lnn-ex991

OMAHA, Neb., June 28, 2018—Lindsay Corporation (NYSE: LNN), a leading global manufacturer of irrigation and infrastructure equipment and technology, today announced results for its third quarter ended May 31, 2018.

Revenues for the third quarter of fiscal 2018 were $169.6 million, an increase of 12 percent compared to revenues of $151.5 million in the prior year’s third quarter. Net earnings for the quarter were $10.4 million and diluted earnings per share were $0.96, compared with net earnings of $11.0 million and diluted earnings per share of $1.02 for the same period in the prior year. Net earnings for the quarter were reduced by after-tax costs of $7.5 million, or $0.70 per diluted share, related to the Company’s Foundation for Growth initiative. Adjusted net earnings for the third quarter were $17.9 million, or $1.66 per diluted share.¹

“Solid overall revenue growth for the quarter resulted from gains in both reporting segments, led by 31 percent growth in Infrastructure and 7 percent growth in Irrigation,” said Tim Hassinger, President and Chief Executive Officer. “I am also pleased with the progress we have made on our Foundation for Growth initiative during the quarter. This effort, focused on simplifying our business and delivering better results for our customers and shareholders, is well underway.”

Irrigation segment revenues increased 7 percent to $128.4 million, compared to $120.0 million in the prior year’s third quarter. North America irrigation revenues increased 11 percent to $87.4 million, reflecting an increase in irrigation system unit volume and higher average selling prices. International irrigation revenues of $41.0 for the third quarter were slightly lower compared to the same period in the prior year.

Irrigation segment operating margin was 9.1 percent of sales in the third quarter (14.1 percent adjusted)¹, compared to 13.8 percent of sales in the prior year. The effects of sales growth in North America and the recovery of $2.5 million in previously reserved accounts receivable were offset by the effects of higher freight costs in the U.S. and a lower margin mix from international project orders.

Infrastructure segment revenues increased 31 percent in the third quarter to $41.2 million, compared to $31.5 million in the prior year’s third quarter. The increase was driven by the delivery of a significant portion of two large Road Zipper System^® orders that were in the backlog.

Infrastructure segment operating margin was 34.6 percent of sales in the third quarter (35.0 percent adjusted)¹, compared to 25.5 percent of sales in the third quarter of the prior year. Higher revenue from Road Zipper Systems resulted in improved margin mix and operating cost leverage.

The backlog of unshipped orders at May 31, 2018 was $55.8 million, compared with $70.1 million at May 31, 2017, reflecting a higher backlog in the infrastructure segment and a lower backlog in the irrigation segment.

In the previous quarter, the Company announced a defined performance improvement initiative, referred to as Foundation for Growth, with a financial objective of achieving operating margin performance of 11 percent to 12 percent in fiscal 2020 exclusive of market changes.

During the third quarter, in connection with a portfolio review of business investments, the Company committed to a plan of divestiture of its pump and filtration businesses as well as a Company-owned irrigation dealership. The investments are classified as held-for-sale in the accompanying May 31, 2018 balance sheet. The combined revenues from these businesses are approximately $70 million annually. The divestures are expected to reduce future revenues and to have a positive impact on operating margins. In addition to these business divestures, the Company announced plans to close one of its Infrastructure manufacturing facilities prior to the end of the calendar year.

Third quarter operating expenses include pre-tax costs of $7.6 million in connection with the Foundation for Growth initiative, of which $6.0 million represents an adjustment to the carrying value of businesses held-for-sale with the remainder representing severance costs and professional consulting fees. These costs, and additional future costs anticipated in connection with this initiative, are expected to be recovered through improved operating income in fiscal 2020.

“We are responding to higher freight and steel costs in the U.S. by passing through these increases to customers.” said Mr. Hassinger. “To date, we have been successful implementing price increases to address this challenge; however, further steel cost increases may be more challenging for us to pass on.”

Added Mr. Hassinger, “Strong infrastructure sales in our third quarter were a result of our ability to deliver a significant portion of two large orders that had been in our backlog. We continue to build a solid pipeline of Road Zipper System projects to support continued growth in this business.”

Lindsay’s fiscal 2018 third quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (877) 317-6789 in the U.S., or (412) 317-6789 internationally, and requesting the Lindsay Corporation call. Additionally, the conference call will be simulcast live on the Internet and can be accessed via the investor relations section of the Company's Web site, www.lindsay.com. Replays of the conference call will remain on our Web site through the next quarterly earnings release. The Company will have a slide presentation available to augment management's formal presentation, which will also be accessible via the Company's Web site.

Lindsay Corporation is a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology. The Lindsay family of irrigation brands includes Zimmatic^® and FieldNET^® as well as irrigation consulting, design, pump and filtration offerings, advanced machine-to-machine communication, remote control and monitoring technology, and wireless networking solutions. Also a global leader in the transportation industry, Lindsay Transportation Solutions manufactures equipment to improve road safety and keep traffic moving on the world’s roads, bridges and tunnels, through the Barrier Systems^®, Road Zipper^® and Snoline™ brands. For more information about Lindsay Corporation, visit www.lindsay.com.

This release 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. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission. Forward-looking statements include information concerning possible or assumed future results of operations and planned financing of the Company and those

statements preceded by, followed by or including the words “anticipate,” “estimate,” “believe,” “intend,” "expect," "outlook," "could," "may," "should," “will,” 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. The Company undertakes no obligation to update any forward-looking information contained in this press release.

LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)

	Three months ended								Nine months ended
(in thousands, except per share amounts)		May 31, 2018				May 31, 2017				May 31, 2018				May 31, 2017

Operating revenues	$		169,571		$		151,533		$		424,436		$		386,048
Cost of operating revenues			118,093				105,627				305,245				278,827
Gross profit			51,478				45,906				119,191				107,221

Operating expenses:
Selling expense			10,842				10,451				31,087				30,565
General and administrative expense			17,974				13,693				44,203				35,278
Engineering and research expense			3,960				4,348				11,932				12,707
Total operating expenses			32,776				28,492				87,222				78,550

Operating income			18,702				17,414				31,969				28,671

Interest expense			(1,226	)			(1,156	)			(3,502	)			(3,566	)
Interest income			540				545				1,171				881
Other expense, net			(571	)			(606	)			(1,725	)			(818	)

Earnings before income taxes			17,445				16,197				27,913				25,168

Income tax expense			7,066				5,245				12,614				8,331

Net earnings	$		10,379		$		10,952		$		15,299		$		16,837

Earnings per share:
Basic	$		0.96		$		1.03		$		1.43		$		1.58
Diluted	$		0.96		$		1.02		$		1.42		$		1.58

Shares used in computing earnings per share:
Basic			10,757				10,677				10,735				10,657
Diluted			10,785				10,705				10,763				10,682

Cash dividends declared per share	$		0.30		$		0.29		$		0.90		$		0.87

LINDSAY CORPORATION AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Unaudited)

	Three months ended									Nine months ended
(in thousands)		May 31, 2018				May 31, 2017				May 31, 2018				May 31, 2017
Operating revenues:
Irrigation segment	$		128,421		$		120,040		$		343,639		$		316,102
Infrastructure segment			41,150				31,493				80,797				69,946
Total operating revenues	$		169,571		$		151,533		$		424,436		$		386,048

Operating income:
Irrigation segment	$		11,718		$		16,508		$		31,502		$		32,961
Infrastructure segment			14,248				8,016				20,058				12,588
Corporate			(7,264	)			(7,110	)			(19,591	)			(16,878	)
Total operating income	$		18,702		$		17,414		$		31,969		$		28,671

The Company manages its business activities in two reportable segments as follows:

Irrigation - This reporting segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems as well as various water pumping stations, controls, filtration solutions and machine-to-machine technology.

Infrastructure – This reporting segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, and road marking and road safety equipment.

LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


(in thousands)	May 31, 2018			May 31, 2017			August 31, 2017

ASSETS
Current assets:
Cash and cash equivalents	$	111,779		$	113,212		$	121,620
Receivables, net		92,135			86,772			73,850
Inventories, net		82,635			88,601			86,155
Prepaid expenses		4,132			4,944			4,384
Assets held-for-sale		51,516			—			—
Other current assets		8,209			11,877			6,925
Total current assets		350,406			305,406			292,934

Property, plant, and equipment, net		59,884			74,409			74,498
Intangibles, net		28,656			43,874			42,808
Goodwill		64,723			76,843			77,131
Deferred income tax assets		4,581			6,027			5,311
Other noncurrent assets, net		11,978			4,728			13,350
Total assets	$	520,228		$	511,287		$	506,032

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	30,281		$	40,256		$	36,717
Current portion of long-term debt		204			200			201
Liabilities held-for-sale		14,275			—			—
Other current liabilities		53,911			62,501			55,119
Total current liabilities		98,671			102,957			92,037

Pension benefits liabilities		6,080			6,628			6,295
Long-term debt		116,622			116,826			116,775
Deferred income tax liabilities		1,117			1,111			1,191
Other noncurrent liabilities		20,229			20,060			19,679
Total liabilities		242,719			247,582			235,977

Shareholders' equity:
Preferred stock		—			—			—
Common stock		18,841			18,773			18,780
Capital in excess of stated value		67,587			61,709			63,006
Retained earnings		483,243			474,483			477,615
Less treasury stock - at cost		(277,238	)		(277,238	)		(277,238	)
Accumulated other comprehensive loss, net		(14,924	)		(14,022	)		(12,108	)
Total shareholders' equity		277,509			263,705			270,055
Total liabilities and shareholders' equity	$	520,228		$	511,287		$	506,032

LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine months ended
(in thousands)		May 31, 2018				May 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$		15,299		$		16,837
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization			12,851				12,337
Loss on businesses held-for-sale			6,023				—
Provision for uncollectible accounts receivable			(2,407	)			(408	)
Deferred income taxes			(687	)			(1,383	)
Share-based compensation expense			2,942				2,798
Other, net			473				226
Changes in assets and liabilities:
Receivables			(29,826	)			(5,737	)
Inventories			(8,247	)			(13,217	)
Prepaid expenses and other current assets			(971	)			3,255
Accounts payable			1,901				8,182
Other current liabilities			10,058				4,734
Other noncurrent assets and liabilities			766				(3,158	)
Net cash provided by operating activities			8,175				24,466

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment			(6,920	)			(6,219	)
Proceeds from settlement of net investment hedges			101				2,054
Payments for settlement of net investment hedges			(3,089	)			(948	)
Other investing activities, net			241				137
Net cash used in investing activities			(9,667	)			(4,976	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			2,788				2,455
Common stock withheld for payroll tax obligations			(833	)			(635	)
Principal payments on long-term debt			(150	)			(147	)
Dividends paid			(9,671	)			(9,280	)
Net cash used in financing activities			(7,866	)			(7,607	)

Effect of exchange rate changes on cash and cash equivalents			(483	)			83
Net change in cash and cash equivalents			(9,841	)			11,966
Cash and cash equivalents, beginning of period			121,620				101,246
Cash and cash equivalents, end of period	$		111,779		$		113,212

The non-GAAP tables below disclose (a) the impact on diluted earnings per share of (1) tax expense attributed to enactment of the Tax Cuts and Jobs Act ("U.S. Tax Reform"), and (2) an adjustment to the carrying value of businesses held-for-sale, severance costs and consulting fees associated with the Company's Foundation for Growth Initiative ("FFG costs"), (b) the impact on operating income of FFG costs, and (c) the impact on segment operating income of FFG costs. Management believes adjusted net earnings, adjusted diluted earnings per share and adjusted operating income are important indicators of the Company’s business performance because they exclude items that may not be indicative of, or may be unrelated to, the Company’s underlying operating results, and provide a useful baseline for analyzing trends in the business. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings, diluted earnings per share and operating income. These non-GAAP financial measures reflect an additional way of viewing the Company’s operations that, when viewed with the GAAP results and the following reconciliations to the corresponding GAAP financial measures, management believes provides a more complete understanding of the Company’s business.

	Three months ended						Nine months ended
(in thousands, except per share amounts)	May 31, 2018			Diluted earnings per share			May 31, 2018			Diluted earnings per share

Net earnings - reported GAAP measure	$	10,379		$	0.96		$	15,299		$	1.42

Impact of U.S. Tax Reform		—			—			2,578			0.24

FFG costs - after tax		7,525			0.70			9,193			0.85

Net earnings - adjusted	$	17,904		$	1.66		$	27,070		$	2.52
Average shares outstanding - diluted					10,785						10,763

	For the three months ended May 31, 2018
Operating income reconciliation	Consolidated			Irrigation			Infrastructure			Corporate

Operating income - reported GAAP measure	$	18,702		$	11,718		$	14,248		$	(7,264	)

FFG costs - before tax		7,556			6,356			165			1,035

Adjusted operating income	$	26,258		$	18,074		$	14,413		$	(6,229	)

Operating revenues	$	169,571		$	128,421		$	41,150		$	—

Operating income as a percent of operating revenues		11.0	%		9.1	%		34.6	%	N/A

Adjusted operating income as a percent of operating revenues		15.5	%		14.1	%		35.0	%	N/A

	For the nine months ended May 31, 2018
Operating income reconciliation	Consolidated			Irrigation			Infrastructure			Corporate

Operating income - reported GAAP measure	$	31,969		$	31,502		$	20,058		$	(19,591	)

FFG costs - before tax		9,887			6,929			165			2,793

Adjusted operating income	$	41,856		$	38,431		$	20,223		$	(16,798	)

Operating revenues	$	424,436		$	343,639		$	80,797		$	—

Operating income as a percent of operating revenues		7.5	%		9.2	%		24.8	%	N/A

Adjusted operating income as a percent of operating revenues		9.9	%		11.2	%		25.0	%	N/A


LINDSAY CORPORATION:		HALLIBURTON INVESTOR RELATIONS:
Brian Ketcham		Hala Elsherbini or Geralyn DeBusk
Vice President & Chief Financial Officer		972-458-8000
402-827-6579