LINDSAY CORP - Quarter Report: 2020 February (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10‑Q

(MARK ONE)

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

For the quarterly period ended February 29, 2020

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

Commission File Number 1-13419

Lindsay Corporation

(Exact name of registrant as specified in its charter)

Delaware		47-0554096
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

18135 Burke Street, Suite 100, Omaha, Nebraska		68022
(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	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	LNN	New York Stock Exchange, Inc.

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☒	Accelerated filer	☐
Non‑accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 3, 2020, 10,834,763 shares of the registrant’s common stock were outstanding.

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Table of Contents

Lindsay Corporation

INDEX FORM 10-Q

		Page

Part I – FINANCIAL INFORMATION		3

	ITEM 1 – Financial Statements	3

	Condensed Consolidated Statements of Operations for the three and six months ended February 29, 2020 and February 28, 2019	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended February 29, 2020 and February 28, 2019	4

	Condensed Consolidated Balance Sheets as of February 29, 2020, February 28, 2019, and August 31, 2019	5
	Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended February 29, 2020 and February 28, 2019	6

	Condensed Consolidated Statements of Cash Flows for the six months ended February 29, 2020 and February 28, 2019	8

	Notes to the Condensed Consolidated Financial Statements	9

	ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

	ITEM 3 – Quantitative and Qualitative Disclosures about Market Risk	26

	ITEM 4 – Controls and Procedures	26

Part II – OTHER INFORMATION		27

	ITEM 1 – Legal Proceedings	27

	ITEM 1A – Risk Factors	27

	ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds	27

	ITEM 3 – Defaults Upon Senior Securities	27

	ITEM 4 – Mine Safety Disclosures	27

	ITEM 5 – Other Information	27

	ITEM 6 – Exhibits	28

SIGNATURES		29

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Table of Contents

Part I – FINANCIAL INFORMATION

ITEM 1 - Financial Statements

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended						Six months ended
($ and shares in thousands, except per share amounts)	February 29, 2020			February 28, 2019			February 29, 2020			February 28, 2019
Operating revenues	$	113,788		$	109,182		$	223,181		$	221,133
Cost of operating revenues		80,382			84,708			155,701			168,011
Gross profit		33,406			24,474			67,480			53,122

Operating expenses:
Selling expense		8,192			8,437			14,684			16,419
General and administrative expense		13,167			16,832			24,971			31,890
Engineering and research expense		3,405			3,665			6,907			7,233
Total operating expenses		24,764			28,934			46,562			55,542

Operating income (loss)		8,642			(4,460	)		20,918			(2,420	)

Other income (expense):
Interest expense		(1,191	)		(1,178	)		(2,377	)		(2,383	)
Interest income		389			751			1,004			1,405
Other (expense) income, net		(973	)		(181	)		(1,423	)		11

Earnings (loss) before income taxes		6,867			(5,068	)		18,122			(3,387	)

Income tax expense (benefit)		1,351			(1,628	)		4,261			(1,159	)

Net earnings (loss)	$	5,516		$	(3,440	)	$	13,861		$	(2,228	)

Earnings (loss) per share:
Basic	$	0.51		$	(0.32	)	$	1.28		$	(0.21	)
Diluted	$	0.51		$	(0.32	)	$	1.28		$	(0.21	)

Shares used in computing earnings (loss) per share:
Basic		10,825			10,786			10,810			10,776
Diluted		10,857			10,786			10,843			10,776

Cash dividends declared per share	$	0.31		$	0.31		$	0.62		$	0.62

See accompanying notes to condensed consolidated financial statements.

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LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three months ended						Six months ended
($ in thousands)	February 29, 2020			February 28, 2019			February 29, 2020			February 28, 2019
Net earnings (loss)	$	5,516		$	(3,440	)	$	13,861		$	(2,228	)
Other comprehensive (loss) income:
Defined benefit pension plan adjustment, net of tax		43			38			86			67
Foreign currency translation adjustment, net of hedging activities and tax		(895	)		852			(1,188	)		1,958
Unrealized gains on marketable securities, net of tax		61			—			61			—
Total other comprehensive income (loss), net of tax (benefit) expense of ($449), $75, ($373) and $301, respectively		(791	)		890			(1,041	)		2,025
Total comprehensive income (loss)	$	4,725		$	(2,550	)	$	12,820		$	(203	)

See accompanying notes to condensed consolidated financial statements.

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LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

($ and shares in thousands, except par values)	February 29, 2020			February 28, 2019			August 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	101,272		$	102,778		$	127,204
Marketable securities		18,740			—			—
Receivables, net of allowance of $2,597, $3,224, and $2,635, respectively		80,468			88,576			75,551
Inventories, net		105,454			99,984			92,287
Assets held-for-sale		—			2,744			2,744
Other current assets, net		19,083			23,144			15,704
Total current assets		325,017			317,226			313,490

Property, plant, and equipment:
Cost		191,688			181,644			188,695
Less accumulated depreciation		(122,926	)		(116,338	)		(119,727	)
Property, plant, and equipment, net		68,762			65,306			68,968

Intangibles, net		23,162			25,853			24,382
Goodwill		64,338			64,591			64,387
Operating lease right-of-use assets		27,257			—			—
Deferred income tax assets		10,162			6,484			11,758
Other noncurrent assets		15,632			20,213			17,329
Total assets	$	534,330		$	499,673		$	500,314

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	33,307		$	37,419		$	29,434
Current portion of long-term debt		211			207			209
Other current liabilities		54,303			44,825			52,488
Total current liabilities		87,821			82,451			82,131

Pension benefits liabilities		5,868			5,732			6,029
Long-term debt		115,765			116,034			115,846
Operating lease liabilities		25,919			—			—
Deferred income tax liabilities		839			991			872
Other noncurrent liabilities		20,791			22,622			27,227
Total liabilities		257,003			227,830			232,105

Shareholders' equity:

Preferred stock of $1 par value - authorized 2,000 shares; no shares issued and outstanding		—			—			—
Common stock of $1 par value - authorized 25,000 shares; 18,918, 18,870, and 18,870 shares issued, respectively		18,918			18,870			18,870
Capital in excess of stated value		74,645			69,772			71,684
Retained earnings		481,890			477,027			474,740
Less treasury stock - at cost, 8,083 shares		(277,238	)		(277,238	)		(277,238	)
Accumulated other comprehensive loss, net		(20,888	)		(16,588	)		(19,847	)
Total shareholders' equity		277,327			271,843			268,209
Total liabilities and shareholders' equity	$	534,330		$	499,673		$	500,314

See accompanying notes to condensed consolidated financial statements.

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Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ and shares in thousands, except per share amounts)
(Unaudited)
	Shares of common stock		Shares of treasury stock		Common stock		Capital in excess of stated value			Retained earnings			Treasury stock			Accumulated other comprehensive loss, net			Total shareholders’ equity
Balance at August 31, 2018		18,841		8,083	$	18,841	$	68,465		$	484,886		$	(277,238	)	$	(18,088	)	$	276,866
Comprehensive income:
Net earnings (loss)		—		—		—		—			(2,228	)		—			—			(2,228	)
Other comprehensive income		—		—		—		—			—			—			2,025			2,025
Total comprehensive income		—		—		—		—			—			—			—			(203	)
Cash dividends ($0.62) per share		—		—		—		—			(6,688	)		—			—			(6,688	)
Issuance of common shares under share compensation plans, net		29		—		29		(976	)		—			—			—			(947	)
Share-based compensation expense		—		—		—		2,283			—			—			—			2,283
Cumulative impact of ASC 606 adoption		—		—		—		—			532			—			—			532
Cumulative impact of ASU 2018-02 adoption		—		—		—		—			525			—			(525	)		—
Balance at February 28, 2019		18,870		8,083	$	18,870	$	69,772		$	477,027		$	(277,238	)	$	(16,588	)	$	271,843


Balance at August 31, 2019		18,870		8,083	$	18,870	$	71,684		$	474,740		$	(277,238	)	$	(19,847	)	$	268,209
Comprehensive income:
Net earnings		—		—		—		—			13,861			—			—			13,861
Other comprehensive income (loss)		—		—		—		—			—			—			(1,041	)		(1,041	)
Total comprehensive income		—		—		—		—			—			—			—			12,820
Cash dividends ($0.62) per share		—		—		—		—			(6,711	)		—			—			(6,711	)
Issuance of common shares under share compensation plans, net		48		—		48		386			—			—			—			434
Share-based compensation expense		—		—		—		2,575			—			—			—			2,575
Balance at February 29, 2020		18,918		8,083	$	18,918	$	74,645		$	481,890		$	(277,238	)	$	(20,888	)	$	277,327

See accompanying notes to condensed consolidated financial statements.

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Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ and shares in thousands, except per share amounts)
(Unaudited)
	Shares of common stock		Shares of treasury stock		Common stock		Capital in excess of stated value			Retained earnings			Treasury stock			Accumulated other comprehensive loss, net			Total shareholders’ equity
Balance at November 30, 2018		18,870		8,083	$	18,870	$	68,710		$	483,811		$	(277,238	)	$	(17,478	)	$	276,675
Comprehensive income:
Net earnings (loss)		—		—		—		—			(3,440	)		—			—			(3,440	)
Other comprehensive income		—		—		—		—			—			—			890			890
Total comprehensive income		—		—		—		—			—			—			—			(2,550	)
Cash dividends ($0.31) per share		—		—		—		—			(3,344	)		—			—			(3,344	)
Issuance of common shares under share compensation plans, net		—		—		—		(4	)		—			—			—			(4	)
Share-based compensation expense		—		—		—		1,066			—			—			—			1,066
Balance at February 28, 2019		18,870		8,083	$	18,870	$	69,772		$	477,027		$	(277,238	)	$	(16,588	)	$	271,843


Balance at November 30, 2019		18,897		8,083	$	18,897	$	71,706		$	479,732		$	(277,238	)	$	(20,097	)	$	273,000
Comprehensive income:
Net earnings		—		—		—		—			5,516			—			—			5,516
Other comprehensive income (loss)		—		—		—		—			—			—			(791	)		(791	)
Total comprehensive income		—		—		—		—			—			—			—			4,725
Cash dividends ($0.31) per share		—		—		—		—			(3,358	)		—			—			(3,358	)
Issuance of common shares under share compensation plans, net		21		—		21		1,524			—			—			—			1,545
Share-based compensation expense		—		—		—		1,415			—			—			—			1,415
Balance at February 29, 2020		18,918		8,083	$	18,918	$	74,645		$	481,890		$	(277,238	)	$	(20,888	)	$	277,327

See accompanying notes to condensed consolidated financial statements.

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LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended
($ in thousands)	February 29, 2020			February 28, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)	$	13,861		$	(2,228	)
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization		9,418			6,889
Gain on sale of assets held-for-sale		(1,191	)		—
Loss on sale of business		—			67
Provision for uncollectible accounts receivable		213			(315	)
Deferred income taxes		1,806			(105	)
Share-based compensation expense		2,575			2,403
Other, net		(638	)		(1,093	)
Changes in assets and liabilities:
Receivables		(5,716	)		(18,157	)
Inventories		(14,153	)		(22,246	)
Other current assets		(4,539	)		(5,111	)
Accounts payable		3,540			8,402
Other current liabilities		(2,183	)		(9,792	)
Other noncurrent assets and liabilities		(5,178	)		1,439
Net cash used in operating activities		(2,185	)		(39,847	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment		(5,335	)		(11,701	)
Proceeds from sale of assets held-for-sale		3,955			—
Purchases of marketable securities available-for-sale		(19,978	)		—
Proceeds from maturities of marketable securities available-for-sale		1,250			—
Proceeds from settlement of net investment hedges		1,092			1,462
Payments for settlement of net investment hedges		—			(245	)
Other investing activities, net		—			38
Net cash used in investing activities		(19,016	)		(10,446	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		1,545			177
Common stock withheld for payroll tax obligations		(1,111	)		(1,124	)
Principal payments on long-term debt		(104	)		(102	)
Dividends paid		(6,711	)		(6,688	)
Net cash used in financing activities		(6,381	)		(7,737	)

Effect of exchange rate changes on cash and cash equivalents		1,650			21
Net change in cash and cash equivalents		(25,932	)		(58,009	)
Cash and cash equivalents, beginning of period		127,204			160,787
Cash and cash equivalents, end of period	$	101,272		$	102,778

SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid, net of refunds	$	2,294		$	5,876
Interest paid	$	2,334		$	2,329

NONCASH INVESTING ACTIVITIES:
Note receivable from sale of business		$ ─		$	5,823

See accompanying notes to condensed consolidated financial statements.

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LINDSAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Basis of Presentation

The condensed consolidated financial statements are presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and do not include all of the disclosures normally required by U.S. generally accepted accounting principles (“U.S. GAAP”) as contained in Lindsay Corporation’s (the “Company”) Annual Report on Form 10-K. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended August 31, 2019.

In the opinion of management, the condensed consolidated financial statements of the Company reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and the results of operations and cash flows for the periods presented. The results for interim periods are not necessarily indicative of trends or results expected by the Company for a full year. The condensed consolidated financial statements were prepared using U.S. GAAP. These principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from these estimates.

Recent Accounting Guidance Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The effective date of ASU No. 2016-13 will be the first quarter of the Company’s fiscal 2021 with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU No. 2016-13 on its consolidated financial statements.

Recent Accounting Guidance Adopted

In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize a right-of-use asset and a lease liability for most leases and disclose key information about leasing arrangements. The new guidance became effective for the Company in the first quarter of fiscal 2020. The Company implemented Accounting Standards Codification (“ASC”) 842 and recorded a right of use asset and lease liability of $26.2 million and $29.5 million, respectively, upon adoption of the standard on the first day of fiscal 2020.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which modifies the financial reporting of hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU No. 2017-12 became effective in the first quarter of the Company’s fiscal 2020. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

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Note 2 – Revenue Recognition

Disaggregation of Revenue

A breakout by segment of revenue recognized over time versus point in time for the three and six months ended February 29, 2020 and February 28, 2019 is as follows:

	Three months ended						Three months ended
	February 29, 2020						February 28, 2019
($ in thousands)	Irrigation		Infrastructure		Total		Irrigation		Infrastructure		Total
Point in time	$	73,025	$	18,153	$	91,178	$	85,939	$	10,917	$	96,856
Over time		19,048		2,028		21,076		9,827		1,292		11,119
Revenue from the contracts with customers		92,073		20,181		112,254		95,766		12,209		107,975

Lease revenue		—		1,534		1,534		—		1,207		1,207
Total operating revenues	$	92,073	$	21,715	$	113,788	$	95,766	$	13,416	$	109,182


	Six months ended						Six months ended
	February 29, 2020						February 28, 2019
($ in thousands)	Irrigation		Infrastructure		Total		Irrigation		Infrastructure		Total
Point in time	$	146,400	$	39,759	$	186,159	$	167,025	$	32,164	$	199,189
Over time		28,025		4,684		32,709		16,351		2,782		19,134
Revenue from the contracts with customers		174,425		44,443		218,868		183,376		34,946		218,322

Lease revenue		—		4,313		4,313		—		2,811		2,811
Total operating revenues	$	174,425	$	48,756	$	223,181	$	183,376	$	37,757	$	221,133

Further disaggregation of revenue is disclosed in the Note 16 – Industry Segment Information.

For contracts with a length longer than twelve months, the unsatisfied performance obligations were $6.1 million at February 29, 2020.

Contract Balances

Contract assets arise when recorded revenue for a contract exceeds the amounts billed under the terms of such contract. Contract liabilities arise when billed amounts exceed revenue recorded. Amounts are billable to customers upon various measures of performance, including achievement of certain milestones and completion of specified units of completion of the contract. At February 29, 2020, February 28, 2019, and August 31, 2019, contract assets amounted to $0.9 million, $1.5 million, and $1.3 million, respectively. These amounts are included within other current assets on the condensed consolidated balance sheet.

Contract liabilities include advance payments from customers and billings in excess of delivery of performance obligations. At February 29, 2020, February 28, 2019, and August 31, 2019, contract liabilities amounted to $13.4 million, $8.7 million, and $18.4 million, respectively. Contract liabilities are included within other current liabilities on the condensed consolidated balance sheets. During the Company’s six months ended February 29, 2020 and February 28, 2019, the Company recognized $12.6 million and $6.5 million of revenue that were included in the liabilities as of August 31, 2019 and August 31, 2018, respectively. The revenue recognized was due to applying advance payments received for the performance obligations completed during the quarter.

Note 3 – Divestitures and Held-For-Sale

The Company completed the divestiture of its Company-owned irrigation dealership during the first quarter of fiscal 2019 and recorded a loss on sale of $0.1 million included in general and administrative expense on the condensed consolidated statement of operations for the six months ended February 28, 2019. The Company received a note of $5.8 million as proceeds for this sale. This is included as a noncash investing activity on the condensed consolidated statement of cash flows for the six months ended February 28, 2019.

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Additionally, during the fourth quarter of fiscal 2018, the Company closed one of its infrastructure manufacturing facilities in North America and consolidated its operations with an irrigation manufacturing facility. In the second quarter of fiscal 2020, the company sold the building for net proceeds of $3.9 million, resulting in a gain of $1.2 million. The gain on sale is in included in cost of goods sold on the condensed consolidated statement of earnings for the three and six months ended February 29, 2020. The building was included within the caption “Assets held-for-sale” for $2.7 million in the condensed consolidated balance sheet as of February 28, 2019 and August 31, 2019.

Note 4 – Net Earnings per Share

Basic earnings per share is calculated on the basis of weighted average outstanding common shares. Diluted earnings per share is calculated on the basis of basic weighted average outstanding common shares adjusted for the dilutive effect of stock options, restricted stock unit awards and other dilutive securities. When a period results in a net loss, the impact of outstanding stock awards is excluded from the diluted loss per share calculation as the inclusion would have an anti-dilutive effect.

The following table shows the computation of basic and diluted net earnings per share for the three and six months ended February 29, 2020 and February 28, 2019:

	Three months ended					Six months ended
($ and shares in thousands, except per share amounts)	February 29, 2020		February 28, 2019			February 29, 2020		February 28, 2019
Numerator:
Net earnings (loss)	$	5,516	$	(3,440	)	$	13,861	$	(2,228	)

Denominator:
Weighted average shares outstanding		10,825		10,786			10,810		10,776
Diluted effect of stock awards		32		—			33		—
Weighted average shares outstanding assuming dilution		10,857		10,786			10,843		10,776

Basic net earnings (loss) per share	$	0.51	$	(0.32	)	$	1.28	$	(0.21	)
Diluted net earnings (loss) per share	$	0.51	$	(0.32	)	$	1.28	$	(0.21	)

Certain stock options and restricted stock units were excluded from the computation of diluted net earnings per share because their effect would have been anti-dilutive. Performance stock units are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied. In addition, the following table shows the securities excluded from the computation of earnings per share because their effect would have been anti-dilutive:

	Three months ended				Six months ended
(Units and options in thousands)	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Restricted stock units		4		7		11		17
Stock options		12		74		6		55
Performance stock units		—		10		10		5

Note 5 – Income Taxes

The Company recorded income tax expense of $1.4 million and income tax benefit of $1.6 million for the three months ended February 29, 2020 and February 28, 2019, respectively and recorded income tax expense of $4.3 million and income tax benefit of $1.2 million for the six months ended February 29, 2020 and February 28, 2019, respectively.

It is the Company’s policy to report income tax expense for interim periods using an estimated annual effective income tax rate. The estimated annual effective income tax rate was 23.5 percent and 29.4 percent for the six months ended February 29, 2020 and February 28, 2019, respectively. The decrease in the estimated annual effective income tax rate from February 2019 to February 2020 relates primarily to the change in earnings mix among foreign operations. The tax effects of significant or unusual items are not considered in the estimated annual effective income tax rate. The tax effects of such discrete events are recognized in the interim period in which the events occur. The impact of such events within income tax expense (benefit) was insignificant for the six months ended February 29, 2020 and amounted to a net benefit of $0.3 million for the six months ended February 28, 2019.

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The United States enacted significant tax reform into law on December 22, 2017 by enacting the U.S. Tax Cuts and Jobs Act (“U.S. Tax Reform”). U.S. Tax Reform made complex and broad changes to the U.S. tax laws. U.S. Tax Reform established new income tax provisions that will affect the Company’s fiscal year 2020, including, but not limited to, establishing a new minimum tax on global intangible low-taxed income (“GILTI”). The Company has elected to account for GILTI as a period cost, the effect of which is reflected in the estimated annual effective tax rate of 23.5 percent for the six months ended February 29, 2020.

Note 6 – Inventories

Inventories consisted of the following as of February 29, 2020, February 28, 2019, and August 31, 2019:

($ in thousands)	February 29, 2020			February 28, 2019			August 31, 2019
Raw materials and supplies	$	50,240		$	47,573		$	49,047
Work in process		6,746			8,715			4,514
Finished goods and purchased parts, net		53,496			51,910			46,812
Total inventory value before LIFO adjustment		110,482			108,198			100,373
Less adjustment to LIFO value		(5,028	)		(8,214	)		(8,086	)
Inventories, net	$	105,454		$	99,984		$	92,287

Note 7 – Long-Term Debt

The following table sets forth the outstanding principal balances of the Company’s long-term debt as of the dates shown:

($ in thousands)	February 29, 2020			February 28, 2019			August 31, 2019
Series A Senior Notes	$	115,000		$	115,000		$	115,000
Revolving Credit Facility		—			—			—
Elecsys Series 2006A Bonds		1,467			1,673			1,571
Total debt		116,467			116,673			116,571
Less current portion		(211	)		(207	)		(209	)
Less unamortized debt issuance costs		(491	)		(432	)		(516	)
Total long-term debt	$	115,765		$	116,034		$	115,846

Principal payments on the debt are due as follows:

Due within	$ in thousands
1 year	$	211
2 years		215
3 years		219
4 years		224
5 years		228
Thereafter		115,370
	$	116,467

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Note 8 – Financial Derivatives

The Company uses certain financial derivatives to mitigate its exposure to volatility in 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 Company manages market and credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and degree of risk that may be undertaken, and by entering into transactions with counterparties that have investment grade credit ratings. Fair values of derivative instruments are as follows:

($ in thousands)	Balance sheet location	February 29, 2020		February 28, 2019			August 31, 2019
Derivatives designated as hedging instruments:
Foreign currency forward contracts	Other current assets	$	247	$	396		$	1,073
Foreign currency forward contracts	Other current liabilities		—		(9	)		—
Total derivatives designated as hedging instruments		$	247	$	387		$	1,073

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	$	—	$	30		$	39
Foreign currency forward contracts	Other current liabilities		—		(13	)		—
Total derivatives not designated as hedging instruments		$	—	$	17		$	39

Accumulated other comprehensive income included realized and unrealized after-tax gains of $7.2 million, $5.7 million, and $7.0 million at February 29, 2020, February 28, 2019, and August 31, 2019, respectively, related to derivative contracts designated as hedging instruments.

Net Investment Hedging Relationships

The amount of gain (loss) recognized in other comprehensive income is as follows:

Three months ended

Six months ended

($ in thousands)

February 29,

2020

February 28,

2019

February 29,

2020

February 28,

2019

Foreign currency forward contracts, net of tax

(benefit) expense of ($86), $25, ($60) and $186,

respectively

277

)

203

643

For the three months ended February 29, 2020, the Company did not settle any foreign currency forward contracts. For the three months ended February 28, 2019, the Company settled foreign currency forward contracts resulting in an after-tax net gain of $0.2 million, which was included in other comprehensive income as part of a currency translation adjustment. For the six months ended February 29, 2020 and February 28, 2019, the Company settled foreign currency forward contracts resulting in an after-tax net gain of $0.8 million and $0.9 million, respectively, which were included in other comprehensive income as part of a currency translation adjustment. There were no amounts recorded in the condensed consolidated statements of operations related to ineffectiveness of foreign currency forward contracts related to net investment hedges for the three and six months ended February 29, 2020 and February 28, 2019.

At February 29, 2020, February 28, 2019, and August 31, 2019, the Company had outstanding foreign currency forward contracts to sell a notional amount of 32.7 million Euro, on each date, at fixed prices to settle during the next fiscal quarter. Additionally, at February 28, 2019, the Company had an outstanding foreign currency forward contract to sell a notional amount of 43.0 million South African Rand at a fixed price settled during the next fiscal quarter. The Company’s foreign currency forward contracts qualify as hedges of a net investment in foreign operations.

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Derivatives Not Designated as Hedging Instruments

The Company generally does not elect hedge accounting treatment for derivative contracts related to future settlements of foreign denominated intercompany receivables and payables. If the Company does not elect hedge accounting treatment for a derivative, the Company carries the derivative at its fair value in the condensed consolidated balance sheets and recognizes any subsequent changes in its fair value during a period through earnings in the condensed consolidated statements of operations. At February 29, 2020, the Company had no foreign currency forward contracts outstanding that are not designated as hedging instruments. At February 28, 2019 and August 31, 2019, the Company had notional value of $2.0 million, and $1.8 million, respectively, of U.S. dollar equivalent of foreign currency forward contracts outstanding that are not designated as hedging instruments.

Note 9 – Leases

The Company, as lessee, has operating leases primarily for office space, manufacturing facilities, equipment, and vehicles. The Company determines if a contract is or contains a lease at the inception of the contract based on whether the contract conveys the right to control the use of an identified asset over a period of time in exchange for consideration.

The Company elected, for all classes of underlying assets, to not separate lease and non-lease components and instead will treat the lease agreement as a single lease component for all asset classes. The Company additionally elected practical expedients to not reassess whether existing contracts are or contain leases, the classification of any existing leases, accounting for initial direct costs for any existing leases, and hindsight in determining the lease term and in assessing impairment of the right-of-use (“ROU”) asset.

Short-term operating leases, which have an initial expected term of twelve months or less, are not recorded on the condensed consolidated balance sheet. Such fixed lease payments are recognized within the condensed consolidated statement of earnings on a straight-line basis over the lease term. Any variable payments associated with short-term operating leases are recognized within the condensed consolidated statement of earnings as they are incurred. The Company did not recognize any expense for such leases during the three and six months ended February 29, 2020.

Many of the Company’s leases contain renewal or extension options. The Company includes all renewal or extension periods that it is reasonably certain to exercise at lease commencement within the measurement of the ROU asset and lease liability.

The Company’s lease portfolio consists of operating leases which are included in operating lease ROU assets and operating lease liabilities in the condensed consolidated balance sheet. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To calculate the present value of future lease payments, the Company uses an incremental borrowing rate that estimates a collateralized rate based on the expected term of the lease.

Lease cost and other information related to the Company’s operating leases are as follows:

($ in thousands)	Three months ended February 29, 2020			Six months ended February 29, 2020
Operating lease cost (cost resulting from lease payments)		1,493			2,913
Variable lease cost (cost excluded from lease payments)		101			201
Total lease cost	$	1,594		$	3,114

Operating cash outflows from operating leases		1,733			2,820
Weighted average lease term - operating leases	9.5 years			9.5 years
Weighted average discount rate - operating leases		3.2	%		3.2	%

Supplemental balance sheet information related to operating leases as of the second quarter of 2020 is as follows:

($ in thousands)	Classification	February 29, 2020
Operating lease ROU assets	Operating lease right-of-use assets	$	27,257

Operating lease short-term liabilities	Other current liabilities		4,790
Operating lease long-term liabilities	Operating lease liabilities		25,919
Total lease liabilities		$	30,709

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The minimum lease payments under operating leases expiring subsequent to February 29, 2020 are as follows:

Fiscal year ending	$ in thousands
2020	$	2,819
2021		5,501
2022		5,201
2023		3,535
2024		3,157
Thereafter		16,324
Total lease payments		36,537
Less: interest		5,828
Present value of lease liabilities	$	30,709

As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 and under the previous lease accounting standard, future minimum lease payments under operating leases with an initial or remaining term in excess of one year at August 31, 2019 would have been as follows:

Fiscal year ending	$ in thousands
2020	$	6,065
2021		5,266
2022		4,771
2023		3,414
2024		3,107
Thereafter		20,119
Total lease payments	$	42,742

Note 10 – Fair Value Measurements

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 February 29, 2020, February 28, 2019, and August 31, 2019. There were no transfers between any levels for the periods presented.

	February 29, 2020
($ in thousands)	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	101,272	$	—		$	—	$	101,272
Marketable securities:
Corporate bonds		—		14,555			—		14,555
U.S. treasury securities		—		4,185			—		4,185
Derivative assets		—		247			—		247

	February 28, 2019
($ in thousands)	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	102,778	$	—		$	—	$	102,778
Derivative assets		—		426			—		426
Derivative liabilities		—		(22	)		—		(22	)

	August 31, 2019
($ in thousands)	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	127,204	$	—		$	—	$	127,204
Derivative assets		—		1,112			—		1,112

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During the second quarter of fiscal 2020, the Company made a net investment of $18.7 million in marketable securities, consisting of United States treasury bonds and investment grade corporate bonds. The marketable securities are classified as available-for-sale and are carried at fair value with the change in unrealized gains and losses reported as a separate component on the condensed consolidated statements of comprehensive income (loss) until realized. The Company determines fair value using data points that are observable, such as quoted prices and interest rates. The amortized cost of the investments approximates fair value. Investment income is recorded within other (expense) income on the condensed consolidated statements of operations. As of February 29, 2020, approximately 55% of the Company’s marketable securities investments mature within one year and 45% mature within one to three years.

There were no required fair value adjustments for assets and liabilities measured at fair value on a non-recurring basis for the six months ended February 29, 2020 or February 28, 2019.

Note 11 – Commitments and Contingencies

In the ordinary course of its business operations, the Company enters into arrangements that obligate it to make future payments under contracts such as lease agreements. Additionally, the Company is involved, from time to time, in commercial litigation, employment disputes, administrative proceedings, business disputes and other legal proceedings. The Company has established accruals for certain proceedings where those proceedings present loss contingencies that are both probable and reasonably estimable at the time of determination. The Company believes that any such currently-pending proceedings are either covered by insurance or would not have a material effect on the business or its consolidated financial statements if decided in a manner that is unfavorable to the Company. Such proceedings are exclusive of environmental remediation matters which are discussed separately below.

Infrastructure Products

The Company is currently defending a number of product liability lawsuits arising out of vehicle collisions with highway barriers incorporating the Company’s X-Lite® end terminal. Despite the September 2017 reversal of a sizable judgment against a competitor, the Company expects that the significant attention brought to the infrastructure products industry by the original judgment may lead to additional lawsuits being filed against the Company and others in the industry. The Company believes it has meritorious factual and legal defenses to each of these lawsuits and is prepared to vigorously defend its interests. Based on the information currently available to the Company, the Company does not believe that a loss is probable in any of these lawsuits; therefore, no accrual has been included in the Company’s condensed consolidated financial statements. While it is possible that a loss may be incurred, the Company is unable to estimate a range of potential loss due to the complexity and current status of these lawsuits. However, the Company maintains insurance coverage to mitigate the impact of adverse exposures in these lawsuits and does not expect that these lawsuits will have a material adverse effect on its business or its consolidated financial statements.

In June 2019, the Company was informed by letter that the Department of Justice, Civil Division and U.S. Attorney’s Office for the Northern District of New York, with the assistance of the Department of Transportation, Office of Inspector General, are conducting an investigation of the Company relating to the Company’s X-Lite end terminal and potential violations of the federal civil False Claims Act. Depending on the outcome of this matter, there could be a material adverse effect on the Company’s business or its consolidated financial statements. Given the current posture of the matter, the Company is unable to estimate a range of potential loss, if any, or to express an opinion regarding the ultimate outcome.

Environmental Remediation

The Company has committed to a preliminary plan to remediate environmental contamination of the groundwater at and adjacent to its Lindsay, Nebraska facility (the “site”) as a result of discussions with the U.S. Environmental Protection Agency (the “EPA”) and the Nebraska Department of Environmental Quality (the “NDEQ”) during the third quarter of fiscal 2016. The proposed remediation plan is preliminary and has not been approved by the EPA or the NDEQ. Based on guidance from third-party environmental experts and the preliminary discussions with the EPA, the Company anticipates that a definitive plan will not be agreed upon until the second half of fiscal 2020 or later.

The current estimated aggregate accrued cost of this remediation plan of $15.6 million is based on consideration of several remediation options that would use different technologies, each of which the Company believes could be successful in meeting the long-term regulatory requirements of the site. The Company accrues the anticipated cost of investigation and remediation when the obligation is probable and can be reasonably estimated. While the Company believes the current accrual is a good faith estimate of the long-term cost of remediation at this site based on the preliminary analysis available at the time of this filing, the estimate of costs and their timing could change as a result of a number of factors, including (1) EPA and NDEQ input on the proposed remediation plan and any changes which they may subsequently require, (2) refinement of cost estimates and length of time required to complete remediation and post-remediation operations and maintenance, (3) effectiveness of the technology chosen in remediation of the site as well as changes in technology that may be available in the future, and (4) unforeseen circumstances existing at the site. As a result of these factors, the actual

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amount of costs incurred by the Company in connection with the remediation of contamination of its Lindsay, Nebraska site could exceed the amounts accrued for this expense at this time. While any revisions could be material to the operating results of any fiscal quarter or fiscal year, the Company does not expect such additional expenses would have a material adverse effect on its liquidity or financial condition. The following table summarizes the undiscounted environmental remediation liability classifications included in the condensed consolidated balance sheets as of February 29, 2020, February 28, 2019, and August 31, 2019:

($ in thousands)	February 29, 2020		February 28, 2019		August 31, 2019
Other current liabilities	$	1,243	$	1,243	$	1,243
Other noncurrent liabilities		14,396		14,993		14,674
Total environmental remediation liabilities	$	15,639	$	16,236	$	15,917

Note 12 – Warranties

The following table provides the changes in the Company’s product warranties:

	Three months ended						Six months ended
($ in thousands)	February 29, 2020			February 28, 2019			February 29, 2020			February 28, 2019
Product warranty accrual balance, beginning of period	$	8,788		$	7,240		$	8,960		$	7,109
Liabilities accrued for warranties during the period		2,135			1,652			3,616			2,830
Warranty claims paid during the period		(1,933	)		(1,259	)		(3,586	)		(2,306	)
Changes in estimates		—			338			—			338
Product warranty accrual balance, end of period	$	8,990		$	7,971		$	8,990		$	7,971

Note 13 – Share-Based Compensation

The Company’s current share-based compensation plans, approved by the stockholders of the Company, provides for awards of stock options, restricted shares, restricted stock units (“RSUs”), stock appreciation rights, performance shares, and performance stock units (“PSUs”) to employees and non-employee directors of the Company. The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. Share-based compensation expense was $1.5 million and $1.1 million for the three months ended February 29, 2020 and 2019, respectively. Share-based compensation expense was $2.7 million and $2.4 million for the six months ended February 29, 2020 and February 28, 2019, respectively.

During the second quarter of fiscal 2020, the Company awarded its annual grant of RSUs to independent members of the Board of Directors at a grant date fair value of $93.74, resulting in a total of 6,650 RSUs being granted.

Note 14 – Other Current Liabilities

($ in thousands)	February 29, 2020		February 28, 2019		August 31, 2019
Other current liabilities:
Compensation and benefits	$	13,398	$	13,102	$	13,960
Contract liabilities		12,323		8,660		14,763
Warranties		8,990		7,971		8,960
Operating lease liabilities		4,790		—		—
Dealer related liabilities		3,681		4,122		3,246
Deferred revenue - lease		2,190		373		2,985
Tax related liabilities		1,709		1,223		1,469
Accrued insurance		1,624		2,010		1,482
Accrued environmental liabilities		1,243		1,243		1,243
Other		4,355		6,121		4,380
Total other current liabilities	$	54,303	$	44,825	$	52,488

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Note 15 – Share Repurchases

There were no shares repurchased during the three and six months ended February 29, 2020 and February 28, 2019 under the Company’s share repurchase program. The remaining amount available under the repurchase program was $63.7 million as of February 29, 2020.

Note 16 – Industry Segment Information

The Company manages its business activities in two reportable segments: irrigation and infrastructure. The Company evaluates the performance of its reportable segments based on segment sales, gross profit and operating income, with operating income for segment purposes excluding unallocated corporate general and administrative expenses, interest income, interest expense, other income and expenses and income taxes. Operating income for segment purposes includes general and administrative expenses, selling expenses, engineering and research expenses and other overhead charges directly attributable to the segment. There are no inter-segment sales included in the amounts disclosed. The Company had no single customer who represented 10 percent or more of its total revenues during the three and six months ended February 29, 2020 and February 28, 2019.

Irrigation - This reporting segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems, as well as various innovative technology solutions such as GPS positioning and guidance, variable rate irrigation, remote irrigation management and scheduling technology, irrigation consulting and design and industrial “internet of things”, or IoT, solutions. The irrigation reporting segment consists of one operating segment.

Infrastructure – This reporting segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, and road marking and road safety equipment; the manufacturing and selling of large diameter steel tubing and railroad signals and structures; and providing outsourced manufacturing and production services. The infrastructure reporting segment consists of one operating segment.

	Three months ended						Six months ended
($ in thousands)	February 29, 2020			February 28, 2019			February 29, 2020			February 28, 2019
Operating revenues:
Irrigation:
North America	$	65,667		$	57,681		$	118,280		$	114,145
International		26,406			38,085			56,145			69,231
Irrigation total		92,073			95,766			174,425			183,376
Infrastructure		21,715			13,416			48,756			37,757
Total operating revenues	$	113,788		$	109,182		$	223,181		$	221,133

Operating income (loss):
Irrigation	$	9,614		$	7,521		$	19,371		$	15,304
Infrastructure		6,358			(446	)		15,126			3,722
Corporate		(7,330	)		(11,535	)		(13,579	)		(21,446	)
Total operating income (loss)		8,642			(4,460	)		20,918			(2,420	)

Interest and other expense, net		(1,775	)		(608	)		(2,796	)		(967	)
Earnings (loss) before income taxes	$	6,867		$	(5,068	)	$	18,122		$	(3,387	)

($ in thousands)	February 29, 2020		February 28, 2019		August 31, 2019
Total assets:
Irrigation	$	318,689	$	309,532	$	292,202
Infrastructure		82,608		69,829		85,848
Corporate		133,033		120,312		122,264
	$	534,330	$	499,673	$	500,314

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ITEM 2 ‑ Management's Discussion and Analysis of Financial Condition and Results of Operations

Concerning Forward‑Looking Statements

This Quarterly Report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical are forward-looking and reflect information concerning possible or assumed future results of operations and planned financing of the Company. In addition, forward-looking statements may be made orally or in press releases, conferences, reports, on the Company's web site, or otherwise, in the future by or on behalf of the Company. When used by or on behalf of the Company, the words “expect,” “anticipate,” “estimate,” “believe,” “intend,” “will,” “plan,” “predict,” “project,” “outlook,” “could,” “may,” “should” or similar expressions generally identify forward-looking statements. The entire section entitled “Executive Overview and Outlook” should be considered forward-looking statements. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve a number of risks and uncertainties, including but not limited to those discussed in the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019. Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results or conditions, which may not occur as anticipated. Actual results or conditions could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein and in the Company’s other public filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended August 31, 2019, as well as other risks and uncertainties not now anticipated. The risks and uncertainties described herein and in the Company’s other public filings 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.

Accounting Policies

In preparing the Company’s condensed consolidated financial statements in conformity with U.S. GAAP, management must make a variety of decisions which impact the reported amounts and the related disclosures. These decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In making these decisions, management applies its judgment based on its understanding and analysis of the relevant circumstances and the Company’s historical experience.

The Company’s accounting policies that are most important to the presentation of its results of operations and financial condition, and which require the greatest use of judgments and estimates by management, are designated as its critical accounting policies. See discussion of the Company’s critical accounting policies under Item 7 in the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended August 31, 2019. Management periodically re-evaluates and adjusts its critical accounting policies as circumstances change. There were no changes in the Company’s critical accounting policies during the six months ended February 29, 2020.

Recent Accounting Guidance

See Note 1 – Basis of Presentation and the disclosure therein of recent accounting guidance (adopted and not yet adopted) to the condensed consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Executive Overview and Outlook

Operating revenues for the three months ended February 29, 2020 were $113.8 million, an increase of 4 percent compared to $109.2 million for the three months ended February 28, 2019. Irrigation segment revenues decreased 4 percent to $92.1 million and infrastructure segment revenues increased 62 percent to $21.7 million. Net earnings for the three months ended February 29, 2020 were $5.5 million, or $0.51 per diluted share, compared to a net loss of $3.4 million, or $0.32 per diluted share, for the three months ended February 28, 2019.

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

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The Company’s irrigation revenues are highly dependent upon the need for irrigated agricultural crop production, which, in turn, depends upon many factors, including the following primary drivers:

•

Agricultural commodity prices – As of February 2020, corn prices have increased 1 percent and soybean prices have decreased approximately 2 percent from February 2019 and remain substantially lower than the peak levels in 2013. Under the U.S.-China Phase 1 trade deal signed January 15, 2020, China has pledged to increase purchases of U.S. agricultural products by $32 billion over two years, to an average annual total of $40 billion compared to the 2017 baseline of $24 billion. An increase in purchases by China should be supportive of higher agricultural commodity prices.

•

Net farm income – As of February 2020, the U.S. Department of Agriculture (the “USDA”) estimated U.S. 2020 net farm income to be $96.7 billion, an increase of 3 percent from the USDA’s estimated U.S. 2019 net farm income of $93.6 billion. The modest increase is a result of projected increases in cash receipts for both crops and livestock, which are partially offset by a projected decrease in payments from the Market Facilitation Program that had to be implemented in response to the U.S. trade dispute with China.

•

Weather conditions – Demand for irrigation equipment is often positively affected by storm damage and prolonged periods of drought conditions as producers look for ways to reduce the risk of low crop production and crop failures. Conversely, demand for irrigation equipment can be negatively affected during periods of more predictable or excessive natural precipitation.

•

Governmental policies – A number of governmental laws and regulations can affect the Company’s business, including:

•

The Agriculture Improvement Act of 2018 (the “Farm Bill”) was signed into law in December 2018. The 2018 Farm Bill continues many of the programs that were in the Agricultural Act of 2014, which expired in September 2018. Such programs are designed to provide a degree of certainty to growers, including funding for the Environmental Quality Incentives Program, which provides financial assistance to farmers to implement conservation practices, and is frequently used to assist in the purchase of center pivot irrigation systems.

•

The U.S. Tax Cuts and Jobs Act (“U.S. Tax Reform”) enacted in December 2017 increased the benefit of certain tax incentives, such as the Section 179 income tax deduction and Section 168 bonus depreciation, which are intended to encourage equipment purchases by allowing the entire cost of equipment to be treated as an expense in the year of purchase rather than amortized over its useful life.

•

Biofuel production continues to be a major demand driver for irrigated corn, sugar cane and soybeans as these crops are used in high volumes to produce ethanol and biodiesel. On December 19, 2019, the U.S. Environmental Protection Agency finalized Renewable Fuels Standard (RFS) volume requirements for 2020 that slightly increased volumes of conventional biofuels as well as volumes for advanced and cellulosic biofuels.

•

Many international markets are affected by government policies such as subsidies and other agriculturally related incentives. While these policies can have a significant effect on individual markets, they typically do not have a material effect on the consolidated results of the Company.

•

Currency – The value of the U.S. dollar fluctuates in relation to the value of currencies in a number of countries to which the Company exports products and in which the Company maintains local operations. The strengthening of the dollar increases the cost in the local currency of the products exported from the U.S. into these countries and, therefore, could negatively affect the Company’s international sales and margins. In addition, the U.S. dollar value of sales made in any affected foreign currencies will decline as the value of the dollar rises in relation to these other currencies.

International irrigation markets remain active with opportunities for further development and expansion, however regional political and economic factors, currency conditions and other factors can create a challenging environment. Additionally, international results are heavily dependent upon project sales which tend to fluctuate and can be difficult to forecast accurately.

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The infrastructure business is dependent to some extent on government spending for road construction. In December 2015, the U.S. government enacted a five-year, $305 billion highway-funding bill (the “FAST Act”) to fund highway and bridge projects. The FAST Act is scheduled to expire in September 2020 unless it is reauthorized by Congress. In addition, the Federal Highway Administration has changed highway safety product certification requirements. The change has required additional research and development spending and could have an impact on the competitive positioning of the Company’s highway safety products. In spite of government spending uncertainty, opportunities exist for market expansion in each of the infrastructure product lines. Demand for the Company’s transportation safety products continues to be driven by population growth and the need for improved road safety.

The backlog of unshipped orders at February 29, 2020 was $104.4 million compared with $45.6 million at February 28, 2019. Included in these backlogs are amounts of $5.5 million and $1.1 million, respectively, for orders that are not expected to be fulfilled within the subsequent twelve months. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing and execution of contracts. Backlog typically represents long-term projects as well as short lead-time orders, and therefore is generally not a good indication of the next fiscal quarter’s revenues.

The global drivers for the Company’s markets of population growth, expanded food production, efficient water use and infrastructure expansion support the Company’s long-term growth goals. The most significant opportunities for growth over the next several years are in international markets, where irrigation use is less developed and demand is driven primarily by food security, water scarcity and population growth.

Results of Operations

For the Three Months ended February 29, 2020 compared to the Three Months ended February 28, 2019

The following section presents an analysis of the Company’s operating results displayed in the condensed consolidated statements of operations for the three months ended February 29, 2020 and 2019. It should be read together with the industry segment information in Note 16 to the condensed consolidated financial statements:

	Three months ended						Percent
($ in thousands)	February 29, 2020			February 28, 2019			Increase (Decrease)
Consolidated
Operating revenues	$	113,788		$	109,182		4%
Gross profit	$	33,406		$	24,474		36%
Gross margin		29.4	%		22.4	%

Operating expenses⁽¹⁾	$	24,764		$	28,934		-14%
Operating income	$	8,642		$	(4,460	)	NM
Operating margin		7.6	%		-4.1	%

Other expense, net	$	(1,775	)	$	(608	)	192%
Income tax expense	$	1,351		$	(1,628	)	NM
Overall income tax rate		19.7	%		32.1	%
Net earnings	$	5,516		$	(3,440	)	NM

Irrigation Segment
Segment operating revenues	$	92,073		$	95,766		-4%
Segment operating income	$	9,614		$	7,521		28%
Segment operating margin		10.4	%		7.9	%

Infrastructure Segment
Segment operating revenues	$	21,715		$	13,416		62%
Segment operating income	$	6,358		$	(446	)	NM
Segment operating margin		29.3	%		-3.3	%

⁽¹⁾	Includes $7.3 million and $11.5 million of corporate operating expenses for the three months ended February 29, 2020 and February 28, 2019, respectively.

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Revenues

Operating revenues for the three months ended February 29, 2020 increased 4 percent to $113.8 million from $109.2 million for the three months ended February 28, 2019, as irrigation revenues decreased $3.7 million and infrastructure revenues increased $8.3 million. The irrigation segment provided 81 percent of the Company’s revenue during the three months ended February 29, 2020 as compared to 88 percent for the three months ended February 28, 2019.

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

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

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

Gross Profit

Gross profit for the three months ended February 29, 2020 of $33.4 million increased 36 percent from $24.5 million for the three months ended February 28, 2019. The increase in gross profit resulted from higher revenues and an increase in gross margin to 29.4 percent of sales for the three months ended February 29, 2020 compared with 22.4 percent of sales for the three months ended February 28, 2019. Gross margin improvement resulted primarily from a more profitable margin mix from higher infrastructure revenues as well as from the results of margin improvement initiatives in both segments. In addition, gross profit for the three months ended February 29, 2020 includes a gain of $1.2 million on the sale of a building that had been held for sale.

Operating Expenses

Operating expenses of $24.8 million for the three months ended February 29, 2020 decreased $4.1 million, or 14 percent, compared with $28.9 million for the three months ended February 28, 2019. Costs of $5.3 million incurred in connection with the Company’s Foundation for Growth initiative during the three months ended February 28, 2019 did not repeat during the current year period. Excluding the impact of the non-repeating costs, operating expenses increased 5 percent compared to the prior year due primarily to an increase in incentive compensation included in administrative expenses.

Income Taxes

The Company recorded income tax expense of $1.4 million and income tax benefit of $1.6 million for the three months ended February 29, 2020 and February 28, 2019, respectively. The effective income tax rate was 19.7 percent and 32.1 percent for the three months ended February 29, 2020 and 2019, respectively. The decrease in the effective tax rate from February 2019 to February 2020 relates primarily to the change in earnings mix among foreign operations.

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For the Six Months ended February 29, 2020 compared to the Six Months ended February 28, 2019

The following section presents an analysis of the Company’s operating results displayed in the condensed consolidated statements of operations for the six months ended February 29, 2020 and February 28, 2019. It should be read together with the industry segment information in Note 16 to the condensed consolidated financial statements:

	Six months ended						Percent
($ in thousands)	February 29, 2020			February 28, 2019			Increase (Decrease)
Consolidated
Operating revenues	$	223,181		$	221,133		1%
Gross profit	$	67,480		$	53,122		27%
Gross margin		30.2	%		24.0	%

Operating expenses⁽¹⁾	$	46,562		$	55,542		-16%
Operating income	$	20,918		$	(2,420	)	NM
Operating margin		9.4	%		-1.1	%

Other expense, net	$	(2,796	)	$	(967	)	189%
Income tax expense (benefit)	$	4,261		$	(1,159	)	NM
Overall income tax rate		23.5	%		34.2	%
Net earnings	$	13,861		$	(2,228	)	NM

Irrigation Segment
Segment operating revenues	$	174,425		$	183,376		-5%
Segment operating income	$	19,371		$	15,304		27%
Segment operating margin		11.1	%		8.3	%

Infrastructure Segment
Segment operating revenues	$	48,756		$	37,757		29%
Segment operating income	$	15,126		$	3,722		306%
Segment operating margin		31.0	%		9.9	%

⁽¹⁾	Includes $13.6 million and $21.4 million of corporate operating expenses for the six months ended February 29, 2020 and February 28, 2019, respectively.

Revenues

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

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

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

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

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Gross Profit

Gross profit for the six months ended February 29, 2020 of $67.5 million increased 27 percent from $53.1 million for the six months ended February 28, 2019. The increase in gross profit resulted primarily from an increase in gross margin to 30.2 percent of sales for the six months ended February 29, 2020 compared with 24.0 percent of sales for the six months ended February 28, 2019. Gross margin improvement resulted primarily from a more profitable margin mix from higher infrastructure revenues as well as from the results of margin improvement initiatives in both segments. In addition, gross profit for the six months ended February 29, 2020 includes a gain of $1.2 million on the sale of a building that had been held for sale.

Operating Expenses

Operating expenses of $46.6 million for the six months ended February 29, 2020 decreased $9.0 million, or 16 percent, compared with $55.5 million for the six months ended February 28, 2019. Costs of $9.3 million incurred in connection with the Company’s Foundation for Growth initiative during the six months ended February 28, 2019 did not repeat during the current year period. Excluding the impact of the non-repeating costs, operating expenses increased 1 percent compared to the prior year as an increase in incentive compensation was partially offset by reductions in other areas.

Income Taxes

The Company recorded income tax expense of $4.3 million and income tax benefit of $1.2 million for the six months ended February 29, 2020 and February 28, 2019, respectively. The effective income tax rate was 23.5 percent and 34.2 percent for the six months ended February 29, 2020 and 2019, respectively. The decrease in the effective tax rate from February 2019 to February 2020 relates primarily to the change in earnings mix among foreign operations.

Liquidity and Capital Resources

The Company's cash, cash equivalents, and marketable securities totaled $120.0 million at February 29, 2020 compared with $102.8 million at February 28, 2019 and $127.2 million at August 31, 2019. The Company requires cash for financing its receivables and inventories, paying operating expenses and capital expenditures, and for dividends and share repurchases. The Company meets its liquidity needs and finances its capital expenditures from its available cash and funds provided by operations along with borrowings under its credit arrangements described below. The Company’s investments in marketable securities are primarily comprised of United States government securities and investment grade corporate bonds. The Company believes its current cash resources, investments in marketable securities, projected operating cash flow, and remaining capacity under its continuing bank lines of credit are sufficient to cover all of its expected working capital needs, planned capital expenditures and dividends. The Company may require additional borrowings to fund potential acquisitions in the future.

The Company’s total cash and cash equivalents held by foreign subsidiaries were approximately $39.8 million, $31.2 million, and $48.1 million as of February 29, 2020, February 28, 2019, and August 31, 2019, respectively. The Company considers earnings in foreign subsidiaries to be indefinitely reinvested and would need to accrue and pay incremental state, local, and foreign taxes if such earnings were repatriated to the United States. The Company does not intend to repatriate the funds and does not expect these funds to have a significant impact on the Company’s overall liquidity.

Net working capital was $237.2 million at February 29, 2020, as compared with $234.8 million at February 28, 2019 and $231.4 million at August 31, 2019. Cash used in operating activities totaled $2.2 million during the six months ended February 29, 2020, compared to cash used in operating activities of $39.8 million during the six months ended February 28, 2019. This change was primarily due to higher net earnings and lower increases in receivables and inventories compared to the same prior year period.

Cash flows used in investing activities totaled $19.0 million during the six months ended February 29, 2020 compared to $10.5 million during the six months ended February 28, 2019. The increase resulted from purchases of marketable securities which were partially offset by proceeds from the sale of assets held-for-sale and a decrease in capital expenditures compared to the same prior year period.

Cash flows used in financing activities totaled $6.4 million during the six months ended February 29, 2020 compared to cash flows used in financing activities of $7.7 million during the six months ended February 28, 2019. The decrease was primarily the result of higher proceeds from the exercise of stock options compared to the same prior year period.

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Capital Allocation Plan

The Company’s capital allocation plan is to continue investing in revenue and earnings growth, combined with a defined process for enhancing returns to stockholders. Under the Company’s capital allocation plan, the priorities for uses of cash include:

•

Investment in organic growth including capital expenditures and expansion of international markets,

•

Dividends to stockholders, along with expectations to increase dividends over time,

•

Synergistic acquisitions that provide attractive returns to stockholders, and

•

Opportunistic share repurchases taking into account cyclical and seasonal fluctuations.

Capital Expenditures

Capital expenditures for fiscal 2020 are expected to be between $15.0 million and $20.0 million, including equipment replacement, productivity improvements and new product development. The Company’s management does maintain flexibility to modify the amount and timing of some of the planned expenditures in response to economic conditions.

Dividends

In the second quarter of each of fiscal 2020 and 2019, the Company paid a quarterly cash dividend of $0.31 per common share, or $6.7 million, to stockholders.

Share Repurchases

The Company’s Board of Directors authorized a share repurchase program of up to $250.0 million of common stock with no expiration date. Under the program, shares may be repurchased in privately negotiated and/or open market transactions as well as under formalized trading plans in accordance with the guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. There were no shares repurchased during the six months ended February 29, 2020 and 2019, respectively. The remaining amount available under the repurchase program was $63.7 million as of February 29, 2020.

Long-Term Borrowing Facilities

Senior Notes. The Company has outstanding $115.0 million in aggregate principal amount of Senior Notes, Series A (the “Senior Notes”). The entire principal of the Senior Notes is due and payable on February 19, 2030. Interest on the Senior Notes is payable semi-annually at a fixed annual rate of 3.82 percent. On May 31, 2019, the Company and holders of the Senior Notes agreed, among other things, to temporarily increase the Company’s maximum permitted funded debt to EBITDA leverage ratio from 3.0 to 3.5 through the fiscal quarter ending May 31, 2020, provided that, if such ratio exceeds the original maximum permitted ratio during such period, the interest rate on the Senior Notes shall be increased by up to 0.50% depending on the degree to which the Company exceeds such ratio. During fiscal 2019 the Company did not exceed the original permitted ratio. Borrowings under the Senior Notes are unsecured. The Company used the proceeds of the sale of the Senior Notes for general corporate purposes, including acquisitions and dividends.

Revolving Credit Facility. The Company has outstanding a $50.0 million unsecured Amended and Restated Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association (“Wells Fargo”) expiring May 31, 2022. The Company intends to use borrowings under the Revolving Credit Facility for working capital purposes and to fund acquisitions. At February 29, 2020 and February 28, 2019, the Company had no outstanding borrowings under the Revolving Credit Facility. The amount of borrowings available at any time under the Revolving Credit Facility is reduced by the amount of standby letters of credit issued by Wells Fargo then outstanding. At February 29, 2020, the Company had the ability to borrow up to $50.0 million under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to LIBOR plus 90 basis points (2.28 percent at February 29, 2020), subject to adjustment as set forth in the loan documents for the Revolving Credit Facility. Interest is paid on a monthly to quarterly basis depending on loan type. The Company currently pays an annual commitment fee of 0.25 percent on the unused portion of the Revolving Credit Facility.

Borrowings under the Revolving Credit Facility have equal priority with borrowings under the Company’s Senior Notes. Each of the credit arrangements described above include certain covenants relating primarily to the Company’s financial condition. These financial covenants include a funded debt to EBITDA leverage ratio and an interest coverage ratio. In the event that the loan documents for the Revolving Credit Facility were to require the Company to comply with any financial

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covenant that is not already included or is more restrictive than what is already included in the arrangement governing the Senior Notes, then such covenant shall be deemed incorporated by reference for the benefit of holders of the Senior Notes. Upon the occurrence of any event of default of these covenants, including a change in control of the Company, all amounts outstanding thereunder may be declared to be immediately due and payable. At February 29, 2020 and February 28, 2019, the Company was in compliance with all financial loan covenants contained in its credit arrangements in place as of each of those dates.

Series 2006A Bonds. Elecsys International Corporation, a wholly owned subsidiary of the Company, has outstanding $1.6 million in principal amount of industrial revenue bonds that were issued in 2006 (the “Series 2006A Bonds”). Principal and interest on the Series 2006A Bonds are payable monthly through maturity on September 1, 2026. The interest rate is adjustable every five years based on the yield of the 5-year United States Treasury Notes, plus 0.45 percent (1.34 percent as of February 29, 2020). This rate was adjusted on September 1, 2016 in accordance with the terms of the bonds, and the adjusted rate will be in force until September 1, 2021. The obligations under the Series 2006A Bonds are secured by a first priority security interest in certain real estate.

Contractual Obligations and Commercial Commitments

There have been no material changes in the Company’s contractual obligations and commercial commitments as described in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019.

ITEM 3 – Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes from the Company’s quantitative and qualitative disclosures about market risk previously disclosed in the Company’s most recent Annual Report on Form 10-K. See discussion of the Company’s quantitative and qualitative disclosures about market risk under Part II, Item 7A in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019.

ITEM 4 – Controls and Procedures

Disclosure Controls and Procedures

The Company carried out an evaluation under the supervision and the participation of the Company’s management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were ineffective as of February 29, 2020 due to the material weakness previously disclosed in Part II, Item 9A of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019.

As previously disclosed, in connection with management’s assessment of internal control over financial reporting as of August 31, 2019, the Company identified a material weakness related to ineffective internal control over indirect tax credits in a foreign jurisdiction. The Company’s control was not designed effectively to include evaluation of the recoverability of the credits due to ineffective risk assessment that did not identify the risk related to valuation of the tax credits. This deficiency resulted in a material misstatement that was corrected before the Company issued the consolidated financial statements included in the Annual Report on Form 10‑K for the fiscal year ended August 31, 2019.

During the second quarter of fiscal 2020, the Company continued executing its remediation plan to address the material weakness identified above, which includes the implementation of new controls focused on the valuation of the tax credits. The weakness will not be considered remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. The Company expects to complete the remediation of this material weakness during fiscal 2020.

Changes in Internal Control over Financial Reporting

During the current quarter, the Company designed and implemented controls related to its investment in marketable securities. Other than with respect to the remediation efforts described above and addition of controls associated with the Company’s investment in marketable securities, the CEO and CFO determined that there has not been any significant change to the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II – OTHER INFORMATION

ITEM 1 – Legal Proceedings

See the disclosure in Note 10 – Commitments and Contingencies to the condensed consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is hereby incorporated herein by reference.

ITEM 1A – Risk Factors

Other than the addition of the text below, there have been no material changes from risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K. See the discussion of the Company’s risk factors under Part I, Item 1A in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019.

The coronavirus (COVID-19) pandemic could disrupt the Company’s operations and adversely affect its business, results of operations, and cash flows.

In March 2020, the World Health Organization declared coronavirus (COVID-19) a global pandemic. This outbreak, which has continued to spread worldwide, has adversely affected workforces, customers, economies, and financial markets globally, potentially leading to an economic downturn. The significance of the impact on the Company’s operations is not yet certain and depends on numerous evolving factors that the Company may not be able to accurately predict or effectively respond to, including, without limitation: the duration and scope of the outbreak; actions taken by governments, businesses, and individuals in response to the outbreak; the effect on economic activity and actions taken in response; the effect on customers and their demand for the Company’s products and services; and the Company’s ability to manufacture, sell, and service its products, including without limitation as a result of supply chain challenges, facility closures, social distancing, restrictions on travel, fear or anxiety by the populace, and shelter-in-place orders. These and other factors relating to or arising from the outbreak could have a material adverse effect on the Company’s business, results of operations, and cash flows.

ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3 – Defaults Upon Senior Securities

None.

ITEM 4 – Mine Safety Disclosures

Not applicable.

ITEM 5 – Other Information

None.

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ITEM 6 – Exhibits

Exhibit
No.		Description

3.1		Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on December 14, 2006.
3.2		Amended and Restated By‑Laws of the Company, effective October 17, 2018, incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on October 19, 2018.
4.1		Specimen Form of Common Stock Certificate, incorporated by reference to Exhibit 4(a) of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2006.
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.
32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.
101*		Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language ("Inline XBRL").
104*		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

* Filed herein.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 7th day of April 2020.

			LINDSAY CORPORATION

	By:		/s/ BRIAN L. KETCHAM
	Name:		Brian L. Ketcham
	Title:		Senior Vice President and Chief Financial Officer
			(on behalf of the registrant and as principal financial officer)

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