- Revenue Decline: ...
- Irrigation Segment Performance: ...
- Infrastructure Growth: ...
- New Project and Liquidity: ...
- Financial Strategies and Margins: ...
- Revenue Decline: Total revenues fell 6% to $155.8M YoY, driven by a 9% drop in irrigation segment sales to $133.4M.
- Infrastructure Growth: Infrastructure revenue rose 17% to $22.4M with operating income up 9% to $4.5M.
- New Project & Liquidity: Announced an $80M Middle East/North Africa project ($70M projected FY26 revenue); liquidity at $249.6M.
- Share Repurchases: $30.3M spent on buybacks in Q1 under a new $150M authorization.
- Margin Outlook: New project margins expected slightly below irrigation segment average, but infrastructure and pricing gains to support margin stability.
Irrigation Segment Performance
The irrigation segment saw a decline in revenues, with North America irrigation revenues down 4% to $74.3 million and international irrigation revenues down 15% to $59.1 million. The decline was attributed to lower volumes, but the company noted that higher average selling prices partially offset the impact. The company's new $80 million project in the Middle East and North Africa region is expected to contribute approximately $70 million in revenue this fiscal year, with a margin profile slightly below the irrigation segment average.
Infrastructure Segment Growth
The Infrastructure segment delivered a solid performance, with revenues up 17% to $22.4 million and operating income up 9% to $4.5 million. The company expects further momentum in the infrastructure segment as road construction activity and infrastructure funding advance. The Road Zipper business, characterized as a lumpy project-oriented business, has many projects in the sales funnel, and the company is engaged with customers on specific projects.
Outlook and Valuation
The company expects softer market conditions to persist in North America in the near term, but international markets, particularly in Latin America and the Middle East, show growth potential. Analysts estimate revenue growth of 6.8% for the next year. With a current P/E Ratio of 18.41 and an EV/EBITDA of 11.24, the stock appears to be reasonably valued. The company's return on equity (ROE) is 14.01%, and the return on invested capital (ROIC) is 9.93%, indicating a decent profitability profile.
Capital Management
Lindsay Corporation deployed $30.3 million into share repurchases in the quarter and has a new authorization of up to $150 million. The company had total available liquidity of $249.6 million at the end of the quarter. The interest income line saw a significant contribution in Q1, driven by the regional mix of funds and interest rates. The company's net debt to EBITDA ratio is -0.58, indicating a healthy debt position.