Lindsay Q4 Earnings Call Highlights

Key Points

• Fourth-quarter results improved: Revenue rose 5% year over year to $161.6 million and earnings increased to $1.10 per diluted share, although fiscal 2026 revenue fell 6% and net earnings declined amid weaker irrigation demand and the absence of a prior-year Road Zipper project.
• Irrigation remains subdued: North American irrigation revenue grew 11% in the quarter, but management said sustained recovery depends on better farm incomes and commodity-price visibility. Lindsay does not expect another large MENA project in fiscal 2027 and aims to replace at least half of the related revenue through smaller projects and other initiatives.
• Cost savings and strategic investments are underway: A global restructuring is expected to deliver $8 million in annualized net savings, while Lindsay plans to acquire Brazil’s Setorial Irrigação and continue investing in agricultural technology, manufacturing capacity and road-safety products.

Lindsay NYSE: LNN reported fiscal fourth-quarter revenue growth and higher earnings, while full-year results declined amid weaker irrigation demand in North America and Brazil and the absence of a large prior-year Road Zipper project sale.

Fourth-quarter revenue rose 5% year over year to $161.6 million, while net earnings increased to $11.3 million, or $1.10 per diluted share, from $10.8 million, or $0.99 per share, a year earlier. For fiscal 2026, revenue fell 6% to $635.9 million and net earnings declined to $55.7 million, or $5.33 per diluted share, compared with $74.1 million, or a 21% decline in earnings per share, in the prior year.

Irrigation Results Show Fourth-Quarter Improvement

The irrigation segment generated fourth-quarter revenue of $133.7 million, up 4% from the prior-year period. North American irrigation revenue increased 11% to $55.4 million, driven primarily by higher unit volume, while average selling prices were comparable with the previous year.

Chief Executive Officer Randy Wood said demand benefited from an improvement in agricultural commodity prices early in the quarter, as well as slightly higher storm-damage replacement activity. He said corn prices moving above $5 per bushel improved customer sentiment, though prices have since declined and the overall market remains subdued.

“For that recovery to become more sustained, growers will need greater forward visibility and improved net farm income,” Wood said. The company expects irrigation-equipment investment to remain relatively subdued until farm economics improve more meaningfully.

International irrigation revenue was $78.3 million in the quarter, roughly flat from a year earlier. Increased project sales in the Middle East and North Africa, or MENA, region and higher volumes in other developed markets were offset by lower Brazil volumes. Lindsay completed equipment delivery during the quarter for an $80 million MENA project.

For the full year, irrigation revenue declined 5% to $541.5 million. North American revenue fell 4% to $262.1 million as lower commodity prices pressured farm incomes and unit volumes. International irrigation revenue declined 5% to $279.3 million, reflecting smaller MENA project activity and lower Brazilian sales volumes, partly offset by a $12.1 million favorable foreign-currency translation effect.

Irrigation operating income for fiscal 2026 fell 17% to $80.1 million, and operating margin declined to 14.8% from 17.1%. Interim Co-Chief Financial Officer Alicia Pfeifer cited lower unit volume, reduced fixed-cost absorption and higher input costs.

Lindsay said it continues to grow its agricultural technology business, with annual recurring revenue increasing about 11% year over year and a five-year compound annual growth rate exceeding 15%. Its technology offerings include FieldNET and FieldNET Advisor.

Infrastructure Growth in the Quarter, Full-Year Decline

Infrastructure revenue increased 13% in the fourth quarter to $27.8 million, driven by higher road-safety product sales. Segment operating income rose 41% to $5 million, while operating margin expanded to 17.9% from 14.4% a year earlier, aided by higher sales and a more favorable revenue mix.

For the full year, infrastructure revenue fell 13% to $94.4 million and operating income declined to $16 million from $26.3 million. The comparison reflected a $20 million Road Zipper System project sale in the prior year that did not repeat. Excluding that project, the company said infrastructure revenue and operating income increased 11% and 12%, respectively, during fiscal 2026.

Wood said the company expects continued growth in road-safety products in fiscal 2027, supported by infrastructure spending and product introductions. Road Zipper leasing is expected to remain generally in line with fiscal 2026. Although the Infrastructure Investment and Jobs Act expired at the end of September, funding was extended through the end of the calendar year, and Wood said existing funds in the system are expected to continue supporting projects.

Cost Reductions, Brazil Acquisition and Capital Plans

In June, Lindsay launched a global restructuring program intended to streamline operations and simplify its organization. The company expects the plan to generate $8 million in net annualized cost reductions after reinvesting part of the savings in priority growth initiatives.

Pfeifer said restructuring-related costs were fully recognized in fiscal 2026 and that savings should begin to materialize immediately in fiscal 2027. Management said the actions affected both selling, general and administrative expenses and cost of goods sold, while preserving spending on strategic priorities including technology, channel development and innovation.

The company also signed a definitive agreement to acquire Setorial Irrigação, a Brazilian manufacturer of hose reels and irrigation equipment. Wood characterized Setorial as relatively small on a consolidated basis but said it would broaden Lindsay’s irrigation portfolio in Brazil and Latin America. He said hose reels are suited to smaller or irregularly shaped fields and have meaningful use in sugarcane production.

The deal is expected to close in the coming months, subject to customary conditions, and will be funded with cash on hand. Lindsay ended the fourth quarter with $239.8 million of available liquidity, including $189.8 million in cash and cash equivalents.

• Fiscal 2026 free cash flow equaled 62% of net earnings and included $40.2 million in capital expenditures.
• The company returned $96.1 million to shareholders during the year through $80.7 million of share repurchases and $15.4 million of dividends.
• Lindsay has $100 million remaining under its current $150 million share-repurchase authorization.

Wood also said a next-generation galvanizing operation at the company’s Lindsay, Nebraska, facility is expected to be online before the end of the calendar year. Along with a tube mill investment, the project is intended to improve safety, capacity, productivity and operating flexibility, while potentially expanding contract manufacturing and galvanizing services in the Midwest.

Looking ahead, Lindsay does not expect another large MENA project to begin revenue delivery in fiscal 2027. Wood said the company expects to offset at least half of the approximately $70 million of fiscal 2026 MENA project revenue through smaller projects and other growth initiatives, but does not anticipate another project of similar size during the coming fiscal year.

About Lindsay (NYSE:LNN)

Lindsay Corporation is a U.S.-based manufacturer of irrigation and infrastructure products. The company's irrigation business provides center-pivot and lateral-move irrigation systems, water-management technologies, and related equipment used by agricultural producers to improve the application and conservation of water.

Lindsay's irrigation portfolio includes Zimmatic irrigation systems and digital tools such as FieldNET, which helps growers monitor and manage irrigation operations remotely.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.