Lindsay Q3 Earnings Call Highlights

Key Points

• Lindsay’s fiscal third-quarter results declined as revenue fell 5% to $160.8 million and net earnings dropped to $15.8 million from $19.5 million a year ago. The company said weak agricultural markets, higher input costs, and delayed farm equipment purchases pressured results.
• The irrigation business remained under pressure, with segment revenue down 7% and North American irrigation sales falling 11% on lower unit volume. Management said drought conditions and Brazil market constraints may support long-term demand, but near-term farmer economics and financing remain a headwind.
• Infrastructure and long-term investments provided some support, as infrastructure revenue rose 8% and Lindsay highlighted progress on its Nebraska manufacturing expansion, restructuring efforts, and technology offerings. The company also expects its Brazil financing environment and irrigation tech growth to contribute more meaningfully in future periods.

Lindsay NYSE: LNN reported lower fiscal third-quarter revenue and earnings as continued weakness in agricultural markets weighed on irrigation equipment demand, while its infrastructure segment posted year-over-year growth.

President and CEO Randy Wood said the company is operating through “a difficult environment amid a cyclical bottom in agricultural markets,” citing trade uncertainty, high input costs and weak farmer sentiment as pressures on demand. Wood said North American irrigation customers continued to delay large capital purchases because of current farm economics, leading to lower unit sales volumes in the quarter.

“We remained focused on the levers within our control, including pricing, cost management, and operational efficiency, while continuing to invest strategically to position the business for long-term growth,” Wood said.

Revenue and Earnings Decline

SVP and CFO Sam Hinrichsen said total revenue for the fiscal third quarter was $160.8 million, down 5% from $169.5 million in the prior-year period. Operating income fell to $18.5 million from $23.8 million, while operating margin declined to 11.5% from 14%.

Net earnings were $15.8 million, or $1.53 per diluted share, compared with $19.5 million, or $1.78 per diluted share, a year earlier. Hinrichsen said the year-over-year decrease reflected lower operating income, partly offset by higher other income and a lower effective tax rate.

The quarter included a one-time benefit related to tariff refunds, which Hinrichsen described as a partial reversal of tariff costs incurred to date. He added that input costs have escalated during the fiscal year and that the company’s pricing actions “still need to catch up.”

Irrigation Segment Pressured by Farm Economics

Irrigation segment revenue fell 7% to $133 million from $143.7 million in the prior year. North America irrigation revenue declined 11% to $61.3 million, primarily due to lower unit sales volume, partly offset by higher average selling prices.

International irrigation revenue declined 4% to $71.7 million. The decrease was driven by lower sales volume in Brazil, where Wood said high interest rates and limited access to credit continue to constrain growers’ ability to finance capital equipment purchases. Growth in other international markets partially offset the decline.

Irrigation segment operating income was $20.3 million, down from $27.2 million, and operating margin declined to 15.3% from 18.9%. Hinrichsen attributed the decline to lower unit sales volume, higher input costs and fixed cost leverage.

Wood said the U.S. irrigation market remains soft as growers wait for more trade certainty and improved profitability. He cited USDA projections indicating that production costs will exceed commodity prices for several key commodities this year, continuing a multi-year trend.

During the question-and-answer portion of the call, Wood said drought conditions have worsened year over year, with more than one-third of the country in severe to exceptional drought compared with about 15% a year ago. He said drought can support irrigation demand when it encourages efficient water use, but extreme drought can become a negative if growers do not have enough water to finish a crop.

Brazil Outlook Remains Cautiously Optimistic

Wood said Lindsay continues to view Brazil as one of the most attractive long-term growth opportunities in global irrigation. He said customer engagement at recent agricultural trade shows, including Agrishow, was encouraging, with strong traffic, high grower interest and robust quoting activity.

The company noted that financing rates under Brazil’s 2026/2027 crop plan declined to 11.5% from 12.5%, which Wood said should improve the affordability and return on investment for irrigation systems. However, he also said the total funding allocated to irrigation within the FINAME program was reduced from approximately BRL 2.75 billion to BRL 1.7 billion, keeping credit availability as a constraint.

In response to an analyst question, Wood said the financing program should allow some “shovel-ready” projects to move through the system, but he does not expect a significant impact in the company’s fiscal fourth quarter, which ends Aug. 31. He said some early benefits could appear in the first quarter of fiscal 2027.

Infrastructure Segment Grows

Lindsay’s infrastructure segment revenue rose 8% to $27.7 million from $25.7 million, driven by higher road safety product revenue. Road Zipper lease revenue was similar to the prior year in Wood’s prepared remarks, though Hinrichsen said Road Zipper revenue was below the prior year within the segment results.

Infrastructure segment operating income was $5.4 million, comparable to the prior year. Operating margin declined to 19.5% from 21.1%, which Hinrichsen attributed to a less favorable mix from lower Road Zipper revenue.

Wood said the Road Zipper pipeline remains strong, though the timing of projects is difficult to predict. He also pointed to the House Transportation and Infrastructure Committee’s advancement of the BUILD America 250 Act, a bipartisan five-year reauthorization totaling $580 billion, as a potential source of long-term funding stability for highway and bridge investments.

Capital Projects, Technology and Cost Actions

Wood said Lindsay’s new tube mill in Lindsay, Nebraska, has been successfully commissioned and is in full production. He said the operation improves safety, efficiency and throughput, while allowing the company to respond more quickly to shifts in demand. The company’s new galvanizing facility remains on schedule and is expected to be turned over to production in early calendar 2027.

Hinrichsen said capital expenditures for the first nine months of the fiscal year were $35.5 million, reflecting ongoing investments at the Lindsay, Nebraska site. In response to an analyst question, Wood said the galvanizing facility is the final step in the company’s strategic investment program and that capital spending should return to normalized levels after it goes live.

The company also plans restructuring and right-sizing actions intended to improve efficiency, reduce complexity and better align resources with expected demand. Wood said savings are expected to begin in fiscal 2027, but the company did not provide specific cost or savings estimates on the call.

Lindsay ended the quarter with $204.8 million in total available liquidity, including $154.8 million in cash and cash equivalents and $50 million available under its revolving credit facility. Hinrichsen said the company repurchased $25.2 million of shares during the quarter and returned $80.7 million to shareholders through repurchases during the first nine months of the fiscal year.

Wood said Lindsay continues to invest in irrigation technology, including its FieldNET and FieldWise platforms. He said the company expects sustained double-digit technology revenue growth in fiscal 2026, supported by products such as TowerWatch within the SmartPivot platform and FieldNET Advisor, which uses AI models to support irrigation scheduling.

“While current market conditions continue to present near-term challenges, we remain confident in our strategy and our ability to execute effectively while positioning the business for sustainable long-term success,” Wood said in closing remarks.

About Lindsay NYSE: LNN

Lindsay Corporation NYSE: LNN is a U.S.-based manufacturer of agricultural irrigation and infrastructure products. Headquartered in Omaha, Nebraska, the company has built a reputation for designing and producing center pivot and lateral‐move irrigation systems under the Zimmatic brand. These systems feature advanced controls, precision sprinklers and automated monitoring technology that help growers optimize water use, improve crop yields and enhance sustainability in a variety of row-crop, specialty crop and forage operations.

Beyond its core irrigation business, Lindsay operates an infrastructure segment that delivers engineered products and services for water and roadway management.

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