basis for
the three months ended November 30, 2009.
The Fair Value Measurements guidance establishes the fair value hierarchy that prioritizes
inputs to valuation techniques based on observable and unobservable data and categorizes the inputs
into three levels, with the highest priority given to Level 1 and the lowest priority given to
Level 3. The levels are described below.
| Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. | ||
| Level 2 Significant observable pricing inputs other than quoted prices included within Level 1 that are either directly or indirectly observable as of the reporting date. Essentially, this represents inputs that are derived principally from or corroborated by observable market data. | ||
| Level 3 Generally unobservable inputs, which are developed based on the best information available and may include the Companys own internal data. |
- 13 -
The following table presents the Companys financial assets and liabilities measured at fair
value based upon the level within the fair value hierarchy in which the fair value measurements
fall, as of November 30, 2009:
$ in thousands | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash and cash equivalents |
$ | 91,750 | $ | | $ | | $ | 91,750 | ||||||||
Derivative Assets |
| | | | ||||||||||||
Derivative Liabilities |
| (2,879 | ) | | (2,879 | ) |
(10) Commitments and Contingencies
In 1992, the Company entered into a consent decree with the Environmental Protection Agency of the
United States Government (the EPA) in which the Company committed to remediate environmental
contamination of the groundwater that was discovered in 1982 through 1990 at and adjacent to its
Lindsay, Nebraska facility (the site). The site was added to the EPAs list of priority
superfund sites in 1989. Between 1993 and 1995, remediation plans for the site were approved by
the EPA and fully implemented by the Company. Since 1998, the primary remaining contamination at
the site has been the presence of volatile organic chemicals in the groundwater. The current
remediation process consists of drilling wells into the aquifer and pumping water to the surface to
allow these contaminants to be removed by aeration. In 2008, the Company and the EPA conducted a
periodic five-year review of the status of the remediation of the contamination of the site. In
response to the review, the Company and its environmental consultants have developed a remedial
action work plan that will allow the Company and the EPA to better identify the boundaries of the
contaminated groundwater and determine whether the contaminated groundwater is being contained by
current and planned remediation methods. The Company accrues the anticipated cost of remediation
where the obligation is probable and can be reasonably estimated. Amounts accrued and included in
balance sheet liabilities related to the remediation actions were $1.1 million, $1.0 million and
$1.3 million at November 30, 2009 and 2008, August 31, 2009, respectively. Although the Company
has been able to reasonably estimate the cost of completing the remediation actions defined in the
supplemental remedial action work plan, it is possible that testing may indicate additional
remediation is required or additional actions could be requested or mandated by the EPA at any
time, resulting in the recognition of additional related expenses.
(11) Retirement Plan
The Company has a supplemental non-qualified, unfunded retirement plan for six former employees.
Plan benefits are based on the participants average total compensation during the three highest
compensation years of employment during the ten years immediately preceding the participants
retirement or termination. This unfunded supplemental retirement plan is not subject to the
minimum funding requirements of ERISA. The Company has purchased life insurance policies on four
of the participants named in this supplemental retirement plan to provide partial funding for this
liability. Components of net periodic benefit cost for the Companys supplemental retirement plan
include:
Three months ended | ||||||||
November 30, | ||||||||
$ in thousands | 2009 | 2008 | ||||||
Net periodic benefit cost: |
||||||||
Service cost |
$ | | $ | | ||||
Interest cost |
88 | 87 | ||||||
Net amortization and deferral |
45 | 44 | ||||||
Total net periodic benefit cost |
$ | 133 | $ | 131 |
(12) Warranties
The Company generally warrants its products against certain manufacturing and other defects. These
product warranties are provided for specific periods and/or usage of the product. The accrued
product warranty costs are for a combination of specifically identified items and other incurred,
but not identified, items based primarily on historical experience of actual warranty claims. This
reserve is classified within other current liabilities.
- 14 -
The following tables provide the changes in the Companys product warranties:
Three months ended | ||||||||
November 30, | ||||||||
$ in thousands | 2009 | 2008 | ||||||
Warranties: |
||||||||
Product warranty accrual balance, beginning of period |
$ | 1,736 | $ | 2,011 | ||||
Liabilities accrued for warranties during the period |
747 | 1,076 | ||||||
Warranty claims paid during the period |
(1,006 | ) | (1,286 | ) | ||||
Product warranty accrual balance, end of period |
$ | 1,477 | $ | 1,801 | ||||
(13) Industry Segment Information
The Company manages its business activities in two reportable segments:
Irrigation: This segment includes the manufacture and marketing of center pivot, lateral
move, and hose reel irrigation systems as well as various water pumping stations and controls. The
irrigation segment consists of eight operating segments that have similar economic characteristics
and meet the aggregation criteria, including similar products, production processes, type or class
of customer and methods for distribution.
Infrastructure: This segment includes the manufacture and marketing of movable barriers,
specialty barriers and crash cushions, providing outsource manufacturing services and the
manufacturing and selling of large diameter steel tubing. The infrastructure segment consists of
three operating segments that have similar economic characteristics and meet the aggregation
criteria.
The accounting policies of the two reportable segments are described in the Accounting
Policies section of Note A to the consolidated financial statements contained in the Companys
Form 10-K for the fiscal year ended August 31, 2009. The Company evaluates the performance of its
reportable segments based on segment sales, gross profit, and operating income, with operating
income for segment purposes excluding general and administrative expenses (which include corporate
expenses), interest income, interest expense, other income and expenses, and income taxes.
Operating income for segment purposes does include selling expenses, engineering and research
expenses and other overhead charges directly attributable to the segment. There are no
inter-segment sales. Certain segment reporting prescribed by current accounting standards is not
shown as this information cannot be reasonably disaggregated by segment and is not utilized by the
Companys management.
For the three months ended November 30, 2009, more than 10% of the total revenues generated by
the Company were realized from the Mexico City road project. The Company had no single customer
representing 10% or more of its total revenues during the three months ended November 30, 2008.
- 15 -
Summarized financial information concerning the Companys reportable segments is shown in the
following table:
Three months ended | ||||||||
November 30, | ||||||||
$ in thousands | 2009 | 2008 | ||||||
Operating revenues: |
||||||||
Irrigation |
$ | 53,266 | $ | 85,964 | ||||
Infrastructure |
32,704 | 27,157 | ||||||
Total operating revenues |
$ | 85,970 | $ | 113,121 | ||||
Operating income: |
||||||||
Irrigation |
$ | 6,744 | $ | 13,312 | ||||
Infrastructure |
7,685 | 1,742 | ||||||
Segment operating income |
14,429 | 15,054 | ||||||
Unallocated general and administrative expenses |
(3,268 | ) | (3,258 | ) | ||||
Interest and other income, net |
(233 | ) | (2,015 | ) | ||||
Earnings before income taxes |
$ | 10,928 | $ | 9,781 | ||||
Total Capital Expenditures: |
||||||||
Irrigation |
$ | 521 | $ | 1,826 | ||||
Infrastructure |
915 | 449 | ||||||
$ | 1,436 | $ | 2,275 | |||||
Total Depreciation and Amortization: |
||||||||
Irrigation |
$ | 1,109 | $ | 1,144 | ||||
Infrastructure |
1,572 | 1,542 | ||||||
$ | 2,681 | $ | 2,686 | |||||
November 30, | November 30, | August 31, | ||||||||||
2009 | 2008 | 2009 | ||||||||||
Total Assets: |
||||||||||||
Irrigation |
$ | 203,489 | $ | 196,553 | $ | 186,558 | ||||||
Infrastructure |
116,847 | 115,873 | 121,339 | |||||||||
$ | 320,336 | $ | 312,426 | $ | 307,897 | |||||||
(14) Share Based Compensation
The Company measures and recognizes compensation expense for all share-based payment awards made to
employees and directors based on estimated fair values. The Companys current share-based
compensation plan, approved by the stockholders of the Company, provides for awards of stock
options, restricted shares, restricted stock units, stock appreciation rights, performance shares
and performance stock units to employees and non-employee directors of the Company. In connection
with the restricted stock units and performance stock units, the Company is accruing compensation
expense based on the estimated number of shares expected to be issued utilizing the most current
information available to the Company at the date of the financial statements. Share-based
compensation expense was $0.6 million and $0.5 million for the three months ended November 30, 2009
and 2008, respectively.
During the first quarter of fiscal 2010, the Company granted 35,245 restricted stock units and
45,608 performance stock units at a grant date price of $33.69. The restricted stock units vest
over a three-year period at approximately 33% per year. The performance stock units vest
contingent upon meeting various performance goals. The performance goals are based upon a
three-year revenue growth and a three-year average return on net assets over the performance
period. The awards actually earned may range from zero to two hundred percent of the targeted
number of performance stock units and will be paid in shares of common stock. Shares earned will
be distributed upon vesting on the first day of November following the end of the three-year
performance period. The Company is accruing compensation expense based on the estimated number of
shares expected to be issued utilizing the most current information available to the Company at the
- 16 -
date of the financial statements. If defined performance goals are not met, no compensation cost
will be recognized and any previously recognized compensation expense will be reversed.
(15) Subsequent Events
The Company has evaluated events occurring subsequent to the date of the financial statements up to
January 6, 2010, the date the Company issued these financial statements and did not identify any
subsequent events requiring disclosure.
- 17 -
ITEM 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
Concerning Forward-Looking Statements
This quarterly report on Form 10-Q contains not only historical information, but also
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Statements that are not historical are
forward-looking and reflect expectations for future Company conditions or performance. In
addition, forward-looking statements may be made orally or in press releases, conferences, reports,
on the Companys worldwide web site, or otherwise, in the future by or on behalf of the Company.
When used by or on behalf of the Company, the words expect, anticipate, estimate, believe,
intend, will, and similar expressions generally identify forward-looking statements. The
entire section entitled Market Conditions and Fiscal 2010 Outlook should be considered
forward-looking statements. For these statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of
1995.
Forward-looking statements involve a number of risks and uncertainties, including but not
limited to those discussed in the Risk Factors section in the Companys annual report on Form
10-K for the year ended August 31, 2009. Readers should not place undue reliance on any
forward-looking statement and should recognize that the statements are predictions of future
results or conditions, which may not occur as anticipated. Actual results or conditions could
differ materially from those anticipated in the forward-looking statements and from historical
results, due to the risks and uncertainties described herein, as well as others not now
anticipated. The risks and uncertainties described herein are not exclusive and further
information concerning the Company and its businesses, including factors that potentially could
materially affect the Companys financial results, may emerge from time to time. Except as
required by law, the Company assumes no obligation to update forward-looking statements to reflect
actual results or changes in factors or assumptions affecting such forward-looking statements.
Accounting Policies
In preparing the Companys condensed consolidated financial statements in conformity with U.S.
generally accepted accounting principles, management must make a variety of decisions, which impact
the reported amounts and the related disclosures. These decisions include the selection of the
appropriate accounting principles to be applied and the assumptions on which to base accounting
estimates. In making these decisions, management applies its judgment based on its understanding
and analysis of the relevant circumstances and the Companys historical experience.
The Companys accounting policies that are most important to the presentation of its results
of operations and financial condition, and which require the greatest use of judgments and
estimates by management, are designated as its critical accounting policies. See further
discussion of the Companys critical accounting policies under Item 7 Managements Discussion
and Analysis of Financial Condition and Results of Operations in the Companys Annual Report on
Form 10-K for the Companys year ended August 31, 2009. Management periodically re-evaluates and
adjusts its critical accounting policies as circumstances change. There were no changes in the
Companys critical accounting policies during the three months ended November 30, 2009.
Overview
Lindsay Corporation (Lindsay or the Company) is a leading designer and manufacturer of
self-propelled center pivot and lateral move irrigation systems that are used principally in the
agricultural industry to increase or stabilize crop production while conserving water, energy, and
labor. The Company has been in continuous operation since 1955, making it one of the pioneers in
the automated irrigation industry. Through the acquisition of Watertronics, LLC (Watertronics)
in January 2008, the Company entered the market for water pumping stations and controls which
provides further opportunities for integration with irrigation control systems. The Company also
manufactures and markets various infrastructure products, including moveable barriers for traffic
lane management, crash cushions, road marking and other road safety devices. In addition, the
Companys infrastructure segment produces large diameter steel tubing and railroad signaling
structures, and provides outsourced manufacturing and production services for other companies.
Industry segment information about Lindsay is included in Note 13 to the consolidated financial
statements.
Lindsay, a Delaware corporation, maintains its corporate offices in Omaha, Nebraska, USA. The
Companys principal irrigation manufacturing facility is located in Lindsay, Nebraska, USA. The
Company also has international sales and irrigation production facilities in France, Brazil, South
Africa and China which provide it with important bases of operations in key international markets.
Lindsay Europe SAS, located in France, was acquired in March 2001 and
- 18 -
manufactures and markets irrigation equipment for the European market. Lindsay America do Sul
Ltda., located in Brazil, was acquired in April 2002 and manufactures and markets irrigation
equipment for the South American market. Lindsay Manufacturing Africa, (PTY) Ltd., located in
South Africa, was organized in September 2002 and manufactures and markets irrigation equipment for
the southern African market. Lindsay (Tianjin) Industry Co., Ltd., located in China, was organized
in June 2009 and manufactures and markets irrigation equipment for the Chinese market. In
addition, the Company leases office space in Beijing, China and leases a warehouse facility in
Dalian, China.
Watertronics, located in Hartland, Wisconsin, designs, manufactures, and services water
pumping stations and controls for the golf, landscape and municipal markets. Watertronics has been
in business since 1986 and was acquired by the Company in January 2008.
Lindsay has two additional irrigation operating subsidiaries. Irrigation Specialists, Inc.
(Irrigation Specialists) is a retail irrigation dealership based in Washington State that
operates at three locations. Irrigation Specialists was acquired by the Company in March 2002 and
provides a strategic distribution channel in a key regional irrigation market. Lindsay
Transportation, Inc. (LTI), located in Lindsay, Nebraska, primarily brokers delivery of
irrigation equipment in the U.S.
Barrier Systems, Inc. (BSI), located in Rio Vista, California, manufactures moveable barrier
products, specialty barriers and crash cushions. BSI has been in business since 1984 and was
acquired by the Company in June 2006. In November 2007, the Company completed the acquisition of
certain assets of Traffic Maintenance Attenuators, Inc. and Albert W. Unrath, Inc. through a wholly
owned subsidiary of BSI. The assets acquired primarily relate to patents that enhance the Companys
highway safety product offering globally.
Snoline S.P.A. (Snoline), located in Milan, Italy, was acquired in December 2006, and is
engaged in the design, manufacture and sale of road marking and safety equipment for use on
roadways.
- 19 -
Results of Operations
For the Three Months ended November 30, 2009 compared to the Three Months ended November 30, 2008
The following section presents an analysis of the Companys operating results displayed in the
condensed consolidated statements of operations for the three months ended November 30, 2009 and
2008. It should be read together with the industry segment information in Note 13 to the condensed
consolidated financial statements:
Three months ended | Percent | |||||||||||
November 30, | Increase | |||||||||||
$ in thousands | 2009 | 2008 | (Decrease) | |||||||||
Consolidated |
||||||||||||
Operating revenues |
$ | 85,970 | $ | 113,121 | (24.0 | )% | ||||||
Cost of operating revenues |
$ | 60,166 | $ | 84,472 | (28.8 | )% | ||||||
Gross profit |
$ | 25,804 | $ | 28,649 | (9.9 | )% | ||||||
Gross margin |
30.0 | % | 25.3 | % | ||||||||
Operating expenses (1) |
$ | 14,643 | $ | 16,853 | (13.1 | )% | ||||||
Operating income |
$ | 11,161 | $ | 11,796 | (5.4 | )% | ||||||
Operating margin |
13.0 | % | 10.4 | % | ||||||||
Interest expense |
$ | (461 | ) | $ | (625 | ) | (26.2 | )% | ||||
Interest income |
$ | 83 | $ | 316 | (73.7 | )% | ||||||
Other income (expense), net |
$ | 145 | $ | (1,706 | ) | 108.5 | % | |||||
Income tax provision |
$ | 4,251 | $ | 3,459 | 22.9 | % | ||||||
Effective income tax rate |
38.9 | % | 35.4 | % | ||||||||
Net earnings |
$ | 6,677 | $ | 6,322 | 5.6 | % | ||||||
Irrigation Equipment Segment |
||||||||||||
Segment operating revenues |
$ | 53,266 | $ | 85,964 | (38.0 | )% | ||||||
Segment operating income (2) |
$ | 6,744 | $ | 13,312 | (49.3 | )% | ||||||
Segment operating margin (2) |
12.7 | % | 15.5 | % | ||||||||
Infrastructure Products Segment |
||||||||||||
Segment operating revenues |
$ | 32,704 | $ | 27,157 | 20.4 | % | ||||||
Segment operating income (2) |
$ | 7,685 | $ | 1,742 | 341.2 | % | ||||||
Segment operating margin (2) |
23.5 | % | 6.4 | % |
(1) | Includes $3.3 million and $3.2 million of unallocated general and administrative expenses for the three months ended November 30, 2009 and 2008, respectively. | |
(2) | Excludes unallocated general and administrative expenses. Beginning in fiscal 2009, segment-specific general and administrative expenses have been allocated to each of the Companys reporting segments. Prior year disclosures have been modified accordingly. |
Revenues
Operating revenues for the three months ended November 30, 2009 decreased by $27.2 million or 24%
compared to the same prior year period. This decrease was attributable to a 38% decrease in
irrigation equipment revenues partially offset by a 20% increase in infrastructure product
revenues.
Domestic irrigation equipment revenues for the three months ended November 30, 2009 of $32.8
million decreased $20.9 million or 39% compared to the same prior year period. The first fiscal
quarter is traditionally a low revenue quarter for irrigation equipment as farmers are typically
focused on harvest activities. It is likely that the late and protracted harvest this fall also
negatively impacted irrigation equipment demand. In comparison the first quarter of fiscal 2009
reflected record first quarter irrigation revenues, working off a record backlog from the end of
the previous fiscal year. Demand for irrigation equipment is also affected by prices for
agricultural commodities. Agricultural commodity prices were relatively stable when compared to
the same time last year. International irrigation equipment revenues for the three
- 20 -
months ended November 30, 2009 of $20.5 million decreased $11.8 million or 37% compared to the
same prior year period. Irrigation revenues decreased in most regions outside of the U.S.,
partially offset by increases in Mexico, Brazil and Europe. The Brazilian market has shown fairly
strong signs of recovery, driven by increased sugar cane production for sugar and ethanol. Cane
production in Brazil is estimated to be up approximately 7% over the previous year. In Europe, the
higher revenues realized were in the traditional markets of Spain and France but revenues were
lower in the Commonwealth of Independent States countries, which were impacted by funding
availability. For all markets, approximately 85% of the revenue reduction was in unit volume, due
to lower demand resulting from the significant changes in the economic environment. The remainder
of the reduction was due to lower unit prices as a result of passing through reductions in input
material costs.
Infrastructure products segment revenues for the three months ended November 30, 2009 of $32.7
million increased $5.5 million or 20% from the same prior year period. The increase in revenues
was primarily the result of the Mexico City road project. Approximately 80% of the revenue for the
$19.6 million project in Mexico City was realized in the first fiscal quarter of 2010 and the
remainder is expected to be realized in the second fiscal quarter of 2010. While BSIs revenues
were significantly higher in the quarter due to the project in Mexico, Diversified Manufacturing
revenues were down approximately $5.0 million compared to the same quarter last year on lower
commercial tubing and contract manufacturing revenues.
Gross Margin
Gross profit was $25.8 million for the three months ended November 30, 2009 a decrease of $2.8
million compared to the three months ended November 30, 2008. Gross margin was 30.0% for the three
months ended November 30, 2009 compared to 25.3% for the same prior year period. The improvement
in gross margin was primarily due to increased revenues of higher margin moveable barrier product
while irrigation margins remained stable. During the first fiscal quarter of 2010, steel prices
remained relatively low and average irrigation equipment prices remained unchanged from the fourth
quarter of fiscal 2009.
Operating Expenses
The Companys operating expenses of $14.6 million for the three months ended November 30, 2009 were
$2.2 million lower than the same prior year period. The decrease in operating expenses for the
three months ended November 30, 2009 reflects the reductions made last fiscal year, primarily in
personnel related expenses.
Interest, Other Income (Expense), net
Interest expense for the three months ended November 30, 2009 decreased by $0.1 million compared to
the same prior year period. The decrease in interest expense is due to principal reductions on the
Companys two outstanding term notes.
Interest income for the three months ended November 30, 2009 decreased by $0.2 million
compared to the same prior year period. The decrease in interest income is primarily due to
earning a lower interest rate on investments of the Companys cash balances.
Other income, net during the three months ended November 30, 2009 increased by $1.8 million
when compared with the same prior year period. The improvement was primarily due to transaction
losses from unfavorable movements in exchange rates experienced by the Company during the previous
years first fiscal quarter that did not recur in the current quarter.
Income Taxes
The Company recorded income tax expense of $4.3 million and $3.5 million for the three months ended
November 30, 2009 and 2008, respectively. The effective tax rate used to calculate income tax
expense before discrete items was 35.1% and 35.4% for the three months ended November 30, 2009 and
2008, respectively. The Companys effective tax rate was slightly higher than the U.S. federal
statutory tax rate primarily due to state and local taxes. These items were partially offset by
the domestic production activities deduction and other tax credits.
For the three months ended November 30, 2009, the Company recorded a discrete item resulting
in $0.4 million of additional tax expense in the current quarter. In fiscal 2004 the European
Commission (EC) overturned a tax deduction previously allowed by the French Tax Authorities and
taken by the Companys French subsidiary in a period prior to being owned by the Company. In the
current period, the Company determined it had not previously recorded the tax obligation resulting
from the EC ruling. The Company corrected the error and recorded an immaterial adjustment of $0.4
million to increase tax expense to reflect the correction of the tax obligation incurred during
fiscal 2004. The Company has concluded that the impact of this correction is not material to its
previously issued financial statements.
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Net Earnings
Net earnings were $6.7 million or $0.53 per diluted share for the three months ended November 30,
2009 compared with $6.3 million or $0.51 per diluted share for the same prior year period.
Liquidity and Capital Resources
The Company requires cash for financing its receivables and inventories, paying operating costs and
capital expenditures, and for dividends. The Company meets its liquidity needs and finances its
capital expenditures from its available cash and funds provided by operations along with borrowings
under four credit arrangements that are described below.
The Companys cash and cash equivalents totaled $91.8 million at November 30, 2009 compared
with $28.3 million at November 30, 2008 and $85.9 million at August 31, 2009.
The Company currently maintains two bank lines of credit with Wells Fargo Bank, N.A. and
Societe Generale to provide additional working capital or to fund acquisitions, if needed. The
Company entered into an unsecured $30.0 million Revolving Credit Note and Credit Agreement,
effective as of January 24, 2008, with Wells Fargo Bank, N.A. (the Revolving Credit Agreement).
As of November 30, 2009, November 30, 2008 and August 31, 2009, there was no outstanding balance on
the Revolving Credit Agreement.
Borrowings under the Revolving Credit Agreement bear interest at a rate equal to LIBOR plus 50
basis points. Interest is repaid on a monthly or quarterly basis depending on loan type. The
Company also pays an annual commitment fee of 0.125% on the unused portion of the Revolving Credit
Agreement. Unpaid principal and interest is due by January 23, 2010, which is the termination date
of the Revolving Credit Agreement. The Companys management expects to obtain a similar line of
credit prior to termination.
The Companys wholly-owned European subsidiary, Lindsay Europe, has an unsecured revolving
line of credit with Societe Generale, a European commercial bank, under which it could borrow up to
2.3 million Euros, which equates to approximately $3.4 million as of November 30, 2009, for working
capital purposes (the Euro Line of Credit). At November 30, 2009, November 30, 2008 and August
31, 2009 there was no balance outstanding under the Euro Line of Credit. Under the terms of the
Euro Line of Credit, borrowings, if any, bear interest at a floating rate in effect from time to
time designated by the commercial bank as the Euro Interbank Offered Rate plus 150 basis points
(all inclusive, 1.97% at November 30, 2009). Unpaid principal and interest is due by January 31,
2010, which is the termination date of the Euro Line of Credit. The Companys management expects
to obtain a similar line of credit prior to termination.
The Company also has two term loan arrangements that it used to finance previous acquisitions.
The Company entered into an unsecured $30.0 million Term Note and Credit Agreement, each effective
as of June 1, 2006, with Wells Fargo Bank, N.A. (collectively, the BSI Term Note) to partially
finance the acquisition of BSI. Borrowings under the BSI Term Note bear interest at a rate equal
to LIBOR plus 50 basis points. However, this variable interest rate has been converted to a fixed
rate of 6.05% through an interest rate swap agreement with the lender. Principal is repaid
quarterly in equal payments of $1.1 million over a seven-year period that commenced in September,
2006. The BSI Term Note is due in June of 2013.
On December 27, 2006, the Companys wholly-owned Italian subsidiary entered into an unsecured
$13.2 million seven-year Term Note and Credit Agreement (the Snoline Term Note) with Wells Fargo
Bank, N.A. Borrowings under the Snoline Term Note are guaranteed by the Company and bear interest
at a rate equal to LIBOR plus 50 basis points. The Snoline Term Note is due in December of 2013.
In connection with the Snoline Term Note, the Company entered into a cross currency swap
transaction obligating the Company to make quarterly payments of 0.4 million Euros per quarter over
the same seven-year period as the Snoline Term Note and to receive payments of $0.5 million per
quarter. In addition, the variable interest rate was converted to a fixed rate of 4.7%. This is
approximately equivalent to converting the $13.2 million seven-year Snoline Term Note into a 10.0
million Euro seven-year term note at a fixed rate of 4.7%.
The BSI Term Note, the Snoline Term Note and the Revolving Credit Agreement (collectively, the
Notes) each contain the same covenants, including certain covenants relating to Lindsays
financial condition. These include maintaining a funded debt to EBITDA ratio, a fixed charge
coverage ratio and a current ratio (all as defined in the Notes) at specified levels. Upon the
occurrence of any event of default of these covenants specified in the Notes, including a change in
control of the Company (as defined in the Notes), all amounts due under the Notes may be declared
to be immediately due and payable. At November 30, 2009, the Company was in compliance with all
loan covenants.
The risk of receivable collectability has increased as global economic conditions have
softened. In response, the Company continuously monitors the receivable portfolio and takes
aggressive collection actions when required. In light of the ongoing significant changes in
credit market liquidity and the general slowdown in the global economy, the Company still believes
its current cash resources, projected operating cash flow, and remaining capacity under its bank
lines of credit are sufficient to cover all of its expected working capital needs, planned capital
expenditures, dividends, and other cash requirements, excluding potential acquisitions.
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Cash flows provided by operations totaled $9.5 million during the three months ended November
30, 2009 compared to $16.3 million used in operations during the same prior year period. Cash
provided by operations improved $25.8 million primarily due to a decrease in cash used for working
capital items resulting from lower business activities.
Cash flows used in investing activities totaled $1.5 million during the three months ended
November 30, 2009 compared to cash flows used in investing activities of $1.4 million during the
same prior year period. Cash outflow for investing activities for the three months ended November
30, 2009 was primarily used for purchases of property, plant and equipment.
Cash flows used in financing activities totaled $2.7 million during the three months ended
November 30, 2009 compared to cash flows used in financing activities of $3.6 million during the
same prior year period. The decrease in cash used in financing activities was primarily due to a
decrease of $1.6 million from net payments on revolving line of credit, partially offset by an
increase of $0.6 million cash used in exercise of stock options and issuance of other stock awards.
Contractual Obligations and Commercial Commitments
There have been no material changes in the Companys contractual obligations and commercial
commitments as described in the Companys Annual Report on Form 10-K for the fiscal year ended
August 31, 2009.
Market Conditions and Fiscal 2010 Outlook
Globally, farmers continued to remain cautious in committing to capital goods investments; however,
the first fiscal quarter is generally the harvest quarter and first quarter revenues are not a
good indicator of next seasons demand. The traditional selling period in the major irrigation
markets will begin in the latter part of January 2010 or early February 2010. In general, lenders
for irrigation equipment purchases in the U.S. remained willing and able to finance purchases;
however, there are indications that requirements for obtaining financing have become more
stringent. Long-term market drivers of expanding food and biofuel production and improving water
use efficiencies through mechanized irrigation systems remains very positive.
In the infrastructure markets, stimulus funds have been applied to shovel ready maintenance
projects versus more significant road widening or new road construction projects, which are more
likely to use the Companys moveable barrier and crash cushion products. While additional roadway
projects have resulted from the federal stimulus package, future projects may be impacted by the
uncertainty surrounding the passage of a new multi-year federal highway funding bill. Multiple
short-term extensions of funding are expected before any serous activity is undertaken to pass a
multi-year bill. The anticipated project list for Barrier Systems traffic mitigation systems
remains strong. The timing of orders for these projects is uncertain and difficult to forecast in
the present economic environment. Numerous projects have been delayed during the past year due to
funding limitations or uncertainties.
Overall, the Company has responded to these contracted market activities with reductions in
the workforce and overall spending reductions in all of the Companys operations. During the
quarter, the Company realized the benefit of these actions and of the leverage attained from a
sizable Quick Move Barrier project. In addition, the Company has implemented actions to enhance
cash flow through the reduction in working capital which has resulted in a strong balance sheet.
The Companys focus on improving cash flow has resulted in increasing cash and cash equivalents by
$63.5 million to $91.8 million compared with the prior year. The Company also reduced debt by $6.2
million over the same period.
As of November 30, 2009, the Company had an order backlog of $36.1 million compared with $40.1
million at November 30, 2008 and $43.6 at August 31, 2009. Irrigation equipment backlog was up
slightly compared to the same time last year.
For both the irrigation and infrastructure markets, the outlook for fiscal year 2010 remains
uncertain at this time. However, in the long term, the global drivers of increasing food
production, improving water-use efficiency, expanding biofuel production, expanding interest in
reducing environmental impacts and improving transportation infrastructure, continue to be drivers
of demand for the Companys products. The Companys strong balance sheet has well-positioned the
Company to invest in growth initiatives both organic and through acquisitions.
Recently Issued Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No.
141R). SFAS No. 141R establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill acquired. SFAS No. 141R also establishes
disclosure requirements to enable the evaluation of the nature and financial effects of the
business combination. SFAS No. 141R became effective for the Company for business combinations for
which the acquisition date is on or after September 1, 2009.
In April 2008, the FASB issued FASB Staff Position No. SFAS 142-3, Determination of the Useful
Life of Intangible Assets (FSP No. SFAS 142-3). FSP No. FAS 142-3 requires companies estimating
the useful life of a
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recognized intangible asset to consider their historical experience in
renewing or extending similar arrangements or, in the absence of historical experience, to consider
assumptions that market participants would use about renewal or extension as adjusted for SFAS No.
142s, Goodwill and Other Intangible Assets, entity-specific factors. FSP No. SFAS 142-3 became
effective for the Company beginning in the first quarter of fiscal year 2010. The adoption of this
guidance did not have a material impact on the Companys consolidated financial statements.
In April 2009, the FASB issued FSP SFAS No. 141R-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies, (FSP SFAS 141R-1).
This FSP amends and clarifies SFAS No. 141R to require that an acquirer recognize at fair value, at
the acquisition date, an asset acquired or a liability assumed in a business combination that
arises from a contingency if the acquisition date fair value of that asset or liability can be
determined during the measurement period. If the acquisition date fair value of such an asset
acquired or liability assumed cannot be determined, the acquirer should apply the provisions of
SFAS No. 5, Accounting for Contingencies, to determine whether the contingency should be recognized
at the acquisition date or after it. FSP SFAS 141R-1 became effective for the Company for business
combinations for which the acquisition date is on or after September 1, 2009.
In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and
Hierarchy of GAAP (SFAS No. 168). SFAS No. 168 replaces SFAS No. 162, The Hierarchy of Generally
Accepted Accounting Principles and establishes the FASB Accounting Standards
CodificationTM as the source of authoritative accounting principles recognized by the
FASB to be applied by nongovernmental entities in the preparation of financial statements in
conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission
under authority of federal securities laws are also sources of authoritative GAAP for SEC
registrants. SFAS No. 168 became effective for the Company beginning in the first quarter of
fiscal year 2010. The adoption of this guidance will change the way the Company references various
elements of GAAP when preparing the financial statement disclosures, but will not have an impact on
the Companys consolidated financial statements.
In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, Fair Value
Measurements and Disclosures (Topic 820) Measuring Liabilities at Fair Value (ASU 2009-05).
This ASU provides amendments for fair value measurements of liabilities. It provides clarification
that in circumstances in which a quoted price in an active market for the identical liability is
not available, a reporting entity is required to measure fair value using one or more techniques.
ASU 2009-05 also clarifies that when estimating a fair value of a liability, a reporting entity is
not required to include a separate input or adjustment to other inputs relating to the existence of
a restriction that prevents the transfer of the liability. ASU 2009-05 became effective for the
Company beginning in the first quarter of its fiscal year 2010. The adoption of this guidance did
not have a material impact on the Companys consolidated financial statements.
In October 2009, the FASB issued ASU No. 2009-13 (ASU 2009-13), which addresses the
accounting for multiple-deliverable arrangements to enable vendors to account for products or
services (deliverables) separately rather than as a combined unit. ASU 2009-13 is effective
prospectively for revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010. The Company is assessing the impact that the adoption of this
standard will have on its consolidated financial statements.
ITEM 3 Quantitative and Qualitative Disclosures About Market Risk
The Company uses certain financial derivatives to mitigate its exposure to volatility in interest
rates and foreign currency exchange rates. The Company uses these derivative instruments to hedge
exposures in the ordinary course of business and does not invest in derivative instruments for
speculative purposes. The credit risk under these interest rate and foreign currency agreements is
not considered to be significant.
The Company has manufacturing operations in the United States, France, Brazil, Italy, South
Africa and China. The Company has sold products throughout the world and purchases certain of its
components from third-party international suppliers. Export sales made from the United States are
principally U.S. dollar denominated. In addition, a majority of the Companys revenue generated
from operations outside the United States is denominated in local currency. Accordingly, these
sales are not subject to significant foreign currency transaction risk. At times, export sales may
be denominated in a currency other than the U.S. dollar. The Companys most significant
transactional foreign currency exposures are the Euro, the Brazilian real, South African rand and
Chinese renminbi in relation to the U.S. dollar. Fluctuations in the value of foreign currencies
create exposures, which can adversely affect the Companys results of operations.
In order to reduce exposures related to changes in foreign currency exchange rates, the
Company, at times, may enter into forward exchange or option contracts for transactions denominated
in a currency other than the functional
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currency for certain of our operations. This activity
primarily relates to economically hedging against foreign currency risk in purchasing inventory,
sales of finished goods, and future settlement of foreign denominated assets and liabilities.
In order to reduce translation exposure resulting from translating the financial statements of
its international subsidiaries into U.S. dollars, the Company, at times, utilizes Euro foreign
currency forward contracts to hedge its Euro net investment exposure in its foreign operations.
In order to reduce interest rate risk on the $30 million BSI Term Note, the Company has
entered into an interest rate swap agreement with Wells Fargo Bank, N.A. that is designed to
convert the variable interest rate on the entire amount of this borrowing to a fixed rate of 6.05%
per annum. Under the terms of the interest rate swap, the Company receives variable interest rate
payments and makes fixed interest rate payments on an amount equal to the outstanding balance of
the BSI Term Note, thereby creating the equivalent of fixed-rate debt.
Similarly, the Company entered into a cross currency swap transaction fixing the conversion
rate of Euros to U.S. dollars for the Snoline Term Note at 1.3195 and obligating the Company to
make quarterly payments of 0.4 million Euros per quarter over the same seven-year period as the
Snoline Term Note and to receive payments of $0.5 million per quarter. In addition, the variable
interest rate was converted to a fixed rate of 4.7%. This is approximately equivalent to
converting the $13.2 million seven-year Snoline Term Note into a 10.0 million Euro seven-year term
note at a fixed rate of 4.7%. Under the terms of the cross currency swap, the Company receives
variable interest rate payments and makes fixed interest rate payments, thereby creating the
equivalent of fixed-rate debt.
ITEM 4 Controls and Procedures
As of the end of the period covered by this report, the Company carried out an evaluation
under the supervision and the participation of the Companys management, including the Companys
Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design
and operation of the Companys disclosure controls and procedures pursuant to Exchange Act Rules
13a-15(e) and 15d-15(e). Based upon that evaluation, the CEO and CFO concluded that the Companys
disclosure controls and procedures were effective as of November 30, 2009.
Additionally, the CEO and CFO determined that there has not been any change to the Companys
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) during the last fiscal quarter that have materially affected, or are reasonably likely
to materially affect, the Companys internal control over financial reporting.
Part II OTHER INFORMATION
ITEM 1 Legal Proceedings
In the ordinary course of its business operations, the Company is involved, from time to time,
in commercial litigation, employment disputes, administrative proceedings, and other legal
proceedings. None of these proceedings, individually or in the aggregate, is expected to have a
material effect on the business or financial condition of the Company.
Environmental Matters
In 1992, the Company entered into a consent decree with the Environmental Protection Agency of the
United States Government (the EPA) in which the Company committed to remediate environmental
contamination of the groundwater that was discovered in 1982 through 1990 at and adjacent to its
Lindsay, Nebraska facility (the site). The site was added to the EPAs list of priority
superfund sites in 1989. Between 1993 and 1995, remediation plans for the site were approved by
the EPA and fully implemented by the Company. Since 1998, the primary remaining contamination at
the site has been the presence of volatile organic chemicals in the groundwater. The current
remediation process consists of drilling wells into the aquifer and pumping water to the surface to
allow these contaminants to be removed by aeration. In 2008, the Company and the EPA conducted a
periodic five-year review of the status of the remediation of the contamination of the site. In
response to the review, the Company and its environmental consultants have developed a remedial
action work plan that will allow the Company and the EPA to better identify the boundaries of the
contaminated groundwater and determine whether the contaminated groundwater is being contained by
current and planned remediation methods. The Company accrues the anticipated cost of remediation
when the obligation is probable and can be reasonably estimated. Amounts accrued and included in
balance sheet liabilities related to the remediation actions were $1.1 million, $1.0 million and
$1.3 million at November 30, 2009, November 30, 2008 and August 31, 2009, respectively. Although the
Company has accrued all reasonably estimable costs of completing the remediation actions defined in
the supplemental remedial action work plan,
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it is possible that testing may indicate additional remediation is required or additional actions could be requested or mandated by the EPA at any
time, resulting in the recognition of additional related expenses.
ITEM 1A Risk Factors
There have been no material changes in our risk factors as described in our Form 10-K for the
fiscal year ended August 31, 2009.
ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds
The Company made no repurchases of its common stock under the Companys stock repurchase plan
during the quarter ended November 30, 2009; therefore, tabular disclosure is not presented. From
time to time, the Companys Board of Directors has authorized the Company to repurchase shares of
the Companys common stock. Under this share repurchase plan, the Company has existing
authorization to purchase, without further announcement, up to 881,139 shares of the Companys
common stock in the open market or otherwise.
ITEM 6 Exhibits
3.1
|
Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed on December 14, 2006. | |
3.2
|
Restated By-Laws of the Company, incorporated by reference to Exhibit 3.1 of the Companys Current Report on Form 8-K filed on November 6, 2007. | |
4.1
|
Specimen Form of Common Stock Certificate, incorporated by reference to Exhibit 4(a) of the Companys Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2006. | |
10.1*
|
Lindsay Corporation Management Incentive Plan (MIP), 2010 Plan Year. ** | |
31.1*
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350. | |
31.2*
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350. | |
32.1*
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350. |
* | - filed herein | |
** | - certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text. This Exhibit has been filed separately with the Secretary of the Commission with the redacted text pursuant to the Companys application requesting confidential treatment under Rule 24B-2 of the Securities Exchange Act of 1934. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this
6th day of January 2010.
LINDSAY CORPORATION |
||||
By: | /s/ DAVID B. DOWNING | |||
Name: | David B. Downing | |||
Title: | Chief Financial Officer and
President International Division |
|||
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