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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, 2000 OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-17116
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Lindsay Manufacturing Co.
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(Exact name of registrant as specified in its charter)
DELAWARE 47-0554096
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2707 NORTH 108TH STREET, SUITE 102, OMAHA, NEBRASKA 68164
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(Address of principal executive offices) (Zip Code)
402-428-2131
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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|_|
At January 4, 2001, 11,698,762 shares of common stock, $1.00 par value, of the
registrant were outstanding.
Total number of pages 13.
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LINDSAY MANUFACTURING CO. AND CONSOLIDATED SUBSIDIARIES
INDEX FORM 10-Q
Page No.
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Balance Sheets, November 30, 2000 and 1999
and August 31, 2000 3
Consolidated Statements of Operations for the three
months ended November 30, 2000 and 1999 4
Consolidated Statements of Cash Flows for the three
months ended November 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6-8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION 9-11
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 11
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 12
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
LINDSAY MANUFACTURING CO.
CONSOLIDATED BALANCE SHEETS
NOVEMBER 30, 2000 AND 1999 AND AUGUST 31, 2000
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
NOVEMBER NOVEMBER AUGUST
($ IN THOUSANDS, EXCEPT PAR VALUES) 2000 1999 2000
----------------------------------- ---- ---- ----
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ...................................... $ 1,504 $ 9,515 $ 3,105
Marketable securities .......................................... 16,697 22,700 22,894
Receivables .................................................... 28,191 15,982 17,589
Inventories .................................................... 12,090 8,731 11,335
Deferred income taxes .......................................... 2,593 3,655 3,106
Other current assets ........................................... 715 796 164
--------- --------- ---------
Total current assets ........................................ 61,790 61,379 58,193
Long-term marketable securities ................................ 19,275 24,473 19,780
Property, plant and equipment, net ............................. 15,953 15,673 15,938
Other noncurrent assets ........................................ 1,915 837 1,905
--------- --------- ---------
Total assets ...................................................... $ 98,933 $ 102,362 $ 95,816
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade ........................................ $ 5,404 4,472 $ 4,556
Other current liabilities ...................................... 12,604 13,182 11,914
Current portion of capital lease obligation .................... 0 55 0
--------- --------- ---------
Total current liabilities ................................... 18,008 17,709 16,470
Other noncurrent liabilities ................................... 1,657 1,025 1,914
--------- --------- ---------
Total liabilities ................................................. 19,665 18,734 18,384
--------- --------- ---------
Commitments and Contingencies
Shareholders' equity:
Preferred stock, ($1 par value, 2,000,000 shares
authorized, no shares issued and outstanding
in November 2000 and 1999 and August 2000)
Common stock, ($1 par value, 25,000,000 shares authorized,
17,310,888, 17,058,851 and 17,310,197 shares
issued in November 2000 and 1999 and August 2000) ........... 17,311 17,059 17,310
Capital in excess of stated value .............................. 1,918 1,795 2,211
Retained earnings .............................................. 148,344 135,976 146,216
Less treasury stock, at cost, 5,615,269, 4,650,237 and 5,615,269
shares in November 2000 and 1999 and August 2000 ............ (88,002) (71,202) (88,002)
Accumulated other comprehensive income ......................... (303) 0 (303)
--------- --------- ---------
Total shareholders' equity ..................................... 79,268 83,628 77,432
--------- --------- ---------
Total liabilities and shareholders' equity ..................... $ 98,933 $ 102,362 $ 95,816
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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LINDSAY MANUFACTURING CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2000 AND 1999
(UNAUDITED)
NOVEMBER NOVEMBER
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2000 1999
---------------------------------------- ---- ----
Operating revenues ................................ $ 33,956 $ 24,503
Cost of operating revenues ........................ 26,228 18,763
-------- --------
Gross profit ...................................... 7,728 5,740
-------- --------
Operating expenses:
Selling expense ................................ 1,673 1,361
General and administrative expense ............. 2,341 2,229
Engineering and research expense ............... 557 472
-------- --------
Total operating expenses .......................... 4,571 4,062
-------- --------
Operating income .................................. 3,157 1,678
Interest income, net .............................. 521 719
Other (expense) income, net ....................... (2) 36
-------- --------
Earnings before income taxes ...................... 3,676 2,433
Income tax provision .............................. 1,140 730
-------- --------
Net earnings ...................................... $ 2,536 $ 1,703
======== ========
Basic net earnings per share ...................... $ 0.22 $ 0.14
======== ========
Diluted net earnings per share .................... $ 0.21 $ 0.13
======== ========
Average shares outstanding ........................ 11,688 12,421
Diluted effect of stock options ................... 286 426
-------- --------
Average shares outstanding assuming dilution ...... 11,974 12,847
======== ========
Cash dividends per share .......................... $ 0.035 $ 0.035
======== ========
The accompanying notes are an integral part of the financial statements.
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LINDSAY MANUFACTURING CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2000 AND 1999
(UNAUDITIED)
<TABLE>
<CAPTION>
NOVEMBER NOVEMBER
($ IN THOUSANDS) 2000 1999
---------------- ---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings ..................................................... $ 2,536 $ 1,703
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization ................................. 805 713
Amortization of marketable securities premiums, net ........... (70) 24
(Gain) on sale of fixed assets ................................ 0 (47)
Loss on maturities of marketable securities
held-to-maturity ........................................... 0 8
Provision for uncollectible accounts receivable ............... 53 (276)
Deferred income taxes ......................................... 513 148
Changes in assets and liabilities:
Receivables ................................................... (10,655) (2,797)
Inventories ................................................... (755) (1,072)
Other current assets .......................................... (551) (711)
Accounts payable .............................................. 848 391
Other current liabilities ..................................... (67) (72)
Current taxes payable ......................................... 757 674
Other noncurrent assets and liabilities ....................... (267) 73
-------- --------
Net cash used in operating activities ......................... (6,853) (1,241)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment ....................... (820) (970)
Proceeds from sale of property, plant and equipment .............. 0 47
Purchases of marketable securities held-to-maturity .............. (883) (5,480)
Proceeds from maturities of marketable securities held-to-maturity 7,655 3,740
-------- --------
Net cash provided by (used in) investing activities .............. 5,952 (2,663)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under capital lease obligation ................ 0 (40)
(Repurchases and cancellations) proceeds from issuance of common
stock under stock option plan, net ............................ (292) (338)
Dividends paid ................................................... (408) (435)
-------- --------
Net cash used in financing activities ............................ (700) (813)
-------- --------
Net decrease in cash and cash equivalents ........................ (1,601) (4,717)
Cash and cash equivalents, beginning of period ................... 3,105 14,232
-------- --------
Cash and cash equivalents, end of period ......................... $ 1,504 $ 9,515
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid ................................................ $ (63) $ (23)
Interest paid .................................................... $ 6 $ 1
</TABLE>
The accompanying notes are an integral part of the financial statements.
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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, 2000 Annual Report to Shareholders.
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, 2000, Lindsay's cash equivalents were held primarily by one financial
institution. Marketable securities and long-term marketable securities are
categorized as held-to-maturity. Investments in the held-to-maturity category
are carried at amortized cost. Lindsay considers all highly liquid investments
with original maturities of three months or less to be cash equivalents, while
those having maturities in excess of three months are classified as marketable
securities or as long-term marketable securities when maturities are in excess
of one year. Marketable securities and long-term marketable securities consist
of investment-grade municipal bonds.
The total amortized cost, gross unrealized holding gains, gross
unrealized holding losses, and aggregate fair value for held-to-maturity
securities are $35,972,000, $35,000, $63,000 and $35,944,000, respectively. In
the held-to-maturity category at November 30, 2000, $16,697,000 in marketable
securities mature within one year and $19,275,000 in long-term marketable
securities have maturities ranging from 12 to 42 months.
(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.
NOVEMBER NOVEMBER AUGUST
$ IN THOUSANDS 2000 1999 2000
--------------- ---- ---- ----
First-in, first-out (FIFO) inventory ......... $ 15,755 $13,054 $ 15,374
LIFO reserves ................................ (3,034) (3,388) (3,408)
Obsolescence reserve ......................... (631) (935) (631)
-------- ------- --------
Total Inventories ............................ $ 12,090 $ 8,731 $ 11,335
======== ======= ========
The estimated percentage distribution between major classes of inventory before
reserves is as follows:
NOVEMBER NOVEMBER AUGUST
2000 1999 2000
---- ---- ----
Raw materials ................................ 13% 12% 13%
Work in process .............................. 6% 5% 6%
Purchased parts .............................. 33% 38% 33%
Finished goods ............................... 48% 45% 48%
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(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant, equipment and capitalized lease assets are stated at cost.
NOVEMBER NOVEMBER AUGUST
$ IN THOUSANDS 2000 1999 2000
--------------- ---- ---- ----
Plant and equipment:
Land .................................... $ 70 $ 70 $ 70
Buildings ............................... 8,560 5,866 8,352
Equipment ............................... 30,154 28,251 30,269
Other.................................... 3,592 5,437 3,300
Capital lease:
Equipment ............................... 0 458 0
-------- ------- --------
Total plant, equipment and capital lease ..... 42,376 40,082 41,991
Accumulated depreciation and amortization:
Plant and equipment ..................... (26,423) (24,165) (26,053)
Capital lease ........................... 0 (244) 0
-------- ------- --------
Property, plant and equipment, net .......... $ 15,953 $15,673 $ 15,938
======== ======= ========
(5) CREDIT ARRANGEMENTS
Lindsay has an agreement with a commercial bank for a $10.0 million unsecured
revolving line of credit through December 30, 2001. Proceeds from this line of
credit, if any, are to be used for working capital and general corporate
purposes including stock repurchases. There have been no borrowings made under
such unsecured revolving line of credit. Borrowings will bear interest at a rate
equal to one percent per annum under the rate in effect from time to time and
designated by the commercial bank as its National Base Rate. No covenants limit
the ability of Lindsay to merge or consolidate, to encumber assets, to sell
significant portions of its assets, to pay dividends, or to repurchase common
stock.
(6) NET EARNINGS PER SHARE
Basic net earnings per share is computed by dividing net earnings by the
weighted average number of shares outstanding. Diluted net earnings per share
includes the dilutive effect of stock options.
Options to purchase 99,750 shares of common stock at a weighted average
price of $27.13 per share were outstanding during the first quarter of fiscal
year 2001, but were not included in the computation of diluted EPS because the
options' exercise price was greater than the average market price of the common
stock. These options expire between September 3, 2007 and September 3, 2008.
(7) REVENUE RECOGNITION
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue recognition in Financial Statements." The
guidance in the SAB is required to be followed no later than the fourth quarter
of the fiscal year beginning after December 15, 1999 (the fourth quarter of
fiscal year 2001 for Lindsay). Lindsay has complied with the provisions of SAB
No. 101 and that compliance did not have a material impact on the Company's
consolidated financial position or results of operations.
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(8) INDUSTRY SEGMENT INFORMATION
The Company adopted SFAS No. 131 "Disclosures About Segments of an Enterprise
and Related Information" in fiscal year 1999 which changed the way the Company
reports information about its operating segments.
The Company manages its business activities in two reportable segments:
Irrigation: This segment includes the manufacture and marketing of
center pivot and lateral move irrigation equipment and other revenues
consisting primarily of revenues from long haul over the road freight
services.
Diversified Products: This segment includes providing outsource
manufacturing services and selling large diameter steel tubing.
The accounting policies of the two reportable segments are the same as
those described in the "Accounting Policies" in Note A. of the financial
statements included in the Form 10-K for the fiscal year ended August 31, 2000.
The Company evaluates the performance of its operating segments based on segment
sales, gross profit and operating income and does not include general or
administrative expenses (which include corporate expenses) or engineering and
research expenses, interest income net, non-operating income and expenses,
income taxes, and assets. Operating income does include selling and other
overhead charges directly attributable to the segment. There are no intersegment
sales.
Summarized financial information concerning the Company's reportable segments is
shown in the following table:
FOR THE THREE MONTHS ENDED
--------------------------
NOVEMBER NOVEMBER
$ IN THOUSANDS 2000 1999
-------------- ---- ----
Operating revenues:
Irrigation........................................ $ 28,981 $ 22,156
Diversified products.............................. 4,975 2,347
--------- --------
Total operating revenues............................. $ 33,956 $ 24,503
========= ========
Operating income:
Irrigation........................................ $ 5,388 $ 3,958
Diversified products.............................. 667 421
--------- --------
Segment operating income............................. 6,055 4,379
Unallocated general & administrative and
engineering & research expenses................... 2,898 2,701
Interest and other income, net....................... 519 755
--------- --------
Earnings before income taxes......................... $ 3,676 $ 2,433
========= ========
Geographic area revenues:
United States..................................... $ 27,273 $ 19,402
Europe, Africa and Middle East.................... 3,893 797
Mexico & Latin America........................... 379 1,667
Other export...................................... 2,411 2,637
--------- --------
Total revenues.................................... $ 33,956 $ 24,503
========= ========
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
The following table provides highlights of the first quarter of fiscal year 2001
compared with the first quarter of fiscal year 2000 of Lindsay's consolidated
operating results displayed in the Consolidated Statements of Operations and
should be read together with the industry segment information in Note (8) to
these consolidated financial statements.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
------------------------------------------------
PERCENT INCREASE
($ IN THOUSANDS) 11/30/00 11/30/99 (DECREASE)
---------------- -------- -------- ----------
<S> <C> <C> <C>
Consolidated
Operating Revenues ...................... $ 33,956 $ 24,503 38.6%
Cost of Operating Revenues .............. $ 26,228 $ 18,763 39.8
Gross Profit ............................ $ 7,728 $ 5,740 34.6
Gross Margin ............................ 22.8% 23.4%
Selling, Eng. & Research, and G&A Expense $ 4,571 $ 4,062 12.5
Operating Income ........................ $ 3,157 $ 1,678 88.1
Operating Margin ........................ 9.3% 6.8%
Interest Income, net .................... $ 521 $ 719 (27.5)
Other (Expense) Income, net ............. $ (2) $ 36 (105.6)
Income Tax Provision .................... $ 1,140 $ 730 56.2
Effective Income Tax Rate ............... 31.0% 30.0%
Net Earnings ............................ $ 2,536 $ 1,703 48.9
Irrigation Equipment Segment (See Note (8))
Operating Revenues ...................... $ 28,981 $ 22,156 30.8
Operating Income ........................ $ 5,388 $ 3,958 36.1
Operating Margin ........................ 18.6% 17.9%
Diversified Products Segment (See Note (8))
Operating Revenues ...................... $ 4,975 $ 2,347 112.0
Operating Income ........................ $ 667 $ 421 58.4%
Operating Margin ........................ 13.4% 17.9%
</TABLE>
As the above table displays, operating revenues for the three month
period ended November 30, 2000, were 38.6 percent ($9.5 million) higher than the
first quarter of fiscal year 2000. This increase was the result of a 31 percent
($5.3 million) increase in U.S. irrigation equipment and other revenues, a 31
percent ($1.6 million) increase in export irrigation equipment revenues, and a
112 percent ($2.6 million) increase in diversified products revenues.
During the first quarter of fiscal year 2001, management continued to
undertake an initiative to level out the Company's factory production, expanding
its full year delivery capacity. One component of this initiative consists of
increasing the number of center pivots sold and delivered to its U.S. dealers
for their floor plan stock inventory during the August through November period,
prior to the January through May peak retail selling season. Most of the first
quarter fiscal year 2001 increase in U.S. irrigation equipment revenues occurred
as a result of this initiative. Longer term, the Company believes that center
pivot irrigation equipment demand drivers remain solidly in place; Farmers need
to conserve water, energy and labor while at the same time improving crop yields
and increasing food production for a growing world population.
Export irrigation equipment revenues during the first quarter of fiscal
year 2001 were higher primarily due to increased whole unit and repair parts
sales to irrigation equipment dealers in the Company's middle eastern market.
Additionally, this year's revenues from sales to Lindsay's Canadian dealers were
higher than those of the first quarter of the fiscal year 2000. Revenues from
sales to the Company's other International markets were lower during the quarter
as compared to the first quarter of fiscal year 2000.
First quarter fiscal year 2001 diversified products revenues rose
significantly from that of the first quarter of fiscal year 2000 primarily due
to increased sales of agricultural related outsource manufacturing products to
Deere & Company and New Holland North America, Inc. Large diameter tubing
revenues during the first quarter of fiscal year 2001 were only slightly higher
than that of the prior year's first quarter.
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Gross margin for the three months ended November 30, 2000, was 22.8
percent as compared to 23.4 percent for the first quarter of last year. First
quarter fiscal year 2001's gross margin was negatively impacted by lower per
unit average sales revenue for U.S. center pivots. Per unit average cost of
goods for US center pivots were also lower during the quarter, but to a lesser
degree. A price increase of approximately 3 percent was implemented for new
orders on October 1, 2000, in part to respond to the contracted gross margin and
in part as a component of the normal seasonal pricing adjustments that occur
with center pivot irrigation equipment. The Company expects that its second
quarter will benefit from this price increase.
First quarter fiscal year 2001's selling, engineering and research and
general and administrative (SG&A) expenses of $4.6 million (13.5 % as a percent
of sales) were higher than the first quarter of fiscal year 2000's SG&A expenses
of $4.1 million (16.6% as a percent of sales). Increased group insurance,
advertising, travel and entertainment, selling and engineering and research
salary and wage and employee moving expense reimbursement costs were partially
offset by a reduction in legal fee costs.
The effective tax rate for the first quarter of fiscal year 2001 was
31.0 percent as compared to 30.0 percent rate for the comparative period of
fiscal year 2000. Due to the federal income tax exempt status of interest income
from its municipal bond investments 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 36.0 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 totaled $6.9 million for the first
three months of fiscal year 2001 compared to $1.2 million for the first three
months of fiscal year 2000. The use of cash flows in operating activities for
fiscal year 2001 was primarily due to increased receivables. During the first
three months of fiscal year 2000, cash flows used in operating activities were
principally due to increased receivables and increased inventories.
Receivables of $28.2 million at November 30, 2000 increased $10.6
million from $17.6 million at August 31, 2000 and increased $12.2 million from
$16.0 million at November 30, 1999. The majority of increased sales activity
during the first quarter of fiscal year 2001 resulted from the use of a
marketing program that offered deferred payment terms on some transactions to
our dealers for taking delivery of irrigation equipment during the fall and
winter months.
Inventories at November 30, 2000 totaled $12.1 million, up from $11.3
million at August 31, 2000 and $8.7 million at November 30, 1999. Inventory
increased due to Lindsay's continued use of the planned build of inventory for
quicker delivery and response times and to achieve higher projected sales.
Current liabilities of $18.0 million at November 30, 2000 are higher
than their $16.5 million balance at August 31, 2000 and their $17.7 million
balance at November 30, 1999. The increase from August 31, 2000 is principally
due to increased trade payables and a higher accrual for taxes payable partially
offset by a lower accrual for payroll and vacation. The increase from November
30, 1999 is primarily due to increased trade payables and a higher accrual for
taxes payable partially offset by lower accruals for payroll and vacation and
legal fees.
Cash flows provided by investing activities of $6.0 million for the
first three months of fiscal year 2001 compared to cash flows used in investing
activities of $2.7 million for the first three months of fiscal year 2000. The
cash flows provided by investing activities in fiscal year 2001 was attributable
to proceeds from maturities of marketable securities partially offset by capital
expenditures and purchases of marketable securities. During the first three
months of fiscal year 2000, cash flows used in investing activities were
primarily due to capital expenditures and purchases of marketable securities,
partially offset by proceeds from maturities of marketable securities.
Lindsay's cash and short-term marketable securities totaled $18.2
million at November 30, 2000, as compared to $26.0 million at August 31, 2000
and $32.2 million at November 30, 1999. At November 30, 2000, Lindsay had $19.3
million invested in long-term marketable securities which represent intermediate
term (12 to 42 months maturities) municipal debt, as compared to $19.8 million
at August 31, 2000 and from $24.5 million at November 30, 1999.
Cash flows used in financing activities were $0.7 million for the first
three months of fiscal year 2001 as compared to $0.8 million for the first three
months of fiscal year 2000. The cash flows used in financing activities during
the first quarter of both fiscal year 2001 and 2000 were primarily attributable
to dividends paid and cancellations to pay for the exercise price or required
taxes on common stock under Lindsay's employee stock option plan.
Lindsay's equity increased to $79.2 million at November 30, 2000 from
$77.4 million at August 31, 2000 due to its net earnings of $2.5 million, less
$0.3 million from the net cancellations of common stock under Lindsay's employee
stock option plan, less dividends paid of $0.4 million. Lindsay's equity at
November 30, 1999 was $83.6 million.
Capital expenditures of $0.8 million during the first three months of
fiscal year 2001 decreased from $1.0 million during the first three months of
fiscal year 2000. Fiscal year 2001 capital expenditures were primarily for
upgrading manufacturing plant
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and equipment and to further automate Lindsay's manufacturing facilities. Total
annual capital expenditures for fiscal year 2001 are expected to be
approximately $3.0 to $4.0 million and will be made to improve the company's
existing manufacturing facilities, expand its manufacturing capabilities and
increase productivity.
Lindsay believes its capitalization (including cash and marketable
securities balances), operating cash flow and line of credit ($10.0 million) are
sufficient to cover expected working capital needs, planned capital
expenditures, dividends 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
U.S. dealers and dealers' 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, agricultural commodity prices,
aggregate net cash farm income, governmental policies regarding the agricultural
sector, water and energy conservation policies and the regularity of rainfall.
Approximately 20% and 21% of Lindsay's operating revenues for the first
quarter of fiscal year 2001 and 2000, respectively, were generated from export
sales. For the full year of 2000, approximately 17% 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.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements." The
guidance in the SAB is required to be followed no later than the fourth quarter
of the fiscal year beginning after December 15, 1999 (the fourth quarter of
fiscal year 2001 for Lindsay). Lindsay has complied with the provisions of SAB
No. 101 and that compliance did not have a material impact on the Company's
consolidated financial position or results of operations.
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 including 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. You 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 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not subject to material market risks with respect to its
marketable securities because of their relatively short maturity (0-42 months)
and the Company intends to hold the investments in these marketable securities
to maturity. Lindsay does not believe that it is subject to material foreign
exchange risk with respect to export sales because it's export sales are
principally U.S. dollar denominated.
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Lindsay is a party to a number of lawsuits 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
consolidated financial condition, results of operations or cash flows.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits -
4 - Specimen Form of Common Stock Certificate incorporated by
reference to Exhibit 4 to the Company's Report on Form 10-Q for
the fiscal quarter ended November 30, 1997
(b) Reports on form 8-K -
No Form 8-K was filed during the quarter ended November 30, 2000
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on this 15th day of
January, 2001.
LINDSAY MANUFACTURING CO.
By: /s/ BRUCE C. KARSK
------------------------------------------------
Name: Bruce C. Karsk
Title: Executive Vice President, Treasurer and Secretary;
Principal Financial and Accounting Officer
By: /s/RALPH J. KROENKE
------------------------------------------------
Name: Ralph J. Kroenke
Title: Controller
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