<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 February 28, 1997 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 9,603,995
- ----------------------------- --------------------------------
Title of Class Outstanding as of March 18, 1997
Exhibit index is located on page 2.
Total number of pages 35.
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<PAGE> 2
LINDSAY MANUFACTURING CO. AND CONSOLIDATED SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
Part I - Financial Information
<S> <C>
Consolidated Balance Sheets, February 28, 1997 and
February 29, 1996 and August 31, 1996 3
Consolidated Statements of Operations for the three
months and six months ended February 28, 1997 and
February 29, 1996. 4
Consolidated Statements of Cash Flows for the six
months ended February 28, 1997 and February 29, 1996 5
Notes to Consolidated Financial Statements 6-8
Management's Discussion and Analysis of Results of
Operations and Financial Position 9-12
Part II - Other Information
Item 1. Legal Proceedings 13-14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit Index
3 (a) - Restated Certificate of Incorporation of 16-33
Lindsay Manufacturing Co. dated October 12, 1988
3 (b) - Certificate of Amendment of the Restated 34
Certificate of Incorporation of Lindsay
Manufacturing Co. dated February 7, 1997
11 - Statement re Computation of Per Share Earnings 35
</TABLE>
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<PAGE> 3
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Lindsay Manufacturing Co.
CONSOLIDATED BALANCE SHEETS
February 28, 1997 and February 29, 1996 and August 31, 1996
(in thousands, except share amounts)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited)
February February August
1997 1996 1996
----------- ------------ -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................... $ 2,141 $ 5,005 $ 2,362
Marketable securities....................................... 15,060 22,814 23,926
Receivables................................................. 33,671 25,297 20,128
Inventories................................................. 9,882 7,587 7,800
Deferred income taxes....................................... 3,426 2,893 3,369
Other current assets........................................ 659 2,154 270
----------- --------- ------------
Total current assets....................................... 64,839 65,750 57,855
Long-term marketable securities.............................. 29,341 22,048 28,146
Property, plant and equipment, net........................... 10,739 8,961 9,691
Other noncurrent assets...................................... 1,131 1,219 1,131
----------- --------- ------------
Total assets................................................. $ 106,050 $ 97,978 $ 96,823
=========== ========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade..................................... $ 7,453 $ 9,007 $ 5,915
Other current liabilities................................... 12,529 13,435 12,782
----------- --------- ------------
Total current liabilities.................................. 19,982 22,442 18,697
Other noncurrent liabilities................................. 1,198 1,270 1,292
----------- --------- ------------
Total liabilities............................................ 21,180 23,712 19,989
----------- --------- ------------
Contingencies
Stockholders' equity:
Preferred stock, ($1 par value, 2,000,000 shares
authorized, no shares issued and outstanding in
February 1997 and 1996 and August 1996)....................
Common stock, ($1 par value, 25,000,000 shares
authorized, 11,182,625, 7,314,513 and 7,327,961 shares
issued in February 1997 and 1996 and August 1996).......... 11,183 7,315 7,328
Capital in excess of stated value........................... 0 2,700 2,952
Retained earnings........................................... 98,151 80,414 88,002
Less treasury stock, (at cost, 1,578,630, 848,220 and 987,820
shares in February 1997 and 1996 and August 1996) (24,464) (16,163) (21,448)
----------- --------- ------------
Total stockholders' equity................................... 84,870 74,266 76,834
----------- --------- ------------
Total liabilities and stockholders' equity................... $ 106,050 $ 97,978 $ 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 and six months ended February 28, 1997
and February 29, 1996
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
--------------------------- ---------------------
February February February February
1997 1996 1997 1996
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating revenues.............................. $ 45,693 $ 38,140 $ 85,160 $ 65,466
Cost of operating revenues...................... 33,942 28,336 63,945 49,241
----------- ---------- --------- ---------
Gross profit.................................... 11,751 9,804 21,215 16,225
----------- ---------- --------- ---------
Operating expenses:
Selling expense................................ 1,266 1,106 2,299 2,061
General and administrative expense............. 1,989 1,829 3,745 3,305
Engineering and research expense............... 373 339 756 691
----------- ---------- --------- ---------
Total operating expenses........................ 3,628 3,274 6,800 6,057
----------- ---------- --------- ---------
Operating income................................ 8,123 6,530 14,415 10,168
Interest income, net............................ 674 708 1,448 1,372
Other income, net............................... 166 285 173 305
----------- ---------- --------- ---------
Earnings before income taxes.................... 8,963 7,523 16,036 11,845
Income tax provision............................ 2,867 2,258 5,131 3,554
----------- ---------- --------- ---------
Net earnings.................................... $ 6,096 $ 5,265 $ 10,905 $ 8,291
=========== ========== ========= =========
Net earnings per share:
Primary........................................ $ 0.61 $ 0.52 $ 1.08 $ 0.82
=========== ========== ========= =========
Fully diluted.................................. $ 0.61 $ 0.52 $ 1.08 $ 0.81
=========== ========== ========= =========
Cash dividends per share........................ $ 0.033 $ 0.033 $ 0.067 $ 0.033
=========== ========== ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 5
Lindsay Manufacturing Co.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended February 28, 1997 and February 29, 1996
(in thousands)
(Unaudited)
<TABLE>
- --------------------------------------------------------------------------------------------------------
February February
1997 1996
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings........................................................... $ 10,905 $ 8,291
Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:
Depreciation........................................................... 990 717
Amortization of marketable securities premiums, net.................... 123 167
(Gain) loss on sale of fixed assets.................................... (10) (14)
(Gain) on sale of marketable securities held-to-maturity............... (14) 0
(Gain) on sale of marketable securities available-for-sale............. 0 (8)
Provision for uncollectible accounts receivable........................ 30 16
Deferred income taxes.................................................. (57) (89)
Changes in assets and liabilities:
Receivables............................................................ (13,573) (14,960)
Inventories............................................................ (2,082) (2,203)
Other current assets................................................... (389) (263)
Accounts payable....................................................... 1,538 4,712
Other current liabilities.............................................. (1,085) 454
Current taxes payable.................................................. 832 1,021
Other noncurrent assets and liabilities................................ (94) (180)
----------- -----------
Net cash flows provided by (used in) operating activities.............. (2,886) (2,339)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment............................. (2,057) (2,537)
Proceeds from sale of property, plant and equipment.................... 29 37
Purchases of marketable securities held-to-maturity.................... (8,527) (1,211)
Proceeds from maturities of marketable securities held-to-maturity..... 16,089 5,460
Proceeds from sale of marketable securities available-for-sale......... 0 3,525
----------- -----------
Net cash flows provided by investing activities........................ 5,534 5,274
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock under stock option plan......... 787 762
Three-for-two stock split fractional shares paid in cash............... (2) (2)
Dividends paid......................................................... (638) 0
Purchases of treasury stock............................................ (3,016) (3,204)
----------- -----------
Net cash flows used in financing activities............................ (2,869) (2,444)
----------- -----------
Net increase (decrease) in cash and cash equivalents................... (221) 491
Cash and cash equivalents, beginning of period......................... 2,362 4,514
----------- -----------
Cash and cash equivalents, end of period............................... $ 2,141 $ 5,005
=========== ===========
Supplemental Cash Flow Information:
Income taxes paid...................................................... $ 4,391 $ 2,636
Interest paid.......................................................... $ 1 $ 1
Supplemental schedule of noncash financing activities:
Dividends payable...................................................... $ 0 $ 324
</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
February 28, 1997, 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 February 28, 1997. Investments in the held-to-maturity
category are included in Marketable securities ($15.1 million) and Long-term
marketable securities ($29.3 million). The total amortized cost, gross
unrealized holding gains, gross unrealized holding losses, and aggregate fair
value for held-to-maturity securities are $44.4 million, $0.2 million, $0.0
million, and $44.6 million, respectively. There have not been any sales of
held-to-maturity securities for the first six months of Fiscal 1997. In the
held-to-maturity category, $15.1 million in securities mature within one year
and $29.3 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)
-------------------------------------
February February August
1997 1996 1996
---------- ---------- ----------
<S> <C> <C> <C>
Total manufactured goods
First-in, first-out inventory $14,774 $11,219 $12,060
LIFO reserves (4,211) (2,987) (3,570)
Obsolescence reserve ( 681) ( 645) ( 690)
--------- -------- --------
Total inventories $ 9,882 $ 7,587 $ 7,800
========= ======== ========
</TABLE>
The estimated percentage distribution between major classes of inventory
before reserves is as follows:
<TABLE>
February February August
1997 1996 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)
-------------------------------------
February February August
1997 1996 1996
---------- ---------- ----------
<S> <C> <C> <C>
Land $ 70 $ 66 $ 70
Buildings 4,825 4,345 4,756
Equipment 22,553 19,614 22,563
Other 3,175 4,033 1,859
---------- ---------- ---------
30,623 28,058 29,248
Less accumulated depreciation 19,884 19,097 19,557
---------- ---------- ---------
Property, plant and equipment, net $10,739 $ 8,961 $ 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
reimbursed remediation costs. In December 1995 the court dismissed Lindsay's
suit against the insurer and entered a judgment in the amount of $2.4 million
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<PAGE> 8
Lindsay Manufacturing Co.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
5. Contingencies - Continued
in favor of the insurer for which the Company has not made a provision.
Lindsay is in the process of appealing the dismissal of it's case against
the insurer and the judgment against Lindsay. In the opinion of management, an
unfavorable outcome with respect to any or all of these matters will not result
in a material adverse effect on Lindsay's consolidated financial position,
results of operations or cash flows.
6. Net Earnings Per Share
Primary net earnings per share are calculated by dividing the earnings by the
weighted average number of common and common equivalent (stock options) shares
outstanding of 10,068,263 for the three months and 10,079,679 for the six
months ended February 28, 1997 as compared to 10,144,167 for the three months
and 10,132,515 for the six months ended February 29, 1996. The difference
between shares for primary and fully diluted earnings per share was not
significant in any period.
7. Stock Split
On February 7, 1997, the Board of Directors declared a three-for-two split of
Lindsay's common stock effective March 10, 1997, to stockholders of record on
March 3, 1997. Accordingly, the average number of shares outstanding, and per
share information have been adjusted to reflect the stock split.
-8-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following table provides highlights for the three month and
six month periods indicated of Fiscal Year 1997 as compared to
the same periods of Fiscal Year 1996.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ------------------------------
Percent Percent
Increase Increase
($ in thousands) 2/28/97 2/29/96 (Decrease) 2/28/97 2/29/96 (Decrease)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Consolidated
Operating Revenues ....................$45,693 $38,140 19.8% $85,160 $65,466 30.1%
Cost of Operating Revenues ............$33,942 $28,336 19.8 $63,945 $49,241 29.9
Gross Profit ..........................$11,751 $ 9,804 19.9 $21,215 $16,225 30.8
Gross Margin ........................... 25.7% 25.7% 24.9% 24.8%
Selling, Eng. & Research, and
G&A Expense ......................... $ 3,628 $ 3,274 10.8 $ 6,800 $ 6,057 12.3
Operating Income ......................$ 8,123 $ 6,530 24.4 $14,415 $10,168 41.8
Operating Margin ...................... 17.8% 17.1% 16.9% 15.5%
Interest Income, net ..................$ 674 $ 708 (4.8) $ 1,448 $ 1,372 5.5
Other Income, net .....................$ 166 $ 285 (41.8) $ 173 $ 305 (43.3)
Income Tax Provision ..................$ 2,867 $ 2,258 27.0 $ 5,131 $ 3,554 44.4
Effective Income Tax Rate ............. 32.0% 30.0% 32.0% 30.0%
Net Earnings...........................$ 6,096 $ 5,265 15.8% $ 10,905 $ 8,291 31.5%
</TABLE>
As the above table displays, operating revenues for the three month period ended
February 28, 1997 increased 19.8 percent ($7.6 million) from the
comparable period of the prior year. The increase in second quarter revenue was
the net result of a 21 percent ($6.0 million) increase in North American
irrigation equipment revenues and a 36 percent ($2.0 million) increase in
diversified manufacturing products and other revenues being partially offset by
a 10 percent ($0.4 million) decrease in export irrigation equipment revenues.
For the six month period ended February 28, 1997, operating revenues were up
30.1 percent ($19.7 million) from the comparable period of the prior year.
North American irrigation equipment and export irrigation equipment revenues
were each up 32 percent ($14.2 million and $2.8 million, respectively) as
compared to the prior year's comparative six month period. Diversified products
and other revenues for the six month period were up 22 percent ($2.6 million).
North American irrigation equipment revenues for both the three and six month
periods of fiscal 1997 were favorably impacted by the long term demand drivers
of continued farmer emphasis on conserving water, energy, and labor.
Additionally, strong 1996 farm income and creative fall and winter sales and
marketing programs favorably impacted North American activity for the three and
six month periods. Export irrigation equipment revenues for both the three and
six month periods of fiscal 1997 benefited from active Western European and
Latin American markets.
Diversified products and other revenues grew during both the three and six
month periods of fiscal 1997 due to increased sales of large diameter steel
tubing (which suffered from weak demand in fiscal 1996) and increased outsource
-9-
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Continued)
manufacturing revenues, in total, from Caterpillar Inc., Deere & Company, and
New Holland North American, Inc., as compared to the prior year's comparative
periods.
Gross margin for the three months ended February 28, 1997, as a percent of
operating revenues, was 25.7 percent - equal to that of the prior year's
comparative period. For the six months ended February 28, 1997, gross margin
as a percent of operating revenues was 24.9 percent as compared to 24.8 percent
for the six months ended February 29, 1996. Strong demand for irrigation
equipment in the North American market for both the three and six month periods
resulted in a continued favorable pricing environment. Additionally, raw
material costs were, in total, stable during both the three and six month
period of the current year. Significantly higher energy costs, however,
prevented growth in second quarter gross margins.
Selling, general and administrative, and engineering and research expenses for
the three month period ended February 28, 1997, were $3.6 million as
compared to $3.3 million during the prior year's comparative period. For the
six month period, fiscal 1997 selling, general and administrative, and
engineering and research expenses totaled $6.8 million as compared to $6.1
million in fiscal 1996. Higher wage, salary and benefit costs and increased
advertising expenditures, offset partially by lower professional fees and
telephone costs, comprise the majority of the increased expenses for both the
three and six month periods.
The effective tax rate for both the three month and six month periods ended
February 28, 1997 was 32.0 perent. This compares to an effective tax
rate of 30.0 percent for both the comparable three month and six month periods
of the prior year. Due to the federal income tax exempt status of interest
income from its municipal bond investments, the state economic development tax
credits, and the Foreign Sales Corporation federal tax provisions as they
relate to export sales, Lindsay benefits from an effective tax rate that is
lower than the combined federal and state statutory rates, currently estimated
at 37.5 percent.
FINANCIAL POSITION AND LIQUIDITY
The discussion of financial position and liquidity focuses on the balance sheet
and statement of cash flows. Lindsay requires cash for financing its
receivables, inventories, capital expenditures, stock repurchases and
dividends. Over the years, Lindsay has financed its growth through funds
provided by operations. Cash flows used in operations of $2.9 million for the
first six months of fiscal 1997 was comparable to $2.3 million for the first
six months of fiscal 1996. The decrease in cash flows from operating
activities for both periods is due primarily to increased receivables and
inventories partially offset by higher net earnings and decreased accounts
payable.
Receivables of $33.7 million at February 28, 1997 increased $13.5 million
from $20.1 million at August 31, 1996 and $8.4 million from $25.3 million at
February 29, 1996 due to the higher level of North American irrigation
equipment sales activity during February 1997 and marketing programs that
offered extended payment terms to our dealers and customers, primarily due to
short-term interest free financing offered by Lindsay. Inventories at February
-10-
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Continued)
28, 1997 totaled $9.9 million, higher than their $7.8 million balance at August
31, 1996 and $7.6 million balance at February 29, 1996. Inventory was
increased to adequately service the higher level of sales activity the Company
was projecting.
Current liabilities of $20.0 million at February 28, 1997 are higher than their
$18.7 million balance at August 31, 1996 but lower than their $22.4 million
balance at February 29, 1996. The increase from August 31, 1996 is principally
due to increased trade payables and a higher accrual for taxes payable
partially offset by lower accruals for international dealership payments and
payroll and vacation pay. The decrease from February 29, 1996 is primarily due
to decreased trade payables and lower accruals for taxes payable partially
offset by a higher accrual for international dealer prepayments.
Cash flows provided by investing activities of $5.5 million for the first six
months of fiscal 1997 was comparable to $5.3 million for the first six
months of fiscal 1996 and for both periods was primarily attributable to
proceeds from marketable securities, partially offset by purchases of
marketable securities and capital expenditures.
Lindsay's cash and short-term marketable securities totaled $17.2 million at
February 28, 1997, as compared to $26.3 million at August 31, 1996, and $27.8
million at February 29, 1996. At February 28, 1997, Lindsay had $29.3 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 an increase from $22.0 million at February 29,
1996.
Cash flows used in financing activities of $2.9 million for the first six
months of fiscal 1997 was comparable to $2.4 million for the first six
months of fiscal 1996 and for both periods was primarily attributable to
purchases of treasury stock partially offset by proceeds from the issuance of
common stock under the stock option plan. Additionally, during fiscal 1997
dividends were paid.
Lindsay's equity increased to $84.9 million at February 28, 1997 from $76.8
million at August 31, 1996, due to its net earnings of $10.9 million, less
$3.0 million used to repurchase 96,900 (split adjusted) shares of common stock
per Lindsay's previously announced stock repurchase plan, plus the proceeds of
$0.8 million from the issuance of 127,139 shares of common stock under
Lindsay's employee stock option plan, less dividends paid of $0.6 million.
Lindsay's equity at February 29, 1996 was $74.3 million.
Capital expenditures totaling $2.1 million for the first six months of 1997
were used primarily for upgrading manufacturing plant equipment. Lindsay
expects its Fiscal 1997 capital expenditures to be 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 repurchase of common stock.
-11-
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Continued)
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
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,
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 14 and 13 percent of Lindsay's operating revenues for the first
six months 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".
-12-
<PAGE> 13
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 February 28, 1997 and August
31, 1996.
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. 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.
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OTHER INFORMATION
(Continued)
Concerning Forward Looking Statements - This Report on Form 10-Q, 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 -
3(a) - Restated Certificate of Incorporation of Lindsay
Manufacturing Co. dated October 12, 1988.
3(b) - Certificate of Amendment of the Restated
Certificate of Incorporation of Lindsay Manufacturing
Co. dated February 7, 1997.
4 - Specimen Form of Common Stock Certificate to Exhibit 4 of
incorporated by reference 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 February 28, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LINDSAY MANUFACTURING CO.
Date: March 25, 1997 Bruce C. Karsk
------------------------------
Bruce C. Karsk
Vice President - Finance, Treasurer and Secretary;
Principal Financial and Accounting Officer
Date: March 25, 1997 Ralph J. Kroenke
------------------------------
Ralph J. Kroenke
Controller
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EXHIBIT 3(a)
RESTATED CERTIFICATE OF INCORPORATION
OF
LINDSAY MANUFACTURING CO.
(Original certificate filed January 18, 1974)
This Restated Ceritificate of Incorporation, which restates and
integrates and further amends the Certificate of Incorporation, has been duly
adopted in accordance with Sections 242 and 245 of the General Corporation Law
of the State of Delaware.
FIRST: The name of the Corporation is Lindsay Manufacturing Co.
SECOND: The address of the Corporation's registered office in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the Corporation's registered
agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation shall be to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is twelve million (12,000,000),
divided into two classes as follows: (i) two million (2,000,000) shares of the
par value of One Dollar ($1.00) each shall be Preferred Stock (hereinafter
referred to as "Preferred Stock") and (ii) ten million (10,000,000) shares of
the par value of One Dollar ($1.00) each shall be Common Stock (hereinafter
referred to as "Common Stock").
The designations, voting powers, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of the above classes of stock shall be as follows:
I.
PREFERRED STOCK
1. The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuances of shares of Preferred Stock in one
or more series with such designations, preferences and relative, participating,
optional or other special rights
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<PAGE> 2
and qualifications, limitations or restrictions thereof as shall be stated and
expressed in the resolution or resolutions providing for the issue thereof
adopted by the Board of Directors (a "Preferred Stock Designation"), and as are
not stated and expressed in this Restated Certificate of Incorporation (the
"Certificate of Incorporation") or any amendment thereto including, but not
limited to, determination of any of the following:
(a) the distinctive serial designation and the number of shares
constituting a series;
(b) the dividend rate or rates, whether dividends shall be cumulative
and, if so, from what date, the payment date or dates for dividends, and
the participating or other special rights, if any, with respect to
dividends;
(c) the voting powers, full or limited, if any, of the shares of such
series;
(d) whether the shares shall be redeemable and, if so, the price or
prices at which, and the terms and conditions on which, the shares may be
redeemed;
(e) the amount or amounts payable upon the shares in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation prior to any payment or distribution of the assets of the
Corporation to any class or classes, or to any series of any class or
classes, of stock of the Corporation ranking junior to the Preferred Stock;
(f) whether the shares shall be entitled to the benefit of a sinking
or retirement fund to be applied to the purchase or redemption of shares
of a series and, if so entitled, the amount of such fund and the manner of
its application, including the price or prices at which the shares may be
redeemed or purchased through the application of such fund;
(g) whether the shares shall be convertible into, or exchangeable for,
shares of any other class or classes or of any other series of the same or
any other class or classes of stock of the Corporation or any other
corporation, and if so convertible or exchangeable, the conversion price
or prices, or the rates of exchange, and the adjustments thereof, if any,
at which such conversion or exchange may be made, and any other terms and
conditions of such conversion or exchange; and
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<PAGE> 3
(h) any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors
may deem advisable and as shall not be inconsistent with the provisions of
this Certificate of Incorporation.
2. Shares of Preferred Stock which have been issued and reacquired in any
manner by the Corporation (excluding, until the Corporation elects to retire
them, shares which are held as treasury shares but including shares redeemed,
shares purchased and retired and shares which have been converted into shares
of Common Stock) shall have the status of authorized but unissued shares of
Preferred Stock and may be reissued.
II.
COMMON STOCK
1. Except as otherwise required by law or this Certificate of
Incorporation, each holder of shares of Common Stock shall have one (1) vote
for each share thereof standing registered in such holder's name on the books
of the Corporation on the date, if any, fixed for the purpose of determining
voting rights on all matters voted on by the stockholders.
2. Subject to the preferential rights of the Preferred Stock, the holders
of the Common Stock shall be entitled to receive, to the extent permitted by
law, such dividends as may be declared from time to time by the Board of
Directors.
3. In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets or winding up of the Corporation, after distribution in
full of the preferential amount to be distributed to the holders of shares of
the Preferred Stock, holders of the Common Stock shall be entitled to receive
all the remaining assets of the Corporation of whatever kind available for
distribution to stockholders, ratably in proportion to the number of shares of
Common Stock held by them respectively.
III.
OTHER PROVISIONS
1. Subject to the protective conditions and restrictions of any
outstanding Preferred Stock, any amendment to this Certificate of Incorporation
which shall in
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crease or decrease the authorized capital stock of any class or classes may be
adopted by the affirmative vote of the holders of a majority of the outstanding
shares of the voting stock of the Corporation.
2. In any case in which the vote of shares of a particular class is
required by law or this Certificate of Incorporation, every holder of shares
of such class shall have full voting rights with respect thereto, whether or
not such holder is also interested in the subject matter of the vote as a
holder of shares.
3. No holder of the shares of stock of any class of this Corporation shall
hereafter have any preemptive right to purchase or subscribe to any additional
share of stock of any class or any security of this Corporation, whether now
or hereafter authorized or issued. All such securities may be issued and
disposed of by the Board of Directors to such recipients thereof for such
lawful considerations, and on such terms, as the Board of Directors, in its
discretion may determine, without first offering the same, or any part thereof,
to the holders of shares of stock of any class of this Corporation.
FIFTH: A. Number, Election and Terms of Directors. Subject to the rights of
the holders of any series of Preferred Stock to elect additional directors
under specified circumstances, the number of directors shall be fixed from time
to time exclusively by the Board of Directors pursuant to a resolution adopted
by a majority of the Whole Board (as defined in Article EIGHTH). The
directors, other than those who may be elected by the holders of any series of
Preferred Stock under specified circumstances, shall be divided, with respect
to the time for which they severally hold office, into three classes whose size
shall be as nearly equal as possible, with the term of office of the first
class to expire at the 1988 annual meeting of stockholders, the term of office
of the second class to expire at the 1989 annual meeting of stockholders and
the term of office of the third class to expire at the 1990 annual meeting of
stockholders, with each director to hold office until his or her successor
shall have been duly elected and qualified. At each annual meeting of
stockholders, commencing with the 1988 annual meeting, (i) directors elected
to succeed those directors whose terms then expire shall be elected for a term
of office to expire at the third succeeding annual meeting of stockholders
after their election, with each director to hold office until his or her
successor shall have been duly elected and qualified and (ii), if authorized by
a resolution of the Board of Directors, directors may be
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<PAGE> 5
elected by the stockholders to fill any vacancy on the Board of Directors,
regardless of how such vacancy was created.
B. Stockholder Nomination of Director Candidates and Introduction of
Business. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in
the By-Laws of the Corporation.
C. Newly Created Directorships and Vacancies. Subject to the rights of
the holders of any series of Preferred Stock, and unless the Board of Directors
otherwise determines, newly created directorships resulting from expansion of
the size of the Board, death, resignation, retirement, disqualification,
removal from office or other cause may be filled by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which such new director shall have
been elected expires and until such director's successor shall have been duly
elected and qualified. No decrease in the number of authorized directors
constituting the entire Board of Directors shall shorten the term of any
incumbent director.
D. Removal. Subject to the rights of the holders of any series of
Preferred Stock, any director, or the entire Board of Directors, may be removed
from office at any time, but only for cause and only by the affirmative vote of
the holders of at least sixty-six and two thirds percent (66-2/3%) of the
voting power of all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors (the
"Voting Stock"), voting together as a single class.
E. Amendment, Repeal or Alteration. Notwithstanding any other
provisions of this Certificate of Incorporation or any provision of law which
might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the
capital stock of the Corporation required by law, this Certificate of
Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least sixty-six and two thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the Voting Stock, voting
together as a single class, shall be required to alter, amend or repeal this
Article FIFTH.
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<PAGE> 6
SIXTH: In furtherance and not in limitation of the powers conferred by
law, the Board of Directors is expressly authorized to make, alter, amend and
repeal the By-Laws of the Corporation, subject to the power of the holders of
the capital stock of the Corporation to alter, amend and repeal the By-Laws;
provided, however, that, with respect to the powers of holders of capital stock
to alter, amend and repeal By-Laws of the Corporation, notwithstanding any
other provision of this Certificate of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the
capital stock of the Corporation required by law, this Certificate of
Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least sixty-six and two thirds (66-2/3%) of the voting power of
all the then-outstanding shares of the Voting Stock, voting together as a
single class, shall be required to (i) alter, amend or repeal any provision of
the By-Laws or (ii) alter, amend or repeal any provisions of this proviso to
this Article SIXTH.
SEVENTH: Subject to the rights of the holders of any series of Preferred
Stock, (A) any action required or permitted to be taken by the stockholders of
the Corporation must be effected at an annual or special meeting of
stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders and (B) special meetings of stockholders of the
Corporation may be called only by the Board of Directors pursuant to a
resolution adopted by a majority of the Whole Board. Notwithstanding any other
provisions of this Certificate of Incorporation or any provision of law which
might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the
capital stock of the Corporation required by law, this Certificate of
Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least sixty-six and two thirds (66-2/3%) of the voting power of
all of the then-outstanding shares of the Voting Stock, voting together as a
single class, shall be required to alter, amend or repeal this Article SEVENTH.
EIGHTH: A. (1) In addition to any affirmative vote required by law, by
this Certificate of Incorporation or by any Preferred Stock Designation, and
except as otherwise expressly provided in Section B of this Article EIGHTH:
(i) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined)
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with (a) any Interested Stockholder (as hereinafter defined) or (b) any
other corporation (whether or not itself an Interested Stockholder) which
is, or after such merger or consolidation would be, an Affiliate (as
hereinafter defined) of any Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder or any Affiliate of any Interested Stockholder of
any assets of the Corporation or any Subsidiary having an aggregate
Fair Market Value (as hereinafter defined) of $200,000 or more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate Fair Market
Value (as hereinafter defined) of $200,000 more ; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate of any Interested Stockholder; or
(v) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving any
Interested Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or any Subsidiary
which is Beneficially Owned (as hereinafter defined) by any Interested
Stockholder or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least sixty-six and two
thirds percent (66-2/3%) of the voting power of all of the then-outstanding
shares of the Voting Stock, voting together as a single class. Such
affirmative vote shall be required notwithstanding any other provisions of this
Certificate of Incorporation or any provision of law or of any agreement with
any national quotation system or national securities exchange or otherwise
which might otherwise permit a lesser vote or no vote.
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(2) The term "Business Combination" as used in this Article EIGHTH shall
mean any transaction which is referred to in any one or more of subparagraphs
(i) through (v) of paragraph (1) of this Section A.
(B) The provisions of Section A of this Article EIGHTH shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law, any
other provision of this Certificate of Incorporation and any Preferred Stock
Designation, if, in the case of a Business Combination that does not involve
any cash or other consideration being received by the stockholders of the
Corporation, solely in their respective capacities as stockholders of the
Corporation, the condition specified in the following paragraph (1) is met or,
in the case of any other Business Combination that does involve consideration
being received by the stockholders of the Corporation, solely in their
respective capacities as stockholders of the Corporation, the conditions
specified in either of the following paragraph (1) or paragraph (2) are met:
(1) The Business Combination shall have been approved by a majority of
the Continuing Directors (as hereinafter defined); provided however, that this
condition shall not be capable of satisfaction unless there are at least three
Continuing Directors.
(2) All of the following conditions shall have been met:
(i) The consideration to be received by holders of shares of a
particular class (or series) of outstanding capital stock (including Common
Stock and other than Excluded Preferred Stock (as hereinafter defined))
shall be in cash or in the same form as the Interested Stockholder or any
of its Affiliates has previously paid for shares of such class (or series)
of capital stock. If the Interested Stockholder or any of its Affiliates
have paid for shares of any class (or series) of capital stock with varying
forms of consideration, the form of consideration to be received per
share by holders of shares of such class (or series) of capital stock shall
be either cash or the form used to acquire the largest number of shares of
such class (or series) of capital stock previously acquired by the
Interested Stockholder.
(ii) The aggregate amount of (x) the cash and (y) the Fair Market
Value (as hereinafter defined), as of
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the date (the "Consummation Date") of the consummation of the Business
Combination, of the consideration other than cash to be received per share
by holders of Common Stock in such Business Combination shall be at least
equal to the higher of the following (in each case appropriately adjusted
in the event of any stock dividend, stock split, combination of shares or
similar event):
(a) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder or any of its Affiliates for any shares of
Common Stock acquired by them within the two-year period immediately
prior to the date of the first public announcement of the proposal of
the Business Combination (the "Announcement Date") or in any
transaction in which the Interested Stockholder became an Interested
Stockholder, whichever is higher, plus interest compounded annually
from the first date on which the Interested Stockholder became an
Interested Stockholder (the "Determination Date") through the
Consummation Date at the publicly announced base rate of interest of
such major bank headquartered in the City of Chicago as may be
selected by the Continuing Directors from time to time in effect in
the City of Chicago, less the aggregate amount of any cash
dividends paid, and the Fair Market Value of any dividends paid in
other than cash, on each share of Common Stock from the Determination
Date through the Consummation Date in any amount up to but not
exceeding the amount of interest so payable per share of Common Stock;
and
(b) the Fair Market Value per share of Common Stock on the
Announcement Date or the Determination Date, whichever is higher.
(iii) The aggregate amount of (x) the cash and (y) the Fair Market
Value, as of the Consummation Date, of the consideration other than cash to
be received per share by holders of shares of any class (or series), other
than Common Stock or Excluded Preferred Stock, of outstanding capital stock
shall be at least equal to the highest of the following (in each case
appropriately adjusted in the event of any stock dividend, stock split,
combination of shares or similar event), it being intended that the
requirements of this paragraph (2)(iii) shall be required to be met
with respect to every such class (or series) of outstanding
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<PAGE> 10
capital stock whether or not the Interested Stockholder or any of its
Affiliates has previously acquired any shares of a particular class (or
series) of capital stock:
(a) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder or any of its Affiliates for any shares of such
class (or series) of capital stock acquired by them within the
two-year period immediately prior to the Announcement Date or in any
transaction in which it became an Interested Stockholder, whichever is
higher, plus interest compounded annually from the Determination Date
through the Consummation Date at the publicly announced base rate of
interest of such major bank headquartered in the City of Chicago as
may be selected by the Continuing Director from time to time in effect
in the City of Chicago, less the aggregate amount of any cash
dividends paid, and the Fair Market Value of any dividends paid in
other than cash, on each share of such class (or series) of capital
stock from the Determination Date through the Consummation Date in an
amount up to but not exceeding the amount of interest so payable per
share of such class (or series) of capital stock;
(b) the Fair Market Value per share of such class (or series) of
capital stock on the Announcement Date or on the Determination Date,
whichever is higher; and
(c) the highest preferential amount per share, if any, to which
the holders of shares of such class (or series) of capital stock would
be entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
(iv) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (a)
except as approved by a majority of the Continuing Directors, there shall
have been no failure to declare and pay at the regular date therefor any
full quarterly dividends (whether or not cumulative) on any outstanding
Preferred Stock; (b) there shall have been (I) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary to reflect
any subdivision of the Common
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Stock), except as approved by a majority of the Continuing Directors, and
(II) an increase in such annual rate of dividends as necessary to reflect
any reclassification (including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of reducing
the number of outstanding shares of the Common Stock, unless the failure so
to increase such annual rate is approved by a majority of the Continuing
Directors; and (c) neither such Interested Stockholder nor any of its
Affiliates shall have become the beneficial owner of any additional shares
of Voting Stock except as part of the transaction which results in such
Interested Stockholder becoming an Interested Stockholder; provided,
however, that no approval by Continuing Directors shall satisfy the
requirements of this subparagraph (iv) unless at the time of such approval
there are at least three Continuing Directors.
(v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder and any of its Affiliates shall
not have received the benefit, directly or indirectly (except
proportionately, solely in such Interested Stockholder's or Affiliate's
capacity as a stockholder of the Corporation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or
other tax advantages provided by the Corporation, whether in anticipation
of or in connection with such Business Combination or otherwise.
(iv) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(or any subsequent provisions replacing such Act, rules or regulations)
shall be mailed to all stockholders of the Corporation at least 30 days
prior to the consummation of such Business Combination (whether or
not such proxy or information statement is required to be mailed pursuant
to such Act or subsequent provisions).
(vii) Such Interested Stockholder shall have supplied the Corporation
with such information as shall have been requested pursuant to Section E of
this Article EIGHTH within the time period set forth therein.
C. For the purposes of this Article EIGHTH:
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<PAGE> 12
(1) A "person" means any individual, limited partnership, general
partnership, corporation or other firm or entity.
(2) "Interested Stockholder" means any person (other than the Corporation
or any Subsidiary) who or which:
(i) is the beneficial owner (as hereinafter defined), directly or
indirectly, of ten percent or more of the voting power of the outstanding
Voting Stock; or
(ii) is an Affiliate or an Associate of the Corporation and at any
time within the two-year period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of ten percent or
more of the voting power of the then-outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in the
course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended.
Notwithstanding the foregoing, an "Interested Stockholder" shall not
include (a) DEKALB Energy Company if DEKALB Energy Company is the beneficial
owner, directly or indirectly, of ten percent or more of the voting power of
the outstanding Voting Stock on the date that the Corporation first has more
than 100 stockholders or (b) any transferee of all or substantially all of the
Voting Stock of the Corporation beneficially owned by such DEKALB Energy
Company on such date, if such transferee would otherwise be an "Interested
Stockholder" solely by virtue of owning such transferred Voting Stock.
(3) A person shall be a "beneficial owner" of, or shall "Beneficially
Own," any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as in
effect on August 31, 1988; or
(ii) which such person or any of its Affiliates or Associates has
(a) the right to acquire (whether such right is exercisable immediately or
only after the
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passage of time), pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) the right to vote pursuant to any agreement,
arrangement or understanding (but neither such person nor any such
Affiliate or Associate shall be deemed to be the beneficial owner of any
shares of Voting Stock solely by reason of a revocable proxy granted for a
particular meeting of stockholders, pursuant to a public solicitation of
proxies for such meeting, and with respect to which shares neither such
person nor any such Affiliate or Associate is otherwise deemed the
beneficial owner); or
(iii) which are beneficially owned, directly or indirectly, within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as in
effect on August 31, 1988, by any other person with which such person or
any of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting (other than
solely by reason of a revocable proxy as described in subparagraph (ii) of
this paragraph (3)) or disposing of any shares of Voting Stock;
provided, however, that in the case of any employee stock ownership or
similar plan of the Corporation or of any Subsidiary in which the beneficiaries
thereof possess the right to vote any shares of Voting Stock held by such plan,
no such plan nor any trustee with respect thereto (or any Affiliate of such
trustee), solely by reason of such capacity of such trustee, shall be deemed,
for any purposes hereof, to beneficially own any shares of Voting Stock held
under any such plan.
(4) For the purposes of determining whether a person is an Interested
Stockholder pursuant to paragraph (2) of this Section C, the number of shares
of Voting Stock deemed to be outstanding shall include shares deemed owned
through application of paragraph (3) of this Section C but shall not include
any other unissued shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on August 31, 1988.
(6) "Subsidiary" means any corporation, limited partnership, general
partnership or other firm or entity of
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<PAGE> 14
which a majority of any class of equity security or other equity interest
is owned, directly or indirectly, by the Corporation; provided, however, that
for the purposes of the definition of Interested Stockholder set forth in
paragraph (2) of this Section C, the term "Subsidiary" shall mean only a
corporation, limited partnership, general partnership or other firm or entity
of which a majority of each class of equity security or other equity interest
is owned, directly or indirectly, by the Corporation.
(7) "Continuing Director" means any member of the Board of Directors of
the Corporation who is unaffiliated with the Interested Stockholder and was a
member of the Board of Directors of the Corporation prior to the time that the
Interested Stockholder became an Interested Stockholder, and any director who
is thereafter chosen to fill any vacancy on the Board of Directors or who is
elected and who, in either event, is unaffiliated with the Interested
Stockholder and in connection with his or her initial assumption of office is
recommended for appointment or election by a majority of Continuing Directors
then on the Board of Directors.
(8) "Fair Market Value" means: (i) in the case of stock, the highest
closing bid quotation with respect to a share of such stock during the 30-day
period preceding the date in question on the National Association of
Securities Dealers, Inc. Automated Quotation System or any system then in use,
or if no such quotations are available, the highest closing sale price during
the 30-day period immediately preceding the date in question of a share of such
stock on the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the fair market value on the date in
question of a share of such stock as determined by the Board of Directors of
the Corporation; and (ii) in the case of property other than cash or stock,
the fair market value of such property on the date in question as determined by
the Board of Directors of the Corporation in accordance with Section D of this
Article EIGHTH.
(9) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as used
in paragraphs (2)(ii) and (2)(iii) of Section B of this Article EIGHTH shall
include the shares of Common Stock and/or the shares of any other class (or
series) of outstanding capital stock of the Corporation retained by the holders
of such shares.
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<PAGE> 15
(10) "Whole Board" means the total number of directors which this
Corporation would have if there were no vacancies.
(11) "Excluded Preferred Stock" means any series of Preferred Stock with
respect to which the Preferred Stock Designation creating such series
expressly provides that the provisions of this Article EIGHTH shall not apply.
D. A majority of the Whole Board, but only if a majority of the Whole
Board shall then consist of Continuing Directors or, if a majority of the Whole
Board shall not then consist of Continuing Directors, a majority of the then
Continuing Directors, shall have the power and duty to determine, on the basis
of information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Article EIGHTH, including, without limitation,
(i) whether a person is an Interested Stockholder, (ii) the number of shares of
Voting Stock beneficially owned by any person, (iii) whether a person is an
Affiliate or Associate of another, (iv) whether the applicable conditions set
forth in paragraph (2) of Section B have been met with respect to any Business
Combination, and (v) the Fair Market Value of stock or other property in
accordance with paragraph (8) of Section C of this Article EIGHTH.
E. A majority of the Whole Board shall have the right to demand, but
only if a majority of the Whole Board shall then consist of Continuing
Directors, or, if a majority of the Whole Board shall not then consist of
Continuing Directors, a majority of the then Continuing Directors shall have
the right to demand that any person who it is reasonably believed is an
Interested Stockholder (or holds of record shares of Voting Stock Beneficially
Owned by any Interested Stockholder) supply this Corporation with complete
information as to (i) the record owner(s) of all shares Beneficially Owned by
such person who it is reasonably believed is an Interested Stockholder, (ii)
the number of, and class or series of, shares Beneficially Owned by such person
who it is reasonably believed is an Interested Stockholder and held of record
by each such record owner and the number(s) of the stock certificate(s)
evidencing such shares, and (iii) any other factual matter relating to the
applicability or effect of this Article EIGHTH, as may be reasonably requested
of such person, and such person shall furnish such information within 10 days
after receipt of such demand.
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<PAGE> 16
F. Nothing contained in this Article EIGHTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
G. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser
vote or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this
Certificate of Incorporation or any Preferred Stock Designation, the
affirmative vote of the holders of at least sixty-six and two thirds (66-2/3%)
of the voting power of all of the then-outstanding shares of the Voting Stock,
voting together as a single class, shall be required to alter, amend or repeal
this Article EIGHTH.
NINTH: A. A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty by such person as a director; provided that the provisions of
this Article Ninth should not eliminate or limit the liability of a director,
(i) for any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the General Corporation Law of the State of Delaware or (iv) for any
transaction from which the director derived an improper personal benefit. If
the General Corporation Law of the State of Delaware is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended. No amendment to
(which amendment would have the effect of increasing the liability or alleged
liability of any director of the corporation) or repeal of this Section A shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any act or omission of such
director occurring prior to such amendment or repeal.
B. (1) The Corporation may indemnify any person (A) to the fullest
extent permitted by law; including indemnification under statutory and case law
or (B) pursuant to agreements or contracts with such person.
(2) The Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
Corporation, or
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<PAGE> 17
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him against such
liability under the provisions of the General Corporation Law of the State of
Delaware.
TENTH: The Board of Directors of the Corporation, in determining what
action it shall take or recommend with respect to any offer or proposal of
another person or entity to (a) make a tender, exchange or similar offer for
any equity security of the Corporation, (b) merge or consolidate the
Corporation with another corporation, (c) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation, or (d)
otherwise gain control of the Corporation, shall, in the exercise of its
judgment in determining what is in the best interest of the Corporation and
its stockholders, consider all relevant factors including, without limitation,
the following: (i) the social, legal and economic effect of the offer or
proposal on the employees, dealers, distributors, customers, suppliers and
others doing business with or otherwise affected by the Corporation and its
subsidiaries and on the communities in which the Corporation and its
subsidiaries carry on their business activities; (ii) the consideration being
proposed in the offer or proposal in relation to (A) the then current market
price of the Corporation's equity securities, (B) the future value of the
Corporation as an independent corporation and (C) the then current value of the
Corporation in a freely negotiated transaction; the judgment of the Board of
Directors in making the determination in this subsection (ii) may be based in
part on economic and market conditions, business prospects, internal or
independent studies and such other economic factors and information as the
directors shall in good faith deem relevant; and (iii) relevant aspects of
other acquisitions made by such person or entity and their course of dealing
with acquired businesses including the effect thereof on the business and
reputation of the acquired businesses and their products and the effect of such
acquisitions on employees and other persons affected by the acquired businesses
and on the communities in which such acquired businesses carry on their
business activities.
ELEVENTH: The Corporation reserves the right to amend, change or repeal
any provision contained in this Certificate of Incorporation, and any other
provisions
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<PAGE> 18
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter provided herein or by
statute, except to the extent otherwise provided herein, and all rights,
preferences and privileges of whatsoever nature conferred upon stockholders,
directors or any other persons whomsoever by and pursuant to this
Certificate of Incorporation in its present form or as amended are granted
subject to the rights reserved in this Article ELEVENTH.
IN WITNESS WHEREOF, Lindsay Manufacturing Co. has caused its corporate
seal to be affixed and this Restated Certificate of Incorporation to be filed
by Gary D. Parker, its President, and attested by Bruce C. Karsk, its
Secretary, this 12th day of October, 1988.
LINDSAY MANUFACTURING CO.
By: Gary D. Parker
---------------------------
[SEAL] Gary D. Parker, President
and Chief Executive Officer
Attest:
Bruce C. Karsk
- -------------------------
Bruce C. Karsk, Secretary
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<PAGE> 1
EXHIBIT 3(b) CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
LINDSAY MANUFACTURING CO.
The undersigned, the President and the Secretary of Lindsay Manufacturing
Co., (the "Corporation"), a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DO HEREBY
CERTIFY:
FIRST: That the Directors of the Corporation have adopted and presented
to the shareholders entitled to vote thereon the following resolution setting
forth a proposed amendment to the Restated Certificate of Incorporation of the
Corporation:
RESOLVED, That it is advisable and proposed that the authorized
capital stock of Lindsay Manufacturing Co. (the "Corporation") be increased
from 12,000,000 shares to 27,000,000 shares, consisting of 2,000,000 shares
of preferred stock, $1.00 par value per share and 25,000,000 shares of
common stock, $1.00 par value per share and that the existing Restated
Certificate of Incorporation of Lindsay Manufacturing Co., (the "
Corporation"), as amended and restated (the "Restated Certificate"), be
amended to reflect such increase by revoking the existing fourth paragraph
of the Restated Certificate and by replacing it with the following:
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is twenty-seven million
(27,000,000), divided into two classes as follows: (i) two million
(2,000,000) shares of the par value of One Dollar ($1.00) each shall
be Preferred Stock (herein- after referred to as "Preferred Stock"),
and (ii) twenty-five million (25,000,000) shares of the par value of
One dollar ($1.00) each shall be Common Stock (hereinafter referred to
as "Common Stock").
SECOND: That said amendment was duly adopted by the holders of at least a
majority of the outstanding stock of the Corporation entitled to vote thereon
in accordance with the applicable provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, President and Secretary of the
Corporation, hereby further certify that the facts hereinabove stated are true
and that the execution hereof is their voluntary act and deed and the voluntary
act and deed of said Corporation, under penalties of perjury.
Dated this 7th day of February, 1997.
LINDSAY MANUFACTURING CO.
(SEAL)
By Gary D. Parker
-------------------------
Gary D. Parker, President
Attest:
By Bruce C. Karsk
------------------------------
Bruce C. Karsk, Secretary
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<PAGE> 1
EXHIBIT 11
Lindsay Manufacturing Co.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
For the three months and six months ended February 28, 1997
and February 29, 1996
(Dollars in thousands except per share amounts)
(Unaudited)
-----------------------------------------
COMPUTATION OF PRIMARY PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------------- ------------------------------
February February February February
1997 1996 1997 1996
----------------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
1. Weighted average shares outstanding....... 9,545,840 9,674,121 9,534,792 9,696,423
2. Net additional shares outstanding assuming
dilutive stock options exercised and
proceeds used to purchase treasury stock 522,423 470,546 544,887 436,092
------------- ------------ ------------ -----------
3. Average number of common and common
equivalent shares outstanding........... 10,068,263 10,144,667 10,079,679 10,132,515
============= ============ ============ ===========
4. Net earnings for per share computation.... $ 6,096 $ 5,265 $ 10,905 $ 8,291
============= ============ ============ ===========
5. Net earnings per average common and common
equivalent shares outstanding........... $ 0.61 $ 0.52 $ 1.08 $ 0.82
============= ============ ============ ===========
COMPUTATION OF FULLY DILUTED PER SHARE EARNINGS
<CAPTION>
Three Months Ended Six Months Ended
----------------------------------- ------------------------------
February February February February
1997 1996 1997 1996
----------------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
1. Weighted average shares outstanding....... 9,545,840 9,674,121 9,534,792 9,696,423
2. Net additional shares outstanding assuming
dilutive stock options exercised and
proceeds used to purchase treasury stock 522,423 522,214 544,887 522,214
------------- ------------ ------------ -----------
3. Average number of common and common
equivalent shares outstanding........... 10,068,263 10,196,335 10,079,679 10,218,637
============= ============ ============ ===========
4. Net earnings for per share computation.... $ 6,096 $ 5,265 $ 10,905 $ 8,291
============= ============ ============ ===========
5. Net earnings per average common and common
equivalent shares outstanding........... $ 0.61 $ 0.52 $ 1.08 $ 0.81
============= ============ ============ ===========
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 2,141
<SECURITIES> 15,060
<RECEIVABLES> 33,671
<ALLOWANCES> 0
<INVENTORY> 9,882
<CURRENT-ASSETS> 64,839
<PP&E> 30,623
<DEPRECIATION> 19,884
<TOTAL-ASSETS> 106,050
<CURRENT-LIABILITIES> 19,982
<BONDS> 0
0
0
<COMMON> 11,183
<OTHER-SE> 73,687
<TOTAL-LIABILITY-AND-EQUITY> 106,050
<SALES> 85,160
<TOTAL-REVENUES> 85,160
<CGS> 63,945
<TOTAL-COSTS> 63,945
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 16,036
<INCOME-TAX> 5,131
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,905
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.08
</TABLE>
