<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________
FORM 10-Q
(MARK ONE)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
------- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1996 OR
-------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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)
402-428-2131
-------------------------------
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ----
Common Stock, $1.00 par value 6,332,916
- ----------------------------- -----------------------------------
Title of Class Outstanding as of December 16, 1996
Exhibit index is located on page 2.
Total number of pages 15.
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<PAGE> 2
LINDSAY MANUFACTURING CO. AND CONSOLIDATED SUBSIDIARIES
INDEX
Page No.
--------
Part I - Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets, November 30, 1996 and 1995
and August 31, 1996 3
Consolidated Statements of Operations for the three
months ended November 30, 1996 and 1995 4
Consolidated Statements of Cash Flows for the three
months ended November 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Position 9-11
Part II - Other Information
Item 1. Legal Proceedings 12-13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index
4 - Specimen Form of Common Stock Certificate 13
11 - Statement re Computation of Per Share Earnings 15
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<PAGE> 3
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Lindsay Manufacturing Co.
CONSOLIDATED BALANCE SHEETS
November 30, 1996 and 1995 and August 31, 1996
(in thousands, except share amounts)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
November November August
1996 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................... $ 3,462 $ 1,253 $ 2,362
Marketable securities........................................ 19,319 21,333 23,926
Receivables.................................................. 27,728 15,268 20,128
Inventories.................................................. 9,084 6,342 7,800
Deferred income taxes........................................ 3,444 2,776 3,369
Other current assets......................................... 824 2,144 270
--------- --------- ---------
Total current assets....................................... 63,861 49,116 57,855
Long-term marketable securities................................ 28,868 31,081 28,146
Property, plant and equipment, net............................. 10,019 8,174 9,691
Other noncurrent assets........................................ 1,131 1,218 1,131
--------- --------- ---------
Total assets................................................... $ 103,879 $ 89,589 $ 96,823
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade...................................... $ 7,589 $ 4,851 $ 5,915
Other current liabilities.................................... 14,335 13,982 12,782
--------- --------- ---------
Total current liabilities.................................. 21,924 18,833 18,697
Other noncurrent liabilities................................... 1,108 1,195 1,292
--------- --------- ---------
Total liabilities.............................................. 23,032 20,028 19,989
--------- --------- ---------
Contigencies
Stockholders' equity:
Preferred stock, ($1 par value, 2,000,000 shares
authorized, no shares issued and outstanding in
November 1996 and 1995 and August 1996)
Common stock, ($1 par value, 10,000,000 shares authorized,
7,341,236, 4,842,805 and 7,327,961 shares issued in
November 1996 and 1995 and August 1996................... 7,341 4,843 7,328
Capital in excess of stated value.......................... 3,382 4,412 2,952
Retained earnings.......................................... 92,494 75,473 88,002
Less treasury stock, (at cost, 1,008,320, 540,480 and 987,820
shares in November 1996 and 1995 and August 1996)........ (22,370) (15,167) (21,448)
--------- --------- ---------
Total stockholders' equity..................................... 80,847 69,561 76,834
--------- --------- ---------
Total liabilities and stockholders' equity..................... $ 103,879 $ 89,589 $ 96,823
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 4
Lindsay Manufacturing Co.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended November 30, 1996 and 1995
(in thousands, except per share amounts)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
November November
1996 1995
-------- --------
<S> <C> <C>
Operating revenues...................................................... $ 39,467 $ 27,326
Cost of operating revenues.............................................. 30,003 20,905
-------- --------
Gross profit............................................................ 9,464 6,421
------- --------
Operating expenses:
Selling expense....................................................... 1,033 955
General and administrative expense.................................... 1,756 1,476
Engineering and research expense...................................... 383 352
------- --------
Total operating expenses................................................ 3,172 2,783
------- --------
Operating income........................................................ 6,292 3,638
Interest income, net.................................................... 774 664
Other income, net....................................................... 7 20
------- --------
Earnings before income taxes............................................ 7,073 4,322
Income tax provision.................................................... 2,264 1,296
------- --------
Net earnings............................................................ $ 4,809 $ 3,026
======== ========
Net earnings per share.................................................. $ 0.71 $ 0.45
======== ========
Cash dividends per share................................................ $ 0.05 $ 0.00
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE> 5
Lindsay Manufacturing Co.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended November 30, 1996 and 1995
(in thousands)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION> November November
1996 1995
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings........................................................... $ 4,809 $ 3,026
Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:
Depreciation........................................................ 455 355
Amortization of marketable securities premiums, net................. 68 92
(Gain) loss on sale of fixed assets................................. 1 (4)
Provision for uncollectible accounts receivable..................... 15 1
Deferred income taxes............................................... (75) 28
Changes in assets and liabilities:
Receivables......................................................... (7,615) (4,916)
Inventories......................................................... (1,284) (958)
Other current assets................................................ (554) (253)
Accounts payable.................................................... 1,674 556
Other current liabilities........................................... (810) 1,047
Current taxes payable............................................... 2,363 1,299
Other noncurrent assets and liabilities............................. (184) (254)
--------- -------
Net cash flows provided by (used in) operating activities.............. (1,137) 19
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment............................. (799) (1,373)
Proceeds from sale of property, plant and equipment.................... 15 12
Purchases of marketable securities held-to-maturity.................... (1,226) (1,211)
Proceeds from maturities of marketable securities held-to-maturity..... 5,043 1,500
--------- -------
Net cash flows provided by (used in) investing activities.............. 3,033 (1,072)
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock under stock option plan......... 443 0
Dividends paid......................................................... (317) 0
Purchases of treasury stock............................................ (922) (2,208)
--------- -------
Net cash flows used in financing activities............................ (796) (2,208)
--------- -------
Net increase (decrease) in cash and cash equivalents................... 1,100 (3,261)
Cash and cash equivalents, beginning of period......................... 2,362 4,514
--------- -------
Cash and cash equivalents, end of period............................... $ 3,462 $ 1,253
========= =======
Supplemental Cash Flow Information:
Income taxes paid...................................................... $ 7 $ (5)
</TABLE>
The accompanying notes are an integral part of the financial statements.
-5-
<PAGE> 6
Lindsay Manufacturing Co.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General
The consolidated financial statements included herein are presented in
accordance with the requirements of Form 10-Q and consequently do not include
all of the disclosures normally required by generally accepted accounting
principles or those normally made in the registrant's annual Form 10-K filing.
These consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Lindsay Manufacturing
Co. (Lindsay) August 31, 1996 Annual Report to Stockholders.
In the opinion of management the unaudited consolidated financial statements
of Lindsay reflect all adjustments of a normal recurring nature necessary to
present a fair statement of the results of operations for the respective
interim periods. The results for interim periods are not necessarily
indicative of trends or results expected for a full year.
2. Cash Equivalents, Marketable Securities and Long-Term Marketable Securities
Cash equivalents are included at cost, which approximates market. At November
30, 1996, 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. The carrying amounts
of the securities used in computing unrealized and realized gains and losses
are determined by specific identification. Lindsay considers all highly liquid
investments with 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.
There are no investments in the available-for-sale category included in
Marketable securities at November 30, 1996. Investments in the
held-to-maturity category are included in Marketable securities ($19.3 million)
and Long-term marketable securities ($28.9 million). The total amortized cost,
gross unrealized holding gains, gross unrealized holding losses, and aggregate
fair value for held-to-maturity securities are $48.2 million, $0.3 million,
$0.0 million, and $48.5 million, respectively. There have not been any sales
of held-to-maturity securities during the first quarter of fiscal 1997. In the
held-to-maturity category, $19.3 million in securities mature within one year
and $28.9 million have maturities ranging from one to four years.
-6-
<PAGE> 7
Lindsay Manufacturing Co.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
3. 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.
<TABLE>
<CAPTION>
(in thousands)
------------------------------------
November November August
1996 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Total manufactured goods
First-in, first-out inventory $13,845 $10,187 $12,060
LIFO reserves (4,073) (3,179) (3,570)
Obsolescence reserve ( 688) ( 666) ( 690)
---------- ---------- ----------
Total inventories $ 9,084 $ 6,342 $ 7,800
========== ========== ==========
</TABLE>
The estimated percentage distribution between major classes of inventory before
reserves is as follows:
<TABLE>
<CAPTION>
November November August
1996 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Raw materials 16% 21% 16%
Work in process 8% 7% 8%
Purchased parts 32% 28% 32%
Finished goods 44% 44% 44%
</TABLE>
4. Property, Plant and Equipment
Property, plant and equipment are stated at cost.
<TABLE>
<CAPTION>
(in thousands)
------------------------------------
November November August
1996 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Land $ 70 $ 66 $ 70
Buildings 4,757 4,345 4,756
Equipment 22,542 19,417 22,563
Other 2,625 3,122 1,859
---------- ---------- ----------
29,994 26,950 29,248
Less accumulated depreciation 19,975 18,776 19,557
---------- ---------- ----------
Property, plant and equipment, net $10,019 $ 8,174 $ 9,691
========== ========== ==========
</TABLE>
5. Contingencies
The Company and its subsidiaries are defendants in various legal actions
arising in the course of their business activities. During fiscal 1996,
Lindsay substantially completed certain environmental remediation efforts at
its manufacturing facility. Lindsay believes that its insurer should cover the
costs of remediation. The insurer reduced its reimbursement of remediation
costs in early 1990. In late 1990, Lindsay filed suit against the insurer.
The insurer completely stopped reimbursement of remediation costs in 1991 and
in 1992 the insurer filed a counterclaim against Lindsay for previously
-7-
<PAGE> 8
Lindsay Manufacturing Co.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
5. Contingencies - Continued
reimbursed remediation costs. In December 1995 the court dismissed Lindsay's
suit against the insurer and entered a judgment in the amount of $2.4 million
in favor of the insurer for which the Company has not made a provision.
Lindsay is in the process of appealing the dismissal of it's case against the
insurer and the judgment against Lindsay. In the opinion of management, an
unfavorable outcome with respect to any or all of these matters will not result
in a material adverse effect on Lindsay's consolidated financial position,
results of operations or cash flows.
6. Net Earnings Per Share
Primary net earnings per share are calculated by dividing the earnings by the
weighted average number of common and common equivalent (stock options) shares
outstanding of 6,727,396 and 6,746,907 for the three months ended November 30,
1996 and 1995, respectively. The difference between shares for primary and
fully diluted earnings per share was not significant in any period.
7. Stock Split
On January 29, 1996, the Board of Directors declared a three-for-two split of
Lindsay's common stock effective February 22, 1996 to stockholders of record on
February 7, 1996. Accordingly, the average number of shares outstanding and
per share information have been adjusted to reflect the stock split.
-8-
<PAGE> 9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
The following table provides highlights for the first quarter of fiscal year
1997 compared with the first quarter of fiscal year 1996.
<TABLE>
<CAPTION>
For The Three Months Ended
-----------------------------
Percent
------------------ Increase
($ in thousands) 11/30/96 11/30/95 (Decrease)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Consolidated
- ------------
Operating Revenues................................$39,467 $27,326 44.4%
Cost of Operating Revenues........................$30,003 $20,905 43.5
Gross Profit......................................$ 9,464 $ 6,421 47.4
Gross Margin...................................... 24.0% 23.5%
Selling, Eng. & Research, and
G&A Expense.....................................$ 3,172 $ 2,783 14.0
Operating Income..................................$ 6,292 $ 3,638 73.0
Operating Margin.................................. 15.9% 13.3%
Interest Income, net..............................$ 774 $ 664 16.6
Other Income, net.................................$ 7 $ 20 (65.0)
Income Tax Provision..............................$ 2,264 $ 1,296 74.7
Effective Income Tax Rate......................... 32.0% 30.0%
Net Earnings......................................$ 4,809 $ 3,026 58.9%
</TABLE>
As the above table displays, operating revenues for the three month period
ended November 30, 1996 were 44.4 percent ($12.1 million) higher than the first
quarter of fiscal 1996. This increase was the result of increases of 51
percent ($8.3 million) in North American irrigation equipment revenues and 68
percent ($3.2 million) in export irrigation equipment revenues and 14 percent
($0.8 million) in diversified products revenues.
During the first quarter of fiscal 1997, North American irrigation equipment
revenue and demand continued to be favorably impacted by ongoing emphasis by
farmers to conserve water, energy, and labor. Increasing farm real estate
values, low prevailing interest rates, favorable federal agricultural program
legislation, low U.S. and worldwide grain reserves and projections of strong
net cash farm income ($58 billion for 1996) are all factors that also had a
favorable effect on demand. Additionally, during the quarter, Lindsay, as in
the previous year's first quarter, conducted several sales and marketing
programs which served to encourage dealers and customers to take early delivery
of irrigation equipment in preparation for the spring planting season. This
may have, to some extent, resulted in sales being pulled forward from our
second and third quarters, but should enable the Company to better service our
dealers during the peak North American irrigation equipment selling season of
January through May, expanding our full fiscal year sales and delivery
capacity.
Export irrigation equipment revenue for the first quarter of fiscal 1997 was
favorably impacted by increased sales to irrigation equipment dealers in the
Latin American market which is seasonally stronger in Lindsay's first and
fourth fiscal quarters.
The increase in diversifed products revenue during the first quarter of fiscal
1997 as compared to the first quarter of fiscal 1996 was due to increases of
both outsource manufacturing and large diameter steel tubing revenues.
-9-
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Continued)
Gross margin for the three months ended November 30, 1996 was 24.0 percent, up
from 23.5 percent of the prior year's comparable period. First quarter gross
margin benefited from higher manufacturing efficiencies, stable raw material
costs and a favorable pricing environment.
First quarter fiscal 1997's selling, general and administrative, and
engineering and research expenses, in total, increased 14% from the prior
year's comparative period. Higher wage and employee benefit cost (partially
due to an increase in selling, general and adminstrative, and engineering, and
research personnel) accounted for the majority of the increase. First quarter
fiscal 1997's selling, general and administrative, and engineering and research
expenses, in total, represented only 8.0% of total revenue as compared to 10.2%
of total revenue in the first quarter of fiscal 1996.
The effective tax rate for the first quarter of fiscal 1997 was 32.0 percent as
compared to 30.0 percent for the comparative period of fiscal 1996. Due to the
federal income tax exempt status of interest income from its municipal bond
investments, the state economic developement tax credits and the foreign sales
corporation federal tax provisions as they relate to export sales, Lindsay
benefits from an effective tax rate which is lower than the combined federal
and state statutory rates, currently estimated at 37.5 percent.
FINANCIAL CONDITION
Lindsay's equity of $80.8 million at November 30, 1996 increased from $76.8
million at August 31, 1996, due to net earnings of $4.8 million, less $0.9
million used to repurchase 20,500 shares of common stock per Lindsay's
previously announced stock repurchase plan, plus the proceeds of $0.4 million
from the issuance of 13,275 shares of common stock under Lindsay's stock option
plan, less dividends paid of $0.3 million. Lindsay's equity at November 30,
1995 was $69.6 million.
Lindsay's cash and short-term marketable securities totaled $22.8 million at
November 30, 1996, as compared to $26.3 million at August 31, 1996, and $22.6
million at November 30, 1995. Receivables of $27.7 million at November 30,
1996 increased $7.6 million from $20.1 million at August 31, 1996 and $12.4
million from $15.3 million at November 30, 1995 due to the higher level of
North American irrigation equipment sales activity during November 1996 and
sales and marketing programs that offered extended payment terms to our dealers
and customers, primarily due to short-term interest free financing offered by
Lindsay to end users. Inventories at November 30, 1996 totaled $9.1 million,
higher than their $7.8 million balance at August 31, 1996 and $6.3 million
balance at November 30, 1995. Inventory was increased to adequately service
the higher level of sales activity the Company was projecting. At November 30,
1996, Lindsay had $28.9 million invested in long-term marketable securities
which represent intermediate term (one to four year maturities) municipal debt.
This is comparable to $28.1 million at August 31, 1996 and down from $31.1
million at November 30, 1995.
Current liabilities of $21.9 million at November 30, 1996 are higher than their
$18.7 million balance at August 31, 1996 and $18.8 million balance at November
30, 1995. The increase from August 31, 1996 is principally due to increased
-10-
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Continued)
trade payables, and higher accruals for taxes payable. The increase from
November 30, 1995 is primarily due to increased trade payables partially offset
by lower accruals for environmental remediation costs.
Capital expenditures totaling $799,000 for the first quarter of 1997 were used
primarily for upgrading manufacturing plant equipment. Lindsay expects its
fiscal 1997 capital expenditures to total approximately $3.5 to $4.5 million
which will be used principally to improve Lindsay's existing facilities and
expand its manufacturing capabilities.
Lindsay believes its capitalization (including cash and marketable securities
balances) and operating cash flow are sufficient to cover expected working
capital needs, planned capital expenditures and continued repurchases of common
stock.
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 Lindsay's second and third
quarters for the spring planting period. Lindsay's expansion into diversified
products complements its irrigation operations by using available capacity and
reducing seasonality.
OTHER FACTORS
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 regularity of rainfall.
Approximately 20 and 17 percent of Lindsay's operating revenues for the first
quarter of 1997 and 1996 respectively, were generated from export sales. For
the full year of 1996, approximately 15 percent of Lindsay's operating revenues
were generated from export sales. 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 or other
secured means.
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. Lindsay will continue its accounting in accordance with
Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to
Employees".
-11-
<PAGE> 12
Part II
OTHER INFORMATION
Item 1. 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 selected plan
implementation was delayed until finalization of the Consent Decree in April
1992. The final remediation plans were approved in 1993 and 1994 and the
remediation plans were fully implemented during fiscal 1995. The balance sheet
reserve for this remediation was $0.3 million at November 30, 1996 and August
31, 1996.
Lindsay believes that the current reserve is sufficient to cover the estimated
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.
In 1987, the insurer agreed to reimburse Lindsay for remediation costs incurred
by Lindsay. The insurer reduced its reimbursement of remediation costs in
early 1990. In late 1990, Lindsay filed suit against the insurer. The insurer
completely stopped reimbursement of remediation costs in 1991 and in 1992 the
insurer filed a counterclaim against Lindsay for previously reimbursed
remediation costs. In December 1995, the court dismissed Lindsay's suit
against the insurer and entered a judgment in the amount of $2.4 million in
favor of the insurer. Lindsay is in the process of appealing the dismissal of
its case against the insurer and the judgment against Lindsay. 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.
-12-
<PAGE> 13
OTHER INFORMATION
(Continued)
CONCERNING FORWARD LOOKING STATEMENTS - This Report on Form 10Q, including the
Management's Discussion and Analysis and other sections, contains forward
looking statements that are subject to risks and uncertainties and which
reflect management's current beliefs and estimates of future economic
circumstances, industry conditions, Company performance and financial results.
Forward looking statements include the information concerning possible or
assumed future results of operations of the Company and those statements
preceded by, followed by or include the words "future", "position",
"anticipate(s)", "expect", "believe(s)", "see", "plan", "further improve",
"outlook", "should", or similar expressions. For these statements, the Company
claims the protection of the safe harbor for forward looking statements
contained in the Private Securities Litigation Reform Act of 1995. Readers of
this Report should understand that the following important factors, in addition
to those discussed elsewhere in this document, could affect the future results
of the Company and could cause those results to differ materially from those
expressed in these forward looking statements; availability of and price of raw
materials, product pricing, competitive environment and related domestic and
international market conditions, operating efficiencies and actions of domestic
and foreign governments. Any changes in such factors could result in
significantly different results.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
4 - 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.
11 - Statement re Computation of Per Share Earnings.
27 - Financial Data Schedule.
(b) Reports on Form 8-K -
No Form 8-K was filed during the quarter ended November 30, 1996.
-13-
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LINDSAY MANUFACTURING CO.
Date: December 20, 1996 /s/ Bruce C. Karsk
--------------------------------------------------
Bruce C. Karsk
Vice President - Finance, Treasurer and Secretary;
Principal Financial and Accounting Officer
Date: December 20, 1996 /s/ Ralph J. Kroenke
---------------------
Ralph J. Kroenke
Controller
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<PAGE> 1
EXHIBIT 11
Lindsay Manufacturing Co.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
For the three months ended November 30, 1996 and 1995
(Dollars in thousands except per share amounts)
(Unaudited)
--------------------------------
<TABLE>
<CAPTION>
COMPUTATION OF PRIMARY PER SHARE EARNINGS Three Months Ended
--------------------------------
November November
1996 1995
-------- --------
<S> <C> <C>
1. Weighted average shares outstanding......................... 6,349,163 6,479,150
2. Net additional shares outstanding assuming
dilutive stock options exercised and
proceeds used to purchase treasury stock............... 378,233 267,757
--------- --------
3. Average number of common and common
equivalent shares outstanding.......................... 6,727,396 6,746,907
========= ========
4. Net earnings for per share computation.............. $ 4,809 $ 3,026
========= ========
5. Net earnings per average common and common
equivalent shares outstanding.................... $ 0.71 $ 0.45
========= ========
COMPUTATION OF FULLY DILUTED PER SHARE EARNINGS Three Months Ended
--------------------------------
November November
1996 1995
-------- --------
1. Weighted average shares outstanding....................... 6,349,163 6,479,150
2. Net additional shares outstanding assuming
dilutive stock options exercised and
proceeds used to purchase treasury stock............... 378,233 280,119
--------- ---------
3. Average number of common and common
equivalent shares outstanding.......................... 6,727,396 6,759,269
========= =========
4. Net earnings for per share computation.............. $ 4,809 $ 3,026
========= ========
5. Net earnings per average common and common
equivalent shares outstanding.................... $ 0.71 $ 0.45
========= =======
</TABLE>
-15-
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<S> <C>
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<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> NOV-30-1996
<CASH> 3,462
<SECURITIES> 19,319
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0
0
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<SALES> 39,467
<TOTAL-REVENUES> 39,467
<CGS> 30,003
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<INCOME-TAX> 2,264
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<EPS-PRIMARY> 0.71
<EPS-DILUTED> 0.71
</TABLE>
