Lindsay (LNN) Q1 2025 earnings summary

Executive summary

• Revenue increased 3% year-over-year to $166.3 million, driven by strong international irrigation projects, especially in the MENA region, while infrastructure segment revenues declined 9% but margins improved through cost management and efficiency gains.

• Net earnings rose 14% to $17.2 million ($1.57 per diluted share), with diluted EPS up 15%, aided by higher other income and a lower effective tax rate.

• Backlog at quarter-end more than doubled year-over-year to $168.2 million, mainly due to the MENA irrigation project.

• Closed a minority investment in Pessl Instruments GmbH, enhancing digital platform capabilities and expanding access to over 240,000 connected devices.

• Secured a $20+ million Road Zipper System contract, to be delivered in Q2.

Financial highlights

• Consolidated Q1 revenues rose 3% to $166.3 million year-over-year; irrigation segment up 5% to $147.1 million, infrastructure segment down 9% to $19.2 million.

• Net earnings increased 14% to $17.2 million ($1.57 per diluted share); diluted EPS up 15% year-over-year.

• Operating income was $20.9 million, nearly flat year-over-year, as higher administrative and selling expenses offset lower engineering and research costs.

• Gross profit was $50.0 million, with gross margin at 30.0% versus 30.9% a year ago, reflecting a higher mix of lower-margin international irrigation projects.

• Cash and cash equivalents were $194.1 million at quarter-end, up from $190.9 million at August 31, 2024.

Outlook and guidance

• Continued strong performance expected in developing international markets, especially MENA, with robust project pipeline and growth opportunities.

• Infrastructure segment growth anticipated, supported by a $20+ million Road Zipper project to be delivered in Q2 and federal funding for transportation projects.

• North America and Brazil irrigation markets expected to remain soft near-term due to low commodity prices and high input costs, but stabilization is emerging and potential mid- to long-term tailwinds identified.

• Capital expenditures for fiscal 2025 projected at $35–40 million, focused on modernization and productivity improvements.

• Lower effective tax rate expected for the year due to earnings shift to Turkey's free trade zone.