<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(MARK ONE)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended August 31, 1995 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________to________
Commission File Number 0-17116
Lindsay Manufacturing Co.
(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.)
Box 156, East Highway 91, Lindsay, Nebraska 68644
- ------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: 402-428-2131
------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
--------------
Common Stock, $1.00 par value
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 X No
----- -----
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. X
-----
As of November 16, 1995, 4,367,925 shares of the registrant's Common Stock were
outstanding and the aggregate market value of all Common Stock held by
non-affiliates (4,201,984 shares) was $144,968,448 based upon the final sales
price on the National Association of Securities Dealers Automated Quotation
("Nasdaq")/National Market on such date.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1995 Annual Report to Stockholders are incorporated herein by
reference into Parts I, II and IV.
Portions of the Proxy Statement pertaining to the February 7, 1996 annual
stockholders' meeting are incorporated herein by reference into Part III.
Exhibit index is located on page 10-12.
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ITEM 1 - BUSINESS
(a) Lindsay Manufacturing Co. ("Lindsay" or the "Company") is a leading
designer, manufacturer and international and domestic marketer, under its
"Zimmatic" trademark, of electrically powered automatic continuous move systems
for the irrigation of agricultural crops and related products and services.
Lindsay also produces and sells large diameter tubing; manufactures and
assembles products for other manufacturers (such as corn planters and
sub-assemblies for construction equipment) and provides services such as hot
dip galvanizing.
Lindsay was founded in 1955, and incorporated under Nebraska law in 1969.
DEKALB Energy Company, ("DEKALB", formerly DEKALB Corporation) acquired Lindsay
in 1974 through its merger into Lindsay Manufacturing Co., a wholly-owned
Delaware subsidiary of DEKALB. The company was a wholly-owned subsidiary of
DEKALB until October 1988.
(b) Industry segment information is included in Part II, Item 8, Footnote K.
The information required by this item is incorporated by reference from the
1995 Annual Report to Stockholders on page 19.
(c) Product. Lindsay's irrigation systems are primarily of the 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. Due to lower price
and simplicity of operation, center pivots currently account for over 95
percent of Lindsay's irrigation system sales.
A typical center pivot for the North American market is approximately
1,300 feet long and is designed to circle within a standard quarter-section of
land, which comprises 160 acres, wherein it irrigates approximately 135 acres.
A typical center pivot for the international market is approximately 1,000 feet
long. Center pivot or lateral move systems can also be custom designed and can
irrigate from 25 to 500 acres.
A center pivot system represents a significant investment to a farmer. A
typical center pivot system, fully installed, requires an investment of up to
approximately $50,000 to $60,000. Approximately one-half of such expenditure
is for the pivot itself and the remainder is attributable to installation of
additional equipment such as wells, pumps, underground water pipe, electrical
supply and a concrete pad upon which the pivot is anchored. Lindsay estimates
that there are approximately 130,000 to 140,000 center pivot irrigation systems
in operation worldwide, resulting in a significant replacement parts business.
TYPES OF IRRIGATION - COMPETITIVE PRODUCTS. Center pivot and lateral
move irrigation systems compete with three other types of irrigation: flood,
drip and other mechanical devices. 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
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source is moved and another set of rows are flooded. In "drip" or "trickle"
irrigation, perforated pipe is installed on the ground or buried underground at
the root level. Several other types of mechanical devices irrigate the
remaining irrigated acres. These other types of mechanical devices are not
generally being replaced and no longer generate significant sales.
Center pivot irrigation offers significant advantages when compared with
other types of irrigation. It requires less labor and monitoring; it can be
used on sandy ground which, due to poor water retention ability must have water
applied frequently; it can be used on uneven ground, thereby allowing
previously unsuitable land to be brought into production; it can also be used
for the application of fertilizers, insecticides, herbicides or other chemicals
(termed "chemigation"); and it conserves water and chemicals through precise
control of the amount and timing of its application.
MARKETS - GENERAL. Water is an essential and critical requirement for crop
production, and the extent, regularity and frequency of water application is a
critical determinant in crop performance and yield.
The fundamental factors which govern the demand for center pivot and
lateral move systems are essentially the same in both the domestic and
international markets. Demand for center pivot and lateral move systems is
determined by whether the increased value of crop production attributable to
the increased water the center pivot or lateral move provides will exceed any
increased costs associated with installing and operating the equipment. Thus,
the decision to install a center pivot or lateral move system reflects the
profitability of agricultural production, which is determined primarily by the
prices of agricultural commodities and the costs of other farming inputs. In
recent years, a critical factor has been the extent to which governments, in
pursuing agricultural, social and other policies and objectives, have
subsidized agricultural profitability and regulated production.
In addition, demand for center pivots and lateral moves depends upon the
need for the particular operational characteristics and advantages of such
systems in relation to alternative types of irrigation, primarily flood.
Selection of center pivot or lateral move systems, over competitive types of
irrigation, is aided by the fact that agricultural production is continually
forced to become more efficient in its use of the basic natural resources of
land, water and energy. Increasing global population not only increases demand
for agricultural output, but also places additional and competing demands on
land, water and energy. As center pivot and lateral move systems are required
where the soil is sandy, the terrain is not flat, there is a shortage of
reliable labor, water supply is restricted and conservation is critical, and/or
chemigation will be utilized, Lindsay expects demand for center pivots and
lateral moves to increase relative to other irrigation methods.
UNITED STATES MARKET. The information required by this item is
incorporated by reference from the 1995 Annual Report to Stockholders under the
heading "Operations Review" on pages 5 through 7.
INTERNATIONAL MARKET. The information required by this item is
incorporated by reference from the 1995 Annual Report to Stockholders under the
heading "Operations Review" on pages 5 through 7.
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COMPETITION. During the 1970's there were over 30 domestic manufacturers
of center pivot irrigation systems, while seven manufacturers remain today.
Lindsay believes that Lindsay and Valmont Industries, Inc. ("Valmont"), the top
two manufacturers, represent 75 percent to 85 percent of the market. Although
detailed market information is not available, Lindsay believes its portion of
the international market is slightly greater than Valmont's, but its domestic
market is somewhat smaller than that of Valmont.
There is manufacturing overcapacity in the center pivot and lateral move
industry, with resulting price competition. Competition also occurs in areas
of product quality and durability, product characteristics, retention and
reputation of local dealers, post-sale service, and, at certain times of the
year, the availability of systems and their delivery time. Lindsay believes it
generally competes favorably with respect to these factors.
DIVERSIFIED PRODUCTS AND SERVICES
The information required by this item is incorporated by reference from
the 1995 Annual Report to Stockholders under the heading "Operations Review" on
pages 5 through 7.
SEASONALITY/CYCLICALITY
Irrigation equipment sales are seasonal by nature. Farmers generally
order systems to be delivered and installed before the growing season.
Shipments to North American customers usually peak during March and April for
the spring planting period. Lindsay's expansion into diversified manufacturing
complements its irrigation operations by using available capacity and reducing
seasonality.
ORDER BACKLOG
As of September 1, 1995 and 1994, Lindsay had an order backlog of
approximately $15 million. At year end Fiscal 1995, Lindsay had a $7.4 million
order backlog for irrigation equipment. This was down from year end Fiscal
1994's irrigation equipment order backlog of $8.3 million. Lindsay believes
that uncertainty in the North American market during late July and August 1995
about the fall crop delayed order activity. At year end Fiscal 1995, order
backlog for diversified products totaled $7.1 million, up 15% from $6.2 million
at Fiscal 1994 year end.
Lindsay manufactures a center pivot or lateral move system only upon a
firm order. International orders are generally shipped against prepayments or
receipt of an irrevocable letter of credit confirmed by a United States bank,
which call for delivery within time periods negotiated with the customer.
North American orders are manufactured to dealer order, accompanied by a down
payment.
RAW MATERIALS AND COMPONENTS
Raw materials used by Lindsay include coil steel, angle steel, plate
steel, zinc, tires, gearboxes, fasteners and electrical components (motors,
switches, cable and stators). Periodically, Lindsay has faced shortages of
certain such materials. Lindsay believes it currently has ready access to
adequate supplies of raw materials and components.
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CAPITAL EXPENDITURES
Capital expenditures for fiscal 1995, 1994 and 1993, were approximately
$2.8 million, $1.3 million and $0.9 million, respectively. Capital
expenditures for fiscal 1996 are expected to be between $3.0 and $3.5 million
and will be used principally to improve the Company's existing operating
facilities. The Company does not anticipate any needs for substantial capital
expenditures for plant expansion over the next several years.
PATENTS, TRADEMARKS, LICENSES
The "Zimmatic" and other trademarks are registered in most markets in
which Lindsay sells its product. Lindsay follows a policy of applying for
patents on all significant patentable inventions. Although Lindsay 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 Lindsay at Fiscal year end 1995, 1994
and 1993 were 491, 481 and 486, respectively. Lindsay currently employs
approximately 525 persons. None of Lindsay's employees are represented by a
union.
ENVIRONMENTAL AND HEALTH AND SAFETY MATTERS
Like other manufacturing concerns, Lindsay is subject to numerous laws
and regulations which govern occupational health and safety and the discharge
and disposal of materials into the environment. Lindsay believes that its
operations are substantially in compliance with all such applicable laws and
regulations. Permits are or may be required for some of the operations at the
Lindsay, Nebraska facility. Although all currently required permits have been
obtained by Lindsay, as with all such permits they are subject to revocation,
modification and renewal. Even where regulations or standards have been
adopted, they are subject to varying and conflicting interpretations and
implementation. In many cases, compliance with environmental regulations or
standards can be achieved only through significant capital and operation
expenditures. See Item 3 Legal Proceedings.
SUBSIDIARIES
Since 1979, international sales personnel have been located in Houston,
Texas as part of Lindsay International Sales Corporation, a subsidiary which
conducts foreign sales operations for Lindsay. Lindsay is in the process of
relocating the Houston international sales office to Lindsay's Nebraska
headquarters, thereby reducing costs while at the same time enhancing
communication and customer service. Lindsay Transportation, Inc., a
wholly-owned subsidiary, was formed in 1975. It owns approximately 105
trailers and, through lease of tractors, supplies the ground transportation in
the United States and Canada for Lindsay's products and the bulk of incoming
raw materials, and hauls other products on backhauls. Lindsay also has three
non-operational subsidiaries.
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ITEM 2 - PROPERTIES
Lindsay owns and occupies 43 acres in Lindsay, Nebraska. Its
manufacturing operation has eight separate buildings, with approximately
525,000 square feet of manufacturing area under roof. With the Company's
current manufacturing capacity, the Company can increase sales without a major
investment in facilities and capital equipment. In Fiscal 1996, the Company is
completing a plant automation project, increasing production capacity to meet
the North American peak season (January through May) demand.
ITEM 3 - LEGAL PROCEEDINGS
Lindsay is a party to a number of lawsuits arising from environmental and
other issues in the ordinary course of its business. Management does not
believe that these lawsuits, either individually or in the aggregate, are
likely to have a material adverse effect on Lindsay's financial condition,
results of operations or cash flows.
Environmental contamination at Lindsay's manufacturing facility occurred
in 1982 when a drill, operated by a sub-contractor installing groundwater
monitoring wells, punctured a silt and sand lens and an underlying clay layer
beneath a clay-lined lagoon. The 1982 puncture of the clay layer caused acid
and solvent leachate to enter the sand and gravel aquifer.
Since 1983, Lindsay has worked actively with the Nebraska Department of
Environmental Control ("NDEC") to remediate this contamination by purging and
treating the aquifer. In October 1989, the Environmental Protection Agency
("EPA") added Lindsay to the list of priority Superfund sites. In 1988, a
sampling which was performed in connection with an investigation of the extent
of aquifer groundwater contamination revealed solvent contamination (volatile
organic compounds) in the soil and shallow groundwater in three locations at
and in the vicinity of the plant. Under a 1988 agreement with the EPA and
NDEC, Lindsay conducted a Remedial Investigation/Feasibility Study ("RI/FS").
This study was completed in June 1990. Lindsay does not believe that there is
any other soil or groundwater contamination at the manufacturing facility.
In September 1990, the EPA issued its Record of Decision ("ROD")
selecting a plan for completing the remediation of both contaminations. The
plan selected for aquifer remediation was in line with Lindsay's expectations.
However, the plan for remediation of the soil and shallow groundwater
contamination proposed a higher degree of remediation than the company had
previously expected. Therefore, Lindsay recognized an additional $2.9 million
accrual in the fourth quarter of Fiscal 1990. The selected plan implementation
was delayed until finalization of the Consent Decree in April 1992. Due to
this delay, Lindsay recognized an additional accrual of $0.6 million in the
fourth quarter of Fiscal 1991 and $0.8 million in the fourth quarter of Fiscal
1992. The final remediation plans were approved in 1993 and 1994 and the
remediation plans were fully implemented during Fiscal 1995.
The total balance sheet reserve for this remediation was $1.9 million at
Fiscal 1995 year end compared to $2.9 million at Fiscal 1994 year end,
reflecting costs of $1.0 million during Fiscal 1995 for the continued
implementation of the plans.
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Lindsay believes that the current reserve is sufficient to cover the
estimated total cost for complete remediation of both the aquifer and soil and
shallow groundwater contaminations under the final plans. Lindsay believes
that its insurer should cover costs associated with the contamination of the
aquifer that was caused by the puncture of the clay layer in 1982. However,
Lindsay and the insurer are in litigation over the extent of the insurance
coverage. If the EPA or the NDEC require remediation which is in addition to
or different from the current plan and depending on the success of Lindsay's
litigation against the insurer, this reserve could increase or decrease
depending on the nature of the change in events.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the vote of security holders during the
fourth quarter of Fiscal 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company, their ages, positions and past
five years experience are set forth below. All officers are elected for one
year terms, which can be annually renewed at a Board of Directors meeting.
This meeting is scheduled for February 7, 1996.
<TABLE>
<CAPTION>
Age Position with the Company
--- -------------------------
<S> <C> <C>
Gary D. Parker 50 Chairman, President and Chief Executive Officer
Eduardo R. Enriquez 55 Vice President - International
Bruce C. Karsk 43 Vice President - Finance, Treasurer and Secretary
Clifford P. Loseke 57 Vice President - Manufacturing
Charles H. Meis 49 Vice President - Engineering
Robert S. Snoozy 49 Vice President - Sales and Marketing
</TABLE>
Mr. Gary D. Parker is Chairman, President and Chief Executive Officer of
Lindsay, and has held such positions since December 1989. Prior to that time
and since 1984, he was President and Chief Executive Officer of Lindsay. He
served as Executive Vice President from 1978 to 1984. Mr. Parker has also been
a Director since 1978.
Mr. Eduardo R. Enriquez is President of Lindsay International Sales
Corporation and has served in that capacity and as Vice President -
International of Lindsay since May of 1986. Prior to that time, and since
1981, he was Vice President - Sales of Lindsay International Sales Corporation.
Mr. Bruce C. Karsk is Vice President - Finance, Treasurer and Secretary
of Lindsay and has held such positions since 1984. Prior to that time and
since 1981, Mr. Karsk had been the Controller.
Mr. Clifford P. Loseke is Vice President - Manufacturing of Lindsay, a
position he has held since 1975.
Mr. Charles H. Meis is Vice President - Engineering of Lindsay and has
held such position since 1975.
Mr. Robert S. Snoozy is Vice President - Sales and Marketing of Lindsay
and has held such position since 1986. Prior to that time and since 1978, he
had been Vice President of Marketing.
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PART II
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Lindsay Common Stock, began public trading on October 12, 1988. It is
listed on the NASDAQ/NMS under the symbol "LINZ". As of November 16, 1995
there were approximately 250 record holders of the Common Stock.
The following table sets forth for the periods indicated the range of the
high and low sales price:
<TABLE>
<CAPTION>
FISCAL YEAR 1995 FISCAL YEAR 1994
---------------- ----------------
HIGH LOW HIGH LOW
------ ------ ------ ------
<S> <C> <C> <C> <C>
First Quarter $32-1/4 $27-7/8 $ 35 $29-1/4
Second Quarter 31-1/4 28-1/4 35-3/4 30
Third Quarter 33 28-1/4 37 31-1/2
Fourth Quarter 35-3/4 31 32-3/4 28
</TABLE>
Lindsay does not currently pay a dividend on its Common Stock. However,
the payment of dividends in the future will be a business decision to be made
by the Board of Directors of Lindsay based on operating results, Lindsay's
financial position and such other business considerations as the Board of
Directors of Lindsay deems relevant.
ITEM 6 - SELECTED FINANCIAL DATA
The information required by this item is incorporated by reference from the
1995 Annual Report to Stockholders under the heading "Selected Financial Data"
on page 8.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The information required by this item is incorporated by reference from the
1995 Annual Report to Stockholders under the heading "Management's Discussion
and Analysis" on pages 9 through 12.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and accompanying notes, together with the report
of independent accountants are incorporated by reference from the 1995 Annual
Report to Stockholders on pages 13 through 19.
The information required by Item 302 of Regulation S-K is incorporated by
reference from the 1995 Annual Report to Stockholders under the heading
"Quarterly Data" on page 8.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company will file with the Securities and Exchange Commission a
definitive Proxy Statement not later than 120 days after the close of its
fiscal year ended August 31, 1995. Item 405 of Regulation S-K calls for
disclosure of any known late filing or failure by an insider to file a report
required by Section 16 of the Securities Exchange Act. This disclosure, if
required, will be contained in the Proxy Statement. The information required
by this Item is incorporated by reference from the Proxy Statement.
Information about Executive Officers is shown on page 7 of this filing.
ITEM 11 - EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference from
the Proxy Statement.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated by reference from
the Proxy Statement.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The following financial statements of Lindsay Manufacturing Co. are
incorporated by reference under Item 8. The 1995 Annual Report to Stockholders
is attached as Exhibit 13.
<TABLE>
<CAPTION>
Reference Page
--------------
Annual Stockholders
Report
<S> <C>
Report of Independent Accountants 12
Consolidated Statements of Operations for the Years
ended August 31, 1995, 1994 and 1993 13
Consolidated Balance Sheets at
August 31, 1995 and 1994 14
Consolidated Statements of Stockholders' Equity
for the years ended August 31, 1995, 1994 and 1993 13
Consolidated Statements of Cash Flows for the Years
ended August 31, 1995, 1994 and 1993 15
Notes to Consolidated Financial Statements 16-19
(a)(2) Financial Statement Schedules
Reference Page
--------------
Form 10-K
Annual Report
Report of Independent Accountants 14
Schedules
VIII. Valuation and Qualifying Accounts -
Years ended August 31, 1995, 1994 and 1993 15
</TABLE>
Financial statements and schedules other than those listed are
omitted for the reason that they are not required, are not applicable or that
equivalent information has been included in the financial statements or notes
thereto.
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a(3) EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description Number
- ------- ----------- ----------
<S> <C> <C>
3(a) Restated Certificate of Incorporation of the Company,
incorporated by reference to amended Exhibit 3(a) of Amendment
No. 4 to the Company's Registration Statement on Form S-1
(Registration No. 33-23084), filed October 12, 1988. -
3(b) By-Laws of the Company incorporated by reference to Amended
Exhibit 3(b) of Amendment No. 3 to the Company's Registration
Statement on Form S-1 (Registration No. 33-23084), filed
September 23, 1988. -
4(a) Specimen Form of Common Stock Certificate incorporated by
reference to Exhibit 4 of Amendment No. 3 to the Company's
Registration Statement on Form S-1 (Registration No. 33-23084),
filed September 23, 1988. -
10(a) Tax Sharing Agreement between DEKALB Energy Company and the
Company, dated October 12, 1988, incorporated by reference to
Exhibit 10(a) of the Company's Annual report on Form 10-K for
the fiscal year ended August 31, 1988. -
10(b) Insurance, Liability and Indemnity Agreement between
DEKALB Energy Company and the Company, dated October 19, 1988,
incorporated by reference to Exhibit 10(c) of the Company's
Annual Report on Form 10-K for the fiscal year ended August
31, 1988. -
10(c) Employment Agreement between the Company and Gary D. Parker,
effective September 1, 1989 amended June 6, 1991, incorporated
by reference to Exhibit 10(c) of the Company's Annual Report
on Form 10K for the fiscal year ended August 31, 1991. -
10(d) Indemnification Agreement between the Company and its
directors and officers, dated October 10, 1988, incorporated
by reference to Exhibit 10(f) of the Company's Annual Report
on Form 10-K for the fiscal year ended August 31, 1988. -
10(e) Lindsay Manufacturing Co. Long-Term Incentive Plan,
incorporated by reference to amended Exhibit 10(h) of
Amendment No. 3 to the Company's Registration Statement
on Form S-1 (Registration No. 33-23084), filed September
23, 1988. -
10(f) Lindsay Manufacturing Co. Profit Sharing Plan, incorporated
by reference to Exhibit 10(i) of the Company's Registration
Statement on Form S-1 (Registration No. 33-23084), filed
July 15, 1988. -
</TABLE>
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a(3) EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description Number
- ------ ----------- ----------
<S> <C> <C>
10(g) Lindsay Manufacturing Co. 1991 Long-Term Incentive Plan,
incorporated by reference to Exhibit 10(h) of the Company's
Annual Report on Form 10-K for the fiscal year ended August
31, 1992. -
10(h) Employment Agreement between the Company and Bruce C. Karsk,
Eduardo R. Enriquez, Clifford P. Loseke, Charles H. Meis, and
Robert S. Snoozy, effective September 1, 1993, incorporated by
reference to Exhibit 10(i) of the Company's Annual Report on
Form 10K for the Fiscal year ended August 31, 1994. -
10(i) Lindsay Manufacturing Co. Supplemental Retirement Plan, incorporated by reference to
Exhibit 10(j) of the Company's Annual Report on Form 10K for the Fiscal year ended
August 31, 1994. -
11 Statement re Computation of Per Share Earnings. 16
13 Lindsay Manufacturing Co. 1995 Annual Report to Stockholders. 17-40
22 Subsidiaries of the Company, incorporated by reference to Exhibit
22 of the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1988. -
25(a) The Power of Attorney authorizing Gary D. Parker and Bruce C. Karsk
and each of them singly to sign the Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Report by Issuers of Securities
quoted on NASDAQ on Form 10-C, Notification of Late Filing on Form
12b-25 and Amendment to Application or Report on Form 8, on behalf
of each other and certain directors, incorporated by reference to
Exhibit 25 of the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1991. -
25(b) The Power of Attorney authorizing Gary D. Parker and Bruce C. Karsk
and each of them singly to sign the Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Report by Issuers of Securities
quoted on NASDAQ on Form 10-C, Notification of Late Filing on Form
12b-25 and Amendment to Application or Report on Form 8, on behalf
of Clayton Yeutter, incorporated by reference to Exhibit 25(b) of the
Company's Annual Report on Form 10-K for the Fiscal year ended
August 31, 1993. -
27 Financial Data Schedule 41
(b) Reports on Form 8-K
</TABLE>
The Registrant has not filed any reports on Form 8-K during the fourth quarter
of fiscal 1995.
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<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
LINDSAY MANUFACTURING CO.
By: Bruce C. Karsk
----------------------------------------------------
Name: Bruce C. Karsk
--------------------------------------------------
Title: Vice President-Finance, Treasurer and Secretary;
-------------------------------------------------
Principal Financial and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on this 22nd day of November, 1995.
Gary D. Parker (1) Chairman, President and Chief Executive
- -------------------------- Officer
Gary D. Parker
Bruce C. Karsk Vice President - Finance, Treasurer and
- -------------------------- Secretary; Principal Financial and
Bruce C. Karsk Accounting Officer
Ralph J. Kroenke Controller
- --------------------------
Ralph J. Kroenke
- -------------------------- Director
Howard G. Buffett
John W. Croghan (1) Director
- --------------------------
John W. Croghan
J. David Dunn (1) Director
- --------------------------
J. David Dunn
George W. Plossl (1) Director
- --------------------------
George W. Plossl
Clayton Yeutter (1) Director
- --------------------------
Clayton Yeutter
(1) By: Bruce C. Karsk
---------------------------------
Bruce C. Karsk, Attorney-In-Fact.
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<PAGE> 14
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of Lindsay Manufacturing Co.:
Our report on the consolidated financial statements of Lindsay Manufacturing
Co. is incorporated by reference in this Form 10-K from page 12 of the Fiscal
1995 Annual Report to Stockholders of Lindsay Manufacturing Co. In connection
with our audits of such financial statements, we have also audited the related
financial statement schedules listed in the Index to Financial Statement
Schedules on page 10 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Omaha, Nebraska
October 9, 1995
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<PAGE> 15
Lindsay Manufacturing Co.
SCHEDULE VIII - VALUATION and QUALIFYING ACCOUNTS
Years ended August 31, 1995, 1994 and 1993
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
-------- -------- ------------------------------ -------- --------
Additions
------------------------------
Balance at Charged to Charged to Balance at
Beginning Costs and Other End
Description of Period Expenses Accounts Deductions of Period
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended August 31, 1995:
Deducted in the balance sheet from the
assets to which they apply:
- Allowance for doubtful accounts $ 513 $ 60 $ 0 $ 0 (a) $ 573
========== ========== ========== ========== ==========
- Allowance for inventory obsolescence $ 760 $ 0 $ 13 $ 101 (b) $ 672
========== ========== ========== ========== ==========
Year ended August 31, 1994:
Deducted in the balance sheet from the
assets to which they apply:
- Allowance for doubtful accounts $ 450 $ 60 $ 0 $ (3) (a) $ 513
========== ========== ========== ========== ==========
- Allowance for inventory obsolescence $ 736 $ 52 $ 0 $ 28 (b) $ 760
========== ========== ========== ========== ==========
Year ended August 31, 1993:
Deducted in the balance sheet from the
assets to which they apply:
- Allowance for doubtful accounts $ 428 $ 0 $ 0 $ (22) (a) $ 450
========== ========== ========== ========== ==========
- Allowance for inventory obsolescence $ 965 $ 0 $ 0 $ 229 (b) $ 736
========== ========== ========== ========== ==========
</TABLE>
- ----------
Notes:
(a) Deductions consist of uncollectible items written off, less
recoveries of items previously written off.
(b) Deductions consist of obsolete items sold or scrapped.
-15-
<PAGE> 1
EXHIBIT 11
Lindsay Manufacturing Co.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Years ended August 31, 1995, 1994 and 1993
(Dollars in thousands except per share amounts)
COMPUTATION OF PRIMARY PER SHARE EARNINGS
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
1. Weighted average shares outstanding........ 4,562,866 4,694,269 4,668,700
2. Net additional shares outstanding assuming
dilutive stock options exercised and
proceeds used to purchase treasury stock 158,116 170,237 178,201
------------ ------------ ------------
3. Average number of common and common
equivalent shares outstanding........... 4,720,982 4,864,506 4,846,901
============ ============ ============
4. Net earnings for per share computation..... $ 11,704 $ 11,892 $ 10,723
============ ============ ============
5. Net earnings per average common and common
equivalent shares outstanding........... $ 2.48 $ 2.44 $ 2.21
============ ============ ============
COMPUTATION OF FULLY DILUTED PER SHARE EARNINGS
1995 1994 1993
------------ ------------ ------------
1. Weighted average shares outstanding........ 4,562,866 4,694,269 4,668,700
2. Net additional shares outstanding assuming
dilutive stock options exercised and
proceeds used to purchase treasury stock 161,269 170,508 182,326
------------ ------------ ------------
3. Average number of common and common
equivalent shares outstanding........... 4,724,135 4,864,777 4,851,026
============ ============ ============
4. Net earnings for per share computation..... $ 11,704 $ 11,892 $ 10,723
============ ============ ============
5. Net earnings per average common and common
equivalent shares outstanding........... $ 2.48 $ 2.44 $ 2.21
============ ============ ============
</TABLE>
-16-
<PAGE> 1
1995
ANNUAL REPORT
LINDSAY MANUFACTURING CO.
A LEADER IN CENTER PIVOT IRRIGATION
[PHOTO:
ZIMMATIC CENTER PIVOT]
CONSERVING WATER, ENERGY AND LABOR
<PAGE> 2
COMPANY PROFILE
Nebraska-based Lindsay Manufacturing Co., a leader in providing irrigation
systems for more than 25 years, maintains a strong marketshare position by
providing high-quality product, superior technology, and first-rate customer
service. Through its diversified products segment, the Company also produces
large diameter steel tubing and performs outsource manufacturing and production
services for others.
For Fiscal 1995, Lindsay had net earnings of $11.7 million, or $2.48
per share, compared with earnings of $11.2 million, or $2.31 per share, in the
prior year, before an increase for the cumulative effect of a change in
accounting for income taxes adopted in the first quarter of Fiscal 1994 of
$659,000, or $0.13 per share. Revenues were $111.8 million, compared to
revenues of $112.7 a year ago.
Lindsay's performance contributed to a solid financial position at
year end. At August 31, 1995, shareholders' equity was $68.7 million, or
$15.74 per share, up from $68.1 million, or $14.44 per share, at the beginning
of the year. Lindsay repurchased almost 8 percent (369,250 shares) of its
outstanding stock during the year.
IRRIGATION EQUIPMENT
Lindsay manufactures center pivot and lateral move irrigation equipment, sold
through a worldwide network of more than 300 independent dealer locations.
1995 RESULTS
Irrigation equipment revenues were $88.8 million compared to $94.3 million a
year ago. North American irrigation equipment revenues were 2 percent lower
than record revenues achieved in Fiscal 1994. Export irrigation equipment
declined 28 percent, as a result of lower sales to dealers in Saudi Arabia
offsetting a 35 percent increase in sales to non-Saudi markets.
OUTLOOK
Long-term, the market for center pivot and lateral move irrigation equipment is
expected to grow at a five year average rate of 6 percent to 8 percent
annually, largely due to demand drivers of farmers' need to conserve water,
energy and labor.
During Fiscal 1996, North American irrigation equipment sales are
expected to be strong, however, there is some uncertainty in the market related
to generally lower crop yields, (but higher crop prices), as well as proposed
changes to government subsidy payments that could impact farmers' income.
In export irrigation equipment, Lindsay expects continued growth in
its non-Saudi international markets including Australia, Western Europe, and
Mexico and Latin America. Fiscal 1996 will also be the first full year where
year-to-year comparisons are level in regard to demand from Lindsay's dealers
in Saudi Arabia.
DIVERSIFIED PRODUCTS
Through its diversified products segment, Lindsay provides outsource
manufacturing services for Caterpillar Inc., Deere & Company, New Holland North
America, Inc. and others. In addition, the Company manufactures and
distributes large-diameter steel tubing to manufacturers and steel service
centers.
1995 RESULTS
Diversified products revenue rose 25 percent in Fiscal 1995 to $23.0 million
from $18.4 million a year ago. This segment comprised over 20 percent of
Lindsay's Fiscal 1995 revenues.
OUTLOOK
Lindsay expects continued growth in its diversified products segment from
additional outsource business from current customers and a stable market for
tubular products. Diversified products revenue during Fiscal 1996 should reach
the Company's goal of accounting for at least 25 percent of revenues, a goal
set five years ago.
TABLE OF CONTENTS
Letter to Shareholders . . . . . . . . . 2
Operations Review . . . . . . . . . . . . 5
Selected Financial Data and Analysis . . 8
Financial Statements . . . . . . . . . . 13
Notes . . . . . . . . . . . . . . . . . . 16
Directors and officers . . . . . . . . . 20
Investors Information . . Inside Back Cover
<PAGE> 3
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
($ in thousands, except per share amounts)
- ------------------------------------------------------------------------------------------------------------
1995 1994 % change
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME DATA
for the fiscal years ended August 31
Operating revenues . . . . . . . . . . . . . . . . . . . . . . $111,843 $112,684 (0.7)%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . 25,857 25,748 0.4
Operating expenses . . . . . . . . . . . . . . . . . . . . . . 11,937 11,610 2.8
Operating income . . . . . . . . . . . . . . . . . . . . . . . 13,920 14,138 (1.5)
Interest and other income, net . . . . . . . . . . . . . . . . 3,166 2,628 20.5
Pre-tax earnings . . . . . . . . . . . . . . . . . . . . . . . 17,086 16,766 1.9
Earnings before accounting change . . . . . . . . . . . . . . . 11,704 11,233 4.2
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,704 $ 11,892 (1.6)%
BALANCE SHEET DATA
at August 31
Current assets . . . . . . . . . . . . . . . . . . . . . . . . $ 43,738 $ 36,381 20.2%
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . 86,060 88,440 (2.7)
Current liabilities . . . . . . . . . . . . . . . . . . . . . . 15,931 18,985 (16.1)
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . $ 68,743 $ 68,084 1.0%
PER SHARE DATA
Earnings before accounting change . . . . . . . . . . . . . . . $ 2.48 $ 2.31 7.4%
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . 2.48 2.44 1.6
Book value . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15.74 $ 14.44 9.0%
PERFORMANCE RATIOS
Operating margin . . . . . . . . . . . . . . . . . . . . . . . 12.5% 12.6%
Net margin . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5% 10.6%
Return on beginning equity . . . . . . . . . . . . . . . . . . 17.2% 21.4%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
REVENUES
($ in millions)
<TABLE>
<CAPTION>
Year Revenues
- ---- --------
<S> <C>
89 92.6
90 102.7
91 98.7
92 108.9
93 102.1
94 112.7
95 111.8
</TABLE>
Since 1989, revenues have increased 20.7% from $92.6 million to $111.8 million
in 1995.
NET MARGIN
(Percentage)
<TABLE>
<CAPTION>
Year Net Margin
- ---- ----------
<S> <C>
89 8.0
90 8.2
91 9.0
92 10.1
93 10.5
94 10.6
95 10.5
</TABLE>
Strong operating efficiencies have allowed the company to increase net margin
from 8% in 1989 to 10.5% in 1995.
NET EARNINGS PER SHARE
(Dollars)
<TABLE>
<CAPTION>
Net Earnings
Year Per Share
- ---- ------------
<S> <C>
89 1.58
90 1.81
91 1.91
92 2.28
93 2.21
94 2.44
95 2.48
</TABLE>
Earnings per share have risen 57.0% from $1.58 in 1989 to $2.48 in 1995.
1 LINDSAY
<PAGE> 4
LETTER TO SHAREHOLDERS
I am pleased to report that Lindsay Manufacturing Co. had, on a per share
basis, higher earnings for the fiscal year ended August 31,1995, compared to
the previous year. We were able to achieve this even though sales were
slightly lower than a year ago.
As we enter Fiscal 1996, our position as a leader in center pivot and
lateral move irrigation equipment continues strong. We remain well positioned
to continue to take advantage of what is truly a growing market, both literally
and figuratively. Center pivot and lateral move irrigation equipment aids in
growing crops more efficiently and can result in higher crop yields. We
estimate that the market for center pivot and lateral move irrigation equipment
is growing at a five year average rate of 6 percent to 8 percent annually,
largely due to the long-term demand drivers of farmers' need to conserve water,
energy and labor and, at the same time, stabilize or increase crop yields.
There are approximately 400 million cultivated acres in the U.S. of which only
15 percent or approximately 60 million acres are irrigated. Of these 60
million irrigated acres, only 25 percent, approximately 15 million acres, are
irrigated by center pivot or lateral move irrigation systems.
Lindsay's center pivot and lateral move irrigation equipment provides
a more uniform distribution and timely application of water to crops, reducing
water usage by as much as 40 percent to 60 percent compared to surface
irrigation. This is an increasingly important factor, as the world moves to
ensure we carefully protect and utilize one of our most precious natural
resources -- water. In fact, the World Bank in a report this year warned that
population growth and increasing urbanization could cause water shortages
serious enough to threaten agriculture in some 80 countries.
Near-term demand drivers such as the general farm economy, prevailing
interest rates and agricultural commodity prices play a variable role each
year, dictating increases or decreases in North American and worldwide demand
for irrigation equipment. In addition, with approximately half of the 110,000
center pivot systems in operation in North America more than 10 years old, we
expect the replacement of old systems to be a contributing factor to sales
growth. Today, one-fourth of our system sales are to farmers who are replacing
an old or outdated center pivot with a new Zimmatic. Our customers, profiled in
the operations review section of this year's report, are primarily those
operating larger farms, where the need to conserve water and at the same time
improve efficiency and crop yields is imperative to long-term success and
survival.
FISCAL 1995: ANOTHER YEAR OF
STRONG FINANCIAL PERFORMANCE
Net earnings were $11.7 million, or $2.48 per share, compared with earnings of
$11.2 million, or $2.31 per share, before an increase for the cumulative effect
of a change in accounting for income taxes adopted in the first quarter of
Fiscal 1994 of $659,000, or $0.13 per share. For the year, revenues were
$111.8 million, slightly lower than $112.7 million a year ago.
Fiscal 1995's North American irrigation equipment revenues were 2
percent lower, while export irrigation equipment declined 28 percent and
diversified product revenues rose 25 percent. Gross margin for the year was
23.1 percent, up slightly from 22.9 percent a year ago. Operating margin
(reflecting continued operating efficiency) was 12.5 percent, nearly equal to
last year's 12.6 percent, and at the upper end of our goal range of 10 percent
to 13 percent.
While sales for North American irrigation equipment were strong during
the year, compared to the prior year they were slightly lower, partially
because of the record sales achieved in Fiscal 1994. However, sales were also
negatively impacted by production and delivery constraints we experienced
during the peak months of January through May. We have taken several steps to
ensure that these production and delivery constraints do not reoccur in Fiscal
1996.
During the year, we saw a more than 35 percent increase in export
irrigation equipment sales to non-Saudi Arabia export markets, which include
Australia, Western Europe, and Mexico and Latin America. This increase,
however, was more than offset by lower sales to our irrigation equipment
dealers in Saudi Arabia. Because export irrigation equipment sales have
declined overall, we are in the process of relocating our Houston international
sales office to Lindsay's Nebraska headquarters, thereby reducing costs while
at the same time enhancing communication and customer service.
Finally, higher diversified product revenue from increased sales of
both tubular products and outsource manufacturing services for Caterpillar
Inc., Deere & Company and New Holland North America, Inc., nearly offset the
reduction in total irrigation equipment revenues. In fact, diversified
products revenue increased 25 percent from the previous year and now comprises
over 20 percent of Lindsay's annual revenues.
Our financial performance contributed to a solid financial position at
year end. At August 31, 1995, shareholders' equity was $68.7 million, or
$15.74 per share, up from $68.1 million, or $14.44 per share, at the beginning
of the year.
We continued to focus on enhancing shareholder value during Fiscal
1995 by initiating a stock repurchase program. By year end, we repurchased
almost 8 percent -- 369,250 shares -- of our outstanding stock.
LEVERAGING LEADERSHIP POSITION TO INCREASE MARKETSHARE
By leveraging its leadership position, superior technology, strong Zimmatic
brand recognition and first-rate dealer net-
2 LINDSAY
<PAGE> 5
work, Lindsay expects to capture a greater marketshare. As mentioned earlier,
we have taken strategic steps to increase capacity to ensure we do not miss
sales opportunities in the near and long-term. These steps include increasing
production capacity to meet the North American peak season demand of January
through May. We are also instituting marketing programs to ensure our dealers
have product immediately available for customers requesting the early delivery
of equipment. Finally, we are increasing capital expenditures in Fiscal 1996
to complete a significant plant automation project. We are confident this will
increase both manufacturing efficiency and capacity during the year.
Our distribution network consists of approximately 170 North American
agribusiness dealer locations and 170 international irrigation equipment dealer
locations. Currently, we have our Zimmatic irrigation equipment operating in
more than 75 countries. We will continue to focus on expanding and upgrading
our dealer organization to expand the sales and technical professionalism of
our dealers, widening the gap in image between Lindsay and second-tier
companies.
Additionally, we will continue to dedicate capital to developing
superior center pivot irrigation technology. Our past efforts in this area are
paying off, as 30 percent of our center pivot irrigation systems sold in Fiscal
1995 were equipped with the Automated Irrigation Management System (AIMS)
computer technology, introduced in the early 1990s, compared to 13 percent in
Fiscal 1994.
Long-term, our export irrigation equipment revenues will continue to
come from the markets where we experienced growth this year: Australia, Western
Europe, and Mexico and Latin America. While international demand for center
pivot irrigation is driven by the same demand drivers as in North America, it
is difficult to project near and long-term demand because of more varied
economic, political and climatic changes in these markets. However, Lindsay
has an active international presence and is prepared to generate and respond to
demand when opportunities occur.
In our diversified products segment we expect continued growth from
our current customers who seek the same manufacturing expertise and efficiency
Lindsay applies in producing center pivot irrigation equipment. Based on past
trends, we anticipate obtaining additional outsource business from Caterpillar
Inc., Deere & Company and New Holland North America, Inc. These customers rely
on Lindsay to deliver a high-quality product with on-time delivery. In
addition, we expect a stable market for our tubular products. We believe
there will continue to be a long-term opportunity to support our primary
business of center pivot irrigation through diversified product sales, which
provides strong incremental margins with little capital investment.
FISCAL 1996 OUTLOOK POSITIVE
[PHOTO:ZIMMATIC CENTER PIVOT]
As of this writing, our outlook for Fiscal 1996 is positive. While our North
American dealers believe that demand for irrigation equipment will continue
strong, there is some uncertainty related to generally lower crop yields, (but
higher crop prices), and proposed changes to government subsidy payments that,
short-term, could negatively impact farmers' incomes. With that in mind, we
remain cautiously optimistic.
For export irrigation equipment, Fiscal 1996 will be our first full
year where year-to-year comparisons are level in regard to demand from our
dealers in Saudi Arabia. As we've stated before, we do not anticipate sales to
Saudi Arabia returning to previous high levels and for the near term this
should be a replacement parts only market. We do expect to see continued
growth in the non-Saudi international markets during the coming year.
Diversified products revenue during Fiscal 1996 should come close to our
goal of accounting for 25 percent of Lindsay's revenues.
Finally, Lindsay remains committed to increasing shareholder value. We
expect to continue to repurchase stock out of cash flow during 1996. We
repurchased 369,250 shares in Fiscal 1995 and we are authorized to repurchase up
to 838,000 additional shares. Equally important, we will continue to seek a
good fitting acquisition. We've been working diligently with a major regional
investment banking firm, which is assisting us in finding a strategic
acquisition consistent with our long-term growth objectives. While we have
reviewed a number of potential acquisitions, none to date have fit our core
criteria of providing a proprietary product that utilizes Lindsay's
manufacturing expertise and adds value for our shareholders.
In closing, I thank all of the employees, dealers and customers of
Lindsay Manufacturing Co. for your continued support and interest. We remain
confident in the opportunities ahead for Lindsay.
Sincerely,
Gary D. Parker
Chairman, President and Chief Executive Officer
3 LINDSAY
<PAGE> 6
OPERATIONS REVIEW
[PHOTO:
ZIMAMTIC CENTER PIVOT]
[INSET PHOTO:
FLOOD
IRRIGATION]
Converting to center pivots from flood irrigation helps customers use
groundwater more efficiently and cuts irrigation expenses, while maintaining
production.
Inset photo: Flood irrigation is less efficient and much more labor intensive
than center pivot irrigation.
4 LINDSAY
<PAGE> 7
Simply stated, center pivot and lateral move irrigation systems are automatic
continuous move systems that consist of sprinklers mounted on a water-carrying
pipeline supported approximately 11 feet off the ground by a truss system
suspended between towers, which are mounted on an interdependent drive train.
More notably, center pivot irrigation is identifiable from an aerial view by
the large circles it creates on agricultural land.
Nebraska-based Lindsay Manufacturing Co. has been a leader in
providing center pivot irrigation systems for more than 25 years and, over the
years, has earned a 35 percent to 40 percent marketshare. More than 95 percent
of Lindsay's irrigation equipment sales are center pivot systems with a small
percentage of sales from lateral move irrigation equipment, which moves in a
straight line.
Though it sounds like a pun, the best words to describe the market for
center pivot irrigation equipment is "unsaturated." Only 15 percent of the
approximately 400 million cultivated acres of U.S. farmland are irrigated. Of
those 60 million irrigated acres, only 25 percent or 15 million acres are
irrigated by center pivots. Converting only an additional 25 percent to center
pivot would require an additional 100,000 to 110,000 new systems. The
long-term demand drivers for center pivot irrigation, farmers' need to conserve
water, energy and labor, and at the same time stabilize or increase yields
should result in a long-term trend of 6 percent to 8 percent average annual
market growth.
The market internationally is currently strongest in Australia,
Western Europe, and Mexico and Latin America, where near-term demand drivers of
strong commodity prices for irrigated crops and healthy general farm economies
exist.
Of the long-term demand drivers, the need to conserve water is,
perhaps, the most crucial and increasing. According to The World Bank in a
report this year, Toward Sustainable Management of Water Resources, agriculture
accounts for some 63 percent of the world's use of freshwater (about 70 percent
in developing countries); a third of the world's crops are produced by
irrigated agriculture, most of which is flood irrigated; and about 40 percent
of the world's food supply comes from irrigated land. While population
pressure will increase demand for food, it is becoming increasingly difficult
to sustain the expansion of irrigation. The report stated,"The increased
demand for food will have to be met by increasing cropping intensities and
achieving higher yields using less water." With flood irrigation, only 45
percent of irrigation water is actually used by the crop. Clearly, center
pivot
CENTER PIVOT IRRIGATION: CONSERVING WATER, ENERGY AND LABOR
Kevin Sanders doesn't mind being the first in his neighborhood to try something
new, especially if it saves money, time and precious groundwater.
Last year, Sanders installed two Zimmatic center pivots to replace flood
irrigation on his farm near Hereford, Texas.
"With everything like it is, I felt like converting to center pivots was
the only way to stay in business," Sanders says. "I have a shortage of
groundwater and I needed to cut irrigation expenses while maintaining
production."
And he did more than maintain production. "With my Zimmatic pivots, I was
able to more efficiently use my water. With water that in prior years I used
to irrigate only 120 acres of corn, I was able to raise nearly 500 acres of
cotton, forage sorghum and wheat by double cropping and irrigating previously
unirrigated land," Sanders commented.
Sanders ran each of this two Zimmatic seven tower pivots more than 1,500
hours over the growing season. After the wheat crop is harvested, Sanders goes
in and double crops forage sorghum and red-topped cane.
"Harvesting crops in 11 months is fantastic," he says. "It is something I
have never been able to do before." He's also saving money. Sanders estimates
it will cost $20 an acre to irrigate with center pivot, compared to at least
$66 per acre of flood irrigated land. The savings are reflective of
significant reductions in labor and energy.
Sanders says his area, Deaf Smith County, is still about 90 percent flood
irrigated, but he believes center pivot use will increase in the next few
years. Cost and time are factors, but water shortage makes efficiency a key
point. Twenty years ago, Sanders' wells pumped between 800 to 1,100 gallons
per minute. Now those same wells only pump 250 gallons per minute.
"Everybody around here is in the same boat as far as water shortages are
concerned," Sanders says.
Sanders uses his Zimmatics to apply fertilizer, herbicide and pesticide.
He estimates he saves $7.60 per acre (a total of nearly $2,000) that would have
been spent on a spray plane.
5 LINDSAY
<PAGE> 8
OPERATIONS REVIEW (CONTINUED)
irrigation meets this demand for more efficient water use.
Farmers purchase Lindsay's center pivot irrigation equipment, rather
than relying on flood irrigation because the system:
- - provides a more uniform distribution and timely application of water to
crops;
- - can reduce water usage by 40 percent to 60 percent;
- - can lower production costs by as much as 25 percent by reducing energy,
labor, fertilizer and chemical use;
- - and can lower the risk of environmental contamination from chemicals.
Center pivot systems, with an estimated cost of approximately $60,000
a system (including well development), have paybacks of approximately four to
six years while ensuring timely water and other nutrient needs for growing
crops. The trend toward larger farms enhances unit volume growth; it is the
larger, better capitalized farmer who purchases center pivots.
Farmers depend on Lindsay to provide first-rate, technologically
superior center pivot systems through a network of dependable service-driven
dealers. During the current decade, Lindsay introduced its Automated
Irrigation Management System (AIMS) and AIMS Telemetry Network, which gives a
farmer the efficiency and flexibility to monitor and control multiple center
pivots from a single personal computer. During Fiscal 1995, approximately
one-third of Lindsay's North American irrigation equipment shipments included
one of these systems or its Remote Monitor Alarm and Control (R-MAC) system,
which also utilizes computer technology and cellular phone or business band
radio allowing farmers to monitor and control irrigation systems from across
the section, the county or the state.
Lindsay's dealer organization, both for the North American and
international markets, is key to its long-term success. Lindsay continuously
evaluates and upgrades its worldwide network of dealer locations to ensure that
dealers selling Zimmatics meet the company's strict standards. Lindsay
recently announced its Circles of Excellence program, designed to encourage
dealers to actively participate in training and educational programs, as well
as utilize the company's advertising and promotional programs. Dealers earning
the Circles of Excellence status are rewarded through monetary incentives and
recognition awards.
During the past 10 years, Lindsay has parlayed its manufacturing
expertise and efficiency to grow its diversified products segment to over 20
percent of its annual revenues. Lindsay's diversified products segment performs
outsource manufacturing and manufactures and markets large-diameter steel
tubing. Lindsay offers agricultural and industrial capital goods
CENTER PIVOTS FIND USE IN WASTEWATER TREATMENT
Water -- even wastewater-- is a precious resource in west Texas. That's why
the city of San Angelo is putting its treated effluent to productive use on the
land through a distribution system that includes 29 Zimmatic center pivots.
In the spring of 1994, the city's new $11 million wastewater disposal
system went into full operation. From the wastewater treatment facility, the
effluent is pumped into two reservoirs that have a total holding capacity of
one billion gallons. The wastewater is then pumped through distribution piping
to the Zimmatic pivots in the fields, which irrigate crops such as corn, wheat,
oats, alfalfa and grasses. Cattle are grazed on the pastureland, while the
other crops are fed to livestock.
"We're very excited and pleased about this project," says Tom Kerr,
assistant public works director for the City of San Angelo, which has a
population of about 85,000. "It's the way of the future. We think it is the
most effective method for getting the maximum benefit out of an important
resource (water) in an environmentally safe way."
The Zimmatic pivots distribute an average volume of 8 million gallons
of wastewater each day. About 2,300 acres are under irrigation; the city has
another 5,300 acres available for future expansion and development. Flood
irrigation was used prior to the Zimmatic pivots.
"Our main goal in using pivots ... is to get uniform, effective
distribution of effluent over the field," Kerr says. The uniform distribution,
he explains, helps to minimize runoff and prevent
6 LINDSAY
<PAGE> 9
manufacturers services that include welding, machining, painting, punching,
forming, galvanizing and hydraulic, electrical and mechanical assembly. The
company's outsource manufacturing customers include Caterpillar Inc., Deere &
Company and New Holland North America, Inc.
Lindsay is also a leading supplier of large-diameter tubing in the
U.S. providing products, manufactured by its advanced large-diameter tube
mills, to steel service centers and original equipment manufacturers. During
Fiscal 1995, the company increased its tubing manufacturing capacity by 50
percent with the installation of an additional tube mill.
Lindsay believes the opportunity to further grow its diversified
products exists based on manufacturing companies' need to produce product in
the most cost-effective manner possible. In fact, Lindsay expects its
diversified products segment to grow during Fiscal 1996, exceeding 25 percent
of total revenues -- a goal set five years ago.
photo:
Person standing by
Zimmatic AIMSmain panel
Tom Kerr, assistant public works director for the City of San Angelo,
says the city uses Lindsay's center pivot system with computerized AIMScontrol
to ensure uniform, effective distribution of effluent, minimize runoff and
prevent leaching, while maximizing water utilization in the production of crops.
leaching into groundwater. At the same time, it allows the production of
"crops that maximize the resources of the water and the land."
Each of the Zimmatic pivots is equipped with an Automated Irrigation
Management System (AIMS) Advance control panel. AIMS Advance allows advance
programming of pivot functions such as starting or stopping system operation or
water application, reversing direction of travel, and changing system speed and
application rates.
According to Kerr, the city decided to use AIMS Advance because "we want to
distribute the water as efficiently as possible and reduce man hours as much as
possible while utilizing the systems throughout all hours of the day." The
automatic control provided by AIMS Advance allows precise water application
without the numerous manual adjustments that would otherwise require increased
work hours and, on occasion, late night or early-morning trips to the field.
Kerr adds that AIMS Advance also helps to keep energy costs down by
"irrigating during non-peak power periods. San Angelo is getting the maximum
benefit from the Zimmatic equipment we have here today."
The bottomline, Kerr emphasizes, is that the system allows the city to
recycle an essential resource and, at the same time, fulfill its obligation to
dispose of wastewater with no harm to the environment.
7 LINDSAY
<PAGE> 10
Lindsay Manufacturing Co.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
($ in millions, except per share amounts) For the years ended August 31,
=======================================================================================================================
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenues $111.8 $112.7 $102.1 $108.9 $98.7 $102.7 $92.6 $76.1 $54.1 $45.6
Gross profit 25.9 25.7 23.8 23.8 21.5 20.0 18.6 11.8 8.9 6.4
Selling, general and
administrative, and engineering
and research expenses 11.9 11.6 10.7 10.9 10.5 9.6 8.2 7.0 6.7 7.1
Earnings before cumulative effect
of accounting change 11.7 11.2 10.7 11.0 8.9 8.4 7.4 3.8 1.6 0.3
Net earnings 11.7 11.9 10.7 11.0 8.9 8.4 7.4 3.8 1.6 0.3
Earnings before cumulative
effect of accounting
change per share(1) 2.48 2.31 2.21 2.28 1.91 1.81 1.58 0.81 0.34 0.07
Net earnings per share(1) 2.48 2.44 2.21 2.28 1.91 1.81 1.58 0.81 0.34 0.07
Property, plant and
equipment, net 7.2 5.6 5.6 6.0 5.4 4.7 4.4 4.6 3.4 4.2
Total assets 86.1 88.4 79.9 71.4 60.4 46.9 31.7 24.0 19.0 23.4
Long-term debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0.2
Return on sales 10.5% 10.6% 10.5% 10.1% 9.0% 8.2% 8.0% 5.0% 2.9% 0.7%
Return on beginning assets 13.2% 14.9% 15.0% 18.2% 19.0% 26.4% 30.8% 19.9% 6.7% 1.2%
=======================================================================================================================
</TABLE>
(1) For 1995, 1994, 1993 and 1992 per share amounts are calculated by dividing
the earnings by the weighted average number of common and common equivalent
(stock options) shares outstanding of 4,720,982, 4,864,506, 4,846,901 and
4,832,458. For 1991, 1990 and 1989, per share amounts are calculated on
Lindsay's 4,648,803, 4,631,625 and 4,657,604 weighted average outstanding
shares, respectively. For 1988 and prior, per share amounts are calculated based
on Lindsay's 4,657,500 outstanding shares as of October 12, 1988, the date of
the initial public offering, since at that time all of the outstanding shares of
Lindsay were owned by DEKALB Energy Company.
QUARTERLY DATA
<TABLE>
<CAPTION>
($ in thousands, except per share amounts) For the three months ended the last day of
=====================================================================================================================
November February May August
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FISCAL 1995
OPERATING REVENUES $ 22,142 $ 30,350 $ 37,451 $ 21,900
COST OF OPERATING REVENUES 17,143 23,790 28,040 17,013
EARNINGS BEFORE INCOME TAXES 2,940 4,416 7,116 2,614
NET EARNINGS 1,999 3,003 4,839 1,863
NET EARNINGS PER SHARE 0.41 0.64 1.03 0.40
MARKET PRICE (NASDAQ)
HIGH $ 32-1/4 $ 31-1/4 $ 33 $ 35-3/4
LOW 27-7/8 28-1/4 28-1/4 31
Fiscal 1994
Operating revenues $ 25,565 $ 27,558 $ 37,724 $ 21,837
Cost of operating revenues 20,012 21,427 28,709 16,788
Earnings before Income taxes and cumulative effect of
accounting change 3,598 4,013 6,843 2,312
Cumulative effect of change in accounting for income taxes 659 0 0 0
Net earnings 3,141 2,731 4,471 1,549
Earnings before cumulative effect of accounting change
per share 0.51 0.56 0.92 0.32
Cumulative effect of change in accounting for income taxes
per share 0.14 0.00 0.00 0.00
Net earnings per share 0.65 0.56 0.92 0.32
Market price (NASDAQ)
High $ 35 $ 35-3/4 $ 37 $ 32-3/4
Low 29-1/4 30 31-1/2 28
=====================================================================================================================
</TABLE>
1995: Fourth-quarter adjustments resulting in a net increase in pre-tax earnings
of $38,000 were made to inventory accounts (due to physical inventory), the LIFO
inventory reserve and the obsolete inventory reserve.
1994: Fourth-quarter adjustments resulting in a net increase in pre-tax earnings
of $255,000 were made to inventory accounts (due to physical inventory), the
LIFO inventory reserve and the obsolete inventory reserve.
8 LINDSAY
<PAGE> 11
Lindsay Manufacturing Co.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OVERVIEW:
Revenue growth from diversified products and the non-Saudi Arabian portion of
Lindsay's international irrigation equipment market partially offset slightly
lower revenues from the North American irrigation equipment market and lower
irrigation equipment sales to Lindsay's Saudi dealers. The negative comparisons
due to the downturn in the Saudi market are now fully behind the Company, as
the last whole goods shipment to that market was made in the first quarter of
Fiscal 1994, almost two years ago.
During the year, Lindsay repurchased approximately 8% -- 369,250 shares -- of
its outstanding stock. The Company continues to have a solid balance sheet with
no debt and strong financial ratios.
RESULTS OF OPERATIONS
FISCAL YEAR 1995 COMPARED TO 1994
The following table provides highlights for Fiscal 1995 compared with Fiscal
1994.
<TABLE>
<CAPTION>
For the Years Ended Percent Increase
August 31, (Decrease)
-----------------------------------------
($ in thousands) 1995 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consolidated
Operating Revenues $111,843 $112,684 (0.7)%
Cost of Operating Revenues $ 85,986 $ 86,936 (1.1)
Gross Profit $ 25,857 $ 25,748 0.4
Gross Margin 23.1% 22.9%
Selling, Eng. & Research, and
G&A Expense $ 11,937 $ 11,610 2.8
Operating Income $ 13,920 $ 14,138 (1.5)
Operating Margin 12.5% 12.6%
Interest Income, net $ 2,728 $ 2,317 17.7
Other Income, net $ 438 $ 311 40.8
Income Tax Provision $ 5,382 $ 5,533 (2.7)
Effective Income Tax Rate 31.5% 33.0%
Earnings Before Accounting Change $ 11,704 $ 11,233 4.2
Cumulative Effect of Accounting Change $ 0 $ 659 N/A
Net Earnings $ 11,704 $ 11,892 (1.6)
Irrigation Equipment Segment (See Note K)
Operating Revenues $ 88,837 $ 94,288 (5.8)
Operating Income $ 16,386 $ 17,161 (4.5)
Operating Margin 18.4% 18.2%
Diversified Products Segment (See Note K)
Operating Revenues $ 23,006 $ 18,396 25.1
Operating Income $ 5,181 $ 4,253 21.8%
Operating Margin 22.5% 23.1%
==========================================================================================
</TABLE>
REVENUES
Operating revenues totaled $111.8 million in Fiscal 1995, compared to $112.7
million in Fiscal 1994. Fiscal 1995's revenue from North American irrigation
equipment totaled $74.8 million, down 2% from $76.4 million in Fiscal 1994.
Fiscal 1995's export irrigation equipment revenues were $11.1 million, 28%
lower than Fiscal 1994's $15.5 million for export irrigation equipment.
Diversified products revenues in Fiscal 1995 were $23.0 million, 25% higher
than 1994's $18.4 million.
Although Lindsay's Fiscal 1995 North American irrigation equipment revenues
were lower than in Fiscal 1994 (when the company experienced a 52.5% growth
rate), the market continued strong in Fiscal 1995. Lindsay's North American
irrigation equipment revenues were negatively impacted by production and
delivery constraints during the peak demand period of January through May. The
Company has taken several steps utilizing both capacity expansion and marketing
programs to ensure that the production and delivery constraints of Fiscal 1995
do not reoccur in Fiscal 1996.
North American farmers are increasingly becoming more sophisticated and are
more aggressively adopting water, energy and labor efficient irrigation
practices. Lindsay believes that this will generate on-going demand for
Lindsay's center pivot and lateral move irrigation equipment.
Fiscal 1995's export sales of irrigation equipment were lower than the prior
year's due to the previously mentioned downturn in the Saudi market. However,
Fiscal 1995's export irrigation equipment sales to markets other than Saudi
increased approximately 35% as compared to Fiscal 1994. Lindsay expects
continued growth in these markets during Fiscal 1996, with the Australian,
Western European, and Mexican and Latin American markets generating the
greatest near-term activity.
At year end Fiscal 1995, Lindsay had a $7.4 million order backlog for
irrigation equipment. This was down from year end Fiscal 1994's irrigation
equipment order backlog of $8.3 million. Lindsay believes that uncertainty in
the North American market during late July and August 1995 about the fall crop
delayed order activity.
Diversified product revenues continued to expand in Fiscal 1995, rising 25%
to $23.0 million from $18.4 million in Fiscal 1994. Revenues from both
outsource manufacturing and large diameter steel tubing rose during the year
due to an expansion of the components, subassemblies and finished products
supplied to Caterpillar Inc., Deere & Company and New Holland North America,
Inc. and to the broadening of Lindsay's large diameter steel tubing customer
base. At year end Fiscal 1995, Lindsay's order backlog for diversified
products totaled $7.1 million, up 15% from $6.2 million at the end of Fiscal
1994.
GROSS MARGIN
Fiscal 1995's gross margin of 23.1% was up from 22.9% in Fiscal 1994. 1995's
gross margin, was favorably impacted by product mix and the ability to pass on,
through pricing, cost increases Lindsay incurred on selected raw materials.
OPERATING EXPENSES
Fiscal 1995's selling, engineering and research, and general and administrative
expenses increased 2.8% to $11.9 million from $11.6 million in Fiscal 1994. The
increase is the net result of higher engineering and research expenses, due to
increased personnel; higher general and administrative expenses, due to
increases in wage, insurance and employee retirement plan expenses; and lower
sales expenses.
INTEREST INCOME, OTHER INCOME AND TAXES
Lindsay's interest income is primarily from interest earned on its investments
in short (0-12 months) and intermediate (12-36 months) term investment-grade
municipal bonds (on which interest earnings are exempt from federal income
taxes) and short-term investment grade commercial paper. Fiscal 1995's interest
income of $2.7 million
9 LINDSAY
<PAGE> 12
is up from Fiscal 1994's $2.3 million as the result of an increase in the
average amount of funds invested during the year. Fiscal 1995's other income of
$0.4 million is up slightly from $0.3 million in Fiscal 1994.
Fiscal 1995's effective tax rate of 31.5% compares to an effective tax rate
of 33.0% for Fiscal 1994. The company expects to continue to benefit from the
Foreign Sales Corporation federal tax provisions as they relate to export sales
and the federal tax free status of interest income from its municipal bond
investments.
RESULTS OF OPERATIONS
FISCAL YEAR 1994 COMPARED TO 1993
The following table provides highlights for Fiscal 1994 compared with Fiscal
1993.
<TABLE>
<CAPTION>
For the Years Ended Percent Increase
August 31, (Decrease)
-------------------------------------------------------
($ in thousands) 1994 1993
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consolidated
Operating Revenues $112,684 $102,062 10.4%
Cost of Operating Revenues $ 86,936 $ 78,294 11.0
Gross Profit $ 25,748 $ 23,768 8.3
Gross Margin 22.9% 23.3%
Selling, Eng. & Research, and
G&A Expense $ 11,610 $ 10,665 8.9
Operating Income $ 14,138 $ 13,103 7.9
Operating Margin 12.6% 12.8%
Interest Income, net $ 2,317 $ 2,225 4.1
Other Income, net $ 311 326 (4.6)
Income Tax Provision $ 5,533 $ 4,931 12.2
Effective Income Tax Rate 33.0% 31.5%
Earnings Before Accounting Change $ 11,233 $ 10,723 4.8
Cumulative Effect of Accounting Change $ 659 $ 0 N/A
Net Earnings $ 11,892 $ 10,723 10.9
Irrigation Equipment Segment (See Note K)
Operating Revenues $ 94,288 $ 88,460 6.6
Operating Income $ 17,161 $ 16,427 4.5
Operating Margin 18.2% 18.6%
Diversified Products Segment (See Note K)
Operating Revenues $ 18,396 $ 13,602 35.2
Operating Income $ 4,253 $ 2,889 47.2%
Operating Margin 23.1% 21.2%
===========================================================================================
</TABLE>
REVENUES
Lindsay's operating revenues totaled $112.7 million in Fiscal 1994, a 10.4%
($10.6 million) increase from Fiscal 1993's operating revenue of $102.1
million. Increases of 52.5% ($26.3 million) in North American irrigation
equipment, 35.2% ($4.8 million) in diversified products, and 4.6% ($0.1
million) in other revenues more than offset a 57.0% ($20.6 million) reduction
in export irrigation equipment revenues.
Lindsay's North American irrigation equipment unit volume increased each year
from 1988 through 1994. The Pacific Northwest, Southwest and Southeastern
regions of the U.S. experienced strong demand for irrigation equipment in
Fiscal 1994. Lindsay believes that as North American farmers continue to adopt
more sophisticated farming practices, the merits of and priority for center
pivot and lateral move irrigation will continue generating ongoing demand for
Lindsay's equipment.
Fiscal 1994's export sales of irrigation equipment suffered as the company
incurred a reduction in export sales to its dealers in Saudi Arabia. The
Mexican and Latin American and the Australian markets expanded during the year
while the Western and Central European markets were flat.
At year end Fiscal 1994, Lindsay's order backlog for irrigation equipment was
$8.3 million, down from year end Fiscal 1993's irrigation order backlog of
$14.8 million. The previously discussed reduction in sales activity in Saudi
Arabia is responsible for all of the reduction in the year end Fiscal 1994
order backlog.
Diversified Product revenues continued to expand in Fiscal 1994, rising 35%
to $18.4 million from $13.6 million in Fiscal 1993. Both outsource
manufacturing revenues and revenues from large diameter steel tubing grew
during the year due to the continued strength of the capital goods equipment
market and an expansion of Lindsay's outsource manufacturing and large diameter
steel tubing customer bases during the year. During the year, Lindsay began
shipping a machined and welded component to a new outsource manufacturing
customer, Ford New Holland, Inc., (now New Holland North America, Inc.) for one
of their agricultural products. At year end Fiscal 1994, Lindsay's order
backlog for diversified products totaled $6.2 million, up 29% from $4.8 million
at Fiscal 1993's year end.
GROSS MARGIN
Fiscal 1994's gross margin of 22.9% was down slightly from 23.3% of Fiscal
1993. 1994's gross margin was negatively impacted by a larger than expected
flow of orders received in December 1993 (immediately prior to a price
increase) resulting in margins at the time of shipment which were lower then
desirable. This negatively impacted Lindsay's gross margin in both the second
and third quarters of Fiscal 1994.
OPERATING EXPENSES
Fiscal 1994's selling, engineering and research, and general and administrative
expenses increased 8.9% to $11.6 million from $10.7 million in Fiscal 1993. The
increase is the net result of higher engineering and research expenses, due to
an increase in engineering and research personnel; higher general and
administrative expenses, due to increases in legal and professional fees, wage,
insurance and employee retirement plan expenses; and slightly lower sales
expenses.
INTEREST INCOME, OTHER INCOME AND TAXES
Fiscal 1994's interest income of $2.3 million is up slightly from Fiscal 1993's
$2.2 million. The increase in Fiscal 1994's interest income is the net result
of an increase in cash invested offset partially by a lower average rate of
yield on the cash invested.
Fiscal 1994's other income of $0.3 million is equal to that of Fiscal 1993.
Fiscal 1994's effective tax rate of 33.0% compares to an effective tax rate
of 31.5% for Fiscal 1993.
FINANCIAL CONDITION
Lindsay's cash and short- and long-term marketable securities decreased to
$57.3 million at August 31, 1995, from $59.0 million at August 31, 1994
primarily due to the repurchase of 369,250 shares of common stock ($11.6
million) using proceeds from the sale and maturity of marketable securities and
operating cash flows. Receivables at August 31, 1995, decreased $0.7 million to
$10.4 million from $11.1 million due to the lower level of North American
irrigation equipment sales activity in the fourth quarter. August 31, 1995,
inventories declined $0.8 million to $5.4 million from $6.2 million at August
31, 1994 due to improved inventory planning. August 31, 1995, current
liabilities dropped $3.1 million to $15.9 million from $19.0 million at August
31, 1994, primarily due to lower accruals for
10 LINDSAY
<PAGE> 13
warranty, international dealer commissions and environmental remediation costs.
Capital expenditures totaled $2.8 million during Fiscal 1995 compared to $1.3
million in Fiscal 1994. Capital expenditures in Fiscal 1995 were primarily for
upgrading of the manufacturing plant and equipment. Lindsay expects its Fiscal
1996 capital expenditures to be approximately $3.0 million to $3.5 million.
Lindsay's Fiscal 1995 depreciation was $1.3 million and is expected to be in
the $1.5 million range in Fiscal 1996.
Lindsay believes its capitalization (including cash and marketable securities
balances) and operating cash flows are sufficient to cover expected working
capital needs, planned capital expenditures and continued repurchases of common
stock.
FISCAL 1996 OUTLOOK
IRRIGATION EQUIPMENT
Although Lindsay's Fiscal 1995 North American irrigation equipment revenues
were lower than in Fiscal 1994 (when the company experienced growth in revenues
from this market in excess of 50%), the North American irrigation equipment
market continued strong in Fiscal 1995. Lindsay believes that the desire of
North American farmers to reduce variable input cost, increase or stabilize
crop yields, reduce labor input and conserve water and energy will continue to
drive demand for center pivot and lateral move irrigation equipment. The
Company believes that these demand drivers will cause long-term growth in North
American demand for center pivot and lateral move irrigation equipment to
average 6% to 8% per annum.
Our current outlook for the North American irrigation equipment market is for
a stable market in Fiscal 1996 - a market that could result in full year unit
shipments increasing or decreasing 5%. Constraining this market in 1996, is the
fact that this market under went significant growth in 1994 (over 50% growth
for Lindsay). The high unit volume shipments of 1994 were nearly maintained in
Fiscal 1995. These high unit volume shipments may partially have been the
result of pent up demand, prior to Fiscal 1994. Additionally, the probability
of some type of reduction in federal government farm program expenditures
(reduced farmer subsidies) may, in the short-term, negatively impact net farm
income and thereby sales of agricultural equipment - including center pivot and
lateral move irrigation equipment. On the positive side, prices for many of the
agriculture crops typically raised using center pivot and lateral move
irrigation are up from last year. This could generate higher demand in Fiscal
1996.
As discussed previously, Fiscal 1995 export irrigation equipment revenues
were lower than in Fiscal 1994 due to reduced sales to Lindsay's dealers in
Saudi Arabia. Although there were several repair and replacement parts
shipments to the Saudi market in Fiscal 1995, the most recent whole goods
shipment to our dealers there was made in the first quarter of Fiscal 1994.
Lindsay expects only nominal sales activity from the Saudi market in Fiscal
1996. Irrigation equipment sales to Lindsay's other export markets, in total,
are expected to expand during Fiscal 1996. Revenues from these non-Saudi
export markets expanded approximately 35% in Fiscal 1995.
Lindsay's domestic and international irrigation equipment sales are
highly dependent upon the need for irrigated agricultural production which, in
turn, depends upon many factors including total worldwide crop production, the
profitability of agricultural production, commodity prices, aggregate net farm
income, governmental policies regarding the agricultural sector, water and
energy conservation policies and the regularity of rainfall. Approximately 10%,
14% and 35% of Lindsay's revenues were generated from export sales in Fiscal
1995, 1994 and 1993, respectively. Lindsay does not believe it has significant
exposure to foreign currency translation risks because its export sales are all
in U.S. dollars and are generally all shipped against prepayments or
irrevocable letters of credit which are confirmed by a U.S. bank.
DIVERSIFIED PRODUCTS
Lindsay's diversified product segment consists of two major products:
large-diameter thin-wall round steel tubing and outsource manufacturing
services. Diversified product customers for both products primarily consist of
agricultural and industrial capital goods manufacturers. Lindsay's long-term
goal has been, and continues to be to build its diversified products segment to
total 25% of total annual revenues.
SEASONALITY
Irrigation equipment sales are seasonal by nature. Farmers generally order
systems to be delivered and installed before the growing season. Shipments to
North American customers usually peak during March and April for the spring
planting period. Lindsay's expansion into diversified products complements its
irrigation operations by using available capacity and reducing seasonality.
OTHER FACTORS
Environmental contamination at Lindsay's manufacturing facility occurred in
1982 when a drill, operated by a sub-contractor installing groundwater
monitoring wells, punctured a silt and sand lens and an underlying clay layer
beneath a clay-lined waste lagoon. The 1982 puncture of the clay layer caused
acid and solvent leachate to enter the sand and gravel aquifer.
Since 1983, Lindsay has worked actively with the Nebraska Department of
Environmental Control (NDEC) to remediate this contamination by purging and
treating the aquifer. In October 1989, the Environmental Protection Agency
(EPA) added Lindsay to the list of priority Superfund sites. In 1988, a
sampling which was performed in connection with an investigation of the extent
of aquifer contamination, revealed solvent contamination (volatile organic
compounds) in the soil and shallow groundwater in three locations at and in the
vicinity of the plant. Under a 1988 agreement with the EPA and NDEC, Lindsay
conducted a Remedial Investigation/ Feasibility Study (RI/FS). This study was
completed in June 1990. Lindsay does not believe that there is any other soil
or groundwater contamination at the manufacturing facility.
In September 1990, the EPA issued its Record of Decision (ROD) selecting a
plan for completing the remediation of both contaminations. The plan selected
for aquifer remediation was in line with Lindsay's expectations. However, the
plan for remediation of the soil and shallow groundwater contamination proposed
a higher degree of remediation than the company had previously expected.
Therefore, Lindsay recognized an additional $2.9 million accrual in the fourth
quarter of Fiscal 1990. The selected plan implementation was delayed until
finalization of the Consent Decree in April 1992. Due to this delay, Lindsay
recognized an additional accrual of $0.6 million in the fourth quarter of
Fiscal 1991 and $0.8 million in the fourth
11 LINDSAY
<PAGE> 14
quarter of Fiscal 1992. The final remediation plans were approved in 1993 and
1994 and the remediation plans were fully implemented during Fiscal 1995.
The total balance sheet reserve for this remediation was $1.9 million at
Fiscal 1995 year end compared to $2.9 million at Fiscal 1994 year end,
reflecting costs of $1.0 million during Fiscal 1995 for the continued
implementation of the plans.
Lindsay believes that the current reserve is sufficient to cover the
estimated total cost for complete remediation of both the aquifer and soil and
shallow groundwater contaminations under the final plans. Lindsay believes that
its insurer should cover costs associated with the contamination of the aquifer
that was caused by the puncture of the clay layer in 1982. However, Lindsay and
the insurer are in litigation over the extent of the insurance coverage. If the
EPA or NDEC require remediation which is in addition to or different from the
current plan and depending on the success of Lindsay's litigation against the
insurer, this reserve could increase or decrease, depending on the nature of
the change in events.
RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENTS
In October 1995, FASB issued statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" (SFAS 123). SFAS 123 establishes
financial accounting and reporting standards for stock-based employee
compensation plans and transactions in which goods or services are the
consideration received for the issuance of equity instruments. This statement
requires that an employer's financial statements include certain disclosures
about stock-based employee compensation regardless of the method used to
account for them. Adoption is required for fiscal years, beginning after
December 15, 1995, Lindsay's Fiscal 1997 or earlier. Lindsay expects to
continue its accounting in accordance with Accounting Principles Board Opinion
No. 25 "Accounting for Stock Issued to Employees".
STATEMENT OF MANAGEMENT
RESPONSIBILITY
The consolidated financial statements and notes to the consolidated financial
statements of Lindsay Manufacturing Co. have been prepared by management, which
has the responsibility for their integrity and objectivity. The statements have
been prepared in accordance with generally accepted accounting principles to
reflect, in all material aspects, the substance of financial events and
transactions occurring during the respective periods.
Gary D. Parker Bruce C. Karsk
Chairman, President and Vice President-Finance,
Chief Executive Officer Treasurer and Secretary
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of
Lindsay Manufacturing Co.:
We have audited the accompanying consolidated balance sheets of Lindsay
Manufacturing Co. as of August 31, 1995 and 1994, and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended August 31, 1995, 1994 and 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatements. 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Lindsay
Manufacturing Co. as of August 31, 1995 and 1994, and the consolidated results
of their operations and their cash flows for the years ended August 31, 1995,
1994 and 1993 in conformity with generally accepted accounting principles.
As described in Note A, the Company changed its method of accounting for
income taxes in Fiscal 1994.
Omaha, Nebraska Coopers & Lybrand L.L.P.
October 9, 1995
12 LINDSAY
<PAGE> 15
Lindsay Manufacturing Co.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
($ in thousands, except per share amounts) Years ended August 31,
- ----------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . $111,843 $112,684 $102,062
Cost of operating revenues . . . . . . . . . . . . . . . . . . . . . 85,986 86,936 78,294
------- ------- -------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,857 25,748 23,768
Operating expenses: ------ ------ --------
Selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . 4,290 4,334 4,452
General and administrative expense . . . . . . . . . . . . . . . . 6,264 6,034 5,167
Engineering and research expense . . . . . . . . . . . . . . . . . 1,383 1,242 1,046
------ ------ --------
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . 11,937 11,610 10,665
------ ------ --------
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . 13,920 14,138 13,103
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . 2,728 2,317 2,225
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . 438 311 326
Earnings before income taxes and ------ ------ --------
cumulative effect of accounting change . . . . . . . . . . . . . 17,086 16,766 15,654
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . 5,382 5,533 4,931
Earnings before cumulative effect of ------ ------ --------
accounting change . . . . . . . . . . . . . . . . . . . . . . . . 11,704 11,233 10,723
Cumulative effect of change in accounting
for income taxes . . . . . . . . . . . . . . . . . . . . . . . . 0 659 0
------ ------ --------
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,704 $ 11,892 $ 10,723
====== ====== ========
Earnings before cumulative effect of
accounting change per share . . . . . . . . . . . . . . . . . . . $ 2.48 $ 2.31 $ 2.21
Cumulative effect of change in accounting
for income taxes per share . . . . . . . . . . . . . . . . . . . 0.00 0.13 0.00
------ ------ --------
Net earnings per share . . . . . . . . . . . . . . . . . . . . . . . $ 2.48 $ 2.44 $ 2.21
====== ====== ========
</TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
($ in thousands)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares of Capital
------------ in excess Total
Common Treasury Common of stated Retained Treasury stockholders'
stock stock stock value earnings stock equity
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT AUGUST 31, 1992. . . 4,761,668 95,630 $4,762 $2,577 $38,128 $ (1,037) $44,430
Net earnings . . . . . . . . . -- -- -- -- 10,723 -- 10,723
Shares issued under
employee stock plan . . . . 21,500 -- 21 586 -- -- 607
Stock option
tax benefits . . . . . . . -- -- -- 6 -- -- 6
Acquisitions of
common stock . . . . . . . -- 10,000 -- -- -- (282) (282)
--------- ------- ----- ----- ------ ------ ------
BALANCE AT AUGUST 31, 1993. . . 4,783,168 105,630 4,783 3,169 48,851 (1,319) 55,484
Net earnings . . . . . . . . . -- -- -- -- 11,892 -- 11,892
Shares issued under
employee stock plan . . . . 36,190 -- 36 593 -- -- 629
Stock option tax benefits . . . -- -- -- 79 -- -- 79
--------- ------- ----- ----- ------ ------ ------
BALANCE AT AUGUST 31, 1994. . . 4,819,358 105,630 4,819 3,841 60,743 (1,319) 68,084
Net earnings . . . . . . . . . -- -- -- -- 11,704 -- 11,704
Shares issued under
employee stock plan . . . . 23,447 -- 24 550 -- -- 574
Stock option tax benefits . . . -- -- -- 21 -- -- 21
Acquisitions of common
stock . . . . . . . . . . . -- 369,250 -- -- -- (11,640) (11,640)
--------- ------- ----- ----- ------ ------ ------
BALANCE AT AUGUST 31, 1995. . 4,842,805 474,880 $4,843 $4,412 $72,447 $(12,959) $68,743
========= ======= ====== ====== ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 LINDSAY
<PAGE> 16
Lindsay Manufacturing Co.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
($ in thousands, except par values) At August 31,
- ---------------------------------------------------------------------------------------------------------------------
1995 1994
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,514 $ 1,712
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,792 11,927
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,353 11,080
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,384 6,248
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,804 3,543
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,891 1,871
------ ------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,738 36,381
Long-term marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,003 45,378
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . 7,164 5,596
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,155 1,085
------ ------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $86,060 $88,440
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,295 $ 4,288
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,636 14,697
------ ------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,931 18,985
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,386 1,371
------ ------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,317 20,356
------ ------
Commitments and contigencies.
Stockholders' equity:
Preferred stock, ($1 par value, 2,000,000 shares authorized, no
shares issued and outstanding in 1995 and 1994) . . . . . . . . . . . . . . . . .
Common stock, ($1 par value, 10,000,000 shares authorized,
4,842,805 and 4,819,358 shares issued
and outstanding in 1995 and 1994) . . . . . . . . . . . . . . . . . . . . . . 4,843 4,819
Capital in excess of stated value . . . . . . . . . . . . . . . . . . . . . . . . . 4,412 3,841
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,447 60,743
Less treasury stock, (at cost, 474,880 shares in 1995 and
105,630 shares in 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,959) (1,319)
------ ------
Total stockholders equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,743 68,084
------ ------
Total liabilities and stockholders equity . . . . . . . . . . . . . . . . . . . . . $86,060 $88,440
====== ======
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 LINDSAY
<PAGE> 17
Lindsay Manufacturing Co.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
($ in thousands) Years ended August 31,
- ---------------------------------------------------------------------------------------------------------------------
1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,704 $ 11,892 $ 10,723
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . 1,254 1,234 1,224
Amortization of marketable securities premiums, net . . . . . . . 390 300 0
(Gain) loss on sale of fixed assets . . . . . . . . . . . . . . . (101) 4 (14)
Loss on sale of marketable securities held-to-maturity . . . . . 2 0 0
Provision for uncollectible accounts receivable . . . . . . . . . 60 60 0
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . 739 (128) 364
Cumulative effect of change in accounting for income taxes . . . 0 (659) 0
Stock option tax benefits . . . . . . . . . . . . . . . . . . . . 21 79 6
Changes in assets and liabilities:
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 667 3,550 (6,476)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . 864 (1,621) (343)
Other current assets . . . . . . . . . . . . . . . . . . . . . . (20) 4 (2)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 7 (3,444) 2,160
Other current liabilities . . . . . . . . . . . . . . . . . . . . (3,192) (1,229) (4,513)
Current taxes payable . . . . . . . . . . . . . . . . . . . . . . 131 (13) (156)
Other noncurrent assets and liabilities . . . . . . . . . . . . . (55) (50) (134)
--------- --------- --------
Net cash flows provided by operating activities . . . . . . . . . . 12,471 9,979 2,839
--------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment . . . . . . . . . . . . (2,840) (1,309) (856)
Proceeds from sale of property, plant and equipment . . . . . . . . 119 55 16
Purchases of marketable securities . . . . . . . . . . . . . . . . 0 (23,450) (21,102)
Proceeds from sale and maturities of marketable securities . . . . 0 13,807 18,400
Purchases of marketable securities held-to-maturity . . . . . . . . (10,260) 0 0
Proceeds from sale of marketable securities held-to-maturity . . . 2,998 0 0
Proceeds from maturities of marketable securities
held-to-maturity . . . . . . . . . . . . . . . . . . . . . 7,630 0 0
Purchases of marketable securities available-for-sale . . . . . . . (2,500) 0 0
Proceeds from sale of marketable securities available-for-sale . . 3,500 0 0
Proceeds from maturities of marketable
securities available-for-sale . . . . . . . . . . . . . . . 2,750 0 0
--------- --------- --------
Net cash flows provided by (used in) investing activities . . . . . 1,397 (10,897) (3,542)
--------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock under stock option plan . . 574 629 607
Purchases of treasury stock . . . . . . . . . . . . . . . . . . . . (11,640) 0 (282)
--------- --------- --------
Net cash flows provided by (used in) financing activities . . . . . (11,066) 629 325
--------- --------- --------
Net increase (decrease) in cash and cash equivalents . . . . . . . 2,802 (289) (378)
Cash and cash equivalents, prior year . . . . . . . . . . . . . . . 1,712 2,001 2,379
--------- --------- --------
Cash and cash equivalents, current year . . . . . . . . . . . . . . $ 4,514 $ 1,712 $ 2,001
========= ========= ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,608 $ 5,647 $ 4,697
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8 $ 1 $ 5
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 LINDSAY
<PAGE> 18
Lindsay Manufacturing Co.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. ACCOUNTING POLICIES
Lindsay Manufacturing Co. (the "Company" or "Lindsay") manufactures and
distributes irrigation systems and manufactures other special metal products
serving both domestic and international markets. Principal facilities are
located within the United States. The principal 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. Significant intercompany balances and transactions are
eliminated in consolidation.
(2) REVENUE RECOGNITION
Revenues and related cost of revenues for all irrigation and diversified
products are recognized when title passes. Generally this occurs at the time of
shipment of product to dealers or customers.
(3) INCOME TAXES
The Company changed its method of accounting for income taxes from the deferred
method to the liability method required by SFAS 109. This new standard requires
that a deferred tax be recorded to reflect the tax expense (benefit) resulting
from the recognition of temporary differences. Temporary differences are
differences between the tax basis of assets and liabilities and their reported
amounts in the financial statements that will result in differences between
income for tax purposes and income for financial statement purposes in future
years. As permitted under the new rules, prior years' financial statements have
not been restated. This standard was adopted September 1, 1993, using the
cumulative catch-up method and increased the first quarter ended November 30,
1993 earnings by $659,000 or $0.14 per share ($0.13 per share for the Fiscal
year ended August 31, 1994). Management does not believe there are
uncertainties surrounding realization of the net deferred tax asset.
(4) WARRANTY COSTS
Cost of operating revenues, included warranty costs of $538,000, $344,000 and
$294,000 for the years ended August 31, 1995, 1994 and 1993, respectively.
Provision for the estimated warranty costs is made in the period in which such
costs become probable and is periodically adjusted to reflect actual
experience.
(5) CASH EQUIVALENTS, MARKETABLE SECURITIES AND
LONG-TERM MARKETABLE SECURITIES
Cash equivalents are included at cost, which approximates market. At August 31,
1995, Lindsay's cash equivalents were held primarily by one financial
institution. Marketable securities and long-term marketable securities are
categorized as held-to-maturity or available-for-sale. Investments in the
held-to-maturity category are carried at amortized cost. Investments in the
available-for-sale category are carried at fair value with unrealized gains and
losses as a separate component of stockholders' equity. Lindsay considers all
highly liquid investments with original maturities of three months or less to
be cash equivalents, while those having maturities in excess of three months
are classified as marketable securities or as long-term marketable securities
when maturities are in excess of one year. Marketable securities and long-term
marketable securities consist of investment-grade municipal bonds.
Lindsay adopted Statement of Financial Accounting Standards (SFAS) 115
"Accounting For Certain Investments in Debt and Equity Securities" September 1,
1994. At September 1, 1994 and the quarter ended November 30, 1994, all
investments in debt securities were classified as held-to- maturity and carried
at amortized cost. The impact of adopting SFAS 115 resulted in no effect to
stockholders' equity or earnings.
During the quarter ended February 28, 1995, Lindsay's board authorized the
repurchase of an additional 750,000 shares of its common stock. Large blocks
of shares became available in the second quarter and were repurchased partially
with the proceeds of the sale of securities maturing June 15, 1995 and
September 1, 1995 from the held-to-maturity portfolio. The total amortized
cost, realized gain and realized loss for sales from securities classified as
held-to-maturity were $3,000,000, $1,500 and $3,750. In order to provide
flexibility for future repurchases of its common stock, Lindsay transferred
securities maturing July 1, 1995 from the held-to-maturity classification to
the available-for-sale classification. The total amortized cost, gross
unrealized holding gains, gross unrealized holding losses and the aggregate
fair value for the transfer were $3,749,000, $4,000, $2,000 and $3,751,000
respectively. Lindsay anticipates that future purchases of its common stock
will be funded out of cash equivalents, available-for-sale securities and cash
flow from operations.
There are no investments in the available-for-sale category included in
Marketable securities at August 31, 1995.
Investments in the held-to-maturity category are included in Marketable
securities ($18,792,000) and Long-term marketable securities ($34,003,000). The
total amortized cost, gross unrealized holding gains, gross unrealized holding
losses, and aggregate fair value for held-to- maturity securities are
$52,795,000, $242,000, $76,000 and $52,961,000, respectively. In the
held-to-maturity category, $18,792,000 in securities mature within one year and
$34,003,000 have maturities ranging from one to three years.
(6) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined by
the last-in, first-out (LIFO) method for all inventories.
(7) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. The Company's policy is to
capitalize expenditures for major renewals and betterments and
16 LINDSAY
<PAGE> 19
to charge to operating expenses the cost of current maintenance and repairs.
Provisions for depreciation 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 - 20 to 30 years;
equipment - three to 10 years; other - two to 20 years; and leasehold
improvements - term of lease.
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 resultant gain or loss is included in current operating
results.
(8) EXPORT SALES
Revenues included export sales of $11,098,000, $15,438,000 and $35,930,000 for
the years ended August 31, 1995, 1994 and 1993, respectively. Sales to Saudi
Arabia approximated 10%, 52% and 86% of export sales for the years ended August
31, 1995, 1994 and 1993, respectively. Lindsay's export sales are all in U.S.
dollars and are essentially all shipped against prepayments or backed by
irrevocable letters of credit which are confirmed by U.S. banks.
(9) EARNINGS PER SHARE
Primary earnings per share are calculated by dividing the earnings by
the weighted average number of common and common equivalent (stock options)
shares outstanding of 4,720,982, 4,864,506 and 4,846,901 for the years ended
August 31, 1995, 1994 and 1993. The difference between shares for primary and
fully diluted earnings per share was not significant in any period.
B. NON-OPERATING ITEMS
<TABLE>
<CAPTION>
===========================================================
For the years ended August 31,
------------------------------
$ in thousands 1995 1994 1993
===========================================================
<S> <C> <C> <C>
Other income, net:
Royalty income . . . $272 $132 $ 82
Gain (loss) on sales
of fixed assets . 101 (4) 14
Legal settlements . . 0 (2) (109)
Finance charges . . . 45 137 141
All other, net . . . 20 48 198
- -----------------------------------------------------------
Total other income,
net . . . . . . . . . $438 $311 $326
===========================================================
</TABLE>
C. INCOME TAX PROVISION
<TABLE>
<CAPTION>
===========================================================
For the years ended August 31,
------------------------------
$ in thousands 1995 1994 1993
===========================================================
<S> <C> <C> <C>
Current:
Federal . . . . . . . $3,816 $4,708 $4,005
State . . . . . . . . 827 953 562
- -----------------------------------------------------------
Total current taxes . . 4,643 5,661 4,567
- -----------------------------------------------------------
Deferred:
Federal . . . . . . . 662 (115) 295
State . . . . . . . . 77 (13) 69
- -----------------------------------------------------------
Total deferred taxes. . 739 (128) 364
- -----------------------------------------------------------
Total income tax
provision . . . . . . $5,382 $5,533 $4,931
===========================================================
</TABLE>
Deferred taxes resulted from the following types of differences in the
recognition of revenue and expense for tax and financial statement purposes:
<TABLE>
<CAPTION>
===========================================================
For the years ended August 31,
------------------------------
$ in thousands 1995 1994 1993
===========================================================
<S> <C> <C> <C>
Book depreciation in
excess of tax . . . . $ 25 $ 22 $ (48)
Employee benefits . . . (92) (98) (246)
Inventory adjustments . 34 (21) 79
Changes in accruals not
currently deductible
for taxes . . . . . . 772 (31) 579
- -----------------------------------------------------------
Total deferred taxes. . $739 $ (128) $364
===========================================================
</TABLE>
Total tax provisions resulted in effective tax rates differing from that of the
statutory federal income tax rates. The reasons for these differences are:
<TABLE>
<CAPTION>
====================================================================================
For the years ended August 31,
---------------------------------------------------------
1995 1994 1993
====================================================================================
$ in thousands Amount % Amount % Amount %
====================================================================================
<S> <C> <C> <C> <C> <C> <C>
U.S. statutory rate . $5,860 34.3 $5,734 34.2 $5,338 34.1
State and local
taxes . . . . . . 594 3.5 619 3.7 429 2.7
Qualified export
activity . . . . (86) (0.5) (81) (0.5) (284) (1.8)
Municipal bonds . . . (822) (4.8) (740) (4.4) (714) (4.5)
Other . . . . . . . . (164) (1.0) 1 0.0 162 1.0
- ------------------------------------------------------------------------------------
Total . . . . . . . . $5,382 31.5 $5,533 33.0 $4,931 31.5
====================================================================================
</TABLE>
Significant components of the Company's deferred tax assets and liabilities are
as follows:
<TABLE>
<CAPTION>
================================================================
For the years ended August 31,
------------------------------
$ in thousands 1995 1994
================================================================
<S> <C> <C>
Book depreciation in
excess of tax . . . . . . $ 79 $ 104
Employee benefits . . . . . . . 1,159 1,067
Inventory adjustments . . . . . 137 171
Changes in accurals not
currently deductible
for taxes . . . . . . . . . 1,429 2,201
- ----------------------------------------------------------------
Net deferred tax assets . . . . $2,804 $3,543
================================================================
</TABLE>
D. RECEIVABLES
<TABLE>
<CAPTION>
=========================================================
August 31,
----------------------
$ in thousands 1995 1994
=========================================================
<S> <C> <C>
Trade accounts and notes . . . $10,926 $11,593
Less allowance for doubtful
accounts . . . . . . . . . 573 513
- ---------------------------------------------------------
Net receivables . . . . . . . . $10,353 $11,080
=========================================================
</TABLE>
E. INVENTORIES
<TABLE>
<CAPTION>
=========================================================
August 31,
---------------------
$ in thousands 1995 1994
=========================================================
<S> <C> <C>
First-in, first-out (FIFO)
inventory . . . . . . . . . $ 9,626 $10,291
LIFO reserves . . . . . . . . . (3,570) (3,283)
Obsolescence reserve . . . . . (672) (760)
- ---------------------------------------------------------
Total Inventories . . . . . . . $ 5,384 $ 6,248
=========================================================
</TABLE>
17 LINDSAY
<PAGE> 20
The estimated percentage distribution between major classes of inventory before
reserves is as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------
August 31,
---------------
1995 1994
- -------------------------------------------------------
<S> <C> <C>
Raw materials . . . . . . . . . 21% 21%
Work in process . . . . . . . . 7% 6%
Purchased parts . . . . . . . . 28% 20%
Finished goods . . . . . . . . 44% 53%
- -------------------------------------------------------
</TABLE>
F. PROPERTY, PLANT & EQUIPMENT
<TABLE>
<CAPTION>
- -------------------------------------------------------
August 31,
---------------
$ in thousands 1995 1994
- -------------------------------------------------------
<S> <C> <C>
Land . . . . . . . . . . . . . $ 66 $ 66
Buildings . . . . . . . . . . . 4,345 4,183
Equipment . . . . . . . . . . . 18,944 17,084
Other . . . . . . . . . . . . . 2,337 1,880
- -------------------------------------------------------
25,692 23,213
Less accumulated depreciation . 18,528 17,617
- -------------------------------------------------------
Property, plant and equipment,
net . . . . . . . . . . . . . . $ 7,164 $ 5,596
- -------------------------------------------------------
</TABLE>
G. OTHER CURRENT LIABILITIES
<TABLE>
<CAPTION>
- --------------------------------------------------------
August 31,
---------------
$ in thousands 1995 1994
- --------------------------------------------------------
<S> <C> <C>
Current state and federal
income taxes . . . . . . . . . $ 1,369 $ 1,335
Payroll and vacation . . . . . 2,633 2,642
Retirement plans . . . . . . . 1,203 968
Taxes, other than income . . . 209 112
Insurance . . . . . . . . . . . 1,632 1,550
Dealer service, commission
and related items . . . . . . . 977 2,675
Export freight . . . . . . . . 153 102
Warranty . . . . . . . . . . . 122 592
Legal settlements . . . . . . . 300 675
Environmental . . . . . . . . . 1,914 2,893
Other . . . . . . . . . . . . . 1,124 1,153
- --------------------------------------------------------
Total other current liabilities $11,636 $14,697
========================================================
</TABLE>
H. COMMITMENTS AND CONTINGENT LIABILITIES
The consolidated balance sheet reflects a reserve of $1.9 million at August 31,
1995, compared to $2.9 million at August 31, 1994, reflecting costs of $1.0
million during Fiscal 1995 for continued implementation of environmental
remediation plans for aquifer and soil and shallow groundwater contaminations.
The insurance company stopped reimbursement of remediation costs and the
company is in litigation over the extent of insurance coverage. The probable
insurance recovery is recorded in other current assets. In the opinion of
management, resolution of these matters, for which provision has not been made,
will not have a material adverse affect on Lindsay's consolidated financial
condition, however, an adverse outcome of these matters could have a material
effect on quarterly or annual operating results or cash flows when resolved in
a future period.
The Company and its subsidiaries are defendants in various legal actions
arising from other issues in the course of their business activities. In the
opinion of management, resolution of these actions will not result in a
material adverse effect on Lindsay's consolidated financial position, results
of operations or cash flows.
Lindsay carries property insurance, with a $10,000 deductible, for replacement
value of all of its buildings and non-auto equipment.
I. RETIREMENT PLANS
Lindsay has established a noncontributory profit-sharing plan covering all
employees. The plan provides for Lindsay to contribute a discretionary amount
when warranted by results of operations. The contribution is allocated to
participants based upon their respective percentage of wages to total wages of
all participants in the plan. Lindsay's contributions charged to expense under
this plan was $750,000 for each of the years ended August 1995, 1994 and 1993.
A supplementary non-qualified, non-funded retirement plan for certain key
executives is also maintained. Plan benefits are based on the executive's
average total compensation during the three highest compensation years of
employment. This unfunded supplemental retirement plan is not subject to the
minimum funding requirements of ERISA.
Cost and the assumptions for the Company's supplemental retirement plan
includes the following components:
<TABLE>
<CAPTION>
- --------------------------------------------------------------
For the years ended August 31,
------------------------------
$ in thousands 1995 1994
- --------------------------------------------------------------
<S> <C> <C>
Service cost . . . . . . . . . $ 66 $ 61
Interest cost . . . . . . . . . 100 88
Net amortization and deferral . 69 69
- -------------------------------------------------------
Net cost . . . . . . . . . . . $ 235 $ 218
- -------------------------------------------------------
Discount rate . . . . . . . . . 7.00% 7.75%
Assumed rates of compensation
increases . . . . . . . . . . . 3.50% 3.50%
- -------------------------------------------------------
</TABLE>
The funded status and the amounts recognized in the Company's consolidated
balance sheet are as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------
August 31,
---------------
$ in thousands 1995 1994
- -------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit
obligations
Vested benefit obligation . . . . $ 950 $ 701
Non-vested benefit obligation . . 108 119
Accumulated benefit obligation. . 1,058 820
Projected benefit obligation. . . . 1,438 1,282
Fair value of plan assets . . . . . 0 0
Unrecognized net gain (loss) . . . 10 0
Unrecognized prior year service
cost . . . . . . . . . . . . . . 0 0
Unrecognized net obligation/
(asset) at transition . . . . . . . 995 1,064
Adjustment to recognize minimum
liability . . . . . . . . . . . . 605 602
Liability recognized in the
consolidated balance sheet. . . . $1,058 $ 820
- -------------------------------------------------------
</TABLE>
18 LINDSAY
<PAGE> 21
J. STOCK OPTIONS
The Company adopted a Long-Term Incentive Plan in October 1988, (1988 Plan)
which provides for awards of stock options, stock appreciation rights, stock
indemnification rights and restricted stock to officers and key employees.
Options may be granted at, above or below the fair market value of the stock at
the date of the grant and are exercisable within periods specified by the
Company's Compensation Committee.
<TABLE>
<CAPTION>
1988 Plan: Number of Shares Average Price
- ------------------------------------------------------------------------
<S> <C> <C>
Outstanding at August 31, 1992 250,950 $ 9.89
Exercised . . . . . . . . . . . . . . (2,500) 8.39
Cancelled . . . . . . . . . . . . . . (1,800) 9.83
Outstanding at August 31, 1993. . . . . 246,650 9.90
Exercisable at August 31, 1993. . . . . 145,400 9.95
Available for grant at August 31, 1993. 65,808
Outstanding at August 31, 1993. . . . . 246,650 9.90
Exercised . . . . . . . . . . . . . . (21,283) 9.10
Outstanding at August 31, 1994. . . . . 225,367 9.98
Exercisable at August 31, 1994. . . . . 157,867 10.04
Available for grant at August 31, 1994. 69,066
Outstanding at August 31, 1994 225,367 9.98
Exercised . . . . . . . . . . . . . . (6,140) 11.16
Outstanding at August 31, 1995. . . . . 219,227 9.94
Exercisable at August 31, 1995. . . . . 185,477 $ 9.96
Available for grant at August 31, 1995. 37,943
- ------------------------------------------------------------------------
</TABLE>
In February 1992, the shareholders approved the 1991 Long-Term Incentive Plan
(1991 Plan) which is similar in most material respects to the 1988 Plan.
Additionally, the 1991 Plan provides for non-qualified stock options to
directors who are not officers or employees of the Company or its subsidiaries.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
1991 Plan: Number of Shares Average Price
- -------------------------------------------------------------------------
<S> <C> <C>
Officers and Key Employees:
Outstanding at August 31, 1992. . . . . 62,000 $34.09
Granted . . . . . . . . . . . . . . . 48,000 29.15
Exercised . . . . . . . . . . . . . . (19,000) 30.89
Cancelled . . . . . . . . . . . . . . (6,000) 33.25
Outstanding at August 31, 1993. . . . . 85,000 32.07
Exercisable at August 31, 1993. . . . . 7,800 35.50
Available for grant at August 31, 1993. 217,427
Outstanding at August 31, 1993. . . . . 85,000 32.07
Granted . . . . . . . . . . . . . . . 19,000 30.47
Exercised . . . . . . . . . . . . . . (19,200) 30.72
Outstanding at August 31, 1994. . . . . 84,800 32.02
Exercisable at August 31, 1994. . . . . 23,800 33.17
Available for grant at August 31, 1994. 200,961
Outstanding at August 31, 1994. . . . . 84,800 32.02
Granted . . . . . . . . . . . . . . . 56,000 28.60
Exercised . . . . . . . . . . . . . . (19,000) 29.49
Outstanding at August 31, 1995. . . . . 121,800 30.84
Exercisable at August 31, 1995. . . . . 40,000 $32.70
Available for grant at August 31, 1995. 140,000
<CAPTION>
- ------------------------------------------------------------------------
Outside Directors: 1995 1994 1993
- ------------------------------------------------------------------------
<C> <C> <C>
Options outstanding September 1 . . . . . 39,000 27,000 22,500
Granted . . . . . . . . . . . . . . . . . 6,000 12,000 4,500
Options outstanding August 31 . . . . . . 45,000 39,000 27,000
Average price at August 31 . . . . . . . $25.91 $25.47 $22.57
Options exercisable at August 31 . . . . 26,700 17,700 9,000
Options available for grant at August 31. 45,000 55,275 71,050
- ------------------------------------------------------------------------
</TABLE>
K. INDUSTRY SEGMENT INFORMATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
For the years ended August 31,
------------------------------
$ in millions 1995 1994 1993
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenues:
Irrigation . . . . . . . . $ 88.8 $ 94.3 $ 88.5
Diversified products . . . 23.0 18.4 13.6
- ------------------------------------------------------------------------
Total operating revenues . . $111.8 $112.7 $102.1
- ------------------------------------------------------------------------
Operating earnings:
Irrigation . . . . . . . . $ 16.4 $ 17.2 $ 16.4
Diversified products . . . 5.2 4.2 2.9
- ------------------------------------------------------------------------
Segment operating earnings 21.6 21.4 19.3
Unallocated general &
administrative and
engineering & research
expenses . . . . . . . . . (7.7) (7.2) (6.2)
Interest and other income,. .
net . . . . . . . . . . . . 3.2 2.6 2.6
- ------------------------------------------------------------------------
Earnings before income taxes. $ 17.1 $ 16.8 $ 15.7
- ------------------------------------------------------------------------
Identifiable assets:
Irrigation . . . . . . . . $ 18.8 $ 19.6 $ 22.8
Diversified products . . . 5.2 4.2 3.0
Corporate . . . . . . . . . 62.1 64.6 54.1
- ------------------------------------------------------------------------
Total identifiable assets . . $ 86.1 $ 88.4 $ 79.9
========================================================================
</TABLE>
Segment operating earnings are based on net sales less identifiable operating
expenses. Identifiable operating expenses do not include general and
administrative expenses (which include corporate expenses) or engineering and
research expenses. Corporate assets are principally cash and cash equivalents,
short- and long-term marketable securities, deferred income taxes and certain
property, plant and equipment.
Capital expenditures and depreciation have not been allocated to industry
segments due to the arbitrary and inexact nature of the allocation process for
Lindsay which operates out of a single manufacturing facility. For the same
reasons, general and administrative and engineering and research expenses, and
interest and other income, net have not been allocated.
19 LINDSAY
<PAGE> 22
DIRECTORS
HOWARD G. BUFFETT
Director since 1995
President of International Operations, GSI Group;
Director: GSI Group; Berkshire Hathaway, Inc.;
Coca-Cola Enterprises, Inc.
JOHN W. CROGHAN
Director since 1989
Chairman, Lincoln Capital Management;
St. Paul Federal Bancorp for Savings Inc.
J. DAVID DUNN
Director since 1988
Executive Vice President, The Carborundum Company
GARY D. PARKER
Director since 1978
President, Chief Executive Officer and
Chairman of the Board
Joined Lindsay in 1971; Vice President-Marketing 1975;
Executive Vice President 1978; President & CEO 1984;
Chairman of the Board 1989.
GEORGE W. PLOSSL
Director since 1989
President, G.W. Plossl & Co., Inc.
CLAYTON YEUTTER
Director since 1993
Of Counsel Hogan & Hartson;
Director: B.A.T. Industries; Caterpillar Inc.;
ConAgra, Inc.; FMC Corporation; Oppenheimer Funds;
Texas Instruments, Inc.; The Vigoro Corporation
OFFICERS
EDUARDO R. ENRIQUEZ
Vice President-International
Joined Lindsay in 1981; Vice President-International 1986.
BRUCE C. KARSK
Vice President-Finance, Treasurer and Secretary
Joined Lindsay in 1979 as Corporate Accounting Manager;
Controller 1981; Vice President-Finance,
Treasurer and Secretary 1984.
CLIFFORD P. LOSEKE
Vice President-Manufacturing
Joined Lindsay in 1971 as Plant Manager;
Vice President-Manufacturing 1975
CHARLES H. MEIS
Vice President-Engineering
Joined Lindsay in 1971 as a Product Engineer;
Director of Engineering 1972;
Vice President-Engineering 1975
ROBERT S. SNOOZY
Vice President-Sales and Marketing
Joined Lindsay in 1973 as a Research Engineer;
Vice President-Marketing 1978;
Vice President-Sales and Marketing 1986.
20 LINDSAY
<PAGE> 23
INVESTOR INFORMATION
ANNUAL MEETING
All shareholders are invited to attend our annual meeting, which will be held
on February 7, 1996 at 1:30 p.m. at The Cornhusker Hotel 333 South 13th Street,
Lincoln, Nebraska. We look forward to meeting shareholders and answering
questions at the meeting. Any shareholder who will be unable to attend is
encouraged to send questions and comments, in writing, to Gary D. Parker,
President, Chief Executive Officer and Chairman of the Board, at Lindsay's
corporate offices.
QUARTERLY CALENDAR
The company operates on a fiscal year ending August 31. Fiscal 1996 quarter-end
dates are November 30, 1995, February 28, 1996, May 31, 1996 and August 31,
1996. Quarterly earnings are announced approximately three to five weeks after
the end of each quarter and audited results are announced four to six weeks
after year end.
FORM 10-K
Shareholders who wish to obtain, free of charge, a copy of Lindsay
Manufacturing Co.'s annual report on Form 10-K for the year ended August 31,
1995, as filed with the Securities and Exchange Commission, may do so by
writing Bruce C. Karsk, Vice President-Finance, Treasurer and Secretary, at
Lindsay's corporate offices.
TRANSFER AGENT AND REGISTRAR
First National Bank of Omaha
One First National Center
Omaha, NE 68102-1596
(402) 341-0500
RECENT RESEARCH REPORTS ISSUED BY
Robert W. Baird & Co. Inc.
Barrington Research Associates
George K. Baum & Company
Fahnestock & Co. Inc.
Mesirow Financial, Inc.
Select Equity Group Research
Standard and Poors
Value Line Investment Survey
STOCK MARKET INFORMATION
Lindsay common stock is traded on NASDAQ's National Market System under the
ticker symbol LINZ. Stock price quotations are printed daily in major
newspapers.
As of August 31, 1995, there were 4,367,925 shares of common stock
outstanding, held by approximately 250 shareholders of record and an estimated
2,500 shareholders for whom securities firms acted as nominees.
As of August 31, 1995, the following securities firms indicated they were
maintaining an inventory of Lindsay common stock and acting as market makers:
Robert W. Baird & Co. Inc.
George K. Baum & Company
Herzog, Heine, Geduld, Inc.
Jefferies & Company, Inc.
Kirkpatrick, Pettis, Smith, Polian Inc.
Merrill Lynch, Pierce, Fenner & Smith Inc.
Mesirow & Company, Inc.
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
Omaha, Nebraska
FOR FURTHER INFORMATION
Shareholders and prospective investors are welcome to call or write Lindsay
Manufacturing Co. with questions or requests for additional information. Please
direct inquiries to:
Bruce C. Karsk
Vice President-Finance, Treasurer and Secretary
Lindsay Manufacturing Co.
East Highway 91
P.O. Box 156
Lindsay, Nebraska 68644
(402) 428-2131
<PAGE> 24
LINDSAY
LINDSAY MANUFACTURING CO.
East Highway 91
Lindsay, Nebraska 68644
(402) 428-2131
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<CASH> 4,514
<SECURITIES> 18,792
<RECEIVABLES> 10,353
<ALLOWANCES> 0
<INVENTORY> 5,384
<CURRENT-ASSETS> 43,738
<PP&E> 25,692
<DEPRECIATION> 18,528
<TOTAL-ASSETS> 86,060
<CURRENT-LIABILITIES> 15,931
<BONDS> 0
<COMMON> 4,843
0
0
<OTHER-SE> 63,900
<TOTAL-LIABILITY-AND-EQUITY> 86,060
<SALES> 111,843
<TOTAL-REVENUES> 111,843
<CGS> 85,986
<TOTAL-COSTS> 85,986
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 17,086
<INCOME-TAX> 5,382
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,704
<EPS-PRIMARY> 2.48
<EPS-DILUTED> 2.48
</TABLE>
