LINDSAY CORP - Annual Report: 2011 (Form 10-K)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(MARK ONE)

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

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		(I.R.S. Employer
incorporation or organization)		Identification No.)
2222 North 111th Street, Omaha, Nebraska		68164
(Address of principal executive offices)		(Zip Code)

402-829-6800
Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Common Stock, $1.00 par value		New York Stock Exchange, Inc. (Symbol LNN)

Indicate by check mark if the registrant is a well-known seasoned issuer, (as defined in Rule 405 of the Securities Act). Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No þ

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K 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 þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a 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

The aggregate market value of Common Stock of the registrant, all of which is voting, held by non-affiliates based on the closing sales price on the New York Stock Exchange, Inc. on February 28, 2011 was $870,441,668.

As of October 21, 2011, 12,675,101 shares of the registrant’s Common Stock were outstanding.

Portions of the Proxy Statement pertaining to the Registrant’s 2012 annual stockholders’ meeting are incorporated herein by reference into Part III.

 

 

TABLE OF CONTENTS

		Page(s)
Part I
Item 1. Business			2-8
Item 1A. Risk Factors			9-10
Item 1B. Unresolved Staff Comments			10
Item 2. Properties			11
Item 3. Legal Proceedings			11
Item 4. (Removed and Reserved)			11
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			12-13
Item 6. Selected Financial Data			14
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			14-23
Item 7A. Quantitative and Qualitative Disclosures about Market Risk			24
Item 8. Financial Statements and Supplementary Data			25-52
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			53
Item 9A. Controls and Procedures			53-54
Item 9B. Other Information			54
Part III
Item 10. Directors, Executive Officers and Corporate Governance			55-56
Item 11. Executive Compensation			57
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			57
Item 13. Certain Relationships and Related Transactions, and Director Independence			57
Item 14. Principal Accounting Fees and Services			57
Part IV
Item 15. Exhibits, Financial Statement Schedules			58-62
SIGNATURES			63
Exhibit 21
Exhibit 23
Exhibit 24
Exhibit 31.1
Exhibit 31.2
Exhibit 32

PART I

ITEM 1		— Business

INTRODUCTION

Lindsay Corporation, along with its subsidiaries (collectively called “Lindsay” or the “Company”), is a global leader in providing a variety of proprietary water management and road infrastructure products and services. The Company has been involved in the manufacture and distribution of agricultural equipment since 1955 and has grown from a regional company to an international agribusiness and highway infrastructure firm with worldwide sales and distribution. Lindsay, a Delaware corporation, maintains its corporate offices in Omaha, Nebraska. The Company has operations which are categorized into two major reporting segments. Industry segment information about Lindsay is included in Note O to the consolidated financial statements.

Irrigation Segment — The Company’s irrigation segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems which are used principally in the agricultural industry to increase or stabilize crop production while conserving water, energy, and labor. The irrigation segment also manufactures and markets repair and replacement parts for its irrigation systems and controls, and designs, manufactures and services water pumping stations and controls for the agriculture, golf, landscape and municipal markets. The Company continues to strengthen irrigation product offerings through innovative technology such as GPS positioning and guidance, variable rate irrigation, wireless irrigation management, and smartphone application. The Company’s principal irrigation manufacturing facilities are located in Lindsay, Nebraska and Hartland, Wisconsin. Internationally, the Company has production operations in France, Brazil and China as well as distribution operations in South Africa, Australia and New Zealand. The Company also exports some of its equipment from the U.S. to other international markets.

Infrastructure Segment — The Company’s infrastructure segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, road marking and road safety equipment, large diameter steel tubing, railroad signals and structures, and outsourced manufacturing services. The principal infrastructure manufacturing facilities are located in Rio Vista, California, Milan, Italy, and Omaha, Nebraska.

PRODUCTS BY SEGMENT

IRRIGATION SEGMENT

Products - The Company manufactures and markets its center pivot and lateral move irrigation systems in the U.S. and internationally under its Zimmatic^® brand. The Company also manufactures and markets separate lines of center pivot and lateral move irrigation equipment for use on smaller fields under its Greenfield^® and Stettyn^™ brands, and hose reel travelers under the Perrot^™ brand (Greenfield^® in the United States, Perrot^™ in Europe, and Stettyn^™ in South Africa). The Company also produces or markets irrigation controls, chemical injection systems and remote monitoring and control systems which it sells under its GrowSmart^® brand. In addition to whole systems, the Company manufactures and markets repair and replacement parts for its irrigation systems and controls. The Company also designs, manufactures and services water pumping stations and controls for the agriculture, golf, landscape and municipal markets.

The Company’s irrigation systems are primarily of the standard sized center pivot type, with a small portion of its products consisting of the lateral move type. Both are automatic, continuous move systems consisting of sprinklers mounted on a water carrying pipeline which is supported approximately 11 feet off the ground by a truss system suspended between moving towers.

A typical center pivot for the U.S. market is approximately 1,300 feet long and is designed to circle within a quarter-section of land, which comprises 160 acres, wherein it irrigates approximately 130 to 135 acres. A typical center pivot for the international market is somewhat shorter than that in the U.S. market. A center pivot or lateral move system can also be custom designed and can irrigate from 25 to 600+ acres. A mini-pivot is a small version of the standard pivot and is used for smaller fields and/or shorter crops than standard pivots.

A center pivot system represents a significant investment to a farmer. In a dry land conversion to center pivot irrigation, approximately one-half of the investment is for the pivot itself and the remainder is attributable to installation of additional equipment such as wells, pumps, underground water pipes, electrical supply and a concrete pad upon which the pivot is anchored. The Company’s center pivot and lateral move irrigation systems can be enhanced with a family of integrated plug-and-play add-ons such as water pumping station controls.

The Company also manufactures and distributes mini-pivots and hose reel travelers. These systems are considered to be relatively easy to operate, and the hose reel travelers are easily moved from field to field. They are typically deployed in smaller or irregular fields. Mini-pivots and hose reel travelers require, on average, a lower investment than a typical standard center pivot.

The Company also markets pivot monitoring and control systems, which include remote telemetry and a web or personal computer hosted data acquisition and monitoring application. These systems allow growers to monitor their pivot system, accumulate data on the operation of the system, and control the pivot from a remote location by logging onto an internet web site. The pivot monitoring and control systems are marketed under the GrowSmart^® brand and product name FieldNET^®.

Other Types of Irrigation — Center pivot and lateral move irrigation systems compete with three other types of irrigation: flood, drip, and other mechanical devices such as hose reel travelers. The bulk of the worldwide irrigation is accomplished by the traditional method of flood irrigation. Flood irrigation is accomplished by either flooding an entire field, or by providing a water source (ditches or a pipe) along the side of a field, which is planed and slopes slightly away from the water source. The water is released to the crop rows through gates in the ditch or pipe, or through siphon tubes arching over the ditch wall into some of the crop rows. It runs down through the crop row until it reaches the far end of the row, at which time the water source is moved and another set of rows are flooded. A significant disadvantage or limitation of flood irrigation is that it cannot be used to irrigate uneven, hilly, or rolling terrain or fields. In “drip” or “low flow” irrigation, perforated plastic pipe or tape is installed on the ground or buried underground at the root level. Several other types of mechanical devices, such as hose reel travelers, irrigate the remaining irrigated acres.

Center pivot, lateral move, and hose reel traveler irrigation offers significant advantages when compared with other types of irrigation. It requires less labor and monitoring; can be used on sandy ground which, due to poor water retention ability, must have water applied frequently; can be used on uneven ground, thereby allowing previously unsuitable land to be brought into production; can also be used for the application of fertilizers, insecticides, herbicides, or other chemicals (termed “chemigation”); and conserves water and chemicals through precise control of the amount and timing of the application.

Markets — Water is an essential and critical requirement for crop production, and the extent, regularity, and frequency of water application can be a critical factor in crop quality and yield.

The fundamental factors which govern the demand for center pivot and lateral move systems are essentially the same in both the U.S. and international markets. Demand for center pivot and lateral move systems is determined by whether the value of the increased crop production attributable to center pivot or lateral move irrigation exceeds any increased costs associated with purchasing, installing, and operating the equipment. Thus, the decision to purchase a center pivot or lateral move system, in part, reflects the profitability of agricultural production, which is determined primarily by the prices of agricultural commodities and other farming inputs.

The current demand for center pivot systems has three sources: conversion to center pivot systems from less water efficient, more labor intensive types of irrigation; replacement of older center pivot systems, which are beyond their useful lives or are technologically obsolete; and conversion of dry land farming to irrigated farming. In addition, demand for center pivots and lateral move irrigation equipment depends upon the need for the particular operational characteristics and advantages of such systems in relation to alternative types of irrigation, primarily flood. More efficient use of the basic natural resources of land, water, and energy helps drive demand for center pivot and lateral move irrigation equipment. Increasing global population not only increases demand for agricultural output, but also places additional and competing demands on land, water, and energy. The Company expects demand for center pivots and lateral move systems to continue to increase relative to other irrigation methods because center pivot and lateral move systems are preferred where the soil is sandy, the terrain is not flat, the land area to be irrigated is sizeable, there is a shortage of reliable labor, water supply is restricted and conservation is critical, and/or chemigation will be utilized.

United States Market — In the United States, the Company sells its branded irrigation systems, including Zimmatic^®, to over 200 independent dealer locations, who resell to their customer, the farmer. Dealers assess their customer’s requirements, assemble and erect the system in the field, and provide additional system components, primarily relating to water supply (wells, pumps, pipes) and electrical supply (on-site generation or hook-up to power lines). Lindsay dealers generally are established local agribusinesses, many of which also deal in related products, such as well drilling and water pump equipment, farm implements, grain handling and storage systems, and farm structures.

International Market — Over the years, the Company has sold center pivot and lateral move irrigation systems throughout the world. The Company has production and sales operations in France, Brazil and China as well as distribution and sales operations in South Africa, Australia and New Zealand and sales operations in Central America and the Middle East serving the key European, South American, Chinese, African, Australian, New Zealand, Central American and Middle Eastern markets, respectively. The Company also exports some of its equipment from the U.S. to other international markets. The majority of the Company’s U.S. export sales is denominated in U.S. dollars and is shipped against prepayments or U.S. bank confirmed irrevocable letters of credit or other secured means.

The Company’s international markets differ with respect to the need for irrigation, the ability to pay, demand, customer type, government support of agriculture, marketing and sales methods, equipment requirements, and the difficulty of on-site erection. The Company’s industry position is such that it believes that it will likely be considered as a potential supplier for most major international agricultural development projects utilizing center pivot or lateral move irrigation systems.

Competition — The U.S. center pivot irrigation system industry has seen significant consolidation of manufacturers over the years; four primary U.S. manufacturers remain today. The international market includes participation and competition by the leading U.S. manufacturers as well as certain regional manufacturers. The Company competes in certain product lines with several manufacturers, some of whom may have greater financial resources than the Company. The Company competes by continuously improving its products through ongoing research and development activities. The Company continues to strengthen irrigation product offerings through innovative technology such as GPS positioning and guidance, variable rate irrigation, wireless irrigation management, and smartphone application. The Company’s engineering and research expenses related to irrigation totaled approximately $6.1 million, $4.1 million, and $3.0 million for fiscal years 2011, 2010, and 2009, respectively. Competition also occurs in areas of price and seasonal programs, product quality, durability, controls, product characteristics, retention and reputation of local dealers, customer service, and, at certain times of the year, the availability of systems and their delivery time. The Company believes it competes favorably with respect to all of these factors.

INFRASTRUCTURE SEGMENT

Products — Quickchange^® Moveable Barrier^™— The Company’s Quickchange^® Moveable Barrier^™ (“QMB^®”) system is composed of three parts: 1) T-shaped concrete barriers that are connected to form a continuous wall, 2) a Barrier Transfer Machine^™ (“BTM^™”) capable of moving the barrier laterally across the pavement, and 3) the variable length barriers necessary for accommodating curves. A barrier element is approximately 32 inches high, 13-24 inches wide, 3 feet long and weighs 1,500 pounds. The barrier elements are interconnected by very heavy duty steel hinges to form a continuous barrier. The BTM^™ employs an inverted S-shaped conveyor mechanism that lifts the barrier, moving it laterally before setting it back on the roadway surface.

In permanent applications, the QMB^® systems increase capacity and reduce congestion by varying the number of traffic lanes to match the traffic demand. Roadways with fixed medians have a set number of lanes in each direction and cannot adjust to traffic demands that may change over the course of a day, or to capacity reductions caused by traffic incidents or road repair and maintenance. Applications include high volume highways where expansion may not be feasible due to lack of additional right-of-way, environmental concerns, or insufficient funding. The QMB^® system is particularly useful in busy commuter corridors and at choke points such as bridges and tunnels. QMB^® systems can also be deployed at roadway or roadside construction sites to accelerate construction, improve traffic flow and safeguard work crews and motorists by positively separating the work area and traffic. Examples of types of work completed with the help of a QMB^® system include highway reconstruction, paving and resurfacing, road widening, median and shoulder construction, and repairs to tunnels and bridges.

The Company offers a variety of equipment lease options for QMB^® systems and BTM^™ equipment used in construction applications. The leases extend for periods of three months or more for equipment already existing in inventory. Longer lease periods may be required for specialty equipment that must be built for specific projects.

These systems have been in use since 1987. Significant progress has been made introducing the products into international markets in recent years. Typical sales for a highway safety or road improvement project range from $2.0-$20.0 million, making them significant capital investments.

Crash Cushions and End Terminals — The Company offers a complete line of redirective and non-redirective crash cushions which are used to enhance highway safety at locations such as toll booths, freeway off-ramps, medians and roadside barrier ends, bridge supports, utility poles and other fixed roadway hazards. The Company’s primary crash cushion products cover a full range of lengths, widths, speed capacities and application accessories and include the following brand names: TAU^®, Universal TAU-II^®, TAU-B_NR^™, ABSORB 350^® and Walt^™. In addition to these products the Company also offers guardrail end terminal products such as the X-Tension^™ and TESI^® systems. The crash cushions and end terminal products compete with other vendors in the world market. These systems are generally sold through a distribution channel that is domiciled in particular geographic areas.

Specialty Barriers — The Company also offers specialty barrier products such as the SAB^™, ArmorGuard^™, PaveGuard^™ and DR46^™ portable barrier and/or barrier gate systems. These products offer portability and flexibility in setting up and modifying barriers in work areas and provide quick opening, high containment gates for use in median or roadside barriers. The gates are generally used to create openings in barrier walls of various types for both construction and incident management purposes. The DR46^™ is an energy absorbing barrier to shield motorcyclists from impacting guardrail posts which is becoming an area of focus for reducing the amount and severity of injuries.

Road Marking and Road Safety Equipment — The Company also offers preformed tape and a line of road safety accessory products. The preformed tape is used primarily in temporary applications such as markings for work zones, street crossings, and road center lines or boundaries. The road safety equipment consists of mostly plastic and rubber products used for delineation, slowing traffic, and signaling. The Company also manages an ISO 17025 certified testing laboratory, Safe Technologies, Inc., that performs full-scale impact testing of highway safety products in accordance with the National Cooperative Highway Research Program (“NCHRP”) Report 350, the Manual for Assessing Safety Hardware (“MASH”), and the European Norms (EN1317) for these types of products. The NCHRP Report 350 and MASH guidelines are procedures required by the U.S. Department of Transportation Federal Highway Administration for the safety performance evaluation of highway features. The EN1317 Norms are being used to qualify roadway safety products for the European markets.

Other Products — The Company’s Diversified Manufacturing and Tubing business unit (“Diversified Manufacturing”) manufactures and markets large diameter steel tubing and railroad signals and structures, and provides outsourced manufacturing and production services for other companies. The Company continues to develop new relationships for infrastructure manufacturing in industries outside of agriculture and irrigation. The Company’s customer base includes certain large industrial companies and railroads. Each customer benefits from the Company’s design and engineering capabilities as well as the Company’s ability to provide a wide spectrum of manufacturing services, including welding, machining, painting, forming, galvanizing and assembling hydraulic, electrical, and mechanical components.

Markets — The Company’s primary infrastructure market includes moveable concrete barriers, delineation systems, guardrails and similar protective equipment. The U.S. roadway infrastructure market includes projects such as new roadway construction, bridges, tunnels, maintenance and resurfacing, and the purchase of rights-of-way for roadway expansion and development of technologies for relief of roadway congestion. Much of the U.S. highway infrastructure market is driven by government (state and federal) spending programs. For example, the U.S. government funds highway and road improvements through the Federal Highway Trust Fund Program. This program provides funding to improve the nation’s roadway system. Matching funding from the various states may be required as a condition of federal funding. In the long term, the Company believes that the federal program provides a solid platform for growth in the U.S. market, as it is generally acknowledged that additional funding will be required for infrastructure development and maintenance in the future.

The European market is presently very different from country to country, but the standardization in performance requirements and acceptance criteria for highway safety devices adopted by the European Committee for Standardization is expected to lead to greater uniformity and a larger installation program. This will also be influenced by the European Union’s prevention program which has the goal to lower highway traffic fatalities.

Competition — The Company competes in certain product lines with several manufacturers, some of whom may have greater financial resources than the Company. The Company competes by continuously improving its products through ongoing research and development activities. The Company’s engineering and research expenses related to infrastructure products totaled approximately $4.3 million, $3.7 million and $3.0 for fiscal years 2011, 2010 and 2009, respectively. The Company competes with certain products and companies in its crash cushion business, but has limited competition in its moveable barrier line, as there is not another moveable barrier product today comparable to the QMB^® system. However, the Company’s barrier product does compete with traditional “safety shaped” concrete barriers and other safety barriers.

Distribution methods and channels — The Company has production and sales operations in Nebraska, California and Italy. Sales efforts consist of both direct sales and sales programs managed by its network of distributors and third-party representatives. The sales teams have responsibility for new business development and assisting distributors and dealers in soliciting large projects and new customers. The distributor and dealer networks have exclusive territories and are responsible for developing sales and providing service, including product maintenance, repair and installation. The typical dealer sells an array of safety supplies, road signs, crash cushions, delineation equipment and other highway products. Customers include Departments of Transportation, municipal transportation road agencies, roadway contractors, subcontractors, distributors and dealers. Due to the project nature of the roadway construction and congestion management markets, the Company’s customer base changes from year-to-year. Due to the limited life of projects, it is rare that a single customer will account for a significant amount of revenues in consecutive years. The customer base also varies depending on the type of product sold. The Company’s moveable barrier products are typically sold to transportation agencies or the contractors or suppliers serving those agencies. In contrast, distributors account for a majority of crash cushion sales since those products have lower price points and tend to have shorter lead times.

GENERAL

Certain information generally applicable to both of the Company’s reportable segments is set forth below.

The following table describes the Company’s total irrigation and infrastructure revenues for the past three years. United States export revenue is included in International as the region of destination. No individual foreign country’s operating revenues were material for separate disclosure purposes.

		For the years ended August 31,
		2011								2010								2009
						% of Total								% of Total								% of Total
$ in millions		Revenues				Revenues				Revenues				Revenues				Revenues				Revenues
United States		$	307.7				64			$	204.5				57			$	200.6				60
International			171.2				36				153.9				43				135.6				40
Total Revenues		$	478.9				100			$	358.4				100			$	336.2				100

SEASONALITY

Irrigation equipment sales are seasonal by nature. Farmers generally order systems to be delivered and installed before the growing season. Shipments to U.S. customers usually peak during the Company’s second and third fiscal quarters for the spring planting period. Sales of infrastructure products are traditionally higher during prime construction seasons and lower in the winter. The primary construction season in North America is from March until late September which corresponds to the Company’s third and fourth fiscal quarters.

CUSTOMERS

The Company is not dependent for a material part of either segment’s business upon a single customer or upon a limited number of customers. The loss of any one customer would not have a material adverse effect on the Company’s financial condition, results of operations or cash flow.

ORDER BACKLOG

As of August 31, 2011, the Company has an order backlog of $46.0 million compared with $38.4 million at August 31, 2010. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing and execution of contracts. Typically, the Company’s backlog at any point in time represents only a portion of the revenue it expects to realize during the following three month period.

Generally, the Company manufactures or purchases the components for its irrigation equipment from a sales forecast and prepares the equipment for shipment upon the receipt of a U.S. or international dealer’s firm order. Irrigation equipment orders from U.S. dealers are generally accompanied with a down payment unless they are purchased through one of the Company’s dealer network preferred vendor financing programs. Irrigation equipment orders being delivered to international markets from the U.S. are generally shipped against prepayments or receipt of an irrevocable letter of credit confirmed by a U.S. bank or other secured means, which call for delivery within time periods negotiated with the customer. Orders delivered from the Company’s international irrigation manufacturing operations are generally shipped according to payment and/or credit terms customary to that country or region.

Generally, the Company manufactures or purchases the components for its infrastructure equipment, excluding QMB^® systems, from a sales forecast and prepares the equipment for shipment upon the receipt of a U.S. or international distributor’s firm order. The Company manufactures or purchases the components for its QMB^® systems once a contract has been signed. Generally, QMB^® system contracts require a down payment before manufacturing of the QMB^® system will begin.

RAW MATERIALS AND COMPONENTS

Raw materials used by the Company include coil steel, angle steel, plate steel, zinc, tires, gearboxes, concrete, rebar, fasteners, and electrical and hydraulic components (motors, switches, cable, valves, hose and stators). The Company has, on occasion, faced shortages of certain such materials. The Company believes it currently has ready access to adequate supplies of raw materials and components.

CAPITAL EXPENDITURES

Capital expenditures for fiscal 2011, 2010, and 2009 were $8.4 million, $5.8 million and $10.5 million, respectively. Capital expenditures for fiscal 2012, excluding possible expansion of the leased barrier and barrier-transfer machine fleet, are estimated to be approximately $9.0 to $11.0 million. The planned expenditures include equipment for manufacturing equipment replacement, tooling, and facilities for identified efficiency improvements. The Company’s management does maintain flexibility to modify the amount and timing of some of the planned expenditures in response to economic conditions.

PATENTS, TRADEMARKS, AND LICENSES

Lindsay’s Zimmatic^®, Greenfield^®, GrowSmart^®, Quickchange^® Moveable Barrier^™, ABSORB 350^®, TAU^®, Universal TAU-II^®, TAU-B_NR^™, X-Tension^™, CableGuard^™, TESI^™, SAB^™, ArmourGuard^™, PaveGuard^™, DR46^™, U-MAD^™, and other trademarks are registered or applied for in the major markets in which the Company sells its products. Lindsay follows a policy of applying for patents on all significant patentable inventions in markets deemed appropriate. Although the Company believes it is important to follow a patent protection policy, Lindsay’s business is not dependent, to any material extent, on any single patent or group of patents.

EMPLOYEES

The number of persons employed by the Company and its wholly-owned subsidiaries at fiscal year ends 2011, 2010, and 2009 were 999, 891 and 766, respectively. None of the Company’s U.S. employees are represented by a union. Certain of the Company’s non-U.S. employees are unionized due to local governmental regulations.

ENVIRONMENTAL AND HEALTH AND SAFETY MATTERS

Like other manufacturing concerns, the Company is subject to numerous laws and regulations that govern environmental and occupational health and safety matters. The Company believes that its operations are substantially in compliance with all such applicable laws and regulations and that it holds all necessary permits in each jurisdiction in which its facilities are located. Environmental and health and safety regulations are subject to change and interpretation. In some cases, compliance with applicable regulations or standards may require the Company to make additional capital and operational expenditures. The Company, however, is not currently aware of any material capital expenditures required to comply with such regulations, other than as described below, and does not believe that these matters, individually or in the aggregate, are likely to have a material adverse effect on the Company’s consolidated financial condition.

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 EPA’s 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, under which the Company continues to work with the EPA to define and implement steps to better contain and remediate the remaining contamination.

The Company accrues the anticipated cost of remediation when the obligation is probable and can be reasonably estimated. Due to the current stage of discussions with the EPA and the uncertainty of the remediation actions that may be required, the Company believes that meaningful estimates of costs or range of costs cannot currently be made for all future remediation requirements. The Company is scheduled to meet with the EPA in fiscal 2012 to discuss options that could result in more permanent or more clearly defined remediation of the source areas of contamination at the site.

During fiscal 2011, the Company accrued incremental costs of $1.3 million for additional environmental monitoring and remediation in connection with the current ongoing remedial action work plan. Amounts accrued in balance sheet liabilities related to the remediation actions were $1.5 million and $0.9 million at August 31, 2011 and 2010, respectively. Although the Company has accrued all reasonably estimable costs of completing the actions defined in the current ongoing work plan agreed to between the Company and the EPA, it is expected that additional testing and environmental monitoring and remediation will be required in the future as part of the Company’s ongoing discussions with the EPA regarding the development and implementation of the remedial action work plan, which could result in the recognition of additional related expenses. While these additional expenses could significantly exceed the amount accrued as of August 31, 2011 and could be material to the operating results of any fiscal quarter or fiscal year, the Company does not expect that such additional expenses would have a material adverse effect on the liquidity or financial condition of the Company.

FINANCIAL INFORMATION ABOUT FOREIGN AND U.S. OPERATIONS

The Company’s primary production facilities are located in the United States. The Company has smaller production and sales operations in France, Brazil, Italy and China as well as distribution and sales operations in South Africa, Australia and New Zealand. Most of the Company’s financial transactions are in U.S. dollars, although some export sales and sales from the Company’s foreign subsidiaries, which are approximately 19% and 20% of total consolidated Company sales in fiscal 2011 and 2010, respectively, are conducted in local currencies.

A portion of the Company’s cash flow is derived from sales and purchases denominated in currencies other than the designated functional currency. To reduce the uncertainty of foreign currency exchange rate movements on these sales and purchase commitments, the Company monitors its risk of foreign currency fluctuations and, 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 Company’s operations.

In addition to the transactional foreign currency exposures mentioned above, the Company also has translation exposure resulting from translating the financial statements of its international subsidiaries into U.S. dollars. In order to reduce this translation exposure, the Company, at times, utilizes foreign currency forward contracts to hedge its net investment exposure in its foreign operations. For information on the Company’s foreign currency risks, see Item 7A of Part II of this report.

INFORMATION AVAILABLE ON THE LINDSAY WEBSITE

The Company makes available free of charge on its website homepage, under the tab “Investors — SEC Filings”, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Proxy Statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. The Company’s internet address is http://www.lindsay.com; however, information posted on its website is not part of this report on Form 10-K. The following documents are also posted on the Company’s website homepage, under the tab “Investors — Governance — Committees” and “Investors — Governance — Ethics”:

Audit Committee Charter
Compensation Committee Charter
Corporate Governance and Nominating Committee Charter
Corporate Governance Principles
Code of Ethical Conduct
Code of Business Conduct and Ethics
Employee Complaint Procedures for Accounting and Auditing Matters
Special Toll-Free Hotline Number and E-mail Address for Making Confidential or Anonymous Complaints

These documents are also available in print to any shareholder upon request, by sending a letter addressed to the Secretary of the Company.

ITEM 1A		— Risk Factors

The following are certain of the more significant risks that may affect the Company’s business, financial condition and results of operations.

The Company’s U.S. and international irrigation equipment sales are highly dependent on the agricultural industry. The Company’s U.S. and international irrigation equipment sales are highly dependent upon the need for irrigated agricultural crop production which, in turn, depends upon many factors, including total worldwide crop production, the profitability of agricultural crop production, agricultural commodity prices, net cash farm income, availability of financing for farmers, governmental policies regarding the agricultural sector, water and energy conservation policies, the regularity of rainfall, regional climate change, and foreign currency exchange rates. As farm income decreases, farmers may postpone capital expenditures or seek less expensive irrigation alternatives.

The Company’s infrastructure revenues are highly dependent on government funding of transportation projects. The demand for the Company’s infrastructure products depends to a large degree on the amount of government spending authorized to improve road and highway systems. For example, the U.S. government funds highway and road improvements through the Federal Highway Trust Fund Program and matching funding from states may be required as a condition of federal funding. If highway funding is reduced or delayed, it may reduce demand for the Company’s infrastructure products.

The Company’s profitability may be negatively affected by increases in the cost of raw materials, as well as in the cost of energy. Certain of the Company’s input costs, such as the cost of steel, zinc, and other raw materials, may increase rapidly from time to time. Because there is a level of price competition in the market for irrigation equipment and certain infrastructure products, the Company may not be able to recoup increases in these costs through price increases for its products, which would result in reduced profitability. Whether increased operating costs can be passed through to the customer depends on a number of factors, including farm income and the price of competing products. The cost of raw materials can be volatile and is dependent on a number of factors, including availability, demand, and freight costs.

The Company’s international equipment sales are highly dependent on foreign market conditions and are subject to additional risk and restrictions. For the fiscal year ended August 31, 2011, approximately 36% of the Company’s consolidated revenues were generated from international sales and United States export revenue to international regions. Specifically, international revenues are primarily generated from Australia, New Zealand, Canada, Central and Western Europe, Mexico, the Middle East, South Africa, China, and Central and South America. In addition to risks relating to general economic and political stability in these countries, the Company’s international sales are affected by international trade barriers, including governmental policies on tariffs, taxes, import or export licensing requirements, trade sanctions, and foreign currency exchange rates. International sales are also more susceptible to disruption from political instability and similar incidents.

Compliance with applicable environmental and health and safety regulations or standards may require additional capital and operational expenditures. Like other manufacturing concerns, the Company is subject to numerous laws and regulations which govern environmental and occupational health and safety matters. The Company believes that its operations are substantially in compliance with all such applicable laws and regulations and that it holds all necessary permits in each jurisdiction in which its facilities are located. Environmental and health and safety regulations are subject to change and interpretation. Compliance with applicable regulations or standards may require the Company to make additional capital and operational expenditures.

The Company’s Lindsay, Nebraska site was added to the EPA’s list of priority superfund sites in 1989. The Company and its environmental consultants have developed a remedial action work plan, under which the Company continues to work with the EPA to define and implement steps to better contain and remediate the remaining contamination. Under this review process, the Company is scheduled to meet with the EPA in fiscal 2012 to discuss options that could result in a more permanent or more clearly defined remediation of the source area of contamination at the site.

Although the Company has accrued all reasonably estimable costs of completing the actions defined in the current ongoing work plan agreed to between the Company and the EPA, it is expected that additional testing and additional environmental monitoring and remediation will be required in the near future as part of the Company’s ongoing discussions with the EPA regarding the development and implementation of the remedial action work plan, which could result in the recognition of additional related expenses. Additional expenses could significantly exceed the amount accrued as of August 31, 2011 and could be material to the operating results of any fiscal quarter or fiscal year. The Company’s ongoing remediation activities at its Lindsay, Nebraska facility are described in Note L to the Company’s consolidated financial statements.

The Company’s sales and access to credit may be negatively affected by current economic conditions. The ongoing instability in U.S. and international financial and credit markets along with the resulting global recessionary concerns and the slow economic recovery has adversely affected, and is expected to continue to adversely affect, the ability of farmers and government agencies to buy and finance irrigation equipment and highway infrastructure equipment, respectively. It is not certain how long these factors may affect demand for the Company’s products. Disruptions in the financial and credit markets could also restrict the Company’s ability to access credit financing under its existing credit facilities or to obtain additional financing.

The Company’s consolidated financial results are reported in U.S. dollars while certain assets and other reported items are denominated in the currencies of other countries, creating currency translation risk. The reporting currency for the Company’s consolidated financial statements is the U.S. dollar. Certain of the Company’s assets, liabilities, expenses and revenues are denominated in other countries’ currencies. Those assets, liabilities, expenses and revenues are translated into U.S. dollars at the applicable exchange rates to prepare the Company’s consolidated financial statements. Therefore, increases or decreases in exchange rates between the U.S. dollar and those other currencies affect the value of those items as reflected in the Company’s consolidated financial statements. Substantial fluctuations in the value of the U.S. dollar compared to those other currencies could have a significant impact on the Company’s results.

Expansion of the Company’s business may result in unanticipated adverse consequences. The Company routinely considers possible expansions of the business, both domestically and in foreign locations. Acquisitions, partnerships, joint ventures or other similar major investments require significant managerial resources, which may be diverted from the Company’s other business activities. The risks of any expansion of the business through investments, acquisitions, partnerships or joint ventures are increased due to the significant capital and other resources that the Company may have to commit to any such expansion, which may not be recoverable if the expansion initiative to which they were devoted is not fully implemented or is ultimately unsuccessful. As a result of these risks and other factors, including general economic risk, the Company may not be able to realize projected returns from any recent or future acquisitions, partnerships, joint ventures or other investments.

ITEM 1B		— Unresolved Staff Comments

None.

ITEM 2		— Properties

The Company believes that each of its owned properties to be well maintained and adequate for present use. Through planned capital expenditures, the Company expects these properties to remain adequate for future needs. Leased properties are covered by leases expiring over terms of generally one to eleven years. The Company does not anticipate any difficulty in retaining occupancy of any leased facilities, either by renewing leases prior to expiration or by replacing them with equivalent leased facilities. The following are the Company’s significant properties.

Geographic

Own/

Lease

Square

Segment

Location (s)

Lease

Expiration

Feet

Property Description

Corporate

Omaha, Nebraska

Lease

2019

30,000

The Corporate headquarters includes office space for its executive offices, U.S. and international sales and marketing offices and engineering laboratory space.

Irrigation and Infrastructure

Lindsay, Nebraska

Own

N/A

300,000

Principal U.S. manufacturing plant consists of eight separate buildings located on 122 acres

Infrastructure

Omaha, Nebraska

Own

N/A

83,000

Manufacturing plant for infrastructure products located on six acres

Irrigation

Hartland, Wisconsin

Own

N/A

73,000

Two commercial buildings on five acres where it designs, manufactures and services water pumping stations and controls for the agriculture, golf, landscape and municipal markets

Irrigation

La Chapelle, France

Own

N/A

72,000

Manufacturing plant for irrigation products for the European markets, consists of three separate buildings situated on 3.5 acres

Irrigation

Mogi Mirim, Sao Paulo, Brazil

Lease

2013

67,000

Manufacturing plant for irrigation products for the South American markets, consists of two buildings

Irrigation

Tianjin, China

Lease

2013

57,000

Manufacturing plant for irrigation products for the Chinese markets

Infrastructure

Milan, Italy

Own

N/A

45,000

Manufacturing plant for infrastructure products

Infrastructure

Rio Vista, California

Own

N/A

30,000

Manufacturing plant for infrastructure products located on seven acres

Irrigation

Pasco, Grandview, and Othello, Washington

Lease

2014 – 2022

26,000

Retail irrigation operations in three leased buildings

Irrigation

Paarl, South Africa

Lease

2016

20,000

Warehouse facility for the sub-Saharan Africa markets

Irrigation

Milford, Nebraska

Lease

2015

14,400

Manufacturing and engineering locations related to Digitec, Inc.

Irrigation

Toowoomba, Queensland, Australia; Feilding, New Zealand

Lease

2014

8,000

Warehouse facilities for the Australian and New Zealand Markets

Irrigation

Pasco, Washington; Hermiston, Oregon; Portland, Oregon

Lease

2013

6,000

Office and warehouse locations related to IRZ Consulting, LLC

ITEM 3		— 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. No such current proceedings, individually or in the aggregate, are expected to have a material effect on the business or financial condition of the Company.

ITEM 4		— (Removed and Reserved)

PART II

ITEM 5		— Market For the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Lindsay Common Stock trades on the New York Stock Exchange, Inc. (NYSE) under the ticker symbol LNN. As of September 30, 2011, there were approximately 177 shareholders of record.

The following table sets forth for the periods indicated the range of the high and low stock prices and dividends paid per share:

		Fiscal 2011 Stock Price												Fiscal 2010 Stock Price
		High				Low				Dividends				High				Low				Dividends
First Quarter		$	66.48			$	37.22			$	0.085			$	45.08			$	31.20			$	0.080
Second Quarter			79.56				58.00				0.085				47.45				35.02				0.080
Third Quarter			85.87				61.85				0.085				43.92				33.00				0.080
Fourth Quarter			73.03				47.68				0.090				38.19				30.80				0.085
Year		$	85.87			$	37.22			$	0.345			$	47.45			$	30.80			$	0.325

The Company currently expects that cash dividends comparable to those paid historically will continue to be paid in the future, although there can be no assurance as to future dividends as they depend on future earnings, capital requirements and financial condition.

Purchases of equity securities by the issuer and affiliated purchases — The Company made no repurchases of its Common Stock under the Company’s stock repurchase plan during the fiscal year ended August 31, 2011; therefore, tabular disclosure is not presented. From time to time, the Company’s Board of Directors has authorized management to repurchase shares of the Company’s Common Stock. Under this share repurchase plan, management has existing authorization to purchase, without further announcement, up to 881,139 shares of the Company’s Common Stock in the open market or otherwise.

Peer Performance Table — The graph below compares the cumulative 5-year total return attained by shareholders on the Company’s Common Stock relative to the cumulative total returns of the S&P Small Cap 600 Index and the S&P 600 Construction, Farm Machinery and Heavy Truck index for the five-year period ended August 31, 2011. An investment of $100 (with the reinvestment of all dividends) is assumed to have been made in the Company’s Common Stock and in each of the indexes on August 31, 2006 and the graph shows its relative performance through August 31, 2011.

		8/31/2006				8/31/2007				8/31/2008				8/31/2009				8/31/2010				8/31/2011
Lindsay Corporation			100.00				143.20				290.54				148.49				133.09				225.76
S&P Smallcap 600			100.00				114.27				107.18				84.96				91.60				113.98
S&P SmallCap 600 Construction, Farm Machinery and Heavy Truck			100.00				153.55				131.99				90.13				101.67				127.29

ITEM 6		— Selected Financial Data

		For the Years Ended August 31,
in millions, except per share amounts		2011				2010				2009				2008				2007
Operating revenues (1)		$	478.9			$	358.4			$	336.2			$	475.1			$	281.9
Gross profit			129.8				98.9				80.6				123.8				69.7
Operating expenses			73.2				61.1				58.2				61.6				46.0
Operating income			56.6				37.8				22.4				62.2				23.8
Net earnings			36.8				24.9				13.8				39.4				15.6
Net diluted earnings per share			2.90				1.98				1.11				3.20				1.31
Cash dividends per share			0.345				0.325				0.305				0.285				0.265
Property, plant and equipment, net			58.5				57.6				59.6				57.6				44.3
Total assets			381.1				325.5				307.9				325.9				242.2
Long-term obligations			4.3				8.6				19.5				25.6				31.8
Return on sales			7.7	%			6.9	%			4.1	%			8.3	%			5.5	%
Return on beginning assets (2)			11.3	%			8.1	%			4.2	%			16.3	%			8.1	%
Diluted weighted average shares			12.692				12.585				12.461				12.324				11.964

ITEM 7		— Management’s Discussion and Analysis of Financial Condition and Results of Operations

Concerning Forward-Looking Statements — This Annual Report on Form 10-K 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 performance. In addition, forward-looking statements may be made orally or in press releases, conferences, reports, on the Company’s 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” and similar expressions generally identify forward-looking statements. The entire section entitled Market Conditions and Fiscal 2012 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 contained in Item 1A. Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results which may not occur as anticipated. Actual results 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 Company’s 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.

Overview

The Company manufactures and markets Zimmatic^®, Greenfield^®, Stettyn^™, and Perrot^™ center pivot, lateral move, and hose reel irrigation systems. The Company also produces irrigation controls, chemical injection systems and remote monitoring and control systems which it sells under its GrowSmart^® brand. These products are used by farmers to increase or stabilize crop production while conserving water, energy, and labor. Through its acquisitions, the Company has been able to enhance its capabilities in providing innovative, turn-key solutions to customers through the integration of its proprietary pump stations, controls and designs. The Company sells its irrigation products primarily to a world-wide independent dealer network, who resell to their customer, the farmer. The Company’s primary production facilities are located in the United States. The Company has smaller production and sales operations in France, Brazil, Italy and China as well as distribution and sales operations in South Africa, Australia and New Zealand. The Company also manufactures and markets various infrastructure products, including moveable barriers for traffic lane management, crash cushions, preformed reflective pavement tapes and other road safety devices, through its production facilities in Omaha, Nebraska, Rio Vista, California and Milan, Italy. In addition, the Company’s infrastructure segment produces large diameter steel tubing and railroad signals and structures, and provides outsourced manufacturing and production services for other companies.

Key factors which impact demand for the Company’s irrigation products include agricultural commodity prices, net cash farm income, crop yields, weather, environmental regulations, availability of financing and interest rates. A key factor which impacts demand for the Company’s infrastructure products is the amount of spending authorized by governments to improve road and highway systems. Much of the U.S. highway infrastructure market is driven by government spending programs. For example, the U.S. government funds highway and road improvements through the Federal Highway Trust Fund Program. This program provides funding to improve the nation’s roadway system. Matching funding from the various states may be required as a condition of federal funding.

The Company will continue to focus on opportunities for growth both organically and through acquisitions. The Company’s recent business combinations include IRZ Consulting, LLC on August 26, 2011, WMC Technology Limited on November 3, 2010, Digitec, Inc. (“Digitec”) on August 31, 2010 and Watertronics, LLC on January 24, 2008. These acquisitions reflect the execution of the Company’s strategy to grow its irrigation business with additional proprietary irrigation products. In addition, on August 28, 2009, the Company completed the acquisition of certain assets of GE Transportation Systems Global Signaling, LLC. The Company sees opportunities to create shareholder value through the acquisition of product line extensions that will enhance the Company’s highway safety product offering, globally.

Since 2001, the Company has added the operations in Europe, South America, South Africa, Australia, New Zealand and China. The addition of those operations has allowed the Company to strengthen its market position in those regions, yet they remain relatively small in scale. As a result, none of the international operations has achieved the operating margin of the United States based irrigation operations.

Recently Issued Accounting Pronouncements

In December 2010, the FASB issued ASU No. 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations, which requires a public entity presenting comparative financial statements to disclose revenue and earnings of the combined entity as though the business combination occurring during the current year had occurred as of the beginning of the comparable prior annual reporting period. Additionally, the standard expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The standard is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company does not expect the adoption of this standard to impact the consolidated financial statements except for the requirement of additional pro forma disclosures.

In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which requires the categorization by level for items that are only required to be disclosed at fair value and information about transfers between Level 1 and Level 2. In addition, the ASU provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The ASU requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The guidance is effective for fiscal years beginning after December 15, 2011. The Company does not expect the adoption of this standard to impact the consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends ASC 220, Comprehensive Income, by requiring all nonowner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance is effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2011. The Company is currently evaluating the impact of the adoption of the guidance on its consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Intangibles — Goodwill and Other. ASU No. 2011-08 allows entities to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting period is less than its carrying amount, the quantitative two-step goodwill impairment test is required. An entity has the unconditional option to bypass the qualitative assessment and proceed directly to performing the first step of the goodwill impairment test. The guidance is effective for annual and interim impairment tests for fiscal years beginning after December 15, 2011. The Company does not expect the adoption of this standard to impact the consolidated financial statements.

Critical Accounting Policies and Estimates

In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management must make a variety of decisions which impact the reported amounts and the related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching such decisions, management applies judgment based on its understanding and analysis of the relevant facts and circumstances. Certain of the Company’s accounting policies are critical, as these policies are most important to the presentation of the Company’s consolidated results of operations and financial condition. They require the greatest use of judgments and estimates by management based on the Company’s historical experience and management’s knowledge and understanding of current facts and circumstances. Management periodically re-evaluates and adjusts the estimates that are used as circumstances change.

Following are the accounting policies management considers critical to the Company’s consolidated results of operations and financial condition:

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method for the Company’s 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 Company’s Omaha, Nebraska warehouse, and at operating locations in California, Wisconsin, China and Australia. Cost is determined by the weighted average cost method for inventory at the Company’s 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.

Valuation of Goodwill, Identifiable Intangible Assets and Other Long-Lived Assets

Assessment of the potential impairment of goodwill, intangible assets and other long-lived assets is an integral part of the Company’s normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on numerous assumptions and reflects management’s best estimates at a particular point in time. The dynamic economic environments in which the Company’s businesses operate and key economic and business assumptions related to projected selling prices, market growth, inflation rates and operating expense ratios, can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized.

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Acquired intangible assets are recognized separately from goodwill. Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually at August 31 and whenever triggering events or changes in circumstances indicate its carrying value may not be recoverable. The Company performs the impairment analysis at the reporting unit level using a two-step impairment test. Fair value is typically estimated using a discounted cash flow analysis, which requires the Company to estimate the future cash flows anticipated to be generated by the particular assets being tested for impairment as well as to select a discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, the Company considers historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment and assumptions by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. To the extent that the reporting unit is unable to achieve these assumptions, impairment losses may emerge. The Company updated its impairment evaluation of goodwill and intangible assets with indefinite useful lives at August 31, 2011.

While the fair value of most of the Company’s reporting units exceeded the respective carrying values by a substantial margin, one international reporting unit, which has goodwill of $6.1 million, had an estimated fair value less than 10% in excess of carrying value. Accordingly, no impairment losses were indicated as a result of the annual impairment testing for fiscal years 2011, 2010, and 2009. If assumptions on discount rates and future cash flows change as a result of events or circumstances, and the Company believes that the long-term profitability may have declined in value, then the Company may record impairment charges, resulting in lower profits. Sales and profitability of each of the Company’s reporting units may fluctuate from year to year and within a year. In the evaluation of the fair value of reporting units, the Company looks at the long-term prospects for the reporting unit and recognizes that current performance may not be the best indicator of future prospects or value, which requires management judgment.

Indefinite life intangible assets primarily consist of tradenames/trademarks. The fair value of these assets are determined using a “relief from royalty” analysis that determines the fair value of each trademark through use of a discounted cash flow model that incorporates an estimated “royalty rate” the Company would be able to charge a third party for the use of the particular trademark. When determining the future cash flow estimates, the Company must estimate future net sales and a fair market royalty rate for each applicable tradename at an appropriate discount rate to measure the present value of the anticipated cash flows. Estimating future net sales requires significant judgment by management in such areas as future economic conditions, industry-specific conditions, product pricing, and consumer trends.

Revenue Recognition

The Company’s basic criteria necessary for revenue recognition are: 1) evidence of a sales arrangement exists, 2) delivery of goods has occurred, 3) the seller’s price to the buyer is fixed or determinable, and 4) collectability is reasonably assured. The Company recognizes revenue when these criteria have been met and when title and risk of loss transfers to the customer. The Company generally has no post delivery obligations to its independent dealers other than standard warranties. Revenues and gross profits on intercompany sales are eliminated in consolidation.

Revenues from the sale of the Company’s irrigation products to its U.S. independent dealers, international locations, and sales by its international locations are recognized based on the delivery terms in the sales contract. If an arrangement involves multiple deliverables, the delivered items are considered separate units of accounting if the items have value on a stand-alone basis and there is objective and reliable evidence of their fair values. Revenues from the arrangement are allocated to the separate units of accounting based on their objectively determined fair value. Revenues for retail sales of irrigation products are recognized when the product or service is delivered to the end-user customers. A small portion of the Company’s revenues relate to subscription revenue of wireless management services and are recognized on a straight-line basis over the contract term.

Revenues from the sale of infrastructure products are usually recognized when the product is delivered to the customer; however, they are dependent on the specific delivery terms in the sales contract. The Company leases certain infrastructure property held for lease to customers such as moveable concrete barriers and QMB^® systems. Revenues for the lease of infrastructure property held for lease are recognized on a straight-line basis over the lease term. If an infrastructure project is completed ahead of schedule and prior to the lease term end date, the Company accelerates the lease term and the timing of recognized revenue once the Company is no longer required to perform under the lease contract.

The costs related to revenues are recognized in the same period in which the specific revenues are recorded. Shipping and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by the Company are included in cost of sales. Customer rebates, cash discounts and other sales incentives are recorded as a reduction of revenues at the time of the original sale. Estimates used in the recognition of operating revenues and cost of operating revenues include, but are not limited to, estimates for product warranties, product rebates, cash discounts and fair value of separate units of accounting on multiple deliverables.

Results of Operations

The following “Fiscal 2011 Compared to Fiscal 2010” and the “Fiscal 2010 Compared to Fiscal 2009” sections present an analysis of the Company’s consolidated operating results displayed in the Consolidated Statements of Operations and should be read together with the industry segment information in Note O to the consolidated financial statements.

Fiscal 2011 Compared to Fiscal 2010

The following table provides highlights for fiscal 2011 compared with fiscal 2010:

		For the Years Ended								Percent
		August 31,								Increase
$ in thousands		2011				2010				(Decrease)
Consolidated
Operating revenues		$	478,890			$	358,440				33.6	%
Cost of operating revenues		$	349,105			$	259,540				34.5	%
Gross profit		$	129,785			$	98,900				31.2	%
Gross margin			27.1	%			27.6	%
Operating expenses (1)		$	73,199			$	61,058				19.9	%
Operating income		$	56,586			$	37,842				49.5	%
Operating margin			11.8	%			10.6	%
Interest expense		$	(762	)		$	(1,557	)			(51.1	)%
Interest income		$	315			$	352				(10.5	)%
Other income (expense), net		$	375			$	145				158.6	%
Income tax provision		$	19,712			$	11,920				65.4	%
Effective income tax rate			34.9	%			32.4	%
Net earnings		$	36,802			$	24,862				48.0	%
Irrigation Equipment Segment (See Note O)
Operating revenues		$	369,930			$	258,666				43.0	%
Operating income (2)		$	59,703			$	40,869				46.1	%
Operating margin (2)			16.1	%			15.8	%
Infrastructure Products Segment (See Note O)
Operating revenues		$	108,960			$	99,774				9.2	%
Operating income (2)		$	11,901			$	11,083				7.4	%
Operating margin (2)			10.9	%			11.1	%

Revenues

Operating revenues for fiscal 2011 increased by $120.5 million to $478.9 million compared with $358.4 million in fiscal 2010. The increase is attributable to a $111.3 million increase in irrigation equipment revenues and a $9.2 million increase in infrastructure segment revenues.

U.S. irrigation equipment revenues of $227.6 million increased $74.8 million or 49% compared to fiscal 2010. The increase in U.S. irrigation equipment revenues is primarily due to an increase in the number of irrigation systems sold compared to the prior fiscal year. Favorable economic conditions in U.S. agriculture markets continued to drive strong demand for irrigation equipment. Relatively high commodity prices, with corn increasing 27% and soybeans increasing 11% from the same period last year, continued to support improved irrigation equipment demand. In August 2011, the USDA increased its projected 2011 net farm income to be the highest on record and 31% higher than 2010, creating positive economic conditions for U.S. farmers.

International irrigation revenues of $142.3 million increased $36.5 million from fiscal 2010 revenues of $105.8 million. Operating revenues increased in nearly all international markets, most significantly in China, Brazil, Australia, New Zealand and the Middle East. Long-term market drivers of improving diets in a growing world-wide population combined with the water use efficiencies available from mechanized irrigation systems continue to be positive drivers for global irrigation equipment demand.

Infrastructure products segment revenues of $109.0 million increased by $9.2 million or 9% compared to the prior fiscal year. The increase in infrastructure revenues was driven primarily by higher QMB^® system revenue and from railroad signals and structures, commercial tubing and contract manufacturing businesses.

Gross Margin

Gross profit was $129.8 million for fiscal 2011, an increase of $30.9 million compared to fiscal 2010. Gross margin was 27.1% for fiscal 2011 compared to 27.6% for the prior fiscal year. Gross margins were lower primarily due to regional sales mix, product mix, and factory inefficiencies during the implementation of a new enterprise resource planning system in the Nebraska-based operations.

Operating Expenses

The Company’s operating expenses of $73.2 million for fiscal 2011 increased $12.1 million compared to fiscal 2010 operating expenses of $61.1 million. The increase in operating expenses for fiscal 2011 was primarily attributable to investments in sales and marketing, higher research and development expenses, higher incentive compensation, and inclusion of operating expenses from acquisitions completed in fiscal 2010. Operating expenses were 15.3% of sales for fiscal 2011 compared to 17.0% of sales for fiscal 2010.

Income Taxes

Income tax expense of $19.7 million for fiscal 2011 increased $7.8 million compared to fiscal 2010 income tax expense of $11.9 million. The increase in income tax expense was primarily due to increases in pretax income. The effective income tax rate increased to 34.9% in fiscal 2011 compared to 32.4% in fiscal 2010. The increase in the effective income tax rate is primarily due to a reduction in state income tax credits of $1.4 million compared to fiscal 2010.

Net Earnings

Net earnings for fiscal 2011 were $36.8 million or $2.90 per diluted share for fiscal 2011 compared to $24.9 million, or $1.98 per diluted share for the prior fiscal year. The Company’s operating income increased to $56.6 million in fiscal 2011 compared to $37.8 million during the prior fiscal year primarily due to an increase in revenues partially offset by higher operating expenses.

Fiscal 2010 Compared to Fiscal 2009

The following table provides highlights for fiscal 2010 compared with fiscal 2009:

		For the Years Ended								Percent
		August 31,								Increase
$ in thousands		2010				2009				(Decrease)
Consolidated
Operating revenues		$	358,440			$	336,228				6.6	%
Cost of operating revenues		$	259,540			$	255,597				1.5	%
Gross profit		$	98,900			$	80,631				22.7	%
Gross margin			27.6	%			24.0	%
Operating expenses (1)		$	61,058			$	58,214				4.9	%
Operating income		$	37,842			$	22,417				68.8	%
Operating margin			10.6	%			6.7	%
Interest expense		$	(1,557	)		$	(2,030	)			(23.3	)%
Interest income		$	352			$	934				(62.3	)%
Other income (expense), net		$	145			$	(782	)			118.5	%
Income tax provision		$	11,920			$	6,716				77.5	%
Effective income tax rate			32.4	%			32.7	%
Net earnings		$	24,862			$	13,823				79.9	%
Irrigation Equipment Segment (See Note O)
Operating revenues		$	258,666			$	255,507				1.2	%
Operating income (2)		$	40,869			$	35,504				15.1	%
Operating margin (2)			15.8	%			13.9	%
Infrastructure Products Segment (See Note O)
Operating revenues		$	99,774			$	80,721				23.6	%
Operating income (2)		$	11,083			$	(36	)			N/A
Operating margin (2)			11.1	%			0.0	%

Revenues

Operating revenues for fiscal 2010 increased by $22.2 million or 7% from fiscal 2009. The increase was attributable to a 24% increase in infrastructure product revenues and a 1% increase in irrigation equipment revenues.

U.S. irrigation revenues decreased $3.3 million or 2% compared to fiscal 2009. This decrease in revenues was primarily due to a decrease of $20.9 million in U.S. irrigation revenues in the first quarter of fiscal 2010 as compared to the same prior year period due to record backlog from the end of fiscal 2008. Offsetting this decrease was an increase in the number of irrigation systems sold in the remaining fiscal quarters of fiscal 2010 compared to the same prior year periods. This was tempered by a decrease in the average selling price per unit. Commodity prices rose during the fourth quarter of fiscal 2010 with corn up approximately 70%, soybeans up approximately 26% and wheat up over 60% since early June 2010. The August update to the USDA for 2010 net farm income indicated a 28% increase compared to 2009. International irrigation revenues increased $6.4 million or 6% compared to fiscal 2009. The Company’s international irrigation business units in South America, South Africa and Europe, as well as exports to Mexico, all achieved solid growth in fiscal 2010, partially offset by lower revenues in other regions.

Infrastructure products segment revenues of $99.8 million increased by $19.1 million or 24% compared to the prior fiscal year. The increase in infrastructure revenues is attributable to revenues increasing primarily from sales of quick-change moveable barrier systems. The Company saw strong interest in its moveable barrier products which are a very cost effective way to add lane capacity. This increase was partially offset by smaller decreases at the Company’s business unit in Milan, Italy.

Gross Margin

Gross profit was $98.9 million for fiscal 2010, an increase of $18.3 million compared to fiscal 2009. Gross margin was 27.6% for fiscal 2010 compared to 24.0% for the prior fiscal year. Gross margin on irrigation products was favorably impacted by improved factory efficiencies at the Company’s Lindsay, Nebraska facility and a favorable regional sales mix. Gross margin on infrastructure products improved due to increased revenues of higher margin moveable barrier product.

Operating Expenses

The Company’s operating expenses of $61.1 million for fiscal 2010 increased $2.8 million compared to fiscal 2009. The increase in operating expenses for fiscal 2010 was primarily attributable to increased investments in product development and higher incentive compensation resulting from improved financial performance. This was partially offset by lower personnel related costs. Operating expenses were 17.0% of sales for fiscal 2010 compared to 17.3% of sales for fiscal 2009.

Income Taxes

Income tax expense of $11.9 million for fiscal 2010 increased $5.2 million compared to fiscal 2009 income tax expense of $6.7 million. The increase in income tax expense was primarily due to increases in pretax income. The effective income tax rate decreased to 32.4% in fiscal 2010 compared to 32.7% in fiscal 2009. The decrease in the effective income tax rate is primarily due to an increase in state income tax credits compared to fiscal 2009.

Net Earnings

Net earnings were $24.9 million or $1.98 per diluted share for fiscal 2010 compared with $13.8 million or $1.11 per diluted share for the same prior year period. The Company’s operating income increased to $37.8 million for fiscal 2010 compared to $22.4 million for fiscal 2009 due primarily to an increase in revenues and in gross margin, which were partially offset by higher operating expenses.

Liquidity and Capital Resources

The Company requires cash for financing its receivables and inventories, paying operating expenses 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 three credit arrangements that are described below.

The Company 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. The Company has permanently reinvested cash and cash equivalents in foreign operations of $10.2 million and $6.4 million as of August 31, 2011 and 2010, respectively, and does not expect these balances to have a significant impact on the Company’s overall liquidity.

Cash flows provided by operations totaled $43.1 million for fiscal 2011 compared to $23.8 million provided by operations during the prior year. Cash provided by operations increased primarily due to an $11.9 million increase in net earnings and a $6.1 million decrease in cash used for working capital items.

Cash flows used in investing activities totaled $15.6 million for fiscal 2011 compared to cash flows used in investing activities of $9.7 million during fiscal 2010. The increase in cash used for investing activities was primarily due to an increase in purchases of property, plant and equipment, the acquisition of the assets of WMC Technology Limited in November 2010, the acquisition of IRZ Consulting, LLC in August 2011, and the settlement of net investment hedges.

Cash flows used in financing activities totaled $3.4 million for fiscal 2011 compared to cash flows used in financing activities of $16.2 million during the same prior year period. The decrease in cash used in financing activities compared to fiscal 2010 was primarily due to principal payments on long-term debt that were $8.5 million lower in fiscal 2011, a $2.4 million increase in excess tax benefits from stock-based compensation in fiscal 2011, and a $2.2 million increase in Common Stock issuances under the Company’s equity compensation plans in fiscal 2011.

The Company has an unsecured $30.0 million Revolving Credit Note and Credit Agreement, as amended on January 23, 2011, with Wells Fargo Bank, N.A. (the “Amended Revolving Credit Agreement”) which has a termination date of January 23, 2014. As of August 31, 2011 and 2010, there were no outstanding balances on the Amended Revolving Credit Agreement.

Borrowings under the Amended Revolving Credit Agreement bear interest at a rate equal to LIBOR plus 105 basis points, subject to adjustment as set forth in the Amended Revolving Credit Agreement. Interest is paid on a monthly or quarterly basis depending on loan type. The Company also pays an annual commitment fee of 0.25% on the unused portion of the Amended Revolving Credit Agreement. Unpaid principal and interest is due by January 23, 2014, which is the termination date of the Amended Revolving Credit Agreement.

The Company’s 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 for working capital purposes up to 2.3 million Euros, which equates to approximately $3.3 million as of August 31, 2011 (the “Euro Line of Credit”). At August 31, 2011 and 2010, there were no borrowings 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 110 basis points (all inclusive, 2.13% at August 31, 2011). Unpaid principal and interest is due by January 31, 2012, which is the termination date of the Euro Line of Credit. The Company’s management expects to obtain a similar line of credit prior to termination.

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 Barrier Systems, Inc. (“BSI”). Borrowings under the BSI Term Note originally bore interest at a rate equal to LIBOR plus 50 basis points. However, this variable interest rate was 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 on June 10, 2013.

The BSI Term Note and the Amended Revolving Credit Agreement (collectively, the “Notes”) each contain the same covenants, including certain covenants relating to the Company’s financial condition. These include maintaining a funded debt to EBITDA ratio, a fixed charge coverage ratio, a current ratio and a tangible net worth requirement (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 August 31, 2011 and 2010, the Company was in compliance with all loan covenants.

Inflation

The Company is subject to the effects of changing prices. During fiscal 2011, the Company realized pricing volatility for purchases of certain commodities, in particular steel and zinc products, used in the production of its products. While the cost outlook for commodities used in the production of the Company’s products is not certain, management believes it can manage these inflationary pressures by introducing appropriate sales price adjustments and by actively pursuing internal cost reduction efforts, while further refining the Company’s inventory and raw materials risk management system. However, competitive market pressures may affect the Company’s ability to pass price adjustments along to its customers.

Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements

In the normal course of business, the Company enters into contracts and commitments which obligate the Company to make future payments. The Company uses off-balance sheet arrangements, such as leases accounted for as operating leases, standby letters of credit and performance bonds, where sound business principles warrant their use. The table below sets forth the Company’s significant future obligations by time period. Where applicable, information included in the Company’s consolidated financial statements and notes is cross-referenced in this table.

																						More
$ in thousands		Note								Less than				2-3				4-5				than 5
Contractual Obligations		Reference				Total				1 Year				Years				Years				Years
Leases			L			$	9,718			$	2,295			$	3,125			$	1,845			$	2,453
Term Note Obligation			J				8,571				4,286				4,285				—				—
Interest Expense			J				583				421				162				—				—
Unrecognized Tax Benefits (1)			D				1,565				—				—				—				1,565
Supplemental Retirement Plan			M				6,787				557				1,079				1,058				4,093
Total						$	27,224			$	7,559			$	8,651			$	2,903			$	8,111

The Company does not have any additional off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Market Conditions and Fiscal 2012 Outlook

Strong sales in the fourth fiscal quarter of 2011 completed a year in which the Company experienced significant growth in nearly all irrigation markets and the highest revenues in Company history.

Agricultural commodity prices, which are subject to a variety of external factors historically driving significant fluctuation, remained relatively high at the end of fiscal 2011, continuing to support improved irrigation equipment demand. In August 2011, the USDA increased its projected 2011 net farm income to be the highest on record and 31% higher than 2010, creating positive economic conditions for U.S. farmers. The Company believes that the positive economic conditions for farmers, the Section 179 deduction for the write-off for accelerated depreciation of equipment purchases in the U.S., and the global drive for food security will support continued strong demand in fiscal 2012. The Company believes the most significant opportunities for growth over the next several years are in international markets, where irrigation use is significantly less developed, and demand is driven by food security, water scarcity and population growth.

In the near-term, the governmental debt environment will likely lead to additional examination of farm subsidies and tax credits, such as the Volumetric Ethanol Excise Tax Credit for ethanol and the extension of the Section 179 deduction for accelerated depreciation on equipment purchased, which could impact demand in the U.S. market.

In the infrastructure segment the Company has recently experienced stable sales in an environment that is supported primarily by highway and railroad spending. The Company continues to experience global interest in its QMB^® systems as a cost effective method for managing traffic congestion by safely adding lane capacity; however, the timing of orders for these projects is uncertain and difficult to forecast in the present economic environment. Demand for the Company’s transportation safety products continues to be driven by population growth and the need for improved road safety. The outlook for general government funded infrastructure spending remains challenging due to global governmental budget constraints and uncertainty on timing of a multi-year U.S. highway bill.

As of August 31, 2011, the Company has an order backlog of $46.0 million compared with $43.3 million at May 31, 2011 and $38.4 million at August 31, 2010. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing and execution of contracts. Typically, the Company’s backlog at any point in time represents only a portion of the revenue it expects to realize during the following three month period.

For the business overall, the global, long-term drivers of water conservation, population growth, increasing importance of biofuels, and the need for safer, more efficient transportation solutions remain positive. In addition, Lindsay continues to have an on-going, structured, acquisition process that will generate additional growth opportunities throughout the world in water and infrastructure. The Company’s strong balance sheet has positioned the Company to invest in growth initiatives both organically and through acquisitions. Lindsay is committed to achieving earnings growth through global market expansion, improvements in margins, and strategic acquisitions.

ITEM 7A		— 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 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. At times, export sales may be denominated in a currency other than the U.S. dollar. A majority of the Company’s revenue generated from operations outside the United States is denominated in local currency. Accordingly, these sales are not typically subject to significant foreign currency transaction risk. The Company’s most significant transactional foreign currency exposures are the Euro, the Brazilian real, the South African rand and the Chinese renminbi in relation to the U.S. dollar. Fluctuations in the value of foreign currencies create exposures, which can adversely affect the Company’s 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 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. At August 31, 2011, the Company had outstanding forward exchange contracts with cash flow hedging relationships totaling less than $0.1 million included in other current 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 a portion of its Euro net investment exposure in its foreign operations. At August 31, 2011, the Company had outstanding Euro foreign currency forward contracts to sell 10.0 million Euro at fixed prices expected to settle during the first quarter of fiscal 2012.

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.

ITEM 8		— Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Lindsay Corporation:

We have audited the accompanying consolidated balance sheets of Lindsay Corporation and subsidiaries (the Company) as of August 31, 2011 and 2010, and the related consolidated statements of operations, shareholders’ equity and comprehensive income, and cash flows for each of the years in the three-year period ended August 31, 2011. In connection with our audits of the consolidated financial statements, we have also audited the financial statement schedule listed in Item 15(a)(2) of this Form 10-K. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lindsay Corporation and subsidiaries as of August 31, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended August 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of August 31, 2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated October 27, 2011 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Omaha, Nebraska
October 27, 2011

Lindsay Corporation and Subsidiaries

		Years ended August 31,
(in thousands, except per share amounts)		2011				2010				2009
Operating revenues		$	478,890			$	358,440			$	336,228
Cost of operating revenues			349,105				259,540				255,597
Gross profit			129,785				98,900				80,631
Operating expenses:
Selling expense			27,842				23,070				22,361
General and administrative expense			34,954				30,196				29,816
Engineering and research expense			10,403				7,792				6,037
Total operating expenses			73,199				61,058				58,214
Operating income			56,586				37,842				22,417
Other income (expense):
Interest expense			(762	)			(1,557	)			(2,030	)
Interest income			315				352				934
Other income (expense), net			375				145				(782	)
Earnings before income taxes			56,514				36,782				20,539
Income tax provision			19,712				11,920				6,716
Net earnings		$	36,802			$	24,862			$	13,823
Basic net earnings per share		$	2.93			$	2.00			$	1.12
Diluted net earnings per share		$	2.90			$	1.98			$	1.11
Weighted average shares outstanding			12,560				12,451				12,294
Diluted effect of stock equivalents			132				134				167
Weighted average shares outstanding assuming dilution			12,692				12,585				12,461
Cash dividends per share		$	0.345			$	0.325			$	0.305

The accompanying notes are an integral part of the condensed consolidated financial statements.

Lindsay Corporation and Subsidiaries

		August 31,				August 31,
($ and shares in thousands, except par values)		2011				2010
ASSETS
Current Assets:
Cash and cash equivalents		$	108,167			$	83,418
Receivables, net of allowance of $2,340 and $2,244, respectively			79,006				63,629
Inventories, net			49,524				45,296
Deferred income taxes			8,598				6,722
Other current assets			12,398				8,946
Total current assets			257,693				208,011
Property, plant and equipment, net			58,465				57,646
Other intangible assets, net			28,639				27,715
Goodwill, net			30,943				27,395
Other noncurrent assets			5,404				4,714
Total assets		$	381,144			$	325,481
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	32,153			$	26,501
Current portion of long-term debt			4,286				4,286
Other current liabilities			42,880				36,295
Total current liabilities			79,319				67,082
Pension benefits liabilities			6,231				6,400
Long-term debt			4,285				8,571
Deferred income taxes			12,550				10,816
Other noncurrent liabilities			3,094				3,005
Total liabilities			105,479				95,874
Shareholders’ equity:
Preferred stock, ($1 par value, 2,000 shares authorized, no shares issued and outstanding)			—				—
Common stock, ($1 par value, 25,000 shares authorized, 18,374 and 18,185 shares issued at August 31, 2011 and 2010, respectively)			18,374				18,185
Capital in excess of stated value			39,058				30,756
Retained earnings			302,732				270,272
Less treasury stock (at cost, 5,698 shares at August 31, 2011 and 2010, respectively)			(90,961	)			(90,961	)
Accumulated other comprehensive income, net			6,462				1,355
Total shareholders’ equity			275,665				229,607
Total liabilities and shareholders’ equity		$	381,144			$	325,481

The accompanying notes are an integral part of the condensed consolidated financial statements.

Lindsay Corporation and Subsidiaries

														Capital in												Accumulated
		Shares of				Shares of								excess of												other				Total
		Common				Treasury				Common				stated				Retained				Treasury				comprehensive				Shareholders’
(in thousands, except per share amounts)		stock				stock				stock				value				earnings				stock				income (loss)				equity
Balance at August 31, 2008			18,055				5,843			$	18,055			$	26,352			$	239,676			$	(93,275	)		$	5,093			$	195,901
Comprehensive income:
Net earnings			—				—				—				—				13,823				—				—				13,823
Other comprehensive income			—				—				—				—				—				—				(2,098	)			(2,098	)
Total comprehensive income																															11,725
Cash dividends ($0.305) per share			—				—				—				—				(3,754	)			—				—				(3,754	)
Issuance of common stock under stock compensation plans			74				(80	)			74				225				(157	)			1,277				—				1,419
Excess tax benefits from stock-based compensation			—				—				—				293				—				—				—				293
Stock-based compensation expense			—				—				—				2,074				—				—				—				2,074
Balance at August 31, 2009			18,129				5,763			$	18,129			$	28,944			$	249,588			$	(91,998	)		$	2,995			$	207,658
Comprehensive income:
Net earnings			—				—				—				—				24,862				—				—				24,862
Other comprehensive income			—				—				—				—				—				—				(1,640	)			(1,640	)
Total comprehensive income																															23,222
Cash dividends ($0.325) per share			—				—				—				—				(4,051	)			—				—				(4,051	)
Issuance of common stock under stock compensation plans			56				(65	)			56				(417	)			(127	)			1,037				—				549
Excess tax benefits from stock-based compensation			—				—				—				127				—				—				—				127
Stock-based compensation expense			—				—				—				2,102				—				—				—				2,102
Balance at August 31, 2010			18,185				5,698			$	18,185			$	30,756			$	270,272			$	(90,961	)		$	1,355			$	229,607
Comprehensive income:
Net earnings			—				—				—				—				36,802				—				—				36,802
Other comprehensive income			—				—				—				—				—				—				5,107				5,107
Total comprehensive income																															41,909
Cash dividends ($0.345) per share			—				—				—				—				(4,342	)			—				—				(4,342	)
Issuance of common stock under stock compensation plans			189				—				189				2,547				—				—				—				2,736
Excess tax benefits from stock-based compensation			—				—				—				2,487				—				—				—				2,487
Stock-based compensation expense			—				—				—				3,268				—				—				—				3,268
Balance at August 31, 2011			18,374				5,698			$	18,374			$	39,058			$	302,732			$	(90,961	)		$	6,462			$	275,665

The accompanying notes are an integral part of the consolidated financial statements.

Lindsay Corporation and Subsidiaries

		Years Ended August 31,
($ in thousands)		2011				2010				2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$	36,802			$	24,862			$	13,823
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			11,734				10,710				10,442
Provision for uncollectible accounts receivable			388				732				558
Deferred income taxes			(2,828	)			(1,500	)			(1,226	)
Stock-based compensation expense			3,474				2,206				2,140
Other, net			208				(399	)			1,357
Changes in assets and liabilities:
Receivables			(12,626	)			(22,294	)			43,316
Inventories			(1,826	)			827				7,726
Other current assets			(1,430	)			(2,862	)			1,009
Accounts payable			4,780				6,739				(12,116	)
Other current liabilities			8,223				1,388				(6,965	)
Current taxes payable			(2,327	)			5,287				(3,140	)
Other noncurrent assets and liabilities			(1,517	)			(1,863	)			571
Net cash provided by operating activities			43,055				23,833				57,495
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(8,405	)			(5,784	)			(10,500	)
Proceeds from sale of property, plant and equipment			80				606				21
Acquisition of business, net of cash acquired			(6,180	)			(6,436	)			(3,076	)
Proceeds from note receivable			—				1,409				—
(Payment) proceeds for settlement of net investment hedge			(1,119	)			518				859
Net cash used in investing activities			(15,624	)			(9,687	)			(12,696	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock under stock compensation plans			2,736				549				1,419
Principal payments on long-term debt			(4,286	)			(12,769	)			(6,171	)
Net borrowing on revolving line of credit			—				—				(1,633	)
Excess tax benefits from stock-based compensation			2,487				76				344
Dividends paid			(4,342	)			(4,051	)			(3,754	)
Net cash used in financing activities			(3,405	)			(16,195	)			(9,795	)
Effect of exchange rate changes on cash			723				(462	)			165
Net increase (decrease) in cash and cash equivalents			24,749				(2,511	)			35,169
Cash and cash equivalents, beginning of period			83,418				85,929				50,760
Cash and cash equivalents, end of period		$	108,167			$	83,418			$	85,929
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid		$	22,057			$	8,368			$	11,081
Interest paid		$	860			$	1,648			$	2,146

The accompanying notes are an integral part of the condensed consolidated financial statements.

Lindsay Corporation and Subsidiaries

A. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Lindsay Corporation, along with its subsidiaries (collectively called “Lindsay” or the “Company”), is a global leader in providing a variety of proprietary water management and road infrastructure products and services. The Company has been involved in the manufacture and distribution of agricultural equipment since 1955 and has grown from a regional company to an international agribusiness and highway infrastructure firm with worldwide sales and distribution. Lindsay, a Delaware corporation, maintains its corporate offices in Omaha, Nebraska. The Company has operations which are categorized into two major reporting segments.

Irrigation Segment — The Company’s irrigation segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems which are used principally in the agricultural industry to increase or stabilize crop production while conserving water, energy, and labor. The irrigation segment also manufactures and markets repair and replacement parts for its irrigation systems and controls, and designs, manufactures and services water pumping stations and controls for the agriculture, golf, landscape and municipal markets. The Company continues to strengthen irrigation product offerings through innovative technology such as GPS positioning and guidance, variable rate irrigation, wireless irrigation management, and smartphone application. The Company’s principal irrigation manufacturing facilities are located in Lindsay, Nebraska and Hartland, Wisconsin. Internationally, the Company has production operations in France, Brazil and China as well as distribution operations in South Africa, Australia and New Zealand. The Company also exports some of its equipment from the U.S. to other international markets.

Infrastructure Segment — The Company’s infrastructure segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, road marking and road safety equipment, large diameter steel tubing, railroad signals and structures, and outsourced manufacturing services. The principal infrastructure manufacturing facilities are located in Rio Vista, California, Milan, Italy, and Omaha, Nebraska.

Notes to the 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 at the time of preparation of the 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 consolidated financial statements.

The significant accounting policies of the Company are as follows:

(1) Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions are eliminated in consolidation.

(2) Reclassifications

Certain reclassifications have been made to prior financial statements to conform to the current-year presentation.

(3) Stock Based Compensation

The Company recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated fair values on the date of grant. The Company uses the straight-line amortization method over the vesting period of the awards. The Company has historically issued shares upon exercise of stock options or vesting of restricted stock units or performance stock units from new stock issuances, except for certain non-plan option shares granted in March 2000 that are issued from Treasury Stock upon exercise. All outstanding non-plan option shares were exercised in fiscal 2010.

The value of the portion of the award that is ultimately expected to vest is recognized as expense in the Company’s Consolidated Statement of Operations over the periods during which the employee or director is required to perform a service in exchange for the award.

The Company uses the Black-Scholes option-pricing model (“Black-Scholes model”) as its valuation method for stock option awards. Under the Black-Scholes model, the fair value of stock option awards on the date of grant is estimated using an option-pricing model that is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. Restricted stock, restricted stock units, performance shares and performance stock units issued under the 2010 Long-Term Incentive Plan will have a grant date fair value equal to the fair market value of the underlying stock on the grant date less present value of expected dividends.

(4) Revenue Recognition

The Company’s basic criteria necessary for revenue recognition are: 1) evidence of a sales arrangement exists, 2) delivery of goods has occurred, 3) the seller’s price to the buyer is fixed or determinable, and 4) collectability is reasonably assured. The Company recognizes revenue when these criteria have been met and when title and risk of loss transfers to the customer. The Company generally has no post delivery obligations to its independent dealers other than standard warranties. Revenues and gross profits on intercompany sales are eliminated in consolidation. If an arrangement involves multiple deliverables, the delivered items are considered separate units of accounting if the items have value on a stand-alone basis and there is objective and reliable evidence of their fair values. Revenues from the arrangement are allocated to the separate units of accounting based on their objectively determined fair value.

The costs related to revenues are recognized in the same period in which the specific revenues are recorded. Shipping and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by the Company are included in cost of sales. Customer rebates, cash discounts and other sales incentives are recorded as a reduction of revenues at the time of the original sale. Estimates used in the recognition of operating revenues and cost of operating revenues include, but are not limited to, estimates for product warranties, product rebates, cash discounts and fair value of separate units of accounting on multiple deliverables.

(5) Receivables and Allowances

Trade receivables are reported on the balance sheet net of any doubtful accounts. Allowances for doubtful accounts are maintained in amounts considered to be appropriate in relation to the receivables outstanding based on collection experience, economic conditions and credit risk quality.

(6) Warranty Costs

The Company’s provision for product warranty reflects management’s best estimate of probable liability under its product warranties. At the time a sale is recognized, the company records the estimated future warranty costs. The Company generally determines its total future warranty liability by applying historical claims rate experience to the amount of equipment that has been sold and is still within the warranty period. In addition, the Company records provisions for known warranty claims. This provision is periodically adjusted to reflect actual experience.

(7) Cash and Cash Equivalents

Cash equivalents consist of investments with original maturities of three months or less.

(8) Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method for the Company’s 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 Company’s Omaha, Nebraska warehouse, and at operating locations in California, Wisconsin, China and Australia. Cost is determined by the weighted average cost method for inventory at the Company’s 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.

(9) Property, Plant and Equipment

Property, plant, equipment, and capitalized assets held for lease are stated at cost. The Company capitalizes major expenditures and charges to operating expenses the cost of current maintenance and repairs. Provisions for depreciation and amortization have been computed principally on the straight-line method for buildings and equipment. Rates used for depreciation are based principally on the following expected lives: buildings — 15 to 30 years; temporary structures — 5 years; equipment — 3 to 10 years; leased Barrier Transfer Machines — 8 to 10 years; leased barriers — 12 years; other — 2 to 20 years and leasehold improvements — shorter of the economic life or term of the lease. All of the Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount of the asset, an impairment loss is recognized based upon the difference between the fair value of the asset and its carrying value. During fiscal 2011, 2010 and 2009 no impairment losses were recognized. The cost and accumulated depreciation relating to assets retired or otherwise disposed of are eliminated from the respective accounts at the time of disposition. The resulting gain or loss is included in operating income in the consolidated statements of operations.

(10) Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Acquired intangible assets are recognized separately from goodwill. Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually at August 31 and whenever triggering events or changes in circumstances indicate its carrying value may not be recoverable. The Company performs the impairment analysis at the reporting unit level using a two-step impairment test. Fair value is typically estimated using a discounted cash flow analysis, which requires the Company to estimate the future cash flows anticipated to be generated by the particular assets being tested for impairment as well as a discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, the Company considers historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment and assumptions by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. To the extent that the reporting unit is unable to achieve these assumptions, impairment losses may emerge.

(11) Income Taxes

Income taxes are accounted for utilizing the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. These expected future tax consequences are measured based on currently enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities is recognized in income during the period that includes the enactment date.

When the Company has claimed tax benefits that may be challenged by a tax authority, the Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.

(12) 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 that they are not anti-dilutive. Performance stock units are included in the calculation of dilutive potential common shares once the threshold performance conditions have been satisfied. At August 31, 2011, the threshold performance conditions for the Company’s outstanding performance stock units that were granted on November 3, 2008, November 12, 2009 and November 1, 2010 had not been satisfied, resulting in the exclusion of 98,625 performance stock units from the calculation of diluted net earnings per share.

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 Company’s 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 threshold 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 2,062, 476 and 24,204 restricted stock units excluded from the calculation of diluted net earnings per share since their inclusion would have been anti-dilutive for the years ended August 31, 2011, 2010 and 2009, respectively.

(13) Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(14) Derivative Instruments and Hedging Activities

The Company uses certain financial derivatives to mitigate its exposure to volatility in interest rates and foreign currency exchange rates. All derivative instruments are recorded on the balance sheet at their respective fair values. The Company uses these derivative instruments only to hedge exposures in the ordinary course of business and does not invest in derivative instruments for speculative purposes. On the date a derivative contract is entered into, the Company may elect to designate the derivative as a fair value hedge, a cash flow hedge, or the hedge of a net investment in a foreign operation.

When an election to apply hedge accounting is made, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness at the inception of the hedge.

The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative that is used in the hedging transaction is highly effective. 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 earnings. All changes in derivative fair values due to ineffectiveness are recognized currently in income.

The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, or management determines that designation of the derivative as a hedging instrument is no longer appropriate.

In situations in which the Company does not elect hedge accounting or hedge accounting is discontinued and the derivative is retained, the Company carries or continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value through earnings.

(15) Fair Value Measurements

The Company applies the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

•

Level 1 — inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities

•

Level 2 — inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly

•

Level 3 — inputs to the valuation techniques are unobservable for the assets or liabilities

The following table presents the Company’s 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 August 31, 2011:

$ in thousands		Level 1				Level 2				Level 3				Total
Cash and cash equivalents		$	108,167			$	—			$	—			$	108,167
Derivative Liabilities			—				(634	)			—				(634	)

The following table presents the Company’s 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 August 31, 2010:

$ in thousands		Level 1				Level 2				Level 3				Total
Cash and cash equivalents		$	83,418			$	—			$	—			$	83,418
Derivative Assets			—				16				—				16
Derivative Liabilities			—				(987	)			—				(987	)

The carrying amount of long-term debt (including current portion) was $8.6 million and $12.9 million as of August 31, 2011 and 2010, respectively. The fair value of this debt at August 31, 2011 and 2010, was estimated at $8.5 million and $12.6 million, respectively. Fair value of long-term debt (including current portion) is estimated by discounting the future estimated cash flows of each instrument at current market interest rates for similar debt instruments of comparable maturities and credit quality.

(16) Treasury Stock

When the Company repurchases its outstanding stock, it records the repurchased shares at cost as a reduction to shareholders’ equity. The weighted average cost method is utilized for share re-issuances. The difference between the cost and the re-issuance price is charged or credited to a “capital in excess of stated value — treasury stock” account to the extent that there is a sufficient balance to absorb the charge. If the treasury stock is sold for an amount less than its cost and there is not a sufficient balance in the capital in excess of stated value — treasury stock account, the excess is charged to retained earnings.

(17) Contingencies

The Company’s accounting for contingencies covers a variety of business activities including contingencies for legal exposures and environmental exposures. The Company accrues these contingencies when its assessments indicate that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company’s estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results may differ from the Company’s estimates resulting in an impact, positive or negative, on earnings.

(18) Translation of Foreign Currency

The Company’s portion of the assets and liabilities related to foreign investments are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average rates of exchange prevailing during the year. Unrealized gains or losses are reflected within common shareholders’ equity as accumulated other comprehensive income or loss.

B. ACQUISITIONS

The Company acquires businesses synergistic to the Company’s core irrigation and infrastructure businesses and to align with its strategic intent with respect to growth markets and adjacent product lines or technologies. The Company accounts for business combinations in accordance with ASC 805 — Business Combinations, which requires the recognition of the identifiable assets acquired, liabilities assumed, goodwill, and any noncontrolling interest in the acquiree. In addition, the Company expenses all acquisition-related costs in the period in which the costs are incurred and the services received. For fiscal 2011, 2010 and 2009, the acquisition-related expenses are not included because the impact on the Company’s consolidated financial statements was not considered to be material.

IRZ Consulting, LLC

On August 26, 2011, the Company completed the acquisition of IRZ Consulting, LLC (“IRZ”) based in Pasco, Washington and Portland, Oregon. The IRZ business is involved in irrigation engineering, field monitoring, and broadband internet services for rural areas. Total consideration paid was $4.9 million which was financed with cash on hand. The allocation of purchase price for IRZ is considered preliminary, largely with respect to certain acquired intangible assets and other long-term liabilities. Goodwill recorded in connection with this acquisition is deductible for income tax purposes.

WMC Technology Limited

On November 3, 2010, the Company completed the acquisition of certain assets of WMC Technology Limited (“WMC”) based in Feilding, New Zealand. The assets acquired primarily relate to technology that has enhanced the Company’s irrigation product offerings. Total consideration paid was $1.3 million which was financed with cash on hand. The fair value assigned to the assets was finalized in the second quarter of the Company’s 2011 fiscal year. Goodwill recorded in connection with this acquisition is not deductible for income tax purposes.

The total purchase price for IRZ and WMC has been allocated to the tangible and intangible assets acquired and liabilities assumed based on fair value assessments. The Company’s allocation of purchase price for these acquisitions consisted of current assets of $0.9 million, fixed assets of $0.6 million, finite-lived intangible assets of $1.6 million, indefinite-lived intangible assets of $1.0 million, goodwill of $2.2 million, other long-term assets of $1.1 million, current liabilities of $0.4 million, and long-term liabilities of $0.8 million. Goodwill resulting from business combinations is largely attributable to the existing workforce and historical and projected profitability of the acquired businesses. The goodwill associated with WMC and IRZ are included in the goodwill of the Company’s irrigation segment. Pro forma information related to acquisitions was not included because the impact on the Company’s consolidated financial statements was not considered to be material.

Digitec, Inc.

On August 31, 2010, the Company completed the acquisition of all outstanding shares of stock of Digitec, Inc., (“Digitec”) based in Milford, Nebraska. Digitec is an electronics research, development and manufacturing company. The addition of Digitec enhances the Company’s capabilities in providing electronic design and integration. Total consideration paid to the selling shareholders was $6.4 million which was financed with cash on hand. The purchase price has been allocated to the tangible and intangible assets and liabilities assumed based on fair value assessments. The Company’s allocation of purchase price consisted of current assets of $1.1 million (including $0.1 million of cash), fixed assets of $0.8 million, intangible assets of $1.5 million, goodwill of $4.4 million, current liabilities of $0.5 million and long-term liabilities of $0.9 million. Goodwill related to the acquisition of Digitec primarily relates to intangible assets that do not qualify for separate recognition, including the experience and knowledge of Digitec management, its assembled workforce, and its intellectual capital and specialization within the Irrigation industry. Goodwill recorded in connection with this acquisition is non-deductible for income tax purposes. Proforma data is not presented for this acquisition, as it was not considered material.

C. COMPREHENSIVE INCOME

Comprehensive income (loss) was as follows:

		For the years ended August 31,
$ in thousands		2011				2010				2009
Net Income		$	36,802			$	24,862			$	13,823
Other comprehensive income (loss):
Defined benefit pension plan			69				(50	)			(501	)
Cash flow hedges			319				1,201				(145	)
Foreign currency translation, net of hedging activities			4,719				(2,791	)			(1,452	)
Total other comprehensive income (loss), net of tax expense (benefit) of $440, $1,104 and ($81)			5,107				(1,640	)			(2,098	)
Total other comprehensive income		$	41,909			$	23,222			$	11,725

Accumulated other comprehensive income is included in the accompanying Consolidated Balance Sheets in the shareholders’ equity section, and consists of the following components:

		For the years ended
		August 31,
$ in thousands		2011				2010
Accumulated other comprehensive income (loss):
Defined benefit pension plan, net of tax of $1,306 and $1,348			(2,139	)			(2,208	)
Cash flow hedges, net of tax of $155 and $348			(253	)			(572	)
Foreign currency translation, net of hedging activities, net of tax of $1,573 and $1,368			8,854				4,135
Total accumulated other comprehensive income		$	6,462			$	1,355