LNN Financial Analysis

Analysis Date: 1/27/2025

Business Model

Lindsay Corporation generates revenue primarily through irrigation equipment and infrastructure solutions

Revenue Sources

• Irrigation segment (88.5% of Q1 2025 revenue) - Zimmatic center pivot and lateral move systems, FieldNET technology
• Infrastructure segment (11.5% of Q1 2025 revenue) - Road Zipper Systems, road safety products

Revenue Distribution by Channel

• North America Irrigation: $77.7M (46.7% of total revenue)
• International Irrigation: $69.4M (41.8% of total revenue)

Income Statement Analysis

• Revenue increased 3.1% driven by international irrigation growth
• Operating margin declined to 12.6% from 13.1% due to higher mix of lower-margin international projects
• Net earnings increased 14.3% benefiting from higher other income and lower tax rate

Balance Sheet Analysis

• Strong cash position with $194.1M in cash and equivalents
• Total liabilities decreased 4.9% year-over-year

Cash Flow Analysis

• Strong operating cash flow of $21.6M
• Lower investing cash outflow due to reduced marketable securities purchases

Capital Allocation

Company maintains strong balance sheet with $244M available liquidity and 1.0x gross debt to EBITDA leverage. Capital allocation priorities include supporting organic growth, strategic acquisitions, and returning capital to shareholders through dividends and opportunistic share repurchases.

Management Commentary

Finalized Road Zipper System contract valued at over $20M for Q2 delivery

Completed acquisition of minority stake in Pessl Instruments GmbH

North America and Brazil irrigation markets remain challenged by lower commodity prices

Overall Sentiment: Cautiously optimistic with near-term headwinds in mature markets offset by international growth opportunities

Recommendation

Rating: Hold

Reason for Rating: Near-term challenges in core markets balanced by international growth and infrastructure opportunities

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/27/2025, 2:09:48 PM