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ADVANCING INNOVATION TO SOLVE GLOBAL CHALLENGES
2 0 17 A N N U A L
R E P O R T
L I N D S AY CO R P O R AT I O N
F I N A N C I A L A N D O PE R AT I N G H I G H L I G H T S
REVENUE ($ in millions)
(In thousands, except per share amounts)
2017
2016
% Change
750
500
250
0
18
12
6
0
18
12
6
0
–
-2%
-8%
17%
NA
14%
17%
-2%
20%
6%
-4%
4%
5%
–
7%
1%
INCOME STATEMENT DATA
(for the fiscal years ended August 31)
Operating revenues
Gross profit
Operating expenses
Operating income
Effective income tax rate
Net earnings
Diluted net earnings per share
Average diluted shares outstanding
$ 517,985
$ 145,012
$ 104,811
$ 40,201
35.1%
$ 23,179
2.17
$
10,694
$ 516,411
$ 148,613
$ 114,238
$ 34,375
30.8%
$ 20,267
$
1.85
10,930
BALANCE SHEET DATA
(at August 31)
Cash and cash equivalents
Current assets
Fixed assets, net
Total assets
Current liabilities
Current and long-term debt
Shareholders' equity
Shares outstanding at year end
CASH FLOW DATA
(for the fiscal years ended August 31)
Cash flows provided by
operating activities
Cash flows used in
investing activities
Cash flows used in
financing activities
Capital expenditures
Share repurchases
Cash dividends declared per share
$ 121,620
$ 292,934
$ 74,498
$ 506,032
$ 92,037
$ 116,976
$ 270,055
10,697
$ 101,246
$ 276,775
$ 77,627
$ 487,515
$ 87,860
$ 117,173
$ 251,567
10,630
$ 39,449
$ 33,125
19%
$
(9,979)
$
(9,898)
NA
$ (10,302)
$
(61,371)
$
$
$
8,863
$ 11,496
–
$ 48,335
1.17
$
1.13
NA
-23%
–
4%
08 09 10 11 12 13 14 15 16 17
Growth in infrastructure revenue in
2017 was partially offset by a decline in
irrigation revenue.
OPERATING MARGIN (percentage)
08 09 10 11 12 13 14 15 16 17
Improved operating margin in
2017 resulted from a reduction in
operating expense.
RETURN ON INVESTED CAPITAL (ROIC)
(percentage)
08 09 10 11 12 13 14 15 16 17
Return on invested capital
improved in 2017 as a result of
higher operating income.
PERFORMANCE RATIOS
Annual revenue growth
Operating margin
Return on invested capital (1)
–
7.8%
6.9%
-7.8%
6.7%
6.1%
NA
NA
NA
(1) Return on invested capital is calculated as Operating Income (after-tax) divided by the average of beginning and
ending Invested Capital. Invested Capital represents current and long-term debt plus shareholders' equity.
2 017 A N N UA L R E P O R T
SUSTAIN & PROTEC T
A growing population
is challenging us to find
better ways to sustain
and protect our world.
We are committed to this
meaningful purpose by
developing innovative
products and technology
that conserve water, feed
the world, and improve the
safety and efficiency
of transportation.
1
11 PRESIDENT'S MESSAGE
I am pleased to be writing to you as the President and Chief Executive Officer
of a company as extraordinary as Lindsay Corporation. Lindsay has a proud
history as an industry leader and renowned innovator.
At this point, I am taking my first 100 days to look, listen and learn and not
make strategic decisions. This time gives the Company an opportunity to
re-examine its strategy, processes and key differentiation points to determine
if any refinement is needed.
I would like to share some of my observations about Lindsay’s identity and
defining strengths.
Lindsay’s business is currently comprised of the Irrigation and Infrastructure
segments, and the intent going forward is to continue in this direction.
Although these segments are quite different from each other, the
company’s purpose is aligned to address a growing world. An increasing
world population creates a need for additional food production, and an
increasing world population causes a greater need for road safety. Lindsay
Corporation’s purpose is to meet these rapidly growing societal needs.
Our outlook for the agriculture market in the near term is that farmer
profitability will continue to be challenged. Although we believe the
long-term fundamentals for this sector are very positive, we will focus on
finding productivity improvement opportunities, for our Company and for our
customers, across our business.
A key area differentiating Lindsay from competitors in the Irrigation segment
is its technology offering and its broad portfolio. This portfolio ranges from
products that specialize in engineering services in hydrology and irrigation
design to filtration and pump systems.
2
FieldNET® is an industry-leading technology offering in the irrigation market.
Lindsay’s focus going forward will be to ramp up this technology and
continue to create next-generation offerings in wireless remote monitoring
and control. The combined efforts of our Omaha technology center and our
Elecsys organization are generating differentiating innovation in this space.
Lindsay’s international growth in irrigation has taken place at a faster rate than
the U.S. business. We expect that trend to continue in the near to mid-term.
The Infrastructure business is also bringing new innovations to the market.
Several new products are being introduced to meet the new Manual for
Assessing Safety Hardware (MASH) standards for road safety hardware. The
recent launch of the MAX-TensionTM end terminal is an example.
The Road Zipper System® is a unique offering in this space that addresses a
critical need to relieve congestion on crowded highways, especially on large
bridges. We believe the outlook for Road Zipper ® is very favorable, and in
some cases we believe it is the only feasible solution to a major problem.
Finally, along with the rest of the Company’s Board of Directors and on behalf
of our shareholders, fellow employees and customers, I want to express our
thanks and appreciation to Rick Parod, my predecessor, who recently retired
as President and Chief Executive Officer of Lindsay Corporation.
The fiscal 2017 operational and financial review that follows reflects Rick’s
leadership. We wish him all the best.
Sincerely,
Tim Hassinger
President and Chief Executive Officer
3
11 2017 SUMMARY
As 2017 unfolded, the cyclical downturn in the agriculture
industry continued for a fourth year, making it one of the longest
on record. In these challenging market conditions, Lindsay
Corporation was able to deliver solid results for the year.
Irrigation segment revenue declined slightly, but the decrease
was more than offset by the strong performance of the
infrastructure segment. Total revenues increased slightly over
fiscal 2016, and the Company was able to achieve a 17 percent
increase in operating income. Operating margin for fiscal 2017
was 7.8 percent, compared to 6.7 percent the previous year.
Such performance in the midst of a challenging marketplace
is indicative of the Lindsay team’s continued ability to manage
strategically through the downturns as well as the upturns of the
cyclical agriculture industry. The Company continued to focus on
reducing costs, increasing efficiency and enhancing productivity.
As it has done throughout a four-year industry downturn, the
Company demonstrated the ability to operate profitably, protect
and preserve margins, maintain a strong balance sheet and return
value to shareholders.
During fiscal 2017, Lindsay continued to differentiate the
Company from competitors by further enhancing its status as the
leading technology innovator and provider of total integrated
solutions that offer superior value to customers.
As the year came to a close, there were encouraging signs that
the U.S. agricultural equipment market was showing signs of
stabilization, possibly suggesting the beginning of a recovery.
Through strategic long-term planning and decisive responses
to short-term conditions, Lindsay Corporation is strong and well
positioned for future growth.
4
FINANCIAL OVERVIEW
Company revenues for the fiscal
year ended August 31, 2017 were
$518.0 million, a modest increase
from $516.4 million in fiscal 2016.
This marked the first year-over-year
increase in revenues since the most
recent cyclical peak in fiscal 2013.
Irrigation segment revenues of
$418.0 million represented a one
percent decrease from the prior
year. In the U.S. market, irrigation
revenues were $242.6 million, a
year-to-year decrease of seven
percent. International irrigation
revenues increased 10 percent to
$175.4 million, driven primarily by
the economic recovery in Brazil and
projects in developing regions.
Infrastructure segment revenues
increased five percent to $99.9
million. Infrastructure operating
income reached $20.1 million, a
nine percent increase from $18.5
million in fiscal 2016.
Company operating income for
fiscal 2017 was $40.2 million, a 17
percent increase from $34.4 million
the prior year. Net earnings were
$23.2 million, or $2.17 per diluted
share, a 14 percent increase from
$20.3 million, or $1.85 per diluted
share, in fiscal 2016. Fiscal 2017 net
earnings reflect a higher effective
income tax rate for the full year that
decreased net earnings by $1.5
million or $0.14 per diluted share.
Gross margin declined slightly in
fiscal 2017 to 28.0 percent from
28.8 percent the prior year. The
decrease was primarily attributable
to lower irrigation equipment sales
as well as a higher proportion of
international product sales which
tend to generate lower margins.
Operating margin increased to
7.8 percent from 6.7 percent
in the prior year. Fiscal 2017
operating expenses were lower,
as $13.0 million of environmental
remediation expenses in fiscal
2016 did not repeat. This was
offset, in part, by higher product
development and testing costs
related to meeting MASH standards
for road safety hardware.
Capital expenditures in fiscal
2017 were $8.9 million compared
to $11.5 million the prior year.
Capital expenditures were lower
than planned as some capacity
expansion projects were deferred
based on market conditions.
The Company’s already strong
balance sheet was further
strengthened in fiscal 2017. As of
August 31, 2017, cash and cash
equivalents were $121.6 million
compared to $101.2 million a year
prior. The strength of the balance
sheet continues to position Lindsay
for investments in organic growth,
strategic and accretive acquisitions,
and other initiatives to drive
improved returns for shareholders.
5
11 Lindsay Corporation is one of the world’s leading providers of irrigation and water
management systems. Our product lines include center pivot and lateral move irrigation
systems, hose reel travelers, integrated water-pumping stations, irrigation controls,
chemical injection systems, water filtration systems, and remote monitoring and control
systems. Lindsay’s irrigation products are sold through more than 340 dealers globally.
LIN DSAY’S IR R IGATIO N SEGMENT
GENER ATES R EVENUE FRO M
THREE PR IM ARY SOURCES:
CONVERSION OF DRY
LAND TO IRRIGATION
CONVERSION FROM
LESS-EFFICIENT
IRRIGATION METHODS TO
MECHANIZED SYSTEMS
SALES OF REPLACEMENT
SYSTEMS AND PARTS
6
IRRIGATION SEGMENT REVIEW
IRRIGATION SEGMENT
PERFORMANCE
The irrigation segment provided
81 percent of Lindsay’s revenue in
fiscal 2017 compared to 82 percent
the prior year. Irrigation equipment
sales in the U.S. were 58 percent of
segment revenue, and international
sales made up 42 percent.
The irrigation segment generated
operating income of $42.8 million
for the year. Operating margin
for the segment was 10.2 percent
compared to 11.7 percent in
fiscal 2016.
The demand for irrigation
equipment was subdued by
FieldNET Advisor helps growers
maximize their profitability by
helping them maximize yield output
and crop performance, reduce crop
stress and reduce input costs by
not wasting water, energy, fertilizer
or time.
FieldNET Advisor is another
powerful, add-on solution
within Lindsay's industry-leading
FieldNET remote irrigation
management platform. Like other
FieldNET solutions, it can be
incorporated into both new and
existing irrigation systems – even
competitors' machines that are
already in the field. FieldNET is
a strong product line that has
relatively lower levels of commodity
also proven to be an effective
prices and farm income in 2017.
way for Lindsay’s technology to
The prolonged recession in
gain a foothold with a new
agricultural markets weighed on
customer base. In addition, each
farmer sentiment toward capital
system in use generates annual
goods purchases, prompting many
subscription revenue.
Elecsys, a Lindsay company,
is a leading provider of
innovative M2M (machine to
machine) technology solutions
and custom electronics.
of them to defer purchases while
cautiously assessing the market.
TECHNOLOGY AS A
COMPETITIVE ADVANTAGE
In April 2017, Lindsay introduced
FieldNET Advisor™, an interactive
tool that helps farmers make
decisions on when, where and
how much to irrigate. FieldNET
Advisor uses patented technology
to leverage massive amounts of
data, cloud computing capabilities
FieldNET products and systems,
such as FieldNET Advisor, represent
the fruition of Lindsay’s 2015
acquisition of Elecsys, a company
that provides innovative M2M
(machine to machine) technology
solutions. Elecsys' expertise has
proven valuable at accelerating
Lindsay’s powerful, versatile
FieldNET platform of remote
product development, enhancing
monitoring and control products
innovation and reducing the
can be incorporated into a new
cost of bringing new technologies
irrigation system or added to an
to market.
existing pivot.
and touch-screen convenience
The seamless integration of Lindsay’s
to deliver growers continuously
industry-leading technology suite is
updated, science-based irrigation
also part of the much larger picture
recommendations that are
customized for each field.
of the “Lindsay solution.”
7
11 IRRIGATION SEGMENT REVIEW
The “Lindsay solution” provides
production target levels the same
an array of products, systems and
as those of 2017. The U.S. Energy
services that add value in every
Information Administration has
area of a customer’s needs. Lindsay
updated its projections, forecasting
provides comprehensive services
that ethanol production would
that create integrated solutions that
increase by approximately three
can include field layout and system
percent in 2017 and one percent
design; systems for pumping,
in 2018. Biodiesel production
filtration and irrigation; weather
is projected to increase by
and field monitoring services;
approximately 5.5 percent.
and design and installation of
in-field broadband communication
infrastructure.
The USDA has projected net farm
income for 2017 to increase 3.1
percent from 2016 to $63.4 billion,
Our spectrum of solutions helps
following three consecutive years
growers optimize their yields and
of significant declines. Along
builds customer loyalty as it creates
with recalibration of input costs
multiple channels of revenue.
and general economic optimism,
IRRIGATION SEGMENT
OUTLOOK
For the near term, U.S. commodity
prices have shown indications
of stabilization, but they are
expected to remain under pressure
as generally favorable weather
grower sentiment in the U.S. is
showing signs of improvement. In
2016, farmers faced uncertainty
on many fronts, from commodity
prices to energy policies to the
presidential election. In 2017,
much of that uncertainty has been
resolved. With increased stability
conditions during the 2017 growing
in the agriculture industry, farmers
season are expected to result in
above-average crop production
levels and ending stocks. The U.S.
Department of Agriculture (USDA)
estimated season average corn
prices of a relatively low $2.80 to
$3.60 per bushel.
Biofuel production will remain a
major consumer of irrigated corn,
sugar cane and soybeans, using
30 to 40 percent of total crop
production to produce ethanol
and biodiesel. For 2018, the
Environmental Protection Agency
has proposed to keep its ethanol
can feel confident to make the
investment in irrigation systems.
Even in an environment of low
commodity prices, a farmer can
always increase profitability by
improving yields and reducing
energy costs. Lindsay irrigation
solutions are proven to deliver
those benefits. As a result, we
expect modest growth in our
U.S. irrigation business as well
as continued aggressive market
penetration of our technology
products in the upcoming year.
Biofuel production will remain
a major consumer of irrigated
corn, sugar cane and soybeans.
The United Nations forecasts
that the world’s population
will grow from the current
7.6 billion to approximately
9.7 billion by 2050.
8
In international irrigation equipment
sales, we expect continued growth.
The irrigation market in Brazil
continues to recover, aided by
stability in government finance
programs. Irrigation projects
continue in our developing
markets such as North Africa, the
Middle East, Russia, and Ukraine.
We continue to quote sizable
agricultural projects in developing
markets around the world.
In 2017, Lindsay introduced FieldNET Advisor, an interactive tool that helps farmers
make decisions on when, where and how much to irrigate.
As we grow our international
increase will require much higher
irrigation markets, we will continue
crop yields, necessitating more
to work to improve margins by
efficient use of land and water.
taking advantage of greater scale
and more vertical integration
in our sales, manufacturing and
distribution processes.
According to the United Nations
Educational, Scientific and Cultural
Organization (UNESCO), only 20
percent of the world’s cultivated
For the long term, the drivers
land is irrigated, yet irrigated land
of demand for our irrigation
produces 40 percent of the world’s
segment remain overwhelmingly
food supply. More land will have to
positive. Global population growth
be irrigated, and irrigation will have
will be the primary factor, as it also
to be done much more efficiently.
entails the need for much greater
The world’s most common irrigation
GLOBAL
PLANTED ACRES
GLOBAL FOOD
PRODUCTION
food production and more effective
method is flood or gravity irrigation
Irrigated land
Dry-land
use of land and water. Protection of
that consumes twice as much water
the environment and the adoption
as an efficient mechanical system.
of biofuels will continue to be
global priorities.
By greatly increasing crop yields
while conserving precious water
Concerning global population,
and reducing energy requirements,
the United Nations forecasts that
Lindsay irrigation solutions can play
the world’s population will grow
a vital role in meeting the most
from the current 7.6 billion to
basic human needs. By continuing
approximately 9.7 billion by 2050.
to expand our global presence, we
The U.N. Food and Agriculture
will remain at the forefront of this
Organization (FAO) projects that
essential industry.
food production will have to
increase by 70 percent to feed that
many people. Achieving such an
Only 20 percent of the
world’s cultivated land is
irrigated, yet irrigated land
produces 40 percent of the
world’s food supply.
9
118000200060004000 Lindsay’s infrastructure segment is an international group of companies producing a
wide range of products that aid in roadway maintenance and transportation safety. We
manufacture moveable road barriers and barrier transfer machines, energy-absorbing crash
cushions, specialty barriers for work areas or construction zones, road marking materials,
railroad signaling structures, and other safety-related products. Lindsay’s roadway
infrastructure products are sold through more than 70 dealers globally, while railroad
products are sold directly to the major railroad companies in the U.S.
10
INFRASTRUCTURE SEGMENT REVIEW
INFRASTRUCTURE
SEGMENT PERFORMANCE
several states have moved or will
move to the new standards before
The infrastructure segment
provided 19 percent of Lindsay’s
revenue in fiscal 2017 compared to
18 percent in fiscal 2016.
Infrastructure segment revenue was
$99.9 million, a 5 percent increase
from $94.8 million the prior year.
Operating income in fiscal 2017
rose to $20.1 million in fiscal 2017
from $18.5 million in fiscal 2016.
The segment’s operating margin
increased for the third consecutive
year, to 20.1 percent compared to
19.6 percent the prior year.
The continued margin improvement
was achieved with a higher level
of engineering and R&D expense
for development and testing of
products to the MASH standards
for road safety hardware.
A five-year, $305 billion U.S.
highway bill enacted in December
2015 provides stability and
predictability in government
spending. However, we have yet
to see significant incremental
increases in spending for surface
transportation projects. In addition,
the current order flow for road
safety products has moderated
by the ongoing transition to
MASH-compliant products.
Under the Federal Highway
program, road safety hardware will
be evaluated for reimbursement
under MASH standards, with
various effective dates that extend
through December 2019. However,
the required dates.
We have already received letters of
eligibility from the Federal Highway
Administration for products tested
and submitted for review, and we
are in the process of completing
testing and preparing requests
for eligibility of the next group
of products.
Internationally, we continue to
see rising interest in Road Zipper
System® projects as well as
increased demand for our road
safety products.
INFRASTRUCTURE
SEGMENT OUTLOOK
In U.S. road safety products, the
elevated level of development and
testing is expected to continue
through fiscal 2018, as we complete
the transition of the core product
lines to the new MASH standards.
There is a continued need for
infrastructure development and
improvement in the U.S. that will
drive growth in demand for critical
road safety products.
We expect continued global growth
in Road Zipper System sales and
leasing, with a strong pipeline of
orders in a range of magnitude and
variety of locations.
From a long-term perspective,
demand for Lindsay’s infrastructure
products is driven by population
growth and increasing needs for
essential transportation. On a
In more developed nations,
infrastructure expansion and
renovation are continual issues,
and traffic congestion is a
costly nuisance.
The Road Zipper System
created safer work zones
along the Joban Expressway,
a major corridor in Moriya,
Japan that runs north from
the city of Tokyo.
11
11 INFRASTRUCTURE SEGMENT REVIEW
Institute, travel delays due to traffic
congestion caused drivers to waste
3.1 billion gallons of fuel and kept
travelers stuck in their cars for
6.9 billion extra hours, equating to
42 hours per rush-hour commuter.
Nationwide, the report notes
that these direct and indirect
costs add up to $160 billion, or
$960 per commuter.
The report predicts urban roadway
congestion will continue to worsen
without more assertive approaches
on the project, program and policy
fronts. By 2020, with a continued
good economy, the report
notes that:
• Annual delay per commuter will
grow from 42 hours to 47 hours.
• Total delay nationwide will
grow from 6.9 billion hours to
8.3 billion hours.
• The total cost of congestion
will jump from $160 billion to
$192 billion.
Traffic and congestion also have
a strong negative impact on the
environment.
In many situations, we expect that
Lindsay’s Road Zipper System
will be the most cost-effective
traffic mitigation solution available,
on either a temporary or
permanent basis.
As the world’s population grows,
mobility increases, and traffic and
congestion become more pressing,
Lindsay’s infrastructure solutions will
provide increasing value in terms
of financial savings, environmental
benefits and improved quality of life.
The MASH-compliant MAX-Tension™ tangent end terminal, with Sabertooth™
technology, features the next level of impact performance and an ultra-slim design.
global basis, more than half of total
infrastructure spending is being
made in emerging nations where
there is a rapidly growing number
of vehicles, an under-developed
roadway infrastructure and an
urgent emphasis on reducing traffic
mortality rates through investment
in highway safety products.
Lindsay is working with agencies
throughout the world to improve
roadway safety with infrastructure
products such as lane barriers,
energy-absorbing crash cushions
and clear markings.
In more developed nations,
infrastructure expansion and
renovation are continual issues,
and traffic congestion is a costly
nuisance. According to the 2015
Urban Mobility Report published
by the Texas Transportation
Lindsay’s infrastructure solutions
will provide increasing value
in terms of financial savings,
environmental benefits and
improved quality of life.
12
CAPITAL ALLOCATION PLAN
LONG-TERM GOALS AND PERFORMANCE
Lindsay’s goals of providing solid financial performance have not changed.
GOAL
FY17
FY16
5-YEAR AVERAGE
REVENUE GROWTH OF 10 TO 15 PERCENT ANNUALLY
OPERATING MARGINS OF 9 TO 14 PERCENT
RETURN ON INVESTED CAPITAL OF 9 TO 15 PERCENT
0%
8%
7%
-5%
7%
6%
0%
10%
11%
These figures exclude acquired companies in the year of acquisition.
At the time the agriculture industry was entering the
THE COMPANY’S PRIORITIZATION FOR CASH USE:
expected cyclical downturn, the Company formulated
a balanced, comprehensive capital allocation plan
that would enable decisive short-term action, assure
long-term growth and return cash to shareholders.
The plan includes maintaining a targeted cash balance
of $60 million to $75 million to support cyclical and
seasonal fluctuations in working capital and projected
capital expenditures. The Company’s cash balance on
August 31, 2017 totaled $121.6 million.
The Company holds $115 million in Senior Notes
maturing on February 19, 2030, at annual interest rate
of 3.82 percent.
Organic growth initiatives
Capital expenditures
– $8.9 million in fiscal 2017
– Expected to be $12-15 million in fiscal 2018
Annual increases in dividends
– 3.5 percent increase in 2017
Synergistic water-related acquisitions that offer
attractive returns
Excess cash invested in opportunistic share
repurchases
There were no repurchases in 2017; $63.7 million
remained available under the share repurchase
authorization
13
11
LOOKING BACK AND LOOKING AHEAD
In the review of Lindsay Corporation’s fiscal year 2017, some notable
attributes are clearly evident.
Through one of the longest cyclical downturns on record, the Lindsay team
has been able to effectively manage for short-term performance while
positioning the Company advantageously for the future.
The Company is uniquely poised, with the power of a strong balance sheet
and the distinction of a strategically developed product line that offers
unmatched competitive advantages.
The Company’s short-term outlook is rich with opportunity, and the
long-term drivers of its businesses are global, vital and indisputably positive.
And the people of Lindsay Corporation have proven capable of continuing
an impressive track record of profitable, purposeful, value-driven
performance in any environment.
14
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(MARK ONE)
(cid:95) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2017
or
(cid:133) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Commission File Number 1-13419
Lindsay Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
2222 North 111th Street, Omaha, Nebraska
(Address of principal executive offices)
47-0554096
(I.R.S. Employer
Identification No.)
68164
(Zip Code)
402-829-6800
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $1.00 par value
Name of each exchange on which registered
New York Stock Exchange, Inc. (Symbol LNN)
Indicate by check mark if the registrant is a well-known seasoned issuer, (as defined in Rule 405 of the Securities Act). Yes (cid:95) No (cid:134)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes (cid:134) No (cid:95)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes (cid:95) No (cid:134)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes (cid:95) No (cid:134)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K (cid:95)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
Non-accelerated filer
(cid:95)
(cid:134)
Emerging growth company
(cid:134)
(Do not check if smaller reporting company)
Smaller reporting company
Accelerated filer
(cid:134)
(cid:134)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:134)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:134) No (cid:95)
The aggregate market value of Common Stock of the registrant, all of which is voting, held by non-affiliates based on the closing sales
price on the New York Stock Exchange, Inc. on February 28, 2017 was $ 825,259,673.
As of October 9, 2017, 10,697,035 shares of the registrant’s Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement pertaining to the Registrant’s 2018 annual stockholders' meeting to be filed hereafter are incorporated by
reference into Part III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Part I
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4.
Mine Safety Disclosures
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Item 6.
Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11.
Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14.
Principal Accounting Fees and Services
Part IV
Item 15.
Exhibits, Financial Statement Schedules
SIGNATURES
Page(s)
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ITEM 1 — Business
PART I
INTRODUCTION
Lindsay Corporation, along with its subsidiaries (collectively called “Lindsay” or the “Company”), is a global leader
in providing a variety of proprietary water management and road infrastructure products and services. The Company
has been involved in the manufacture and distribution of agricultural irrigation equipment since 1955 and has grown
from a regional company to an international water efficiency solutions and highway infrastructure firm with worldwide
sales and distribution. Lindsay, a Delaware corporation, maintains its corporate offices in Omaha, Nebraska. The
Company has operations which are categorized into two major reporting segments, Irrigation and Infrastructure.
Irrigation Segment – The Company’s irrigation segment includes the manufacture and marketing of center pivot,
lateral move, and hose reel irrigation systems which are used principally in the agricultural industry to increase or
stabilize crop production while conserving water, energy and labor. The irrigation segment also manufactures and
markets repair and replacement parts for its irrigation systems and controls. In addition, the irrigation segment also
designs and manufactures water pumping stations and controls for the agriculture, golf, landscape and municipal
markets and filtration solutions for groundwater, agriculture, industrial and heat transfer markets. The Company
continues to strengthen irrigation product offerings through innovative technology such as Global Positioning System
(“GPS”) positioning and guidance, variable rate irrigation, wireless irrigation management, machine-to-machine
(“M2M”) communication technology solutions and smartphone applications. The Company’s primary domestic
irrigation manufacturing facilities are located in Lindsay, Nebraska; Hartland, Wisconsin; Olathe, Kansas; and Fresno,
California. Internationally, the Company has production operations in Brazil, France, China, Turkey, and South
Africa, as well as distribution and sales operations in the Netherlands, Australia, and New Zealand. The Company
also exports equipment from the U.S. to other international markets.
Infrastructure Segment – The Company’s infrastructure segment includes the manufacture and marketing of
moveable barriers, specialty barriers, crash cushions and end terminals, road marking and road safety equipment, large
diameter steel tubing, and railroad signals and structures. The infrastructure segment also provides outsourced
manufacturing and production services. The principal infrastructure manufacturing facilities are located in Rio Vista,
California; Milan, Italy; and Omaha, Nebraska.
PRODUCTS BY SEGMENT
IRRIGATION SEGMENT
Products - The Company manufactures and markets its center pivot, lateral move irrigation systems, and irrigation
controls in the U.S. and internationally under its Zimmatic® brand. The Company also manufactures and markets hose
reel travelers under the Perrot™ and Greenfield® brands. The Company also produces or markets chemical injection
systems, variable rate irrigation systems, flow meters, weather stations, soil moisture sensors, and remote monitoring
and control systems which it sells under its GrowSmart® brand. In addition to whole systems, the Company
manufactures and markets repair and replacement parts for its irrigation systems and controls. The Company also
designs and manufactures water pumping stations and controls for the agriculture, golf, landscape, and municipal
markets under its Watertronics® brand and filtration solutions for groundwater, agriculture, industrial, and heat
transfer markets, worldwide, under its LAKOS® brand. Furthermore, the Company designs and manufactures
innovative M2M communication technology solutions, data acquisition and management systems, and custom
electronic equipment for critical applications under its Elecsys™ brand.
The Company’s irrigation systems are primarily of the standard center pivot type, with a small portion of its products
consisting of the lateral move type. Both are automatic move systems consisting of sprinklers mounted on a water
carrying pipeline which is supported approximately 11 feet off the ground by a truss system suspended between
moving towers.
A standard center pivot in the U.S. is typically seven spans and approximately 1,300 feet long and is designed to circle
within a quarter-section of land, which comprises 160 acres, wherein it irrigates approximately 125 to 130 acres. A
center pivot or lateral move system can also be custom designed and can irrigate from 25 to 600+ acres.
A center pivot system represents a significant investment to a farmer. In a dry land conversion to center pivot
irrigation, approximately one-half of the investment is for the pivot itself, and the remainder is attributable to
installation of additional equipment such as wells, pumps, underground water pipes, electrical supply, and a concrete
3
pad upon which the pivot is anchored. The Company’s center pivot and lateral move irrigation systems can be
enhanced with a family of integrated proprietary products such as water pumping stations, GPS monitoring, and other
automated controls.
The Company also manufactures and distributes hose reel travelers. Hose reel travelers are typically deployed in
smaller or irregular fields and usually are easy to operate, easy to move from field to field, and a smaller investment
than a typical standard center pivot.
The Company also markets proprietary remote monitoring and automation technology that works on any brand of
electronic pivot and drip irrigation systems and is sold on a subscription basis under the FieldNET® product name.
FieldNET® technology enables growers to remotely monitor and operate irrigation equipment, saving time, and
reducing water and energy consumption. The technology uses cellular or radio frequency communication systems to
remotely acquire data relating to various conditions in an irrigated field, including operational status of the irrigation
system, position of the irrigation system, water usage, weather and soil conditions, and similar data. The system can
remotely control the irrigation system, altering the speed to vary water application amounts, and controlling pump
station and diesel generator operation. Data management and control is achieved using applications running on various
personal computer or mobile devices connected to the internet.
Other Types of Irrigation – Center pivot and lateral move irrigation systems compete with three other types of
irrigation: flood, drip, and other mechanical devices such as hose reel travelers and solid set sprinklers. The bulk of
worldwide irrigation is accomplished by traditional flood irrigation. Flood irrigation is accomplished by either
flooding an entire field, or by providing a water source (ditches or a pipe) along the side of a field, which is planed
and slopes slightly away from the water source. The water is released to the crop rows through gates in the ditch or
pipe, or through siphon tubes arching over the ditch wall into some of the crop rows. It runs down through the crop
row until it reaches the far end of the row, at which time the water source is moved and another set of rows are flooded.
Disadvantages or limitations of flood irrigation include that it cannot be used to irrigate uneven, hilly, or rolling terrain,
it can be wasteful or inefficient and coverage can become inconsistently applied. In “drip” or “low flow” irrigation,
perforated plastic pipe or tape is installed on the ground or buried underground at the root level. Several other types
of mechanical devices, such as hose reel travelers, irrigate the remaining irrigated acres.
Center pivot, lateral move, and hose reel traveler irrigation offer significant advantages when compared with other
types of irrigation. It requires less labor and monitoring; can be used on sandy ground, which, due to poor water
retention ability, must have water applied frequently; can be used on uneven ground, thereby allowing previously
unsuitable land to be brought into production; can be used for the application of fertilizers, insecticides, herbicides, or
other chemicals (termed “fertigation” or “chemigation”); and conserves water and chemicals through precise control
of the amount and timing of the application.
Markets - Water is an essential and critical requirement for crop production, and the extent, regularity, and frequency
of water application can be a critical factor in crop quality and yield. The fundamental factors which govern the
demand for center pivot and lateral move systems are essentially the same in both the U.S. and international markets.
Demand for center pivot and lateral move systems is determined by whether the value of the increased crop production
and cost savings attributable to center pivot or lateral move irrigation exceeds any increased costs associated with
purchasing, installing, and operating the equipment. Thus, the decision to purchase a center pivot or lateral move
system, in part, reflects the profitability of agricultural production, which is determined primarily by the prices of
agricultural commodities and the costs of other farming inputs.
The current demand for center pivot systems has three sources: conversion to center pivot systems from less water-
efficient, more labor-intensive types of irrigation; replacement of older center pivot systems, which are beyond their
useful lives or are technologically obsolete; and conversion of dry land farming to irrigated farming. Demand for
center pivots and lateral move irrigation equipment also depends upon the need for the particular operational
characteristics and advantages of such systems in relation to alternative types of irrigation, primarily flood. More
efficient use of the basic natural resources of land, water, and energy helps drive demand for center pivot and lateral
move irrigation equipment. An increasing global population not only increases demand for agricultural output, but
also places additional and competing demands on land, water, and energy. The Company expects demand for center
pivots and lateral move systems to continue to increase relative to other irrigation methods because center pivot and
lateral move systems are preferred where the soil is sandy; the terrain is not flat; the land area to be irrigated is sizeable;
there is a shortage of reliable labor; water supply is restricted and conservation is preferred or critical; and/or
fertigation or chemigation will be utilized.
4
United States Market – In the United States, the Company sells its branded irrigation systems, including Zimmatic®,
to over 200 independent dealers, who resell to their customer, the farmer. Dealers assess their customers’
requirements, design the most efficient solution, assemble and erect the system in the field, and provide additional
system components, primarily relating to water supply (wells, pumps, pipes) and electrical supply (on-site generation
or hook-up to power lines). Lindsay dealers generally are established local agribusinesses, many of which also deal
in related products, such as well drilling and water pump equipment, farm implements, grain handling and storage
systems, and farm structures.
International Market – The Company sells center pivot and lateral move irrigation systems throughout the world.
International sales accounted for approximately 42 percent and 38 percent of the Company’s total irrigation segment
revenues in fiscal 2017 and 2016, respectively. The Company sells direct to consumers, as well as through an
international dealer network, and has production and sales operations in Brazil, France, China, Turkey, and South
Africa, as well as distribution and sales operations in the Netherlands, Australia, and New Zealand serving the key
South American, European, Chinese, African, Russian, Ukrainian, Middle East, Australian, and New Zealand markets.
The Company also exports irrigation equipment from the U.S. to international markets.
The Company’s international markets differ with respect to the need for irrigation, the ability to pay, demand, customer
type, government support of agriculture, marketing and sales methods, equipment requirements, and the difficulty of
on-site erection. The Company’s industry position is such that it believes that it will likely be considered as a potential
supplier for most major international agricultural development projects utilizing center pivot or lateral move irrigation
systems.
Competition – Four manufacturers control a substantial majority of the U.S. center pivot irrigation system industry.
The international irrigation market includes participation and competition by the leading U.S. manufacturers, as well
as various regional manufacturers. The Company competes in certain product lines with several manufacturers, some
of whom may have greater financial resources than the Company. The Company competes by continuously improving
its products through ongoing research and development activities. The Company continues to strengthen irrigation
product offerings through innovative technology such as GPS positioning and guidance, variable rate irrigation,
wireless irrigation management, and smartphone applications, as well as through the acquisition of products and
services that allow the Company to provide a more comprehensive solution to growers’ needs. Competition also
occurs in areas of price and seasonal programs, product quality, durability, controls, product characteristics, retention
and reputation of local dealers, customer service, and, at certain times of the year, the availability of systems and their
delivery time. On balance, the Company believes it competes favorably with respect to these factors.
INFRASTRUCTURE SEGMENT
Products – The Company’s Quickchange® Moveable Barrier™ system, commonly known as the Road Zipper System®,
is composed of three parts: 1) T-shaped concrete and steel barriers that are connected to form a continuous wall; 2) a
Barrier Transfer Machine™ (“BTM™”) capable of moving the barrier laterally across the pavement; and 3) the variable
length barriers necessary for accommodating curves. A barrier element is approximately 32 inches high, 12-24 inches
wide, 3 feet long, and weighs 1,500 pounds. The barrier elements are interconnected by heavy duty steel hinges to
form a continuous barrier. The BTM™ employs an inverted S-shaped conveyor mechanism that lifts the barrier,
moving it laterally before setting it back on the roadway surface.
In permanent applications, the Road Zipper System® increases capacity and reduces congestion by varying the number
of directional traffic lanes to match the traffic demand, and promotes safety by maintaining the physical separation of
opposing lanes of traffic. Roadways with fixed medians have a set number of lanes in each direction and cannot be
adjusted to traffic demands that may change over the course of a day, or to capacity reductions caused by traffic
incidents or road repair and maintenance. Applications include high-volume highways where expansion may not be
feasible due to lack of additional right-of-way, environmental concerns, or insufficient funding. The Road Zipper
System® is particularly useful in busy commuter corridors and at choke points such as bridges and tunnels. Road
Zipper Systems® can also be deployed at roadway or roadside construction sites to accelerate construction, improve
traffic flow, and safeguard work crews and motorists by positively separating the work area and traffic. Examples of
types of work completed with the help of a Road Zipper System® include highway reconstruction, paving and
resurfacing, road widening, median and shoulder construction, and repairs to tunnels and bridges.
The Company offers a variety of equipment lease options for Road Zipper Systems® and BTM™ equipment used in
construction applications. The leases extend for periods of one month or more for equipment already existing in the
Company’s lease fleet. Longer lease periods may be required for specialty equipment that must be built for specific
5
projects. Sales for a highway safety or road improvement project range from $2.0 to $20.0 million, making them
significant capital investments.
Crash Cushions and End Terminals – The Company offers a complete line of redirective and non-redirective crash
cushions which are used to enhance highway safety at locations such as toll booths, freeway off-ramps, medians and
roadside barrier ends, bridge supports, utility poles, and other fixed roadway hazards. The Company’s primary crash
cushion products cover a full range of lengths, widths, speed capacities, and application accessories and include the
following brand names: TAU®; Universal TAU-II®; TAU-II-R™; TAU-B_NR™; ABSORB 350®; and Walt™. In
addition to these products the Company also offers guardrail end terminal products such as the X-Tension® and X-
Lite® systems. The crash cushions and end terminal products compete with other vendors in the world market. These
systems are generally sold through a distribution channel that is domiciled in particular geographic areas.
Specialty Barriers – The Company also offers specialty barrier products such as the SAB™, ArmorGuard™,
PaveGuard™, and DR46™ portable barrier and/or barrier gate systems. These products offer portability and flexibility
in setting up and modifying barriers in work areas and provide quick-opening, high-containment gates for use in
median or roadside barriers. The gates are generally used to create openings in barrier walls of various types for both
construction and incident management purposes. The DR46™ is an energy-absorbing barrier that can help protect
motorcyclists from impacting guardrail posts which is an area of focus by departments of transportation and
government regulators for reducing the amount and severity of injuries.
Road Marking and Road Safety Equipment – The Company also offers preformed tape and a line of road safety
accessory products. The preformed tape is used primarily in temporary applications such as markings for work zones,
street crossings, and road center lines or boundaries. The road safety equipment consists of mostly plastic and rubber
products used for delineation, slowing traffic, and signaling. The Company also manages an ISO 17025 certified
testing laboratory that performs full-scale impact testing of highway safety products in accordance with the National
Cooperative Highway Research Program (“NCHRP”) Report 350, the Manual for Assessing Safety Hardware
(“MASH”), and the European Norms (“EN1317 Norms”) for these types of products. The NCHRP Report 350 and
MASH guidelines are procedures required by the U.S. Department of Transportation Federal Highway Administration
(“FHWA”) for the safety performance evaluation of highway features. The EN1317 Norms are being used to qualify
roadway safety products for the European markets.
Other Products – The Company’s Diversified Manufacturing, Rail and Tubing business manufactures and markets
railroad signals and structures, and large diameter steel tubing, and provides outsourced manufacturing and production
services for other companies. The Company’s customer base includes large industrial companies and railroads.
Customers benefit from the Company’s design and engineering capabilities as well as the Company’s ability to provide
a wide spectrum of manufacturing services, including welding, machining, painting, forming, galvanizing, and
assembling hydraulic, electrical, and mechanical components.
Markets – The Company’s primary infrastructure market includes moveable concrete barriers, delineation systems,
crash cushions, and similar protective equipment. The U.S. roadway infrastructure market includes projects such as
new roadway construction, bridges, tunnels, maintenance and resurfacing, and development of technologies for relief
of roadway congestion. Much of the U.S. highway infrastructure market is driven by government (federal and state)
spending programs. For example, the U.S. government funds highway and road improvements through the Federal
Highway Trust Fund Program. This program provides funding to improve the nation’s roadway system. Matching
funding from the various states may be required as a condition of federal funding. In the long term, the Company
believes that the federal program provides a solid platform for growth in the U.S. market, as it is generally
acknowledged that additional funding will be required for infrastructure development and maintenance in the future.
The global market for the Company’s infrastructure products continues to be driven by population growth and the
need for improved road safety. International sales accounted for approximately 45 percent and 37 percent of the
Company’s total infrastructure segment revenues in fiscal 2017 and 2016, respectively. The international market is
very different from country to country. The standardization in performance requirements and acceptance criteria for
highway safety devices adopted by the European Committee for Standardization is expected to lead to greater
uniformity and a larger installation program. Prevention programs put in place in various countries to lower highway
traffic fatalities may also lead to greater demand. The Company distributes infrastructure products in Europe, South
America, the Middle East, and Asia. The Company expects to continue expanding in international markets as
populations grow and markets become more established.
6
Competition – The Company competes in certain product lines with several manufacturers, some of whom may have
greater financial resources than the Company. The Company competes by continuously improving its products
through ongoing research and development activities. The Company competes with certain products and companies
in its crash cushion business, but has limited competition in its moveable barrier line, as there is not another moveable
barrier product today comparable to the Road Zipper System®. However, the Company’s barrier product does compete
with traditional “safety-shaped” concrete barriers and other safety barriers.
Distribution Methods and Channels – The Company has dedicated production and sales operations in the United States
and Italy. Sales efforts consist of both direct sales and sales programs managed by its network of distributors and
third-party representatives. The sales teams have responsibility for new business development and assisting
distributors and dealers in soliciting large projects and new customers. The distributor and dealer networks have
exclusive territories and are responsible for developing sales and providing service, including product maintenance,
repair, and installation. The typical dealer sells an array of safety supplies, road signs, crash cushions, delineation
equipment, and other highway products. Customers include departments of transportation, municipal transportation
road agencies, roadway contractors, subcontractors, distributors, and dealers. Due to the project nature of the roadway
construction and congestion management markets, the Company’s customer base changes from year to year. Due to
the limited life of projects, it is rare that a single customer will account for a significant amount of revenues in
consecutive years. The customer base also varies depending on the type of product sold. The Company’s moveable
barrier products are typically sold to transportation agencies or the contractors or suppliers serving those agencies. In
contrast, distributors account for a majority of crash cushion sales since those products have lower price points and
tend to have shorter lead times.
PRESIDENT AND CHIEF EXECUTIVE OFFICER TRANSITION
As previously disclosed, the Board of Directors of the Company has appointed Timothy L. Hassinger as President and
Chief Executive Officer and a member of the Board of Directors, effective October 16, 2017. Mr. Hassinger will
succeed Richard W. Parod, who is retiring from his positions as President, Chief Executive Officer and a member of
the Board of Directors after 17 years of service to the Company. From October 16, 2017 through his expected
retirement date of December 1, 2017, Mr. Parod is expected to serve the Company in an advisory capacity as President
Emeritus.
GENERAL
Certain information generally applicable to both of the Company’s reportable segments is set forth below.
The following table describes the Company’s total revenues for the past three fiscal years. United States export
revenue is included in International, based on the region of destination.
($ in millions)
United States
International
Total revenues
2017
For the years ended August 31,
2016
2015
Revenues
297.3
220.7
518.0
$
$
% of
total
57
43
100
$
$
Revenues
321.6
194.9
516.4
% of
total
62
38
100
Revenues
$
350.3
209.9
560.2
$
% of
total
63
37
100
SEASONALITY
Irrigation equipment sales are seasonal by nature. Farmers generally order systems to be delivered and installed before
the growing season. Shipments to customers located in Northern Hemisphere countries usually peak during the
Company’s second and third fiscal quarters for the spring planting period. Sales of infrastructure products are
traditionally higher during prime road construction seasons and lower in the winter. The primary construction season
for Northern Hemisphere countries generally corresponds with the Company’s third and fourth fiscal quarters.
CUSTOMERS
The Company is not dependent upon a single customer or upon a limited number of customers for a material part of
either segment’s business. The loss of any one customer would not have a material adverse effect on the Company’s
financial condition, results of operations, or cash flow.
ORDER BACKLOG
As of August 31, 2017, the Company had an order backlog of $51.8 million compared with $50.7 million at August
31, 2016. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing, and
7
execution of contracts. Backlog typically represents long-term projects as well as short lead-time orders, therefore it
is generally not a good indication of the next quarter’s revenues.
RAW MATERIALS AND COMPONENTS
Raw materials used by the Company include coil steel, angle steel, plate steel, zinc, tires, gearboxes, concrete, rebar,
fasteners, and electrical and hydraulic components (motors, switches, cable, valves, hose, and stators). The Company
has, on occasion, faced shortages of certain such materials. The Company believes it currently has ready access from
assorted domestic and foreign suppliers to adequate supplies of raw materials and components.
CAPITAL EXPENDITURES
Capital expenditures for fiscal 2017, 2016, and 2015 were $8.9 million, $11.5 million, and $15.2 million, respectively.
Capital expenditures for fiscal 2018 are estimated to be approximately $12.0 million to $15.0 million, including
equipment replacement, manufacturing capacity expansion and productivity improvements. The Company’s
management does maintain flexibility to modify the amount and timing of some of the planned expenditures in
response to economic conditions.
PATENTS, TRADEMARKS, AND LICENSES
Lindsay’s Zimmatic®, Greenfield®, GrowSmart®, Perrot™, Road Zipper System®, Quickchange® Moveable Barrier™,
ABSORB 350®, FieldNET®, TAU®, Universal TAU-II®, TAU-II-R™, TAU-B_NR™, X-Tension®, X-Lite® CableGuard™,
TESI™, SAB™, ArmorGuard™, PaveGuard™, DR46™, U-MAD™, Watertronics®, LAKOS®, and other trademarks are
registered or applied for in the major markets in which the Company sells its products. In addition, the Company
owns multiple patents dealing with cellular communication techniques, cathodic protection measurement methods,
and data compression and transmission. Lindsay follows a policy of applying for patents on all significant patentable
inventions in markets deemed appropriate. Although the Company believes it is important to follow a patent
protection policy, Lindsay’s business is not dependent, to any material extent, on any single patent or group of patents.
EMPLOYEES
The number of persons employed by the Company and its wholly-owned subsidiaries at the fiscal years ended 2017,
2016, and 2015 was 1,410, 1,366, and 1,324, respectively. None of the Company’s U.S. employees are represented
by a union. Certain of the Company’s non-U.S. employees are unionized due to local governmental regulations.
ENVIRONMENTAL AND HEALTH AND SAFETY MATTERS
The Company is subject to numerous laws and regulations that govern environmental and occupational health and
safety matters. The Company believes that its operations are substantially in compliance with all such applicable laws
and regulations, and that it holds all necessary permits in each jurisdiction in which its facilities are located.
Environmental and health and safety regulations are subject to change and interpretation. In some cases, compliance
with applicable regulations or standards may require the Company to make additional capital and operational
expenditures. The Company, however, is not currently aware of any material expenditures required to comply with
such regulations, other than information related to the environmental remediation activities described in Note 13,
Commitments and Contingencies, to the Company’s consolidated financial statements. The Company accrues for the
anticipated cost of investigation and remediation when the obligation is probable and can be reasonably estimated.
Any revisions to these estimates could be material to the operating results of any fiscal quarter or fiscal year, however
the Company does not expect such additional expenses would have a material adverse effect on its liquidity or financial
condition.
FINANCIAL INFORMATION ABOUT FOREIGN AND U.S. OPERATIONS
The Company’s primary production facilities are located in the United States. The Company has smaller production
and sales operations in Brazil, France, Italy, China, Turkey, and South Africa, as well as distribution and sales
operations in the Netherlands, Australia, and New Zealand. Where the Company exports products from the United
States to international markets, the Company generally ships against prepayment, an irrevocable letter of credit
confirmed by a U.S. bank or another secured means of payment, or with credit insurance from a third party. For sales
within both U.S. and foreign jurisdictions, prepayments or other forms of security may be required before credit is
granted, however most local sales are made based on payment terms after a full credit review has been performed.
Most of the Company’s financial transactions are in U.S. dollars, although some export sales and sales from the
Company’s foreign subsidiaries are conducted in other currencies. Approximately 23 percent and 19 percent of total
consolidated Company sales were conducted in currencies other than the U.S. dollar in fiscal 2017 and 2016,
respectively. To reduce the uncertainty of foreign currency exchange rate movements on these sales and purchase
commitments conducted in local currencies, the Company monitors its risk of foreign currency fluctuations and, at
8
times, may enter into forward exchange or option contracts for transactions denominated in a currency other than U.S.
dollars.
In addition to the transactional foreign currency exposures mentioned above, the Company also has translation
exposure resulting from translating the financial statements of its international subsidiaries into U.S. dollars. In order
to reduce this translation exposure, the Company, at times, utilizes foreign currency forward contracts to hedge its net
investment exposure in its foreign operations. For information on the Company’s foreign currency risks, see Item 7A
of Part II of this report.
INFORMATION AVAILABLE ON THE LINDSAY WEBSITE
The Company makes available free of charge on its website homepage, under the tab “Investor Relations – SEC
Filings”, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy
Statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company electronically files such
material with, or furnishes it to, the Securities and Exchange Commission. The Company’s internet address is
http://www.lindsay.com; however, information posted on its website is not part of this Annual Report on Form 10-K.
The following documents are also posted on the Company’s website homepage, under the tabs “Investor Relations –
Governance – Committees” and “Investor Relations – Governance – Ethics”:
Audit Committee Charter
Compensation Committee Charter
Corporate Governance and Nominating Committee Charter
Code of Business Conduct and Ethics
Corporate Governance Principles
Code of Ethical Conduct
Employee Complaint Procedures for Accounting and Auditing Matters
Special Toll-Free Hotline Number and E-mail Address for Making Confidential or Anonymous Complaints
These documents are also available in print to any stockholder upon request, by sending a letter addressed to the
Secretary of the Company.
9
ITEM 1A — Risk Factors
The following are certain of the more significant risks that may affect the Company’s business, financial condition
and results of operations.
The Company’s irrigation revenues are highly dependent on the agricultural industry and weather conditions. The
Company’s irrigation revenues are cyclical and highly dependent upon the need for irrigated agricultural crop
production which, in turn, depends upon many factors, including total worldwide crop production, the profitability of
agricultural crop production, agricultural commodity prices, net farm income, availability of financing for farmers,
governmental policies regarding the agricultural sector, water and energy conservation policies, the regularity of
rainfall, and regional climate conditions. As farm income decreases, farmers may postpone capital expenditures or
seek less expensive irrigation alternatives.
Weather conditions, particularly leading up to the planting and early growing season, can significantly affect the
purchasing decisions of consumers of irrigation equipment. Natural calamities such as regional floods, hurricanes or
other storms, and droughts can have significant effects on seasonal irrigation demand. Drought conditions, which
generally affect irrigation equipment demand positively over the long term, can adversely affect demand if water
sources become unavailable or if governments impose water restriction policies to reduce overall water availability.
Changing worldwide demand for food and different types of biofuel could have an effect on the price of agricultural
commodities and consequently the demand for irrigation equipment. Changing worldwide demand for farm outputs
to meet the world’s growing food and biofuel demands, driven in part by government policies and an expanding global
population, are likely to result in fluctuating agricultural commodity prices, which affect demand for irrigation
equipment. The primary benefit of many of the Company’s irrigation products is to increase grain yields and the
resulting revenue for farmers. As grain prices decline, the breakeven point of incremental production is more difficult
to achieve, reducing or eliminating the profit and return on investment from the purchase of the Company’s products.
As a result, changes in grain prices can significantly affect the Company’s sales levels.
A decline in oil prices or changes in government policies regarding biofuels could also negatively affect the biofuels
market and/or reduce government revenues of oil-producing countries that purchase or subsidize the purchase of
irrigation equipment. Biofuels production is a significant source of grain demand in the U.S. and certain international
markets. While ethanol production levels are currently mandated within the U.S., potential mandate changes or price
declines for ethanol could reduce the demand for grains. In addition, a number of ethanol producers in the U.S. are
cooperatives partially owned by farmers. Reduced profit of ethanol production could reduce income for farmers which
could, in turn, reduce the demand for irrigation equipment.
The Company’s international sales are highly dependent on foreign market conditions and subject the Company
to additional risk, restrictions, and compliance obligations. International revenues are primarily generated from
Australia, New Zealand, Canada, Europe, Mexico, the Middle East, Africa, China, Russia, Ukraine, and Central and
South America. In addition to risks relating to general economic and potential instability in these countries, a number
of countries are particularly susceptible to disruption from changing socioeconomic conditions as well as terrorism,
sanctions, war and similar incidents. The collectability of receivables can also be difficult to estimate, particularly in
areas of political instability or with governments with which the Company has limited experience or where there is a
lack of transparency as to the current credit condition.
The Company’s international sales efforts and profit margins are affected by international trade barriers, including
governmental policies on tariffs, taxes, import or export licensing requirements and trade sanctions. In addition, the
Company’s international sales efforts must also comply with anti-corruption laws like the U.S. Foreign Corrupt
Practices Act. These anti-corruption laws generally prohibit companies and their intermediaries (including, in the
Company’s case, dealers and sales representatives) from making improper payments or providing anything of value
to improperly influence government officials or certain private individuals for the purpose of obtaining or retaining a
business advantage. As part of the Company’s irrigation and infrastructure sales efforts, the Company promotes and
sells products to governmental entities and state-owned or state-backed business enterprises, the employees and
representatives of which may be considered government officials for purposes of the U.S. Foreign Corrupt Practices
Act. Further, some of the countries in which the Company does business lack fully developed legal systems and are
perceived to have elevated levels of corruption. Although the Company has compliance and training programs in
place designed to reduce the likelihood of potential violations of such laws, violations of these laws or other
compliance requirements could occur and result in criminal or civil sanctions and have an adverse effect on the
Company’s reputation, business, financial condition and results of operations.
10
The Company’s international sales and profit margins are subject to currency exchange risk. Most of the
Company’s international sales involve some level of export from the U.S., either of components or completed
products. Policies and geopolitical events affecting exchange rates could adversely affect the international flow of
agricultural and other commodities, which can cause a corresponding downturn in the demand for agricultural
equipment in many areas of the world. Further, any strengthening of the U.S. dollar or any other currency of a country
in which the Company manufactures its products (e.g. the Euro, Brazilian real, South African rand, Turkish lira and
Chinese renminbi) and/or any weakening of local currencies can increase the cost of the Company’s products in its
foreign markets. Irrespective of any effect on the overall demand for agricultural equipment, the effect of these
changes can make the Company’s products less competitive relative to local producing competitors and, in extreme
cases, can result in the Company’s products not being cost-effective for customers. As a result, the Company’s
international sales and profit margins could decline.
The Company’s profitability may be negatively affected by changes in the availability and price of certain parts,
components, and raw materials. The Company requires access to various parts, components, and raw materials at
competitive prices in order to manufacture its products. Changes in the availability and price of these parts,
components, and raw materials (including steel and zinc), which have changed significantly and rapidly at times and
are affected by factors like demand and freight costs, can significantly increase the costs of production. Due to price
competition in the market for irrigation equipment and certain infrastructure products, the Company may not be able
to recoup increases in these costs through price increases for its products, which would result in reduced profitability.
Whether increased operating costs can be passed through to the customer depends on a number of factors, including
farm income and the price of competing products. Further, the Company relies on a limited number of suppliers for
certain raw materials, parts and components in the manufacturing process. Disruptions or delays in supply or
significant price increases from these suppliers could adversely affect the Company’s operations and profitability.
Such disruptions, terminations or cost increases could result in cost inefficiencies, delayed sales or reduced sales.
The Company’s infrastructure revenues are highly dependent on government funding of transportation projects and
subject to compliance with government regulations. The demand for the Company’s infrastructure products depends
to a large degree on the amount of government spending authorized to improve road and highway systems. For
example, the U.S. government funds highway and road improvements through the Federal Highway Trust Fund
Program and matching funding from states may be required as a condition of federal funding. If highway funding is
reduced or delayed, it may reduce demand for the Company’s infrastructure products.
In addition, the Company’s infrastructure products are required to meet certain standards as outlined by the various
governments worldwide. The Federal Highway Administration (“FHWA”) has begun to implement Manual for
Assessing Safety Hardware (“MASH”) standards which update and supersede National Cooperative Highway
Research Program (“NCHRP”) Report 350 standards for evaluating new road safety hardware devices. In addition,
state departments of transportation have the ability to require compliance with MASH standards prior to FHWA
mandating such practices. While infrastructure products previously accepted under NCHRP Report 350 criteria are
not required to be retested under MASH standards, they will no longer be eligible for federal reimbursement as the
MASH standards are implemented by FHWA and the states. The Company is incurring, and will continue to incur,
research and development and testing expense to comply with MASH standards. Any reevaluation of the Company’s
infrastructure products’ compliance with applicable standards, the implementation of new standards, and/or any delay
in the Company’s development of additional infrastructure products that comply with new standards could have a
significant adverse effect on the Company’s competitive position and on sales and profitability from its infrastructure
product line.
Compliance with applicable environmental and health and safety regulations or standards may require additional
capital and operational expenditures. The Company is subject to numerous laws and regulations which govern
environmental and occupational health and safety matters. The Company believes that its operations are substantially
in compliance with all such applicable laws and regulations and that it holds all necessary permits in each jurisdiction
in which its facilities are located. Environmental and health and safety regulations are subject to change and
interpretation. Compliance with applicable regulations or standards may require the Company to make additional
capital and operational expenditures.
The Company’s Lindsay, Nebraska site was added to the list of priority superfund sites of the U.S. Environmental
Protection Agency (the “EPA”) in 1989. The Company and its environmental consultants have developed a remedial
alternative work plan, under which the Company continues to work with the EPA to define and implement steps to
better contain and remediate the remaining contamination. Although the Company has accrued reasonably estimable
11
costs associated with remediation of the site, the estimate of costs and their timing could change as a result of a number
of factors, including (1) input from the EPA and the Nebraska Department of Environmental Quality on the proposed
remediation plan and any changes which they may subsequently require, (2) refinement of cost estimates and length
of time required to complete remediation and post-remediation operations and maintenance, (3) effectiveness of the
technology chosen in remediation of the site as well as changes in technology that may become available in the future,
and (4) unforeseen circumstances existing at the site. As a result of these factors, the actual amount of costs incurred
by the Company in connection with the remediation of contamination of its Lindsay, Nebraska site could exceed the
amounts accrued for this expense at the end of fiscal 2017. The Company’s ongoing remediation activities at its
Lindsay, Nebraska facility are described in Note 13, Commitments and Contingencies, to the Company’s consolidated
financial statements.
The Company is exposed to risks from legal proceedings. From time to time, the Company may be involved in
various legal proceedings and other various claims that arise in the ordinary course of its business, which may include
commercial, employment, product liability, tort, and other litigation. Current and future litigation, governmental
proceedings and investigations, audits, indemnification claims or other claims that the Company faces may result in
substantial costs and expenses and significantly divert the attention of its management regardless of the outcome. In
addition, these matters could lead to increased costs or interruptions of its normal business operations. Litigation,
governmental proceedings and investigations, audits, indemnification claims or other claims involve uncertainties and
the eventual outcome of any such matter could adversely affect the Company’s business, results of operations or cash
flows. For a summary of the Company’s infrastructure products litigation, see Note 13, Commitments and
Contingencies, to the Company’s consolidated financial statements.
The frequency and magnitude of liability claims and the related expenses could lower profitability and
increase business risk. The nature of the Company’s business subjects the Company to potential liability for claims
alleging property damage and personal injury or death arising from the use of or exposure to its products, especially
infrastructure products that are installed along roadways. While the Company’s liability insurance coverage is
consistent with commercial norms in the industries in which the Company operates, an unusually large liability claim
or a string of claims could potentially exceed the Company’s available insurance coverage. In addition, the availability
of, and the Company’s ability to collect on, insurance coverage can be subject to factors beyond the Company’s
control. For example, any accident, incident, or lawsuit involving the Company, its products specifically, or the
industries in which the Company operates generally, even if the Company is fully insured, contractually indemnified,
or not held to be liable, could significantly affect the cost and availability of insurance to the Company in the future.
If any of the Company’s third-party insurers fail, cancel, or refuse coverage, or otherwise are unable to provide the
Company with adequate insurance coverage, then the Company’s overall risk exposure and operational expenses
would increase and the management of the Company’s business operations would be disrupted.
Further, as insurance policies expire, increased premiums for renewed or new coverage, if such coverage can be
secured, may increase the Company’s insurance expense and/or require that the Company increase its self-insured
retention or deductibles. The Company maintains primary coverage and excess coverage policies. If the number of
claims or the dollar amounts of any such claims rise in any policy year, the Company could suffer additional costs
associated with accessing its excess coverage policies. Also, an increase in the loss amounts attributable to such claims
could expose the Company to uninsured damages if the Company was unable or elected not to insure against certain
claims because of increased premiums or other reasons.
The Company’s infrastructure products are installed along roadways in inherently dangerous applications.
Accidents involving the Company’s infrastructure products could reduce demand for such products and expose the
Company to significant damages and reputational harm. The Company is currently defending a number of product
liability lawsuits involving the Company’s X-Lite® end terminal. While the Company’s infrastructure products are
designed to meet all applicable standards in effect in the markets in which such products are offered, the risk of product
liability claims and associated adverse publicity is inherent in the development, manufacturing, marketing, and sale
of such products, including end terminals and crash cushions that are ultimately installed along roadways. In addition
to this inherent risk, a sizable judgment against a competitor (although recently reversed on appeal) brought significant
attention to the infrastructure products industry and may lead to additional lawsuits being filed against the Company
and others in the industry.
12
An actual or perceived issue with the Company’s infrastructure products could lead to a decline in demand for such
products, the removal of such products from qualified products lists used by government customers in their purchasing
decisions, product recalls, adverse publicity, claims or litigation, and/or the diversion of management’s attention,
which could materially and adversely affect the Company’s reputation, business, financial condition, and results of
operations. While infrastructure product selection, assembly, installation, operation, repair, and maintenance are the
responsibilities of dealers, distributors, customers, and/or state departments of transportation, the Company may
nevertheless also be subjected to claims or litigation in connection with a third party’s alleged failure to satisfactorily
discharge such responsibilities, including but not limited to claims associated with personal injuries, property damage,
and death. Likewise, improper assembly, installation, operation, repair, or maintenance of the Company’s
infrastructure products may cause such infrastructure products to fail to meet certain performance standards, which
could lead to similar consequences as an actual or perceived issue with the infrastructure products themselves.
Although the Company currently maintains insurance against product-related claims or litigation, the Company could
be exposed to significant losses arising from claims involving infrastructure products if the Company’s insurance does
not cover all associated liabilities or if coverage in the future becomes unobtainable on commercially reasonable terms.
Changes in interest rates could reduce demand for the Company’s products. Interest rates globally remain at
historically low levels. In some international markets, the Company has recently seen these rates rise to some degree
and it is expected that global rates will continue to increase, potentially quickly in the U.S., as the economy continues
to improve. Rising interest rates could have a dampening effect on overall economic activity and/or the financial
condition of the Company’s customers, either or both of which could negatively affect customer demand for the
Company’s products and customers’ ability to repay obligations to the Company. An increase in interest rates could
also make it more difficult for customers to cost-effectively fund the purchase of new equipment, which could
adversely affect the Company’s sales.
The Company’s consolidated financial results are reported in U.S. dollars while certain assets and other reported
items are denominated in the currencies of other countries, creating currency translation risk. The reporting
currency for the Company’s consolidated financial statements is the U.S. dollar. Certain of the Company’s assets,
liabilities, expenses and revenues are denominated in other countries’ currencies. Those assets, liabilities, expenses
and revenues are translated into U.S. dollars at the applicable exchange rates to prepare the Company’s consolidated
financial statements. Therefore, increases or decreases in exchange rates between the U.S. dollar and those other
currencies affect the value of those items as reflected in the Company’s consolidated financial statements. Substantial
fluctuations in the value of the U.S. dollar compared to other currencies could have a significant effect on the
Company’s results.
Security breaches and other disruptions to the Company’s information technology infrastructure could interfere
with its operations and could compromise the Company’s and its customers’ and suppliers’ information, exposing
the Company to liability that could cause its business and reputation to suffer. In the ordinary course of business,
the Company relies upon information technology networks and systems to process, transmit and store electronic
information, and to manage or support a variety of business functions, including supply chain, manufacturing,
distribution, invoicing and collection of payments. The Company uses information technology systems to record,
process and summarize financial information and results of operations for internal reporting purposes and to comply
with regulatory financial reporting, legal and tax requirements. Additionally, the Company collects and stores
sensitive data, including intellectual property, proprietary business information and the proprietary business
information of customers and suppliers, as well as personally identifiable information of customers and employees, in
data centers and on information technology networks. The secure operation of these networks and the processing and
maintenance of this information is critical to the Company’s business operations and strategy. Despite security
measures and business continuity plans, the Company’s information technology networks and infrastructure may be
vulnerable to damage, disruptions or shutdowns due to, among other reasons, attacks by hackers or breaches due to
employee error or malfeasance or other disruptions during the process of upgrading or replacing computer software
or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other
catastrophic events. The occurrence of any of these events could compromise the Company’s networks, and the
information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other
loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting
the privacy of personal information, disrupt operations, and damage the Company’s reputation, which could adversely
affect the Company’s business.
13
ITEM 1B — Unresolved Staff Comments
None.
ITEM 2 — Properties
The Company’s facilities are well-maintained, in good operating condition, and suitable for present purposes. These
facilities, together with both short-term and long-term planned capital expenditures, are expected to meet the
Company’s manufacturing needs in the foreseeable future. The Company does not anticipate any difficulty in
retaining occupancy of any leased facilities, either by renewing leases prior to expiration or by replacing them with
equivalent leased facilities. The following are the Company’s significant properties.
Segment
Corporate
Geographic
location (s)
Omaha, Nebraska
Irrigation
Lindsay, Nebraska
Corlu, Turkey
Irrigation
Tianjin, China
Irrigation
Irrigation
Fresno, California
Infrastructure Omaha, Nebraska
Own/
lease
Lease
Own
Lease
Lease
Own
Own
Irrigation
Hartland, Wisconsin
Own
Irrigation
Irrigation
Irrigation
La Chapelle, France
Bellville, South Africa
Mogi Mirim, Sao Paulo,
Brazil
Irrigation
Olathe, Kansas
Infrastructure Milan, Italy
Infrastructure Rio Vista, California
Own
Lease
Own
Own
Own
Own
ITEM 3 — Legal Proceedings
Lease
expiration
2019
Square
feet
30,000 Corporate headquarters
Property description
N/A
2025
2022
N/A
N/A
N/A
N/A
2024
N/A
N/A
N/A
N/A
300,000
Principal U.S. manufacturing plant consists of
eight separate buildings located on 122 acres
283,000 Manufacturing plant for irrigation products
150,000 Manufacturing plant for irrigation products
94,000 Manufacturing plant for filtration products
83,000 Manufacturing plant for infrastructure products
73,000
Manufacturing plant for water pumping stations
and controls
72,000 Manufacturing plant for irrigation products
71,000 Manufacturing plant for irrigation products
67,000 Manufacturing plant for irrigation products
60,000
Manufacturing plant for machine to machine
products
45,000 Manufacturing plant for infrastructure products
30,000 Manufacturing plant for infrastructure products
In the ordinary course of its business operations, the Company is involved, from time to time, in commercial litigation,
employment disputes, administrative proceedings, business disputes, and other legal proceedings. No such current
proceedings, individually or in the aggregate, are expected to have a material effect on the business or financial
condition of the Company, other than the specific environmental remediation matters which are disclosed as part of
Note 13, Commitments and Contingencies, to the Company’s consolidated financial statements. Any revisions to the
estimates accrued for environmental remediation could be material to the operating results of any fiscal quarter or
fiscal year, however the Company does not expect such additional expenses would have a material adverse effect on
its liquidity or financial condition.
For a summary of the Company’s infrastructure products litigation, see Note 13, Commitments and Contingencies, to
the Company’s consolidated financial statements.
ITEM 4 — Mine Safety Disclosures
Not applicable.
14
PART II
ITEM 5 — Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Holders
Lindsay Common Stock trades on the New York Stock Exchange, Inc. (“NYSE”) under the ticker symbol LNN. As
of October 9, 2017, there were approximately 167 stockholders of record.
Price Range of Common Stock
The following table sets forth for the periods indicated the range of the high and low stock prices and dividends paid
per share:
Fiscal 2017 Stock Price
Low
High
Fiscal 2016 Stock Price
Low
High
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Year
$
$
$
$
$
85.68 $
89.98 $
89.57 $
95.04 $
95.04 $
69.11
72.85
79.01
83.63
69.11
$
$
$
$
$
Dividends
0.29
0.29
0.29
0.30
1.17
$
$
$
$
$
77.34
79.27
79.22
75.70
79.27
$
$
$
$
$
Dividends
0.28
0.28
0.28
0.29
1.13
63.19 $
62.99 $
65.78 $
65.80 $
62.99 $
Purchases of Equity Securities by the Issuer and Affiliated Purchases
The Company’s Board of Directors authorized a share repurchase program of up to $250.0 million of common stock
with no expiration date. Under the program, shares may be repurchased in privately negotiated and/or open market
transactions as well as under formalized trading plans in accordance with the guidelines specified under Rule 10b5-1
of the Securities Exchange Act of 1934, as amended. There were no shares repurchased during the twelve months
ended August 31, 2017. During the twelve months ended August 31, 2016, the Company repurchased 688,790 shares
of common stock for an aggregate purchase price of $48.3 million. During the twelve months ended August 31, 2015,
the Company repurchased 1,198,089 shares of common stock for an aggregate purchase price of $96.9 million. The
remaining amount available under the repurchase program was $63.7 million as of August 31, 2017.
Dividends
The Company paid a total of $12.5 million and $12.2 million in dividends during fiscal 2017 and 2016, respectively.
The Company currently expects that cash dividends comparable to those paid historically will continue to be paid in
the future, although there can be no assurance as to the payment of future dividends as such payment depends on
results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any
potential indebtedness the Company may incur, restrictions imposed by applicable law, tax considerations, and other
factors that the Board of Directors deems relevant.
15
Company Stock Performance
The following graph compares the cumulative five-year total return attained by stockholders on the Company’s
Common Stock relative to the cumulative total returns of the S&P Small Cap 600 Index and the S&P Small Cap 600
Construction, Farm Machinery and Heavy Truck index for the five-year period ended August 31, 2017. An investment
of $100 (with the reinvestment of all dividends) is assumed to have been made in the Company’s Common Stock and
in each of the indexes on August 31, 2012 and the graph shows its relative performance through August 31, 2017.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Lindsay Corporation, the S&P Smallcap 600 Index,
and S&P SmallCap 600 Construction, Farm Machinery and Heavy Truck Index
$300
$250
$200
$150
$100
$50
$0
8/12
8/13
8/14
8/15
8/16
8/17
Lindsay Corporation
S&P Smallcap 600
S&P SmallCap 600 Construction, Farm Machinery and Heavy Truck Index
*$100 invested on 8/31/12 in stock or index, including reinvestment of dividends.
Fiscal year ending August 31.
Copyright© 2017 S&P, a division of McGraw Hill Financial. All rights reserved.
Lindsay Corporation
S&P Smallcap 600
S&P SmallCap 600 Construction, Farm Machinery and Heavy Truck Index
100.00
100.00
100.00
117.00
126.69
152.86
121.04
150.38
242.86
120.19
153.09
199.66
115.29
173.39
221.15
140.70
196.12
277.82
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
8/12
8/13
8/14
8/15
8/16
8/17
16
ITEM 6 — Selected Financial Data
($ in millions and shares in thousands,
except per share amounts)
Operating revenues
Gross profit
Gross margin
Operating expenses
Operating income
Operating margin
Net earnings
Net margin
Diluted net earnings per share
Cash dividends per share
Property, plant, and equipment, net
Total assets
Long-term debt, including current
installments
Total shareholders' equity
Return on beginning shareholders'
equity (4)
Diluted weighted average shares
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2017
518.0
145.0
28.0%
104.8
40.2
7.8%
23.2
4.5%
2.17
1.17
74.5
506.0
117.0
270.1
9.2%
10,694
2014(3)
$
$
$
$
$
$
For the years ended August 31,
2015(2)
560.2
156.3
27.9%
105.6
50.7
9.0%
26.3
4.7%
2.22
1.09
78.7
522.6
2016(1)
516.4
148.6
28.8%
114.2
34.4
6.7%
20.3
3.9%
1.85
1.13
77.6
487.5
$
$
$
$
$
$
$
$
$
$
$
$
617.9 $
171.0 $
27.7%
92.6 $
78.4 $
12.7%
51.5 $
8.3%
4.00 $
0.92 $
72.5 $
515.5 $
117.2
251.6
$
$
117.4
288.6
$
$
— $
382.6 $
7.0%
10,930
6.9%
11,855
13.5%
12,882
2013
690.8
194.8
28.2%
87.8
107.0
15.5%
70.6
10.2%
5.47
0.48
65.1
502.5
—
380.6
22.7%
12,901
(1) Fiscal 2016 operating expenses include an increase in an environmental remediation reserve of $13.0 million.
(2) Fiscal 2015 includes operating results of Elecsys Corporation acquired in the second quarter of fiscal 2015 and SPF Water Engineering,
LLC acquired in the fourth quarter of fiscal 2015. Operating expenses include an increase in bad debt expense of $5.0 million and an increase
in an environmental remediation reserve of $1.5 million.
(3) Fiscal 2014 includes operating results of Claude Laval Corporation acquired near the end of fiscal 2013.
(4) Defined as net earnings divided by beginning-of-period shareholders' equity.
17
ITEM 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
Concerning Forward-Looking Statements
This Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and
Results of Operations, contains not only historical information, but also forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Statements that are not historical are forward-looking and reflect expectations for future
Company performance. In addition, forward-looking statements may be made orally or in press releases, conferences,
reports, on the Company’s web site, or otherwise, in the future by or on behalf of the Company. When used by or on
behalf of the Company, the words “expect,” “anticipate,” “estimate,” “believe,” “intend,” “will,” “plan,” “predict,”
“project,” “outlook,” “could,” “may,” “should,” and similar expressions generally identify forward-looking
statements. For these statements throughout the Annual Report on Form 10-K, the Company claims the protection of
the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The
entire sections entitled “Financial Overview and Outlook” and “Risk Factors” should be considered forward-looking
statements.
Forward-looking statements involve a number of risks and uncertainties, including but not limited to those discussed
in the “Risk Factors” section contained in Item 1A. Readers should not place undue reliance on any forward-looking
statement and should recognize that the statements are predictions of future results or conditions, which may not occur
as anticipated. Actual results or conditions could differ materially from those anticipated in the forward-looking
statements and from historical results, due to the risks and uncertainties described herein, as well as others not now
anticipated. The risks and uncertainties described herein are not exclusive and further information concerning the
Company and its businesses, including factors that potentially could materially affect the Company’s financial results,
may emerge from time to time. Except as required by law, the Company assumes no obligation to update forward-
looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking
statements.
Company Overview
The Company manufactures and markets center pivot, lateral move, and hose reel irrigation systems. The Company
also produces and markets irrigation controls, chemical injection systems, and remote monitoring and control systems.
These products are used by farmers to increase or stabilize crop production while conserving water, energy, and labor.
Through its acquisitions, the Company has been able to enhance its capabilities in providing innovative, turn-key
solutions to customers through the integration of its proprietary pump stations, controls, and designs. The Company
sells its irrigation products primarily to a world-wide independent dealer network, who resell to their customers, the
farmers. The Company’s primary production facilities are located in the United States. The Company has smaller
production and sales operations in Brazil, France, China, Turkey, and South Africa, as well as distribution and sales
operations in the Netherlands, Australia, and New Zealand. The Company also manufactures and markets, through
distributors and direct sales to customers, various infrastructure products, including moveable barriers for traffic lane
management, crash cushions, preformed reflective pavement tapes, and other road safety devices, through its
production facilities in the United States and Italy, and has produced road safety products in irrigation manufacturing
facilities in China and Brazil. In addition, the Company’s infrastructure segment produces large diameter steel tubing,
and railroad signals and structures, and provides outsourced manufacturing and production services for other
companies.
For the business overall, the global, long-term drivers of water conservation, population growth, increasing importance
of biofuels, and the need for safer, more efficient transportation solutions remain positive. Key factors which impact
demand for the Company’s irrigation products include total worldwide agricultural crop production, the profitability
of agricultural crop production, agricultural commodity prices, net farm income, availability of financing for farmers,
governmental policies regarding the agricultural sector, water and energy conservation policies, the regularity of
rainfall, regional climate conditions, and foreign currency exchange rates. A key factor which impacts demand for
the Company’s infrastructure products is the amount of spending authorized by governments to improve road and
highway systems. Much of the U.S. highway infrastructure market is driven by government spending programs. For
example, the U.S. government funds highway and road improvements through the Federal Highway Trust Fund
Program. This program provides funding to improve the nation’s roadway system. In December 2015, the U.S.
government enacted a five-year, $305 billion highway-funding bill to fund highway and bridge projects, the first long-
term national transportation spending bill in a decade. Matching funding from the various states may be required as
a condition of federal funding.
18
The Company continues to have an ongoing, structured, acquisition process that it expects to generate additional
growth opportunities throughout the world in irrigation/water solutions. Lindsay is committed to achieving earnings
growth by global market expansion, improvements in margins, and strategic acquisitions. Since 2001, the Company
has utilized acquisitions and greenfield efforts to expand its product lines and add to its operations in France, Italy,
Brazil, South Africa, the Netherlands, Australia, New Zealand, China, and Turkey. The addition of those operations
has allowed the Company to strengthen its market position in those regions.
New Accounting Standards Issued But Not Yet Adopted
See Note 2, New Accounting Pronouncements, to the Company’s consolidated financial statements for information
regarding recently issued accounting pronouncements.
Critical Accounting Policies and Estimates
In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles
(“GAAP”), management must make a variety of decisions which impact the reported amounts and the related
disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and the
assumptions on which to base accounting estimates. In reaching such decisions, management applies judgment based
on its understanding and analysis of the relevant facts and circumstances. Certain of the Company’s accounting
policies are critical, as these policies are most important to the presentation of the Company’s consolidated results of
operations and financial condition. They require the greatest use of judgments and estimates by management based
on the Company’s historical experience and management’s knowledge and understanding of current facts and
circumstances. Management periodically re-evaluates and adjusts the estimates that are used as circumstances change.
Following are the accounting policies management considers critical to the Company’s consolidated results of
operations and financial condition:
Revenue Recognition
The Company’s revenue recognition accounting policy is critical because it can significantly impact the Company’s
consolidated results of operations and financial condition. The Company’s basic criteria necessary for revenue
recognition are: 1) evidence of a sales arrangement exists; 2) delivery of goods has occurred; 3) the sales price to the
buyer is fixed or determinable; and 4) collectability is reasonably assured. The Company recognizes revenue when
these criteria have been met, and when title and risk of loss transfers to the customer. The Company generally has no
post-delivery obligations to its independent dealers other than standard warranties. Revenues and gross profits on
intercompany sales are eliminated in consolidation. Revenues from the sale of the Company’s products are recognized
based on the delivery terms in the sales contract. If an arrangement involves multiple deliverables, revenues from the
arrangement are allocated to the separate units of accounting based on their relative selling price.
The Company offers a subscription-based service for wireless management and recognizes subscription revenue on a
straight-line basis over the contract term. The Company leases certain infrastructure property held for lease to
customers, such as moveable concrete barriers and Road Zipper Systems®. Revenues for the lease of infrastructure
property held for lease are recognized on a straight-line basis over the lease term.
The costs related to revenues are recognized in the same period in which the specific revenues are recorded. Shipping
and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by the Company
are included in cost of sales. Customer rebates, cash discounts, and other sales incentives are recorded as a reduction
of revenues at the time of the original sale. Estimates used in the recognition of operating revenues and cost of
operating revenues include, but are not limited to, estimates for product warranties, product rebates, cash discounts,
and fair value of separate units of accounting on multiple deliverables.
Inventories
The Company’s accounting policy on inventories is critical because the valuation and costing of inventory is essential
to the presentation of the Company’s consolidated results of operations and financial condition. Inventories are stated
at the lower of cost or market. Cost is determined by the last-in, first-out (“LIFO”) method, the first-in, first-out
(“FIFO”) method, or the weighted average cost method for inventory depending on the operations at each specific
location. At all locations, the Company reserves for obsolete, slow moving, and excess inventory by estimating the
net realizable value based on the potential future use of such inventory.
19
Environmental Remediation Liabilities
The Company’s accounting policy on environmental remediation is critical because it requires significant judgments
and estimates by management, involves changing regulations and approaches to remediation plans, and any revisions
could be material to the operating results of any fiscal quarter or fiscal year. The Company is subject to an array of
environmental laws and regulations relating to the protection of the environment. In particular, the Company
committed to remediate environmental contamination of the groundwater at, and land adjacent, to its Lindsay,
Nebraska facility (the “site”) with the EPA. The Company and its environmental consultants have developed a
remedial alternative work plan, under which the Company continues to work with the EPA to define and implement
steps to better contain and remediate the remaining contamination.
Environmental remediation liabilities include costs directly associated with site investigation and clean up, such as
materials, external contractor costs, and incremental internal costs directly related to the remedy. Estimates used to
record environmental remediation liabilities are based on the Company’s best estimate of probable future costs based
on site-specific facts and circumstances. Estimates of the cost for the likely remedy are developed using internal
resources or by third-party environmental engineers or other service providers. The Company records the
undiscounted environmental remediation liabilities that represent the points in the range of estimates that are most
probable, or the minimum amount when no amount within the range is a better estimate than any other amount.
During the second quarter of fiscal 2016, the Company completed its testing for a feasibility study which clarified the
extent of contamination, including the identification of a source of contamination near the manufacturing building that
was not part of the area for which reserves were previously established. The Company, together with its third-party
environmental experts, participated in a preliminary meeting with the EPA and the Nebraska Department of
Environmental Quality (the “NDEQ”) during the third quarter of fiscal 2016 to review remediation alternatives and
proposed plans for the site and submitted its remedial alternatives evaluation report to the EPA in August 2016. The
proposed remediation plan is preliminary and has not been approved by the EPA or the NDEQ. Based on guidance
from third-party environmental experts and the preliminary discussions held with the EPA, the Company anticipates
that a definitive plan will not be agreed upon until fiscal 2018 or later.
The Company accrues the anticipated cost of environmental remediation when the obligation is probable and can be
reasonably estimated. Although the Company has accrued reasonably estimable costs associated with remediation of
the site, additional testing, environmental monitoring, and remediation could be required in the future as part of the
Company’s ongoing discussions with the EPA regarding the development and implementation of the remedial action
plans. While any revisions could be material to the operating results of any fiscal quarter or fiscal year, the Company
does not expect such additional expenses would have a material adverse effect on its liquidity or financial condition.
Trade Receivables and Allowances
Trade receivables are reported on the balance sheet, net of any doubtful accounts. Losses are recognized when it is
probable that an asset has been impaired and the amount of the loss can be reasonably estimated. In estimating
probable losses, the Company reviews specific accounts that are significant and past due, in bankruptcy, or otherwise
identified at risk for potential credit loss. Collectability of these specific accounts are assessed based on facts and
circumstances of that customer, and an allowance for credit losses is established based on the probability of default.
In assessing the likelihood of collection of receivable, the Company considers, for example, the Company’s history
of collections, the current status of discussions and repayment plans, collateral received, and other evidence and
information regarding collection or default risk that is available in the market place. The allowance for credit losses
attributable to the remaining accounts is established using probabilities of default and an estimate of associated losses
based upon the aging of receivable balances, collection experience, economic condition, and credit risk quality. In
evaluating the allowance expense as a percentage of sales, if the prior three-year average rate were to double, the result
on the fiscal 2017 consolidated statement of operations would be additional expense of approximately $2.1 million.
As the Company’s international business has grown, the exposure to potential losses in international markets has also
increased. These exposures can be difficult to estimate, particularly in areas of political instability, or with
governments with which the Company has limited experience, or where there is a lack of transparency as to the current
credit condition of governmental units. The Company’s allowance for all doubtful accounts related to outstanding
receivables decreased to $7.4 million at August 31, 2017 from $8.3 million at August 31, 2016. The Company’s
evaluation of the adequacy of the allowance for credit losses is based on facts and circumstances available to the
Company at the date the consolidated financial statements are issued, and considers any significant changes in
circumstances occurring through the date that the financial statements are issued.
20
Valuation of Goodwill and Identifiable Intangible Assets
The Company’s accounting policy on valuation of goodwill and identifiable intangible assets is critical because it
requires significant judgments and estimates by management, and can significantly affect the Company’s consolidated
results of operations and financial condition. Goodwill represents the excess of the purchase price over the fair value
of net assets acquired in a business combination. Acquired intangible assets are recognized separately from
goodwill. Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually at
August 31, and whenever triggering events or changes in circumstances indicate its carrying value may not be
recoverable. Assessment of the potential impairment of goodwill and identifiable intangible assets is an integral part
of the Company’s normal ongoing review of operations. Testing for potential impairment of these assets is
significantly dependent on numerous assumptions and reflects management’s best estimates at a particular point in
time. The dynamic economic environments in which the Company’s businesses operate and key economic and
business assumptions related to projected selling prices, market growth, inflation rates, and operating expense ratios,
can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly
from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant
impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized.
In fiscal 2017, in conjunction with the Company’s annual review for impairment, the Company performed a qualitative
analysis of goodwill for each of the Company’s reporting units, which are the same as its operating segments, and did
not identify any potential impairment. Also in fiscal 2017, the Company performed a qualitative analysis of other
intangible assets not subject to amortization and concluded there were no indicators of impairment.
Financial Overview and Outlook
Operating revenues in fiscal 2017 were $518.0 million, a slight increase compared to $516.4 million in the prior year.
Infrastructure segment revenues increased 5 percent to $99.9 million while irrigation segment revenues decreased 1
percent to $418.0 million. Net earnings for fiscal 2017 were $23.2 million or $2.17 per diluted share compared with
$20.3 million or $1.85 per diluted share in the prior year.
The Company’s irrigation revenues are highly dependent upon the need for irrigated agricultural crop production,
which, in turn, depends upon many factors, including the following primary drivers:
• Agricultural commodity prices - As of August 2017, corn prices have increased approximately 13 percent
and soybean prices have increased approximately 2 percent from August 2016. However, commodity prices
continue to be constrained from rising following record 2016 harvests in the U.S., generally favorable
growing conditions in 2017, and continuing high stock levels.
• Net farm income - As of August 2017, the U.S. Department of Agriculture (the “USDA”) estimated U.S.
2017 net farm income to be $63.4 billion, up 3.1 percent from the USDA’s final U.S. 2016 net farm income
of $61.5 billion. If the USDA’s estimate proves accurate, this would be the first increase in net farm income
following three years of significant decline.
• Weather conditions – Demand for irrigation equipment is often positively affected by storm damage and
prolonged periods of drought conditions as producers look for ways to reduce the risk of low crop production
and crop failures. Conversely, demand for irrigation equipment can be negatively affected during periods of
more predictable or excessive natural precipitation.
• Governmental policies - A number of government laws and regulations can impact the Company’s business,
including:
o The Agricultural Act of 2014 provides a degree of certainty to growers by adopting a five-year farm
bill. This law continued many of the existing programs, including funding for the Environmental
Quality Incentives Program, which provides financial assistance to farmers to implement
conservation practices, and is frequently used to assist in the purchase of center pivot irrigation
systems.
o Current tax incentives, such as the Section 179 income tax deduction and Section 168 bonus
depreciation, are intended to encourage equipment purchases. These incentives could benefit
equipment sales in the future.
21
o Biofuel production continues to be a major demand driver for irrigated corn, sugar cane and
soybeans as these crops are used in high volumes to produce ethanol and biodiesel. In July 2017,
the EPA proposed to maintain the 2018 ethanol production target levels at the same levels as the
2017 requirements.
o Many international markets are affected by government policies such as subsidies and other
agriculturally related incentives. While these policies can have a significant effect on individual
markets, they typically do not have a material effect on the consolidated results of the Company.
• Currency –The value of the U.S. dollar fluctuates in relation to the value of currencies in a number of
countries to which the Company exports products and maintains local operations. The strengthening of the
dollar increases the cost in the local currency of the products exported from the U.S. into these countries and,
therefore, could negatively affect the Company’s international sales and margins. In addition, the U.S. dollar
value of sales made in any affected foreign currencies will decline as the value of the dollar rises in relation
to these other currencies.
After a four year cyclical downturn in our U.S. irrigation business, indications are that the market has reached a level
of stabilization. Stable commodity prices and net farm income, recalibration of farm input costs and general economic
optimism have all contributed to improved grower sentiment towards investment in irrigation equipment. However,
notable growth in demand for irrigation equipment is expected to remain constrained until there is more significant
and sustained improvement in commodity prices and net farm income. International markets remain active with
opportunities for further development and expansion, however regional political and economic factors, currency
conditions and other factors can create a challenging environment. Additionally, international results are heavily
dependent upon project sales which tend to fluctuate and can be difficult to forecast accurately.
The infrastructure business has continued to generate growth and profitability improvement in an environment of
constrained government spending. In December 2015, the U.S. government enacted a five-year, $305 billion highway-
funding bill to fund highway and bridge projects, the first long-term national transportation spending bill in a decade.
In addition, the FHWA has changed highway safety product certification requirements. The change has required
additional research and development spending and could have an impact on the competitive positioning of the
Company’s highway safety products. In spite of government spending uncertainty, opportunities exist for market
expansion in each of the infrastructure product lines. Demand for the Company’s transportation safety products
continues to be driven by population growth and the need for improved road safety.
As of August 31, 2017, the Company had an order backlog of $51.8 million compared with $50.7 million at August
31, 2016. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing, and
execution of contracts. Backlog typically represents long-term projects as well as short lead-time orders; therefore it
is generally not a good indication of the next quarter’s revenues.
The global drivers for the Company’s markets of population growth, expanded food production and efficient water
use and infrastructure expansion support the Company’s long-term growth goals. The most significant opportunities
for growth over the next several years are in international markets, where irrigation use is significantly less developed
and demand is driven primarily by food security, water scarcity and population growth.
22
Results of Operations
The following “Fiscal 2017 Compared to Fiscal 2016” and the “Fiscal 2016 Compared to Fiscal 2015” sections present
an analysis of the Company’s consolidated operating results displayed in the Consolidated Statements of Earnings and
should be read together with the information in Note 16, Industry Segment Information, to the consolidated financial
statements.
Fiscal 2017 Compared to Fiscal 2016
The following table provides highlights for fiscal 2017 compared with fiscal 2016:
($ in thousands)
Consolidated
Operating revenues
Cost of operating revenues
Gross profit
Gross margin
Operating expenses
Operating income
Operating margin
Other (expense) income, net
Income tax expense
Effective income tax rate
Net earnings
Irrigation segment (1)
Operating revenues
Operating income (2)
Operating margin (2)
Infrastructure segment (1)
Operating revenues
Operating income (2)
Operating margin (2)
For the years ended
August 31,
2017
2016
Percent
increase
(decrease)
$
$
$
$
$
$
$
$
$
$
$
$
517,985
372,973
145,012
28.0%
104,811
40,201
7.8%
$
$
$
$
$
(4,486) $
12,536
$
35.1%
23,179
$
418,041
42,774
10.2%
99,944
20,131
20.1%
$
$
$
$
516,411
367,798
148,613
28.8%
114,238
34,375
6.7%
(5,087)
9,021
30.8%
20,267
421,641
49,232
11.7%
94,770
18,535
19.6%
0%
1%
(2%)
(8%)
17%
(12%)
39%
14%
(1%)
(13%)
5%
9%
(1) See Note 16 for further details regarding segments.
(2) Excludes unallocated corporate general and administrative expenses of $22.7 million and $33.4 million for fiscal 2017 and fiscal 2016,
respectively.
Revenues
Operating revenues in fiscal 2017 were $518.0 million, a slight increase compared with $516.4 million in fiscal 2016.
The increase is attributable to a $5.1 million increase in infrastructure segment revenues and a $3.6 million decrease
in irrigation segment revenues. The irrigation segment provided 81 percent of Company revenue in fiscal 2017 as
compared to 82 percent in fiscal 2016.
U.S. irrigation revenues in fiscal 2017 of $242.6 million decreased $19.6 million or 7 percent from $262.2 million in
fiscal 2016. The decrease in U.S. irrigation revenues resulted from a decline in irrigation system unit sales volume
reflecting lower market demand as well as a decline in revenue from other irrigation product lines, including filtration
and pump systems. The impact of lower irrigation system unit sales volume was partially offset by higher average
selling prices from passing through higher raw material costs.
International irrigation revenues in fiscal 2017 of $175.4 million increased $16.0 million or 10 percent from $159.4
million in fiscal 2016. A notable recovery of market demand in Brazil and increased project activity in Africa and the
Commonwealth of Independent States region were partially offset by lower revenues in other international markets.
Changes in foreign currency translation rates compared to the prior year resulted in an increase in international
irrigation revenues of approximately 3 percent for fiscal 2017.
Infrastructure segment revenues in fiscal 2017 of $99.9 million increased $5.1 million or 5 percent from $94.8 million
in fiscal 2016. The increase resulted from higher Road Zipper System® sales and lease revenue and higher sales of
road safety products in international markets. Sales of road safety products in the U.S. declined modestly compared
to the prior year.
23
Gross Profit
Gross profit was $145.0 million for fiscal 2017, a decrease of $3.6 million, or 2 percent, compared to fiscal 2016. The
decrease in gross profit resulted from lower irrigation sales and a decline in gross margin to 28.0 percent for fiscal
2017 from 28.8 percent for fiscal 2016. Comparable year-to-year gross margin in the infrastructure segment was
offset by lower gross margin in the irrigation segment. Irrigation gross margin declined primarily due to lower
overhead cost absorption from lower domestic unit sales volume and a higher mix of revenue from international
markets which produce lower gross margins.
Operating Expenses
The Company’s operating expenses of $104.8 million for fiscal 2017 decreased $9.4 million compared to fiscal 2016
operating expenses of $114.2 million. The reduction in operating expenses in the current year is due to $13.0 million
of environmental remediation expenses in the prior year that did not repeat in fiscal 2017, offset in part by higher
product development and testing costs and professional fees in the current year. Operating expenses were 20.2 percent
of sales for fiscal 2017 compared to 22.1 percent of sales for fiscal 2016. The Company’s operating income increased
to $40.2 million in fiscal 2017 compared to $34.4 million during fiscal 2016. Operating margin was 7.8 percent for
fiscal 2017 as compared to 6.7 percent for fiscal 2016.
Income Taxes
The Company recorded income tax expense of $12.5 million and $9.0 million for fiscal 2017 and fiscal 2016,
respectively. The effective income tax rate increased to 35.1 percent in fiscal 2017 compared to 30.8 percent in fiscal
2016. The increase in the annual effective income tax rate is primarily due to the impact of differences between book
and tax treatment of certain items and proportionately higher earnings from U.S. operations in the current year with
tax rates higher than in foreign jurisdictions.
Net Earnings
Net earnings for fiscal 2017 were $23.2 million, or $2.17 per diluted share, compared to $20.3 million, or $1.85 per
diluted share, for fiscal 2016.
Fiscal 2016 Compared to Fiscal 2015
The following table provides highlights for fiscal 2016 compared with fiscal 2015:
($ in thousands)
Consolidated
Operating revenues
Cost of operating revenues
Gross profit
Gross margin
Operating expenses
Operating income
Operating margin
Other (expense) income, net
Income tax expense
Effective income tax rate
Net earnings
Irrigation segment (1)
Operating revenues
Operating income (2)
Operating margin (2)
Infrastructure segment (1)
Operating revenues
Operating income (2)
Operating margin (2)
For the years ended
August 31,
2016
2015
Percent
increase
(decrease)
$
$
$
$
$
$
$
$
$
$
$
$
516,411
367,798
148,613
28.8%
114,238
34,375
6.7%
$
$
$
$
$
(5,087) $
9,021
$
30.8%
20,267
$
421,641
49,232
11.7%
94,770
18,535
19.6%
$
$
$
$
560,181
403,860
156,321
27.9%
105,626
50,695
9.0%
(3,944)
20,442
43.7%
26,309
451,205
52,065
11.5%
108,976
20,249
18.6%
(8%)
(9%)
(5%)
8%
(32%)
29%
(56%)
(23%)
(7%)
(5%)
(13%)
(8%)
(1) See Note 16 for further details regarding segments.
(2) Excludes unallocated corporate general and administrative expenses of $33.4 million and $21.6 million for fiscal 2016 and fiscal 2015,
respectively.
24
Revenues
Operating revenues in fiscal 2016 decreased by 8 percent to $516.4 million compared with $560.2 million in fiscal
2015. The decrease is attributable to a $29.6 million decrease in irrigation segment revenues and a $14.2 million
decrease in infrastructure segment revenues. The irrigation segment provided 82 percent of Company revenue in
fiscal 2016 as compared to 81 percent in fiscal 2015.
U.S. irrigation revenues in fiscal 2016 of $262.2 million decreased $11.5 million or 4 percent from $273.7 million in
fiscal 2015. The decrease in U.S. irrigation revenues is due to a decline in irrigation system unit sales volume
reflecting lower market demand, and reduced market pricing from passing through lower steel costs. This decrease
was offset somewhat by a modest increase in other irrigation component revenues, including pump stations and
technology products, and the full year impact of the Elecsys and SPF acquisitions completed in fiscal 2015.
International irrigation revenues in fiscal 2016 of $159.4 million decreased $18.1 million or 10 percent from $177.5
million in fiscal 2015. Changes in foreign currency translation rates compared to the prior year reduced international
irrigation revenues by $12.3 million for fiscal 2016. Excluding the impact of changes in foreign currency translation
rates, international irrigation revenues declined by $5.8 million as lower market demand in Brazil and Australia more
than offset improved unit sales volume in most other international markets.
Infrastructure segment revenues in fiscal 2016 of $94.8 million decreased by $14.2 million or 13 percent from $109.0
million in fiscal 2015. The decrease is primarily due to the completion of a large of Road Zipper System® project in
the prior year and the negative impact of changes in foreign currency translation rates of $2.2 million. In addition,
increased Road Zipper System® lease revenue and road safety product sales in fiscal 2016 were partially offset by
declines in tubing, rail, and contract manufacturing revenue.
Gross Profit
Gross profit was $148.6 million for fiscal 2016, a decrease of $7.7 million, or 5 percent, compared to fiscal 2015. The
decrease in gross profit was due to the decline in sales partially offset by an increase in gross margin to 28.8 percent
for fiscal 2016 from 27.9 percent for fiscal 2015. Gross margin in irrigation increased by slightly less than 1 percentage
point due to higher margin sales mix from the full year impact of Elecsys Corporation and improvement in other
irrigation component margins. Infrastructure gross margin increased by approximately 2.8 percentage points due to
revenue growth and cost leverage in road safety products in both the U.S. and Europe.
Operating Expenses
The Company’s operating expenses of $114.2 million for fiscal 2016 increased $8.6 million compared to fiscal 2015
operating expenses of $105.6 million. The increase in operating expenses is primarily due to $11.5 million of
incremental environmental remediation expenses and $4.8 million of additional expenses from the full year impact of
the Elecsys and SPF acquisitions, net of reductions of $5.0 million in bad debt expense, $1.9 million in acquisition
and integration related costs in the prior year, and collection of previously reserved accounts receivable. Operating
expenses were 22.1 percent of sales for fiscal 2016 compared to 18.9 percent of sales for fiscal 2015. Operating
margin was 6.7 percent for fiscal 2016 as compared to 9.0 percent for fiscal 2015. The Company’s operating income
decreased to $34.4 million in fiscal 2016 compared to $50.7 million during fiscal 2015.
Income Taxes
The Company recorded income tax expense of $9.0 million and $20.4 million for fiscal 2016 and fiscal 2015,
respectively. The effective income tax rate decreased to 30.8 percent in fiscal 2016 compared to 43.7 percent in fiscal
2015. The decrease in the annual effective income tax rate is due to a deferred income tax asset valuation allowance
in the prior year that impacted the rate by 6.3 percent, and proportionately higher earnings from foreign operations in
the current year with tax rates lower than in the U.S.
Net Earnings
Net earnings for fiscal 2016 were $20.3 million, or $1.85 per diluted share, compared to $26.3 million, or $2.22 per
diluted share, for fiscal 2015.
25
Liquidity and Capital Resources
The Company’s cash and cash equivalents totaled $121.6 million at August 31, 2017 compared with $101.2 million
at August 31, 2016. The Company requires cash for financing its receivables and inventories, paying operating
expenses and capital expenditures, and for dividends and share repurchases. The Company meets its liquidity needs
and finances its capital expenditures from its available cash and funds provided by operations along with borrowings
under the credit arrangements that are described below. The Company believes its current cash resources, projected
operating cash flow, and remaining capacity under its continuing bank lines of credit are sufficient to cover all of its
expected working capital needs, planned capital expenditures and dividends. The Company’s Capital Allocation Plan
outlined below could require the Company to incur additional debt depending on the size and timing of share
repurchases and potential acquisitions.
The Company’s total cash and cash equivalents held by foreign subsidiaries was approximately $23.5 million and
$34.6 million as of August 31, 2017 and 2016, respectively. The Company considers earnings of foreign subsidiaries
to be indefinitely reinvested, and would need to accrue and pay taxes if these funds were repatriated. The Company
does not intend to repatriate the funds, and does not expect these funds to have a significant impact on the Company’s
overall liquidity.
Net working capital was $200.9 million at August 31, 2017 as compared with $188.9 million at August 31, 2016.
Cash flows provided by operations totaled $39.4 million during the year ended August 31, 2017 compared to $33.1
million provided by operations during the same prior year period. Cash provided by operations increased by $6.3
million compared to the prior year period primarily as a result of a $2.9 million increase in net earnings and normal
fluctuations in the changes between assets and liabilities.
Cash flows used in investing activities totaled $10.0 million during the year ended August 31, 2017 compared to $9.9
million during the same prior year period. Capital spending was $8.9 million in fiscal 2017 compared to prior year
capital spending of $11.5 million.
Cash flows used in financing activities totaled $10.3 million during the year ended August 31, 2017 compared to cash
flows used in financing activities of $61.4 million during the same prior year period. The $51.1 million decrease in
cash used in financing activities was primarily due to share repurchases of $48.3 million in fiscal 2016.
Capital Allocation Plan
The Company’s capital allocation plan is to continue investing in revenue and earnings growth, combined with a
defined process for enhancing returns to stockholders. Priorities for the use of cash under the Company’s capital
allocation plan include:
Investment in organic growth including capital expenditures and expansion of international markets,
•
• Dividends to stockholders, along with expectations to increase dividends on an annual basis,
• Synergistic water related acquisitions that provide attractive returns to stockholders, and
• Opportunistic share repurchases taking into account cyclical and seasonal fluctuations.
Capital Expenditures and Expansion of International Markets
In fiscal 2018, the Company expects capital expenditures of approximately $12.0 million to $15.0 million, including
equipment replacement, manufacturing capacity expansion, and productivity improvements. The Company’s
management does maintain flexibility to modify the amount and timing of some of the planned expenditures in
response to economic conditions.
Dividends
In fiscal 2017, the Company paid cash dividends of $1.17 per common share or $12.5 million to stockholders as
compared to $1.13 per common share or $12.2 million in fiscal 2016.
Share Repurchases
The Company’s Board of Directors authorized a share repurchase program of up to $250.0 million of common stock
with no expiration date. Under the program, shares may be repurchased in privately negotiated and/or open market
transactions as well as under formalized trading plans in accordance with the guidelines specified under Rule 10b5-1
of the Securities Exchange Act of 1934, as amended. There were no shares repurchased during the twelve months
ended August 31, 2017. During the twelve months ended August 31, 2016, the Company repurchased 688,790 shares
of common stock for an aggregate purchase price of $48.3 million. During the twelve months ended August 31, 2015,
the Company repurchased 1,198,089 shares of common stock for an aggregate purchase price of $96.9 million. The
remaining amount available under the repurchase program was $63.7 million as of August 31, 2017.
26
Long-Term Borrowing Facilities
Senior Notes. On February 19, 2015, the Company issued $115.0 million in aggregate principal amount of Senior
Notes, Series A (the “Senior Notes”). The entire principal of the Senior Notes is due and payable on February 19,
2030. Interest on the Senior Notes is payable semi-annually at a fixed annual rate of 3.82 percent and borrowings
under the Senior Notes are unsecured. The Company used the proceeds of the sale of the Senior Notes for general
corporate purposes, including acquisitions and dividends.
Revolving Credit Facility. On February 18, 2015, the Company entered into a $50.0 million unsecured Amended and
Restated Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association
(“Wells Fargo”). On February 28, 2017, the Company and Wells Fargo entered into an amendment to the Revolving
Credit Facility which, among other things, extended the termination date of the Revolving Credit Facility from
February 18, 2018 to February 28, 2020. The Company intends to use borrowings under the Revolving Credit Facility
for working capital purposes and to fund acquisitions. At August 31, 2017 and August 31, 2016, the Company had no
outstanding borrowings under the Revolving Credit Facility. The amount of borrowings available at any time under
the Revolving Credit Facility is reduced by the amount of standby letters of credit issued by Wells Fargo then
outstanding. At August 31, 2017, the Company had the ability to borrow up to $44.6 million under this facility, after
consideration of outstanding standby letters of credit of $5.4 million. Borrowings under the Revolving Credit Facility
bear interest at a variable rate equal to LIBOR plus 90 basis points (2.14 percent at August 31, 2017), subject to
adjustment as set forth in the loan documents for the Revolving Credit Facility. Interest is paid on a monthly to
quarterly basis depending on loan type. The Company also pays an annual commitment fee of 0.25 percent on the
unused portion of the Revolving Credit Facility.
Borrowings under the Revolving Credit Facility have equal priority with borrowings under the Company’s Senior
Notes. Each of the credit arrangements described above include certain covenants relating primarily to the Company’s
financial condition. These financial covenants include a funded debt to EBITDA leverage ratio and an interest
coverage ratio. Upon the occurrence of any event of default of these covenants, including a change in control of the
Company, all amounts outstanding thereunder may be declared to be immediately due and payable. At August 31,
2017 and August 31, 2016, the Company was in compliance with all financial loan covenants contained in its credit
arrangements in place as of each of those dates.
Series 2006A Bonds. Elecsys International Corporation, a wholly owned subsidiary of the Company, has outstanding
$2.0 million in principal amount of industrial revenue bonds that were issued in 2006 (the “Series 2006A Bonds”).
Principal and interest on the Series 2006A Bonds are payable monthly through maturity on September 1, 2026. The
interest rate is adjustable every five years based on the yield of the 5-year United States Treasury Notes, plus 0.45 percent
(1.92 percent as of August 31, 2017). This rate was adjusted on September 1, 2016 in accordance with the terms of the
bonds, and the adjusted rate will be in force until September 1, 2021. The obligations under the Series 2006A Bonds are
secured by a first priority security interest in certain real estate.
Inflation
The Company is subject to the effects of changing prices. During fiscal 2017, the Company realized pricing volatility
for purchases of certain commodities, in particular steel and zinc products, used in the production of its products.
While the cost outlook for commodities used in the production of the Company’s products is not certain, management
believes it can manage these inflationary pressures by introducing appropriate sales price adjustments and by actively
pursuing internal cost reduction efforts, while further refining the Company’s inventory and raw materials risk
management system. However, competitive market pressures may affect the Company’s ability to pass price
adjustments along to its customers.
Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements
In the normal course of business, the Company enters into contracts and commitments which obligate the Company
to make future payments. The Company uses off-balance sheet arrangements, such as leases accounted for as
operating leases, standby letters of credit and performance bonds, where sound business principles warrant their use.
The table below sets forth the Company’s significant future obligations by time period.
27
($ in thousands)
Contractual obligations (1)
Operating lease obligations
Pension benefit obligations
Long-term debt
Interest
Total
Total
19,183
6,825
116,976
55,095
198,079
$
$
$
$
Less than
1 year
3,826
519
201
4,430
8,976
$
$
2-3
years
5,796
1,019
414
8,848
16,077
$
$
More than
4-5
years
5,051 $
990
430
8,831
15,302 $
5 years
4,510
4,297
115,931
32,986
157,724
(1) Total liabilities for unrecognized tax benefits as of August 31, 2017 were $1.5 million and are excluded from the table above. Unrecognized
tax benefits are classified on the Company's consolidated balance sheets within other noncurrent liabilities.
The Company does not have any additional off-balance sheet arrangements that have or are reasonably likely to have
a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital resources.
ITEM 7A — Quantitative and Qualitative Disclosures about Market Risk
The Company uses certain financial derivatives to mitigate its exposure to volatility in interest rates and foreign
currency exchange rates. The Company uses these derivative instruments to hedge exposures in the ordinary course
of business and does not invest in derivative instruments for speculative purposes. The credit risk under these interest
rate and foreign currency agreements is not considered to be significant. The Company attempts to manage market
and credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and
degree of risk that may be undertaken, and by entering into transactions with counterparties that have investment grade
credit ratings. As of August 31, 2017, the Company’s derivative counterparty had investment grade credit ratings.
The Company has manufacturing operations in the United States, Brazil, France, Italy, China, Turkey, and South
Africa. The Company has sold products throughout the world and purchases certain of its components from third-
party international suppliers. Export sales made from the United States are principally U.S. dollar denominated. At
times, export sales may be denominated in a currency other than the U.S. dollar. A majority of the Company’s revenue
generated from operations outside the United States is denominated in local currency. Accordingly, these sales are
not typically subject to significant foreign currency transaction risk. The Company’s most significant transactional
foreign currency exposures are the Euro, the Brazilian real, the South African rand and the Chinese renminbi in relation
to the U.S. dollar. Fluctuations in the value of foreign currencies create exposures, which can adversely affect the
Company’s results of operations. Based on the consolidated statement of operations for the year ended August 31,
2017, the Company estimates the potential decrease in operating income from a 10 percent adverse change in the
underlying exchange rates, in U.S. dollar terms, would be approximately $0.5 million.
In order to reduce exposures related to changes in foreign currency exchange rates, the Company, at times, may enter
into forward exchange or option contracts for transactions denominated in a currency other than the functional
currency for certain of its operations. This activity primarily relates to economically hedging against foreign currency
risk in purchasing inventory, sales of finished goods, intercompany transactions and future settlement of foreign
denominated assets and liabilities. The Company had $5.0 million of U.S. dollar equivalent cash flow forward
exchange contracts and option contracts outstanding as of August 31, 2017.
In order to reduce translation exposure resulting from translating the financial statements of its international
subsidiaries into U.S. dollars, the Company, at times, utilizes Euro foreign currency forward contracts to hedge a
portion of its Euro net investment exposure in its foreign operations. At August 31, 2017, the Company had
outstanding Euro foreign currency forward contracts to sell 32.8 million Euro at fixed prices expected to settle during
the first quarter of fiscal 2018. At August 31, 2017, the Company also had an outstanding foreign currency forward
contract to sell 43.0 million South African rand at fixed prices to settle during the first quarter of fiscal 2018. Based
on the net investments contracts outstanding at August 31, 2017, the Company estimates the potential decrease in fair
value from a 10 percent adverse change in the underlying exchange rates would be approximately $3.4 million. This
decrease in fair value would be reflected as a reduction to other comprehensive income offsetting the translation
exposure or adjustment of the international subsidiaries.
28
ITEM 8 — Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Lindsay Corporation:
We have audited the accompanying consolidated balance sheets of Lindsay Corporation and subsidiaries as of
August 31, 2017 and 2016, and the related consolidated statements of earnings, comprehensive income, shareholders’
equity, and cash flows for each of the years in the three-year period ended August 31, 2017. In connection with our
audits of the consolidated financial statements, we also have audited financial statement schedule Item 15(a)(2) of this
Form 10-K. These consolidated financial statements and financial statement schedule are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of Lindsay Corporation and subsidiaries as of August 31, 2017 and 2016, and the results of their
operations and their cash flows for each of the years in the three-year period ended August 31, 2017, in conformity
with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), Lindsay Corporation’s internal control over financial reporting as of August 31, 2017, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO), and our report dated October 13, 2017 expressed an unqualified opinion on
the effectiveness of the Company’s internal control over financial reporting.
Omaha, Nebraska
October 13, 2017
/s/ KPMG LLP
29
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
($ and shares in thousands, except per share amounts)
Operating revenues
Cost of operating revenues
Gross profit
Operating expenses:
Selling expense
General and administrative expense
Engineering and research expense
Total operating expenses
Operating income
Interest expense
Interest income
Other expense, net
Earnings before income taxes
Income tax expense
Net earnings
Earnings per share:
Basic
Diluted
Shares used in computing earnings per share:
Basic
Diluted
Cash dividends declared per share
See accompanying notes to consolidated financial statements.
2017
Years ended August 31,
2016
2015
$
517,985
372,973
145,012
516,411 $
367,798
148,613
40,705
46,959
17,147
104,811
40,201
(4,757)
1,178
(907)
35,715
12,536
41,973
56,419
15,846
114,238
34,375
(4,751)
645
(981)
29,288
9,021
23,179
$
20,267 $
2.17
2.17
$
$
1.86 $
1.85 $
10,666
10,694
10,906
10,930
1.17
$
1.13 $
560,181
403,860
156,321
40,516
52,261
12,849
105,626
50,695
(2,626)
631
(1,949)
46,751
20,442
26,309
2.23
2.22
11,818
11,855
1.09
$
$
$
$
$
30
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in thousands)
Net earnings
Other comprehensive income (loss):
Defined benefit pension plan adjustment, net of tax
Foreign currency translation adjustment, net of
hedging activities and tax
Total other comprehensive income (loss), net of tax
(benefit) expense of ($582), $79, and $1,450
Total comprehensive income
See accompanying notes to consolidated financial statements.
2017
Years ended August 31,
2016
2015
23,179
$
20,267 $
26,309
331
1,733
(258)
1,394
2,064
25,243
$
1,136
21,403 $
(26)
(13,081)
(13,107)
13,202
$
$
31
Lindsay Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
($ and shares in thousands, except par values)
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash
Receivables, net of allowance of $7,447 and $8,312, respectively
Inventories, net
Prepaid expenses
Other current assets
Total current assets
Property, plant, and equipment, net
Intangible assets, net
Goodwill
Deferred income tax assets
Other noncurrent assets
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
Current portion of long-term debt
Other current liabilities
Total current liabilities
Pension benefits liabilities
Long-term debt
Deferred income tax liabilities
Other noncurrent liabilities
Total liabilities
Shareholders' equity:
Preferred stock of $1 par value - authorized 2,000 shares;
no shares issued and outstanding
Common stock at $1 par value - authorized 25,000 shares;
18,780 and 18,713 shares issued at August 31, 2017 and 2016, respectively
Capital in excess of stated value
Retained earnings
Less treasury stock - at cost, 8,083 and 8,083 shares
at August 31, 2017 and 2016, respectively
Accumulated other comprehensive loss, net
Total shareholders' equity
Total liabilities and shareholders' equity
See accompanying notes to consolidated financial statements.
August 31,
2017
August 31,
2016
121,620 $
—
73,850
86,155
4,384
6,925
292,934
74,498
42,808
77,131
5,311
13,350
506,032 $
36,717 $
201
55,119
92,037
6,295
116,775
1,191
19,679
235,977
101,246
2,030
80,610
74,750
3,671
14,468
276,775
77,627
47,200
76,803
4,225
4,885
487,515
32,268
197
55,395
87,860
6,869
116,976
1,223
23,020
235,948
—
—
18,780
63,006
477,615
(277,238)
(12,108)
270,055
506,032 $
18,713
57,338
466,926
(277,238)
(14,172)
251,567
487,515
$
$
$
$
32
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ and shares in thousands, except per share amounts)
Shares of
common
stock
Shares of
treasury
stock
Common
stock
Capital in
excess of
stated
value
Retained
earnings
Treasury
stock
Accumulated
other
comprehensive
(loss) income,
net
Total
shareholders’
equity
Balance at August 31, 2014
Comprehensive income:
Net earnings
Other comprehensive loss
Total comprehensive income
Cash dividends ($1.09) per share
Repurchase of common stock
Issuance of common shares
under share compensation plans
Excess tax benefits from share-
based compensation
Share-based compensation
expense
Balance at August 31, 2015
Comprehensive income:
Net earnings
Other comprehensive income
Total comprehensive income
Cash dividends ($1.13) per share
Repurchase of common stock
Issuance of common shares under
share compensation plans
Excess tax benefits from share-
based compensation
Share-based compensation expense
Balance at August 31, 2016
Comprehensive income:
Net earnings
Other comprehensive income
Total comprehensive income
Cash dividends ($1.17) per share
Issuance of common shares under
share compensation plans
Share-based compensation expense
18,636
6,196 $
18,636 $
52,866 $ 445,366 $ (132,020) $
(2,201) $
382,647
26,309
(12,772)
(13,107)
1,198
(96,883)
48
48
(1,360)
576
3,102
26,309
(13,107)
13,202
(12,772)
(96,883)
(1,312)
576
3,102
18,684
7,394 $
18,684 $
55,184 $ 458,903 $ (228,903) $
(15,308) $
288,560
20,267
(12,244)
1,136
689
(48,335)
29
29
(628)
(84)
2,866
20,267
1,136
21,403
(12,244)
(48,335)
(599)
(84)
2,866
18,713
8,083 $
18,713 $
57,338 $ 466,926 $ (277,238) $
(14,172) $
251,567
67
67
2,318
3,350
23,179
(12,490)
2,064
23,179
2,064
25,243
(12,490)
2,385
3,350
Balance at August 31, 2017
18,780
8,083 $
18,780 $
63,006 $ 477,615 $ (277,238) $
(12,108) $
270,055
See accompanying notes to consolidated financial statements.
33
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
2017
Years ended August 31,
2016
2015
$
23,179
$
20,267 $
26,309
16,678
—
(574)
(903)
3,598
626
7,959
(10,092)
4,581
4,076
(717)
(3,104)
(5,858)
39,449
(8,863)
—
2,117
(3,466)
233
(9,979)
3,020
(635)
—
(197)
—
—
(12,490)
(10,302)
1,206
20,374
101,246
121,620
16,214
4,696
$
$
$
16,881
—
(843)
(5,755)
3,060
89
(4,730)
1,330
(1,047)
(7,101)
(230)
(813)
12,017
33,125
(11,496)
—
3,381
(2,924)
1,141
(9,898)
113
(712)
—
(193)
—
(48,335)
(12,244)
(61,371)
297
(37,847)
139,093
101,246 $
16,412
270
5,840
278
3,332
4,665
10,902
915
(3,984)
(337)
(8,856)
(8,011)
1,558
49,293
(15,244)
(69,521)
7,473
(1,202)
(1,091)
(79,585)
394
(1,706)
115,000
(112)
(620)
(96,883)
(12,772)
3,301
(5,758)
(32,749)
171,842
139,093
18,395 $
4,674 $
26,917
2,448
($ in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization
Asset write-down
Provision for uncollectible accounts receivable
Deferred income taxes
Share-based compensation expense
Other, net
Changes in assets and liabilities:
Receivables
Inventories
Prepaid expenses and other current assets
Accounts payable
Other current liabilities
Current taxes payable
Other noncurrent assets and liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment
Acquisition of business, net of cash acquired
Proceeds from settlement of net investment hedges
Payments for settlement of net investment hedges
Other investing activities, net
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options
Common stock withheld for payroll tax obligations
Proceeds from issuance of long-term debt
Principal payments on long-term debt
Issuance costs related to debt
Repurchase of common shares
Dividends paid
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid
Interest paid
See accompanying notes to consolidated financial statements.
$
$
$
34
Lindsay Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Description of Business and Significant Accounting Policies
Lindsay Corporation, along with its subsidiaries (collectively called “Lindsay” or the “Company”), is a global leader
in providing a variety of proprietary water management and road infrastructure products and services. The Company
has been involved in the manufacture and distribution of agricultural irrigation equipment since 1955 and has grown
from a regional company to an international water efficiency solutions and highway infrastructure firm with worldwide
sales and distribution. Lindsay, a Delaware corporation, maintains its corporate offices in Omaha, Nebraska. The
Company has operations which are categorized into two major reporting segments.
Irrigation Segment
The Company’s irrigation segment includes the manufacture and marketing of center pivot, lateral move, and hose
reel irrigation systems which are used principally in the agricultural industry to increase or stabilize crop production
while conserving water, energy and labor. The irrigation segment also manufactures and markets repair and
replacement parts for its irrigation systems and controls. In addition, the irrigation segment also designs and
manufactures water pumping stations and controls for the agriculture, golf, landscape and municipal markets and
filtration solutions for groundwater, agriculture, industrial and heat transfer markets. The Company continues to
strengthen irrigation product offerings through innovative technology such as Global Positioning System (“GPS”)
positioning and guidance, variable rate irrigation, wireless irrigation management, machine-to-machine (“M2M”)
communication
irrigation
manufacturing facilities are located in Lindsay, Nebraska; Hartland, Wisconsin; Olathe, Kansas and Fresno,
California. Internationally, the Company has production operations in Brazil, France, China, Turkey and South Africa
as well as distribution and sales operations in the Netherlands, Australia and New Zealand. The Company also exports
equipment from the U.S. to other international markets.
technology solutions and smartphone applications. The Company’s domestic
Infrastructure Segment
The Company’s infrastructure segment includes the manufacture and marketing of moveable barriers, specialty
barriers, crash cushions and end terminals, road marking and road safety equipment, large diameter steel tubing, and
railroad signals and structures. The infrastructure segment also provides outsourced manufacturing and production
services. The principal infrastructure manufacturing facilities are located in Rio Vista, California; Milan, Italy; and
Omaha, Nebraska.
Notes to the consolidated financial statements describe various elements of the financial statements and the accounting
policies, estimates, and assumptions applied by management. While actual results could differ from those estimated
at the time of preparation of the consolidated financial statements, management believes that the accounting policies,
assumptions, and estimates applied promote the representational faithfulness, verifiability, neutrality, and
transparency of the accounting information included in the consolidated financial statements. The significant
accounting policies of the Company are as follows:
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany
balances and transactions are eliminated in consolidation.
Reclassifications
Certain reclassifications have been made to prior financial statements to conform to the current-year presentation.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.
35
Revenue Recognition
The Company’s basic criteria necessary for revenue recognition are: 1) evidence of a sales arrangement exists, 2)
delivery of goods has occurred, 3) the sales price to the buyer is fixed or determinable, and 4) collectability is
reasonably assured. The Company recognizes revenue when these criteria have been met and when title and risk of
loss transfers to the customer. The Company generally has no post-delivery obligations to its independent dealers
other than standard warranties. Revenues and gross profits on intercompany sales are eliminated in
consolidation. Revenues from the sale of the Company’s products are recognized based on the delivery terms in the
sales contract. If an arrangement involves multiple deliverables, revenues from the arrangement are allocated to the
separate units of accounting based on their relative selling price.
The Company offers a subscription-based service for wireless management and recognizes subscription revenue on a
straight-line basis over the contract term. The Company leases certain infrastructure property held for lease to
customers such as moveable concrete barriers and Road Zipper Systems®. Revenues for the lease of infrastructure
property held for lease are recognized on a straight-line basis over the lease term.
The costs related to revenues are recognized in the same period in which the specific revenues are recorded. Shipping
and handling fees billed to customers are reported in revenue. Shipping and handling costs incurred by the Company
are included in cost of sales. Customer rebates, cash discounts and other sales incentives are recorded as a reduction
of revenues at the time of the original sale. Estimates used in the recognition of operating revenues and cost of
operating revenues include, but are not limited to, estimates for product warranties, product rebates, cash discounts
and fair value of separate units of accounting on multiple deliverables.
Share-Based Compensation
The Company recognizes compensation expense for all share-based payment awards made to employees and directors
based on estimated fair values on the date of grant. The Company uses the straight-line amortization method over the
vesting period of the awards. The Company has historically issued shares upon exercise of stock options or vesting
of restricted stock units or performance stock units from new stock issuances.
The value of the portion of the award that is ultimately expected to vest is recognized as expense in the Company’s
Consolidated Statement of Operations over the periods during which the employee or director is required to perform
a service in exchange for the award.
The Company uses the Black-Scholes option-pricing model (“Black-Scholes model”) as its valuation method for stock
option awards. Under the Black-Scholes model, the fair value of stock option awards on the date of grant is estimated
using an option-pricing model that is affected by the Company’s stock price as well as assumptions regarding a number
of highly complex and subjective variables. These variables include, but are not limited to, the Company’s expected
stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors.
Restricted stock, restricted stock units, performance shares and performance stock units issued under the 2015 Long-
Term Incentive Plan will have a grant-date fair value equal to the fair market value of the underlying stock on the
grant date less present value of expected dividends.
Warranty Costs
The Company’s provision for product warranty reflects management’s best estimate of probable liability under its
product warranties. At the time a sale is recognized, the company records the estimated future warranty costs. The
Company generally determines its total future warranty liability by applying historical claims rate experience to the
amount of equipment that has been sold and is still within the warranty period. In addition, the Company records
provisions for known warranty claims. This provision is periodically adjusted to reflect actual experience.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with original maturities of three months or less.
36
Receivables and Allowances
Trade receivables are reported on the balance sheet net of any doubtful accounts. Losses are recognized when it is
probable that an asset has been impaired and the amount of the loss can be reasonably estimated. In estimating
probable losses, the Company reviews specific accounts that are significant and past due, in bankruptcy or otherwise
identified as at risk for potential credit loss. Collectability of these specific accounts are assessed based on facts and
circumstances of that customer, and an allowance for credit losses is established based on the probability of default.
In assessing the likelihood of collection of receivable, the Company considers (for example) the Company’s history
of collections, the current status of discussions and repayment plans, collateral received, and other evidence and
information regarding collection or default risk that is available in the market place. The allowance for credit losses
attributable to the remaining accounts is established using probabilities of default and an estimate of associated losses
based upon the aging of receivable balances, collection experience, economic condition and credit risk quality.
As the Company’s international business has grown, the exposure to potential losses in international markets has also
increased. These exposures can be difficult to estimate, particularly in areas of political instability or with
governments with which the Company has limited experience or where there is a lack of transparency as to the current
credit condition of governmental units. The Company’s allowance for all doubtful accounts related to outstanding
receivables decreased to $7.4 million at August 31, 2017 from $8.3 million at August 31, 2016. The Company’s
evaluation of the adequacy of the allowance for credit losses is based on facts and circumstances available to the
Company at the date the consolidated financial statements are issued and considers any significant changes in
circumstances occurring through the date that the financial statements are issued.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined by the last-in, first-out (“LIFO”) method, the
first-in, first-out (“FIFO”) method, or the weighted average cost method for inventory depending on the operations at
each specific location. At all locations, the Company reserves for obsolete, slow moving, and excess inventory by
estimating the net realizable value based on the potential future use of such inventory.
Property, Plant, and Equipment
Property, plant, equipment, and capitalized assets held for lease are stated at cost. The Company capitalizes major
expenditures and charges to operating expenses the cost of current maintenance and repairs. Provisions for
depreciation and amortization have been computed principally on the straight-line method for property, plant, and
equipment. Rates used for depreciation are based principally on the following expected lives: buildings -- 15 to 30
years; equipment -- 3 to 7 years; leased barrier transfer machines -- 8 to 10 years; leased barriers -- 12 years; other -- 2
to 20 years and leasehold improvements – shorter of the economic life or term of the lease. All of the Company’s
long-lived asset groups are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount
of the asset group, an impairment loss is recognized based upon the difference between the fair value of the asset and
its carrying value. No impairments were recorded during the fiscal years ended August 31, 2017, 2016, and 2015.
The cost and accumulated depreciation relating to assets retired or otherwise disposed of are eliminated from the
respective accounts at the time of disposition. The resulting gain or loss is included in operating income in the
consolidated statements of earnings.
Valuation of Goodwill and Identifiable Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business
combination. Acquired intangible assets are recognized separately from goodwill. Goodwill and intangible assets
with indefinite useful lives are tested for impairment at least annually at August 31 and whenever triggering events or
changes in circumstances indicate its carrying value may not be recoverable. Assessment of the potential impairment
of goodwill and identifiable intangible assets is an integral part of the Company’s normal ongoing review of
operations. Testing for potential impairment of these assets is significantly dependent on numerous assumptions and
reflects management’s best estimates at a particular point in time. The dynamic economic environments in which the
Company’s businesses operate and key economic and business assumptions related to projected selling prices, market
growth, inflation rates and operating expense ratios, can significantly affect the outcome of impairment tests. Estimates
based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in
assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well
as the time in which such impairments are recognized.
37
In fiscal 2017, in conjunction with the Company’s annual review for impairment, the Company performed a qualitative
analysis of goodwill for each of the Company’s reporting units, which are the same as its operating segments, and did
not identify any potential impairment. Also in fiscal 2017, the Company performed a qualitative analysis of other
intangible assets not subject to amortization and concluded there were no indicators of impairment.
Income Taxes
Income taxes are accounted for utilizing the asset and liability method. Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the financial statement
carrying value of existing assets and liabilities and their respective tax bases. These expected future tax consequences
are measured based on currently enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities
is recognized in income during the period that includes the enactment date. In assessing the ability to realize deferred
tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset
will not be realized. The Company’s evaluation of the adequacy of any potential allowance is based on facts and
circumstances available to the Company at the date the consolidated financial statements are issued and considers any
significant changes in circumstances occurring through the date that the financial statements are issued.
Net Earnings per Share
Basic net earnings per share is computed using the weighted average number of common shares outstanding during
the period. Diluted net earnings per share is computed using the weighted average number of common shares
outstanding plus dilutive potential common shares outstanding during the period.
Employee stock options, non-vested shares and similar equity instruments granted by the Company are treated as
potential common share equivalents outstanding in computing diluted net earnings per share. The Company’s diluted
common shares outstanding reported in each period includes the dilutive effect of restricted stock units, in-the-money
options, and performance stock units for which threshold performance conditions have been satisfied and is calculated
based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock
method, the amount the employee must pay for exercising stock options, and the amount of compensation cost for
future service that the Company has not yet recognized, are assumed to be used to repurchase shares.
Derivative Instruments and Hedging Activities
The Company uses certain financial derivatives to mitigate its exposure to volatility in interest rates and foreign
currency exchange rates. All derivative instruments are recorded on the balance sheet at their respective fair values.
The Company uses these derivative instruments only to hedge exposures in the ordinary course of business and does
not invest in derivative instruments for speculative purposes. On the date a derivative contract is entered into, the
Company may elect to designate the derivative as a fair value hedge, a cash flow hedge, or the hedge of a net
investment in a foreign operation.
The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative
that is used in the hedging transaction is effective. For those instruments that are designated as a cash flow hedge and
meet certain documentary and analytical requirements to qualify for hedge accounting treatment, changes in the fair
value for the effective portion are reported in other comprehensive income (“OCI”), net of related income tax effects,
and are reclassified to the income statement when the effects of the item being hedged are recognized in the income
statement. Changes in fair value of derivative instruments that qualify as hedges of a net investment in foreign
operations are recorded as a component of accumulated currency translation adjustment in accumulated other
comprehensive income (“AOCI”), net of related income tax effects. Changes in the fair value of undesignated hedges
are recognized currently in earnings. All changes in derivative fair values due to ineffectiveness are recognized
currently in income.
The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer
effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or
exercised, or management determines that designation of the derivative as a hedging instrument is no longer
appropriate. In situations in which the Company does not elect hedge accounting or hedge accounting is discontinued
and the derivative is retained, the Company carries or continues to carry the derivative at its fair value on the balance
sheet and recognizes any subsequent changes in its fair value through earnings. The Company manages market and
credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and degree
of risk that may be undertaken, and by entering into transactions with high-quality counterparties. As of August 31,
2017, the Company’s derivative counterparty had investment grade credit ratings.
38
Fair Value Measurements
The Company’s disclosure of the fair value of assets and liabilities is based on a three-level hierarchy for fair value
measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement
date. Inputs refers broadly to the assumptions that market participants would use in pricing the asset or liability,
including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of
input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value will be
classified and disclosed in one of the following three categories:
• Level 1 – inputs to valuation techniques are quoted prices in active markets for identical assets or liabilities
• Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or
liabilities, either directly or indirectly
• Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities
Treasury Stock
When the Company repurchases its outstanding stock, it records the repurchased shares at cost as a reduction to
shareholders’ equity. The weighted average cost method is utilized for share re-issuances. The difference between
the cost and the re-issuance price is charged or credited to a “capital in excess of stated value – treasury stock” account
to the extent that there is a sufficient balance to absorb the charge. If the treasury stock is sold for an amount less than
its cost and there is not a sufficient balance in the capital in excess of stated value – treasury stock account, the excess
is charged to retained earnings.
Contingencies
The Company’s accounting for contingencies covers a variety of business activities including contingencies for legal
exposures and environmental exposures. The Company accrues these contingencies when its assessments indicate
that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company’s
estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results
may differ from the Company’s estimates resulting in an impact, positive or negative, on earnings.
Environmental Remediation Liabilities
Environmental remediation liabilities include costs directly associated with site investigation and clean up, such as
materials, external contractor costs and incremental internal costs directly related to the remedy. The Company
accrues the anticipated cost of environmental remediation when the obligation is probable and can be reasonably
estimated. Estimates used to record environmental remediation liabilities are based on the Company’s best estimate
of probable future costs based on site-specific facts and circumstances. Estimates of the cost for the likely remedy are
developed using internal resources or by third-party environmental engineers or other service providers. The
Company records the undiscounted environmental remediation liabilities that represent the points in the range of
estimates that are most probable or the minimum amount when no amount within the range is a better estimate than
any other amount.
Translation of Foreign Currency
The Company’s portion of the assets and liabilities related to foreign investments are translated into U.S. dollars at
the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average rates of
exchange prevailing during the year. Unrealized gains or losses are reflected within common shareholders’ equity as
accumulated other comprehensive income or loss.
39
Note 2 – New Accounting Pronouncements
Recent Accounting Guidance Adopted
In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. The
standard provides guidance for employee share-based compensation payments, including the income tax
consequences, classification of awards as either equity or liabilities and the classification on the statement of cash
flows. The Company adopted this ASU during the first quarter of fiscal 2017. The Company recognized all excess
tax benefits and excess tax deficiencies as income tax expense or benefit in fiscal 2017. The result of the adoption of
ASU 2016-09 was immaterial to the financial statements. Additionally, as required by the new guidance, when
calculating diluted earnings per share, excess tax benefits were excluded from the calculation of assumed proceeds
since such amounts are recognized in the income statement. ASU 2016-09 also allows an entity to elect, as an
accounting policy, either to estimate the number of forfeited awards or to account for forfeitures as they occur. The
Company has elected to account for forfeitures as they occur. This change did not have a material impact on estimated
expense. The Company elected to present the cash flow statement on a retrospective transition method and prior
periods have been adjusted to present the excess tax benefits as part of cash flows from operating activities. This
resulted in an increase in cash flows from operating activities and a decrease in cash flows from financing activities
of $0.1 million in fiscal 2016.
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred
Taxes. The standard requires an entity to classify all deferred tax assets and liabilities as noncurrent. In addition,
companies will no longer allocate valuation allowances between current and noncurrent because all deferred tax assets
will be classified as noncurrent. The guidance allows companies to apply the update either on a retrospective or
prospective basis. The Company adopted this ASU during the first quarter of fiscal 2017 on a retrospective basis.
Accordingly, the Company reclassified current deferred tax assets and liabilities to noncurrent on its August 31, 2016
condensed consolidated balance sheets, which increased net noncurrent deferred tax assets by $3.3 million, and
decreased noncurrent deferred tax liabilities by $12.0 million.
Recent Accounting Guidance Not Yet Adopted
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)
No. 2014-09, Revenue from Contracts with Customers. In August 2015, the FASB issued ASU No. 2015-14, Revenue
from Contracts with Customers: Deferral of the Effective Date. The standard provides a single model for revenue
arising from contracts with customers and supersedes current revenue recognition guidance. The ASU requires an
entity to recognize the amount of revenue to which it expects to be entitled for the transfer of goods or services. The
ASU will replace existing revenue recognition guidance in U.S. GAAP and becomes effective in the first quarter of
fiscal 2019. Early adoption is permitted only in fiscal 2018. The guidance permits companies to either apply the
requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through
a cumulative adjustment.
The Company is currently in the assessment phase, reviewing a representative sample of contracts, holding discussions
with key stakeholders, and cataloging potential impacts on the Company’s operations, accounting policies, internal
control over financial reporting, and financial statements. The Company has identified that the key changes in the
ASU that could potentially impact the Company’s revenue recognition relates to the allocation of contract revenues
between various products and services, the timing of when those revenues are recognized, and the deferral of
incremental costs to obtain a contract. The Company is continuing to evaluate the impact of the ASU on the
consolidated statements of earnings, financial position, and financial statement disclosures, as well as the adoption
method.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires a lessee to recognize
assets and liabilities arising from an operating lease on the balance sheet. Additionally, companies are permitted to
make an accounting policy election to not recognize lease assets and liabilities for leases with a term of 12 months or
less. The effective date of ASU No. 2016-02 will be the first quarter of fiscal 2020 with early adoption permitted.
The Company is currently evaluating the effect that adopting this standard will have on its consolidated financial
statements.
40
Note 3 – Net Earnings Per Share
The following table shows the computation of basic and diluted net earnings per share for fiscal 2017, 2016, and 2015:
($ and shares in thousands, except per share amounts)
Numerator:
Net earnings
For the years ended August 31,
2016
2015
2017
$
23,179
$
20,267 $
26,309
Denominator:
Weighted average shares outstanding
Diluted effect of stock equivalents
Weighted average shares outstanding assuming dilution
10,666
28
10,694
10,906
24
10,930
Basic net earnings per share
Diluted net earnings per share
$
$
2.17
2.17
$
$
1.86 $
1.85 $
11,818
37
11,855
2.23
2.22
Certain stock options and restricted stock units were excluded from the computation of diluted net earnings per share
because their effect would have been anti-dilutive. Performance stock units are excluded from the calculation of
dilutive potential common shares until the threshold performance conditions have been satisfied. The following table
shows the securities excluded from the computation of earnings per share because their effect would have been anti-
dilutive:
(Units and options in thousands)
Restricted stock units
Stock options
Note 4 – Accumulated Other Comprehensive Loss
For the years ended August 31,
2016
2015
2017
10
108
5
89
3
50
Accumulated other comprehensive loss is included in the accompanying consolidated balance sheets in the
shareholders’ equity section, and consists of the following components:
($ in thousands)
Accumulated other comprehensive loss:
Defined benefit pension plan, net of tax benefit of $1,451 and $1,648
Foreign currency translation, net of hedging activities, net of tax expense
of $2,508 and $3,287
Total accumulated other comprehensive loss
August 31,
2017
2016
$
(2,450) $
(2,781)
$
(9,658)
(12,108) $
(11,391)
(14,172)
The following is a roll-forward of the balances in accumulated other comprehensive income (loss), net of tax.
($ in thousands)
Balance at August 31, 2015
Current-period change
Balance at August 31, 2016
Current-period change
Balance at August 31, 2017
Defined
benefit
pension plan
adjustment
Foreign
currency
translation
adjustment
Accumulated
other
comprehensive
loss
(15,308)
1,136
(14,172)
2,064
(12,108)
$
$
(2,523) $
(258)
(2,781)
331
(2,450) $
(12,785) $
1,394
(11,391)
1,733
(9,658) $
41
Note 5 – Income Taxes
For financial reporting purposes earnings (losses) before income taxes include the following components:
($ in thousands)
United States
Foreign
For the years ended August 31,
2016
2017
2015
$
$
21,969
13,746
35,715
$
$
17,805 $
11,483
29,288 $
49,668
(2,917)
46,751
Significant components of the income tax provision are as follows:
($ in thousands)
Current:
Federal
State
Foreign
Total current
Deferred:
Federal
State
Foreign
Total deferred
Total income tax provision
For the years ended August 31,
2016
2017
2015
$
$
7,873
781
4,785
13,439
(688)
(43)
(172)
(903)
12,536
$
$
10,570 $
976
3,230
14,776
(5,456)
(268)
(31)
(5,755)
9,021 $
15,908
1,426
2,830
20,164
(406)
45
639
278
20,442
Total income tax provision resulted in effective tax rates differing from that of the statutory United States federal
income tax rates. The reasons for these differences are:
($ in thousands)
$
U.S. statutory rate
State and local taxes, net of federal
tax benefit
Foreign tax rate differences
Domestic production activities deduction
Deferred tax asset valuation allowance
Other
Effective rate
$
2017
For the years ended August 31,
2016
2015
Amount
12,500
%
35.0
Amount
$
10,251
%
35.0 $
Amount
16,363
480
(486)
(700)
—
742
12,536
1.3
(1.4)
(2.0)
—
2.2
35.1
$
350
(195)
(960)
—
(425)
9,021
1.2
(0.7)
(3.3)
—
(1.4)
30.8 $
911
1,478
(1,548)
2,949
289
20,442
%
35.0
1.9
3.2
(3.3)
6.3
0.6
43.7
42
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of
the Company’s deferred tax assets and liabilities are as follows:
($ in thousands)
Deferred tax assets:
Accrued expenses and allowances
Warranty
Defined benefit pension plan
Inventory
Share-based compensation
Vacation
Net operating loss carry forwards
Deferred revenue
Other
Gross deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Intangible assets
Property, plant, and equipment
Inventory
Total deferred tax liabilities
Net deferred tax assets
August 31,
2017
2016
12,459 $
2,957
2,666
2,101
1,578
1,422
1,420
793
2,834
28,230
(2,804)
25,426 $
13,053
2,708
2,917
1,898
1,845
1,365
1,174
1,501
2,603
29,064
(2,825)
26,239
(15,422) $
(5,706)
(178)
(21,306) $
(16,426)
(6,609)
(203)
(23,238)
4,120 $
3,001
$
$
$
$
$
In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that
some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable
income, and tax planning strategies in making this assessment. Because the Company has a recent history of
generating cumulative losses in a certain foreign tax jurisdiction, management did not consider projections of future
taxable income as persuasive evidence for the recoverability of deferred tax assets in that jurisdiction. Therefore, the
Company recorded a valuation allowance of $2.9 million as of August 31, 2015. The Company did not record an
additional allowance in fiscal 2017 or 2016.
The Company does not intend to repatriate earnings of its foreign subsidiaries and accordingly, has not provided a
U.S. deferred income tax liability on these undistributed earnings that are indefinitely reinvested. The Company would
recognize a deferred income tax liability if the Company were to determine that such earnings are no longer
indefinitely reinvested. At August 31, 2017, undistributed earnings of the Company’s foreign subsidiaries amounted
to approximately $43.9 million. Determination of the estimated amount of unrecognized deferred tax liability on these
undistributed earnings is not practicable.
The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon
examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater
than 50 percent likely to be realized upon settlement. Unrecognized tax benefits are tax benefits claimed in the
Company’s tax returns that do not meet these recognition and measurement standards.
43
A reconciliation of changes in unrecognized tax benefits is as follows:
($ in thousands)
Unrecognized tax benefits at September 1
Increases for positions taken in current year
Increases for positions taken in prior years
Reduction resulting from lapse of applicable statute of limitations
Decreases for settlements with tax authorities
Unrecognized tax benefits at August 31
August 31,
2017
2016
1,260 $
371
129
(224)
(38)
1,498 $
3,836
33
153
(299)
(2,463)
1,260
$
$
The net amount of unrecognized tax benefits at August 31, 2017 and 2016 that, if recognized, would impact the
Company’s effective tax rate was $1.5 million and $1.3 million, respectively. Recognition of these tax benefits would
have a favorable impact on the Company’s effective tax rate. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits in income tax expense. Total accrued liabilities for interest and penalties included
in the unrecognized tax benefits liability were $0.8 million for each of the years ended August 31, 2017 and 2016.
While it is expected that the amount of unrecognized tax benefits will change in the next twelve months as a result of
the expiration of statutes of limitations, the Company does not expect this change to have a significant impact on its
results of operations or financial position.
The Company files income tax returns in the United States and in state, local, and foreign jurisdictions. The Company
is no longer subject to examination by tax authorities in most jurisdictions for years prior to 2014.
Note 6 - Inventories
($ in thousands)
Raw materials and supplies
Work in process
Finished goods and purchased parts
Total inventory value before LIFO adjustment
Less adjustment to LIFO value
Inventories, net
August 31,
2017
2016
$
$
31,158 $
7,113
52,382
90,653
(4,498)
86,155 $
26,599
5,742
47,805
80,146
(5,396)
74,750
44
Note 7 – Property, Plant, and Equipment
($ in thousands)
Operating property, plant, and equipment:
Land
Buildings
Machinery and equipment
Furniture and fixtures
Construction in progress
Total operating property, plant, and equipment
Accumulated depreciation
Total operating property, plant, and equipment, net
Property held for lease:
Machines
Barriers
Total property held for lease
Accumulated depreciation
Total property held for lease, net
Property, plant, and equipment, net
August 31,
2017
2016
4,869 $
49,977
80,442
24,547
3,004
162,839
(99,912)
62,927 $
7,833 $
18,468
26,301 $
(14,730)
11,571 $
4,817
48,417
73,185
24,787
8,316
159,522
(90,210)
69,312
6,868
16,306
23,174
(14,859)
8,315
74,498 $
77,627
$
$
$
$
$
Depreciation expense was $12.2 million, $12.2 million, and $11.7 million for fiscal 2017, 2016, and 2015,
respectively.
Note 8 – Goodwill and Other Intangible Assets
The carrying amount of goodwill by reportable segment for the year ended August 31, 2017 and 2016 is as follows:
($ in thousands)
Balance as of August 31, 2015
Foreign currency translation
Balance as of August 31, 2016
Foreign currency translation
Balance as of August 31, 2017
Irrigation
60,905
37
60,942
36
60,978
$
$
$
$
$
Infrastructure
$
15,896 $
(35)
15,861 $
292
16,153 $
Total
76,801
2
76,803
328
77,131
The components of the Company’s identifiable intangible assets at August 31, 2017 and 2016 are included in the table
below.
($ in thousands)
Amortizable intangible assets:
Patents and developed technology
Customer relationships
Non-compete agreements
Other
Unamortizable intangible assets:
Tradenames
Total
August 31,
Weighted
average
years
2017
Gross
carrying
amount
Weighted
Accumulated average
amortization
years
2016
Gross
carrying
amount
Accumulated
amortization
5.1
5.8
1.6
8.8
N/A
5.1
$
$
34,038 $
19,975
2,354
210
20,121
76,698 $
(21,581)
(10,419)
(1,806)
(84)
—
(33,890)
6.1
6.0
2.2
9.5
N/A
5.7
$
33,732 $
19,952
2,350
239
(18,893)
(8,747)
(1,450)
(97)
20,114
76,387 $
$
—
(29,187)
Amortization expense for amortizable intangible assets was $4.4 million, $4.7 million, and $4.7 million for fiscal
2017, 2016, and 2015, respectively.
45
Future estimated amortization of intangible assets for the next five years is as follows:
Fiscal years
2018
2019
2020
2021
2022
Thereafter
$ in thousands
4,221
$
3,569
3,149
2,421
2,253
7,074
22,687
$
The Company updated its impairment evaluation of goodwill and intangible assets with indefinite useful lives at
August 31, 2017. No impairment losses were indicated as a result of the annual impairment testing for fiscal 2017,
2016 and 2015.
Note 9 – Other Current Liabilities
($ in thousands)
Other current liabilities:
Compensation and benefits
Warranties
Deferred revenues
Customer deposits
Dealer related liabilities
Tax related liabilities
Accrued environmental liabilities
Other
Total other current liabilities
Note 10 – Credit Arrangements
August 31,
2017
2016
$
$
18,926 $
8,411
6,166
4,096
3,500
2,813
2,095
9,112
55,119 $
19,044
7,443
7,594
3,399
4,978
4,200
722
8,015
55,395
Senior Notes. On February 19, 2015, the Company issued $115.0 million in aggregate principal amount of Senior
Notes, Series A (the “Senior Notes”). The entire principal of the Senior Notes is due and payable on February 19,
2030. Interest on the Senior Notes is payable semi-annually at a fixed annual rate of 3.82 percent and borrowings
under the Senior Notes are unsecured. The Company used the proceeds of the sale of the Senior Notes for general
corporate purposes, including acquisitions and dividends.
Revolving Credit Facility. On February 18, 2015, the Company entered into a $50.0 million unsecured Amended and
Restated Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association
(“Wells Fargo”). On February 28, 2017, the Company and Wells Fargo entered into an amendment to the Revolving
Credit Facility which, among other things, extended the termination date of the Revolving Credit Facility from
February 18, 2018 to February 28, 2020. The Company intends to use borrowings under the Revolving Credit Facility
for working capital purposes and to fund acquisitions. At August 31, 2017 and August 31, 2016, the Company had no
outstanding borrowings under the Revolving Credit Facility. The amount of borrowings available at any time under
the Revolving Credit Facility is reduced by the amount of standby letters of credit then outstanding. At August 31,
2017, the Company had the ability to borrow up to $44.6 million under this facility, after consideration of outstanding
standby letters of credit of $5.4 million. Borrowings under the Revolving Credit Facility bear interest at a variable rate
equal to LIBOR plus 90 basis points (2.14 percent at August 31, 2017), subject to adjustment as set forth in the loan
documents for the Revolving Credit Facility. Interest is paid on a monthly to quarterly basis depending on loan type.
The Company also pays an annual commitment fee of 0.25 percent on the unused portion of the Revolving Credit
Facility.
Borrowings under the Revolving Credit Facility have equal priority with borrowings under the Company’s Senior
Notes. Each of the credit arrangements described above include certain covenants relating primarily to the Company’s
financial condition. These financial covenants include a funded debt to EBITDA leverage ratio and an interest
coverage ratio. Upon the occurrence of any event of default of these covenants, including a change in control of the
46
Company, all amounts outstanding thereunder may be declared to be immediately due and payable. At August 31,
2017 and August 31, 2016, the Company was in compliance with all financial loan covenants contained in its credit
arrangements in place as of each of those dates.
Series 2006A Bonds. Elecsys International Corporation, a wholly owned subsidiary of the Company, has outstanding
$2.0 million in principal amount of industrial revenue bonds that were issued in 2006 (the “Series 2006A Bonds”).
Principal and interest on the Series 2006A Bonds are payable monthly through maturity on September 1, 2026. The
interest rate is adjustable every five years based on the yield of the 5-year United States Treasury Notes, plus 0.45 percent
(1.92 percent as of August 31, 2017). This rate was adjusted on September 1, 2016 in accordance with the terms of the
bonds, and the adjusted rate will be in force until September 1, 2021. The obligations under the Series 2006A Bonds are
secured by a first priority security interest in certain real estate.
Long-term debt consists of the following:
($ in thousands)
Senior Notes
Revolving Credit Facility
Series 2006A Bonds
Total debt
Less current portion
Total long-term debt
Principal payments due on the debt are as follows:
Due within
1 year
2 years
3 years
4 years
5 years
Thereafter
Note 11 – Financial Derivatives
Fair values of derivative instruments are as follows:
August 31,
2017
2016
115,000 $
—
1,976
116,976
(201)
116,775 $
115,000
—
2,173
117,173
(197)
116,976
$
$
$ in thousands
201
$
205
209
213
217
115,931
116,976
$
($ in thousands)
Derivatives designated as hedging instruments:
Foreign currency forward contracts
Foreign currency forward contracts
Total derivatives designated as hedging
instruments
Balance sheet location
2017
2016
August 31,
Other current assets
Other current liabilities
$
$
— $
(1,633)
(1,633) $
Derivatives not designated as hedging instruments:
Foreign currency forward contracts
Foreign currency forward contracts
Total derivatives not designated as hedging
instruments
Other current assets
Other current liabilities
$
9 $
(114)
$
(105) $
Accumulated other comprehensive income included realized and unrealized after-tax gains of $3.9 million, $5.6
million, and $5.4 million at August 31, 2017, 2016, and 2015, respectively, related to derivative contracts designated
as hedging instruments.
47
40
(385)
(345)
33
(210)
(177)
Net Investment Hedging Relationships
The amount of loss recognized in OCI on derivatives is as follows:
($ in thousands)
Foreign currency forward contracts, net of tax (benefit)
expense of ($927), $52, and $2,083
For the years ended August 31,
2016
2015
2017
$
1,710
$
(204) $
(3,420)
During fiscal 2017, 2016, and 2015, the Company settled Euro foreign currency forward contracts resulting in an
after-tax net loss of $0.9 million and after-tax net gains of $0.3 million and $3.8 million, respectively, which were
included in OCI as part of a currency translation adjustment. There were no amounts recorded in the consolidated
statement of operations related to ineffectiveness of Euro foreign currency forward contracts for the years ended
August 31, 2017, 2016, and 2015.
At August 31, 2017 and 2016, the Company had outstanding Euro foreign currency forward contracts to sell 32.8
million Euro and 32.6 million Euro, respectively, at fixed prices to settle during the next fiscal quarter. At August 31,
2017 and 2016, the Company also had an outstanding foreign currency forward contract to sell 43.0 million South
African rand at fixed prices to settle during the next fiscal quarter. The Company’s foreign currency forward contracts
qualify as hedges of a net investment in foreign operations.
Derivatives Not Designated as Hedging Instruments
In order to reduce exposures related to changes in foreign currency exchange rates, the Company, at times, may enter
into forward exchange or option contracts for transactions denominated in a currency other than the functional
currency for certain of the Company’s operations. This activity primarily relates to economically hedging against
foreign currency risk in purchasing inventory, sales of finished goods, and future settlement of foreign denominated
assets and liabilities. The Company may choose whether or not to designate these contracts as hedges. For those
contracts not designated, changes in fair value are recognized currently in the income statement. At August 31, 2017
and 2016, the Company had $5.0 million and $8.2 million, respectively, of U.S. dollar equivalent of foreign currency
forward contracts outstanding.
Note 12 – Fair Value Measurements
The following table presents the Company’s financial assets and liabilities measured at fair value, based upon the level
within the fair value hierarchy in which the fair value measurements fall, as of August 31, 2017 and 2016, respectively:
($ in thousands)
Cash and cash equivalents
Derivative assets
Derivative liabilities
($ in thousands)
Cash and cash equivalents
Derivative assets
Derivative liabilities
Level 1
Level 2
Level 3
Total
August 31, 2017
$
$
$
$
121,620
—
—
Level 1
101,246
—
—
— $
9
(1,747)
— $
—
—
121,620
9
(1,747)
August 31, 2016
Level 2
Level 3
Total
— $
73
(595)
— $
—
—
101,246
73
(595)
The carrying value of long-term debt (including current portion) was $117.0 million and $117.2 million at August 31,
2017 and 2016, respectively. The fair value of this debt was estimated to be $113.3 million and $116.5 million as of
August 31, 2017 and 2016, based on current market rates as of the respective year-ends.
Note 13 – Commitments and Contingencies
In the ordinary course of its business operations, the Company enters into arrangements that obligate it to make future
payments under contracts such as lease agreements. Additionally, the Company is involved, from time to time, in
commercial litigation, employment disputes, administrative proceedings, business disputes and other legal
proceedings. The Company has established accruals for certain proceedings based on an assessment of probability of
loss. The Company believes that any such currently-pending proceedings are either covered by insurance or would
not have a material effect on the business or its consolidated financial statements if decided in a manner that is
48
unfavorable to the Company. Such proceedings are exclusive of environmental remediation matters which are
discussed separately below.
Infrastructure Products Litigation
The Company is currently defending a number of product liability lawsuits involving the Company’s X-Lite® end
terminal. Despite the September 2017 reversal of a sizable judgment against a competitor, the Company expects that
the significant attention brought to the infrastructure products industry by the original judgment may lead to additional
lawsuits being filed against the Company and others in the industry.
The Company intends to vigorously defend each of these allegations. The Company maintains insurance to mitigate
the impact of adverse judgment exposures in the current product liability cases. Based on the information currently
available to the Company, the Company does not believe that a loss is probable in any of these lawsuits; therefore, no
accrual has been included in the Company’s consolidated financial statements. Because of the complexity and early
stage of these lawsuits, the Company is unable to estimate a range of possible loss.
Environmental Remediation
In 1992, the Company entered into a consent decree with the U.S. Environmental Protection Agency (the “EPA”) in
which the Company committed to remediate environmental contamination of the groundwater that was discovered
from 1982 through 1990 at and adjacent to its Lindsay, Nebraska facility (the “site”). The site was added to the EPA’s
list of priority superfund sites in 1989. Between 1993 and 1995, remediation plans for the site were approved by the
EPA and fully implemented by the Company. Since 1998, the primary remaining contamination at the site has been
the presence of volatile organic compounds in the soil and groundwater. To date, the remediation process has consisted
primarily of drilling wells into the aquifer and pumping water to the surface to allow these contaminants to be removed
by aeration.
In fiscal 2012, the Company undertook an investigation to assess further potential site remediation and containment
actions. In connection with the receipt of preliminary results of this investigation and other evaluations, the Company
estimated that it would incur $7.2 million in remediation of source area contamination and operating costs and accrued
that undiscounted amount. In addition to this source area, the Company determined that volatile organic compounds
also existed under one of the manufacturing buildings on the site. Due to the location, the Company had not yet
determined the extent of these compounds or the extent to which they were contributing to groundwater contamination.
Based on the uncertainty of the remediation actions that might be required with respect to this affected area, the
Company believed that meaningful estimates of costs or range of costs could not be made and accordingly were not
accrued.
In December 2014, the EPA requested that the Company prepare a feasibility study related to the site, including the
area covered by the building, which resulted in a revision to the Company’s remediation timeline. In the first quarter
of fiscal 2015, the Company accrued $1.5 million of incremental operating costs to reflect its updated timeline.
The Company began soil and groundwater testing in preparation for developing this feasibility study during the first
quarter of fiscal 2016. During the second quarter of fiscal 2016, the Company completed its testing which clarified
the extent of contamination, including the identification of a source of contamination near the manufacturing building
that was not part of the area for which reserves were previously established. The Company, with the assistance of
third-party environmental experts, developed and evaluated remediation alternatives, a proposed remediation plan,
and estimated costs. Based on these estimates of future remediation and operating costs, the Company accrued an
additional $13.0 million in the second quarter of fiscal 2016 and included the related expenses in general and
administrative expenses in the consolidated statement of operations.
The current estimated aggregate accrued cost of $18.0 million is based on consideration of several remediation options
that would use different technologies, each of which the Company believes could be successful in meeting the long-
term regulatory requirements of the site. The Company participated in a preliminary meeting with the EPA and the
Nebraska Department of Environmental Quality (the “NDEQ”) during the third quarter of fiscal 2016 to review
remediation alternatives and proposed plans for the site and submitted its remedial alternatives evaluation report to
the EPA in August 2016. The proposed remediation plan is preliminary and has not been approved by the EPA or the
NDEQ. Based on guidance from third-party environmental experts and the preliminary discussions with the EPA, the
Company anticipates that a definitive plan will not be agreed upon until fiscal 2018 or later.
49
The Company accrues the anticipated cost of investigation and remediation when the obligation is probable and can
be reasonably estimated. While the Company believes the current accrual is a good faith estimate of the long-term
cost of remediation at this site based on preliminary analysis available at this time, the estimate of costs and their
timing could change as a result of a number of factors, including (1) EPA and NDEQ input on the proposed
remediation plan and any changes which they may subsequently require, (2) refinement of cost estimates and length
of time required to complete remediation and post-remediation operations and maintenance, (3) effectiveness of the
technology chosen in remediation of the site as well as changes in technology that may be available in the future, and
(4) unforeseen circumstances existing at the site. As a result of these factors, the actual amount of costs incurred by
the Company in connection with the remediation of contamination of its Lindsay, Nebraska site could exceed the
amounts accrued for this expense at this time. While any revisions could be material to the operating results of any
fiscal quarter or fiscal year, the Company does not expect such additional expenses would have a material adverse
effect on its liquidity or financial condition.
The following table summarizes the undiscounted environmental remediation liability classifications included in the
balance sheet as of August 31, 2017 and 2016:
($ in thousands)
Balance sheet location
Other current liabilities
Other noncurrent liabilities
Total environmental remediation liabilities
August 31,
2017
2016
$
$
2,095 $
15,937
18,032 $
722
18,255
18,977
Leases
The Company leases land, buildings, machinery, equipment, and computer equipment under various non-cancelable
operating lease agreements. At August 31, 2017, future minimum lease payments under non-cancelable operating
leases were as follows:
Fiscal years
2018
2019
2020
2021
2022
Thereafter
$ in thousands
3,826
$
3,150
2,646
2,599
2,452
4,510
19,183
$
Lease expense was $5.1 million, $5.0 million, and $4.5 million for fiscal 2017, 2016, and 2015, respectively.
Note 14 – Retirement Plans
The Company has defined contribution profit-sharing plans covering substantially all of its full-time U.S. employees.
Participants may voluntarily contribute a percentage of compensation, but not in excess of the maximum allowed
under the Internal Revenue Code. The plans provide for a matching contribution by the Company. The Company’s
total contributions charged to expense under the plans were $1.7 million, $1.5 million, and $1.2 million for the years
ended August 31, 2017, 2016, and 2015, respectively.
A supplementary non-qualified, non-funded retirement plan for five former executives is also maintained. Plan
benefits are based on the executive’s average total compensation during the three highest compensation years of
employment. This unfunded supplemental retirement plan is not subject to the minimum funding requirements of
ERISA. While the plan is unfunded, the Company has purchased life insurance policies on certain former executives
named in this supplemental retirement plan to provide funding for this liability. The cash surrender value of these
insurance policies are recorded as other noncurrent assets.
As of August 31, 2017 and 2016, the funded status of the supplemental retirement plan was recorded in the
consolidated balance sheets. The Company utilizes an August 31 measurement date for plan obligations related to the
supplemental retirement plan. As this is an unfunded retirement plan, the funded status is equal to the benefit
obligation.
50
The funded status of the plan and the net amount recognized in the accompanying balance sheets as of August 31 is
as follows:
($ in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year
Interest cost
Actuarial (gain) loss
Benefits paid
Benefit obligation at end of year
Amounts recognized in the statement of financial position consist of:
($ in thousands)
Other current liabilities
Pension benefit liabilities
Net amount recognized
August 31,
2017
2016
7,426 $
236
(287)
(550)
6,825 $
7,126
281
576
(557)
7,426
August 31,
2017
2016
530 $
6,295
6,825 $
557
6,869
7,426
$
$
$
$
The before-tax amounts recognized in accumulated other comprehensive loss consists of:
($ in thousands)
Net actuarial loss
August 31,
2017
2016
$
(3,901) $
(4,429)
For the years ended August 31, 2017 and 2016, the Company assumed a discount rate of 3.70 percent and 3.30 percent,
respectively, for the determination of the liability. The assumptions used to determine benefit obligations and costs
are selected based on current and expected market conditions. The discount rate is based on a hypothetical portfolio
of long-term corporate bonds with cash flows approximating the timing of expected benefit payments.
For the years ended August 31, 2017, 2016, and 2015, the Company assumed a discount rate of 3.30 percent, 4.10
percent, and 4.00 percent, respectively, for the determination of the net periodic benefit cost. The components of the
net periodic benefit cost for the supplemental retirement plan are as follows:
($ in thousands)
Interest cost
Net amortization and deferral
Total
For the years ended August 31,
2016
2017
2015
$
$
236
241
477
$
$
281 $
209
490 $
275
209
484
The estimated actuarial loss for the supplemental retirement plan that will be amortized, on a pre-tax basis, from
accumulated other comprehensive loss into net periodic benefit cost during fiscal 2017 will be $0.2 million.
The Company’s future annual contributions to the supplemental retirement plan will be equal to expected net benefit
payments since the plan is unfunded. The following net benefit payments are expected to be paid:
Fiscal years
2018
2019
2020
2021
2022
Thereafter
$ in thousands
519
$
513
506
499
491
4,297
6,825
$
51
Note 15 - Warranties
Product Warranties
The Company generally warrants its products against certain manufacturing and other defects. These product
warranties are provided for specific periods and/or usage of the product. The accrued product warranty costs are for
a combination of specifically identified items and other incurred, but not identified, items based primarily on historical
experience of actual warranty claims. This reserve is classified within other current liabilities.
The following tables provide the changes in the Company’s product warranties:
($ in thousands)
Product warranty accrual balance, beginning of period
Liabilities accrued for warranties during the period
Warranty claims paid during the period
Changes in estimates
Product warranty accrual balance, end of period
For the years ended August 31,
2017
2016
$
$
7,443 $
6,914
(6,312)
366
8,411 $
7,271
5,912
(5,244)
(496)
7,443
Warranty costs were $7.3 million, $5.4 million, and $2.8 million for fiscal 2017, 2016, and 2015, respectively.
Note 16 – Industry Segment Information
The Company manages its business activities in two reportable segments: Irrigation and Infrastructure. The
accounting policies of the two reportable segments are the same as those described in Note 1, Description of Business
and Significant Accounting Policies. The Company evaluates the performance of its reportable segments based on
segment sales, gross profit, and operating income, with operating income for segment purposes excluding unallocated
corporate general and administrative expenses, interest income, interest expense, other income and expenses, and
income taxes. Operating income for segment purposes does include general and administrative expenses, selling
expenses, engineering and research expenses and other overhead charges directly attributable to the segment. There
are no inter-segment sales.
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 M2M technology. The irrigation
reporting segment consists of three operating segments that have similar economic characteristics and meet the
aggregation criteria, including similar products, production processes, type or class of customer and methods for
distribution.
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; the manufacturing and selling of large
diameter steel tubing and railroad signals and structures; and providing outsourced manufacturing and production
services. The infrastructure reporting segment consists of one operating segment.
The Company has no single major customer representing 10 percent or more of its total revenues during fiscal 2017,
2016, or 2015.
52
Summarized financial information concerning the Company’s reportable segments is shown in the following tables:
($ in thousands)
Operating revenues:
Irrigation
Infrastructure
Total operating revenues
Operating income:
Irrigation
Infrastructure
Segment operating income
Unallocated general and administrative expenses
Interest and other income (expense), net
Earnings before income taxes
Total capital expenditures:
Irrigation
Infrastructure
Corporate
Total depreciation and amortization:
Irrigation
Infrastructure
Corporate
Total assets:
Irrigation
Infrastructure
Corporate
2017
2016
2015
418,041
99,944
517,985
42,774
20,131
62,905
(22,704)
(4,486)
35,715
6,313
1,562
988
8,863
11,840
4,452
386
16,678
337,446
80,187
88,399
506,032
$
$
$
$
$
$
$
$
$
$
421,641 $
94,770
516,411 $
451,205
108,976
560,181
49,232 $
18,535
67,767
(33,392)
(5,087)
29,288 $
8,375 $
2,977
144
11,496 $
11,774 $
4,648
459
16,881 $
52,065
20,249
72,314
(21,619)
(3,944)
46,751
12,406
2,671
167
15,244
11,000
4,966
446
16,412
332,294 $
81,160
74,061
487,515 $
316,220
79,436
126,939
522,595
$
$
$
$
$
$
$
$
$
$
Summarized financial information concerning the Company’s geographical areas is shown in the following tables.
($ in thousands)
United States
International
Total revenues
($ in thousands)
United States
International
Total long-lived assets
2017
For the years ended August 31,
2016
Revenues
297,261
220,724
517,985
$
$
% of
total
57
43
100
$
$
Revenues
321,554
194,857
516,411
% of
total
62
38
100
$
$
2015
Revenues
350,290
209,891
560,181
% of
total
63
37
100
2017
For the years ended August 31,
2016
2015
Long-lived
tangible assets
54,199
20,299
74,498
$
$
% of
total
73
27
100
Long-lived
tangible assets
58,098
$
19,529
77,627
$
% of
total
75
25
100
Long-lived
tangible assets
61,332
$
17,324
78,656
$
% of
total
78
22
100
53
Note 17 – Share-Based Compensation
Share-Based Compensation Program
Share-based compensation is designed to reward employees for their long-term contributions to the Company and
provide incentives for them to remain with the Company. The number and frequency of share grants are based on
competitive practices, operating results of the Company, and individual performance. As of August 31, 2017, the
Company’s share-based compensation plan was the 2015 Long-Term Incentive Plan (the “2015 Plan”). The 2015
Plan was approved by the shareholders of the Company, and became effective on January 26, 2015, and replaced the
Company’s 2010 Long Term Incentive Plan. At August 31, 2017, the Company had share-based awards outstanding
under its 2010 and 2015 Long-Term Incentive Plans.
The 2015 Plan provides for awards of stock options, restricted shares, restricted stock units, stock appreciation rights,
performance shares and performance stock units to employees and non-employee directors of the Company. The
maximum number of shares as to which stock awards may be granted under the 2015 Plan is 626,968 shares, exclusive
of any forfeitures from the 2010 Long Term Incentive Plan. At August 31, 2017, 486,278 shares of common stock
(including forfeitures from prior plans) remained available for issuance under the 2015 Plan. All stock awards will
be counted against the 2015 Plan in a 1 to 1 ratio. If options, restricted stock units or performance stock units awarded
under the 2010 Plan terminate without being fully vested or exercised, those shares will be available again for grant
under the 2015 Plan. The 2015 Plan also limits the total awards that may be made to any individual.
Share-Based Compensation Information
The following table summarizes share-based compensation expense for fiscal 2017, 2016, and 2015:
($ in thousands)
Share-based compensation expense included in cost of
operating revenues
Research and development
Sales and marketing
General and administrative
Share-based compensation expense included in
operating expenses
Total share-based compensation expense
Tax benefit
Share-based compensation expense, net of tax
For the years ended August 31,
2016
2015
2017
$
231
$
207 $
162
397
2,807
3,366
3,597
(1,338)
2,259
$
140
455
2,258
2,853
3,060
(1,138)
1,922 $
$
161
121
523
2,527
3,171
3,332
(1,240)
2,092
As of August 31, 2017, there was $4.9 million pre-tax of total unrecognized compensation cost related to non-vested
share-based compensation arrangements which is expected to be recognized over a weighted average period of 2.0
years.
Stock Options – Stock option awards have an exercise price equal to the closing price on the date of grant, expire no
later than ten years from the date of grant and vest over a four-year period at 25 percent per year. The fair value of
stock option awards is estimated using the Black-Scholes option pricing model. The table below shows the annual
weighted average assumptions used for valuation purposes.
Risk-free interest rate
Dividend yield
Expected life (years)
Volatility
Weighted average grant-date fair value of options granted
Grant year
Fiscal 2017
1.5%
1.5%
7
36.5%
26.25 $
Fiscal 2016
1.8%
1.7%
7
46.3%
27.88
$
The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant; the dividend yield is calculated
as the ratio of dividends paid per share of common stock to the stock price on the date of grant; the expected life is
based on historical and expected exercise behavior; and volatility is based on the historical volatility of the Company’s
stock price over the expected life of the option.
54
The following table summarizes information about stock options outstanding as of and for the years ended August 31,
2017, 2016, and 2015:
Stock options outstanding at August 31, 2015
Granted
Exercised
Forfeited / cancelled
Stock options outstanding at August 31, 2016
Granted
Exercised
Forfeited / cancelled
Stock options outstanding at August 31, 2017
Exercisable at August 31, 2015
Exercisable at August 31, 2016
Exercisable at August 31, 2017
Average
Number of
exercise price
stock options
70.65
$
96,376
67.68
39,999
$
25.47
(4,456) $
72.14
(4,633) $
71.24
$
127,286
78.23
47,223
$
69.33
(43,556) $
73.90
(8,434) $
74.43
$
122,519
39,449
57,250
36,348
$
$
$
61.47
68.57
71.37
Average
remaining
contractual
term (years)
7.3 $
Aggregate
intrinsic value
(thousands)
710
$
7.4 $
$
181
521
681
7.5 $
1,487
6.1 $
6.1 $
5.8 $
583
362
553
There were 25,285, 23,164, and 19,178 outstanding stock options that vested during fiscal 2017, 2016, and 2015,
respectively. Additional information regarding stock option exercises is summarized in the table below.
($ in thousands)
Intrinsic value of stock options exercised
Cash received from stock option exercises
Tax benefit realized from stock option exercises
Aggregate grant-date fair value of stock options vested
For the years ended August 31,
2016
2015
2017
$
$
$
$
681
3,020
254
35.79
$
$
$
$
181 $
113 $
67 $
37.70 $
425
394
158
36.71
Restricted stock units - The restricted stock units have a grant-date fair value equal to the fair market value of the
underlying stock on the grant date less present value of expected dividends. The restricted stock units granted to
employees vest over a three-year period at approximately 33 percent per year. The restricted stock units granted to
non-employee directors generally vest over a nine-month period.
The following table summarizes information about restricted stock units as of and for the years ended August 31,
2017, 2016, and 2015:
Restricted stock units outstanding at August 31, 2015
Granted
Vested
Forfeited / Cancelled
Restricted stock units outstanding at August 31, 2016
Granted
Vested
Forfeited / Cancelled
Restricted stock units outstanding at August 31, 2017
Number of
restricted
stock units
Weighted
average grant-
date fair value
78.54
64.36
78.68
70.41
69.11
74.75
69.89
70.51
72.25
56,972 $
48,022
(30,634)
(7,306)
67,054 $
44,647
(34,312)
(8,366)
69,023 $
Restricted stock units are generally settled with the issuance of shares with the exception of certain restricted stock
units awarded to internationally-based employees that are settled in cash. At August 31, 2017, 2016, and 2015,
outstanding restricted stock units included 6,709, 6,155, and 5,504 units, respectively, that will be settled in cash. The
fair value of restricted stock units that vested during the period was $2.4 million and $2.4 million for each of the years
ended August 31, 2017 and 2016, respectively.
55
Performance stock units - The performance stock units have a grant-date fair value equal to the fair market value of
the underlying stock on the grant date less present value of expected dividends. The performance stock units granted
to employees cliff vest after a three-year period and a specified number of shares of common stock will be awarded
under the terms of the performance stock units, if performance measures relating to revenue growth and a return on
net assets are achieved.
The table below summarizes the status of the Company’s performance stock units as of and for the year ended August
31, 2017, 2016, and 2015:
Performance stock units outstanding at August 31, 2015
Granted
Vested
Forfeited / cancelled
Performance stock units outstanding at August 31, 2016
Granted
Forfeited / cancelled
Performance stock units outstanding at August 31, 2017
Number of
performance
stock units
Weighted
average grant-
date fair value
76.50
64.37
74.31
72.28
72.20
74.80
74.10
72.52
33,856 $
16,466
(7,665)
(4,509)
38,148 $
15,902
(15,361)
38,689 $
In connection with the performance stock units, the performance goals are based upon revenue growth and a return on
net assets during the performance period. The awards actually earned will range from zero to two hundred percent of
the targeted number of performance stock units and will be paid in shares of common stock. Shares earned will be
distributed upon vesting on the first day of November following the end of the three-year performance period. The
Company is accruing compensation expense based on the estimated number of shares expected to be issued utilizing
the most current information available to the Company at the date of the financial statements. If defined performance
goals are not met, no compensation cost will be recognized and any previously recognized compensation expense will
be reversed. In fiscal 2017, no performance stock units vested. In fiscal 2016, performance stock units that vested
represented 7,665 of actual shares of common stock issued. The fair value of performance stock units that vested
during the period was $0.6 million for the year ended August 31, 2016.
Note 18 – Share Repurchases
The Company’s Board of Directors authorized a share repurchase program of up to $250.0 million of common stock
with no expiration date. Under the program, shares may be repurchased in privately negotiated and/or open market
transactions as well as under formalized trading plans in accordance with the guidelines specified under Rule 10b5-1
of the Securities Exchange Act of 1934, as amended. There were no shares repurchased during the twelve months
ended August 31, 2017. During the twelve months ended August 31, 2016, the Company repurchased 688,790 shares
of common stock for an aggregate purchase price of $48.3 million. During the twelve months ended August 31, 2015,
the Company repurchased 1,198,089 shares of common stock for an aggregate purchase price of $96.9 million. The
remaining amount available under the repurchase program was $63.7 million as of August 31, 2017.
56
Note 19 – Quarterly Results of Operations (Unaudited)
($ in thousands, except per share amounts)
Year ended August 31, 2017
Operating revenues
Cost of operating revenues
Earnings before income taxes
Net earnings
Diluted net earnings per share
Year ended August 31, 2016
Operating revenues
Cost of operating revenues
Earnings (loss) before income taxes
Net earnings (loss)
Diluted net earnings (loss) per share
$
$
$
$
$
$
$
$
$
$
First
Quarter
Second
Quarter(1)
Third
Quarter
Fourth
Quarter
110,390
82,016
1,335
873
0.08
121,622
87,208
10,396
6,944
0.62
$
$
$
$
$
$
$
$
$
$
124,125
91,184
7,636
5,012
0.47
$
$
$
$
$
$
120,573
88,128
$
(6,193) $
(4,129) $
(0.37) $
151,533 $
105,627 $
16,197 $
10,952 $
1.02 $
141,319 $
99,511 $
14,065 $
9,644 $
0.90 $
131,937
94,146
10,547
6,342
0.59
132,897
92,951
11,020
7,808
0.73
(1) The second quarter 2016 results were affected by an environmental charge reducing net earnings by $8.5 million.
57
ITEM 9 — Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
ITEM 9A — Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and
with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and
procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting,
as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Based upon that evaluation, the Company’s Chief
Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are
effective in enabling the Company to record, process, summarize and report information required to be included in
the Company’s periodic SEC filings within the required time period.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the
Company. The Company’s internal control system was designed to provide reasonable assurance to the Company’s
management and board of directors regarding the preparation and fair presentation of published financial statements.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of August
31, 2017, based on the criteria for effective internal control described in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment,
management concluded that the Company’s internal control over financial reporting was effective as of August 31,
2017.
The Audit Committee has engaged KPMG LLP, the independent registered public accounting firm that audited the
consolidated financial statements included in this Annual Report on Form 10-K, to attest to and report on
management’s evaluation of the Company’s internal control over financial reporting. The report of KPMG LLP is
included herein.
58
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Lindsay Corporation:
We have audited Lindsay Corporation’s internal control over financial reporting as of August 31, 2017, based on
criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Lindsay Corporation’s management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit
also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
In our opinion, Lindsay Corporation maintained, in all material respects, effective internal control over financial
reporting as of August 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Lindsay Corporation and subsidiaries as of August 31, 2017 and 2016, and
the related consolidated statements of earnings, comprehensive income, shareholders’ equity, and cash flows for each
of the years in the three-year period ended August 31, 2017, and the related financial statement schedule and our report
dated October 13, 2017 expressed an unqualified opinion on those consolidated financial statements and related
financial statement schedule.
Omaha, Nebraska
October 13, 2017
/s/ KPMG LLP
59
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal controls over financial reporting that occurred during the year ended
August 31, 2017, that have materially affected, or are reasonably likely to materially affect, the Company’s internal
control over financial reporting.
ITEM 9B — Other Information
None.
60
ITEM 10 — Directors, Executive Officers and Corporate Governance
PART III
The Company will file with the Securities and Exchange Commission a definitive Proxy Statement for its 2018 Annual
Meeting of Stockholders (the “Proxy Statement”) not later than 120 days after the close of its fiscal year ended August
31, 2017. Information about the Board of Directors required by Items 401 and 407 of Regulation S-K is incorporated
by reference to the discussion responsive thereto under the captions “Board of Directors and Committees” and
“Corporate Governance” in the Proxy Statement.
The executive officers and significant employees of the Company, their ages, positions and business experience are
set forth below. All executive officers of the Company are appointed by the Board of Directors annually and have
employment agreements. There are no family relationships between any director or executive officer. There are no
arrangements or understandings between any executive officer and any other person pursuant to which they were
selected as an officer.
Richard W. Parod
Timothy L. Hassinger
Eric R. Arneson*
David B. Downing
C. Mike Harris*
Brian L. Ketcham
Mark A. Roth*
Randy A. Wood
Lori L. Zarkowski*
Age
64
55
43
62
51
56
42
45
42
Position
President and Chief Executive Officer
Incoming President and Chief Executive Officer
Vice President, General Counsel and Secretary
Executive Vice President
President – Industrial Water Solutions Business
Vice President and Chief Financial Officer
Vice President – Corporate Development and Treasurer
President – Agricultural Irrigation Division
Chief Accounting Officer
* The employee is not an executive officer of the Registrant.
Mr. Richard W. Parod is President and Chief Executive Officer of the Company, and has held such positions and
served as a member of the Board of Directors since April 2000. Prior to that time and since 1997, Mr. Parod was Vice
President and General Manager of the Irrigation Division of The Toro Company. Mr. Parod was employed by James
Hardie Irrigation from 1993 through 1997, becoming President in 1994. On October 16, 2017, Timothy L. Hassinger
will succeed Mr. Parod as President and Chief Executive Officer of the Company and as a member of the Board of
Directors. From October 16, 2017 through his expected retirement date of December 1, 2017, Mr. Parod is expected
to serve the Company in an advisory capacity as President Emeritus.
Mr. Timothy L. Hassinger will serve as President and Chief Executive Officer of the Company commencing on
October 16, 2017. Mr. Hassinger will also serve as a director of the Company commencing on such date. Prior to
joining the Company and since May 2014, Mr. Hassinger served as President and Chief Executive Officer of Dow
AgroSciences, an Indianapolis-based subsidiary of The Dow Chemical Company which discovers, develops and
brings to market crop protection and plant biotechnology solutions. During his 33-year career at Dow AgroSciences,
Hassinger held a series of senior leadership positions across a variety of domestic and international business units.
Prior to becoming President and Chief Executive Officer of Dow AgroSciences in May 2014, he served as its Global
Commercial Leader from February 2013 to April 2014 and as Vice President for its Crop Protection Global Business
Unit from August 2009 to April 2014. Previously, he served as Vice President for the Dow AgroSciences business in
the Europe, Latin America, and Pacific regions from 2007 to 2009. In 2005, he moved to Shanghai, where he served
as Regional Commercial Unit Leader for Greater China.
Mr. Eric R. Arneson is Vice President, General Counsel and Secretary of the Company and has held such positions
since April 2008, when he joined the Company. Prior to that time and since January 1999, Mr. Arneson practiced law
with the law firm of Kutak Rock LLP, and was most recently a partner of the firm.
61
Mr. David B. Downing is Executive Vice President of the Company and has held such position since May 2016.
Between October 2013 and May 2016, Mr. Downing served as President - Agricultural Irrigation Division of the
Company. Between March 2008 and October 2013, Mr. Downing served as President – International operations of
the Company. Between March 2009 and June 2011, Mr. Downing served as both Chief Financial Officer and President
– International Operations of the Company. Previously he was Senior Vice President-Finance, Chief Financial
Officer, Treasurer and Secretary of the Company and held such positions from August 2004, when he joined the
Company, to March 2008. Prior to August 2004, Mr. Downing served as the President of FPM L.L.C., a heat-treating
company based in Elk Grove Village, Illinois, after joining that company in January 2001 as Vice President and Chief
Financial Officer. Previously, Mr. Downing served as Vice President and Controller for Thermo-King, which
manufactured transport refrigeration equipment.
Mr. C. Mike Harris is President – Industrial Water Solutions Business of the Company and has held such position
since November 2013. Prior to joining Lindsay and since February 2013, he served as Vice President of Sales and
Field Operation at Johnson Controls, Inc., a global diversified technology and industrial company. From May 2010
to February 2013, Mr. Harris served as Vice President and Managing Director of Asia Pacific at Johnson Controls,
Inc. From February 2005 to April 2010, Mr. Harris served as Vice President and General Manager of Energy Services
for Johnson Controls, Inc. Prior to 2005 and since 2002, Mr. Harris served in several Vice President positions’ at
Johnson Controls, Inc. Prior to joining Johnson Controls, Inc., Mr. Harris held various leadership positions in the
energy services, commodity trading and utility industries.
Mr. Brian L. Ketcham is Vice President and Chief Financial Officer of the Company, and has held such positions
since April 2016. Prior to joining Lindsay and since 2001, Mr. Ketcham served in various finance roles at Valmont
Industries, Inc., most recently as Vice President and Group Controller of the Engineered Support Structures segment.
Prior to joining Valmont, Mr. Ketcham held various positions with Consolidated Container Company LLC and KPMG
LLP.
Mr. Mark A. Roth is Vice President – Corporate Development and Treasurer of the Company. Mr. Roth joined
Lindsay in January 2004, as Director of Corporate Development and was promoted to Vice President – Corporate
Development in March 2007, adding Treasurer to his role in April 2008. From March 2001 through 2004 when he
joined the Company, Mr. Roth was an Associate with McCarthy Group, Inc., a Midwest-based investment bank and
private equity fund. From January 1998 through February 2001, Mr. Roth was a Senior Credit Analyst at US Bancorp.
Mr. Randy A. Wood is President – Agricultural Irrigation Division of the Company and has held such position since
May 2016. Between October 2013 and May 2016, Mr. Wood served as President – International Irrigation of the
Company. Between February 2012 and October 2013, Mr. Wood served as Vice President – Americas / ANZ Sales
and Marketing. Previously he was Vice President – North America Irrigation Sales of the Company and held such
position from March 2008, when he joined the Company. Prior to March 2008, Mr. Wood spent 11 years with Case
Corporation / CNH Global including roles as the Senior Director of Marketing, Case IH Tractors, and Senior Director
of Sales and Marketing, Parts and Service.
Ms. Lori L. Zarkowski is Chief Accounting Officer of the Company, and has held such position since August 2011.
Ms. Zarkowski joined Lindsay in June 2007 as Corporate Reporting Manager and was promoted to Corporate
Controller in April 2008. Prior to joining the Company and since 1997, Ms. Zarkowski was most recently an Audit
Senior Manager with Deloitte & Touche LLP.
Section 16(a) Beneficial Ownership Reporting Compliance - Item 405 of Regulation S-K calls for disclosure of any
known late filing or failure by an insider to file a report required by Section 16 of the Securities Exchange Act. The
information required by Item 405 is incorporated by reference to the discussion responsive thereto under the caption
“Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement.
Code of Ethics – Item 406 of Regulation S-K calls for disclosure of whether the Company has adopted a code of ethics
applicable to the principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The Company has adopted a code of ethics applicable to the Company’s
principal executive officer and senior financial officers known as the Code of Ethical Conduct (Principal Executive
Officer and Senior Financial Officers). The Code of Ethical Conduct (Principal Executive Officer and Senior
Financial Officers) is available on the Company’s website. In the event that the Company amends or waives any of
the provisions of the Code of Ethical Conduct applicable to the principal executive officer and senior financial officers,
the Company intends to disclose the same on the Company’s website at www.lindsay.com. No waivers were provided
for the fiscal year ended August 31, 2017.
62
ITEM 11 — Executive Compensation
The information required by this Item is incorporated by reference to the discussion responsive thereto under the
captions “Executive Compensation,” “Compensation Discussion and Analysis,” “Pension Benefits,” “Nonqualified
Deferred Compensation,” “Report of the Compensation Committee on Executive Compensation,” “Compensation of
Directors,” and “Compensation Committee Interlocks and Insider Participation” in the Proxy Statement.
ITEM 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item relating to security ownership of certain beneficial owners and management is
incorporated by reference to the discussion responsive thereto under the caption “Voting Securities and Beneficial
Ownership Thereof by Principal Stockholders, Directors and Officers” in the Proxy Statement.
Equity Compensation Plan Information - The following equity compensation plan information summarizes plans and
securities approved by security holders as of August 31, 2017 (there were no equity compensation plans not approved
by security holders as of August 31, 2017):
Plan category
Equity compensation plans
approved by security holders (1) (2)
Total
(a)
Number of securities to be
issued upon exercise of
outstanding options,
warrants, and rights
(b)
Weighted-average
exercise price of
outstanding options,
warrants, and rights
(c)
Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
223,522
223,522
$
$
74.43
74.43
486,278
486,278
(1) Plans approved by stockholders include the Company’s 2010 and 2015 Long-Term Incentive Plans. While certain share-based awards remain
outstanding under the Company’s 2010 Long-Term Incentive Plan, no future equity compensation awards may be granted under such plan.
(2) Column (a) includes (i) 38,689 shares that could be issued under performance stock units (“PSU”) outstanding at August 31, 2017, and (ii)
62,314 shares that could be issued under restricted stock units (“RSU”) outstanding at August 31, 2017. The PSUs are earned and Common Stock
issued if certain predetermined performance criteria are met. Actual shares issued may be equal to, less than or greater than (but not more than 200
percent of) the number of outstanding PSUs included in column (a), depending on actual performance. The RSUs vest and are payable in Common
Stock after the expiration of the time periods set forth in the related agreements. Column (b) does not take these PSU and RSU awards into account
because they do not have an exercise price.
ITEM 13 — Certain Relationships and Related Transactions, and Director Independence
The information required by this Item is incorporated by reference to the discussion responsive thereto under the
captions “Corporate Governance” and “Corporate Governance – Related Party Transactions” in the Proxy Statement.
ITEM 14 — Principal Accounting Fees and Services
The information required by this Item is incorporated by reference to the discussion responsive thereto under the
caption “Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.
63
ITEM 15 — Exhibits, Financial Statement Schedules
(a)(1) Financial Statements.
PART IV
The following financial statements of Lindsay Corporation and Subsidiaries are included in Part II Item 8.
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Earnings for the years ended August 31, 2017, 2016, and 2015
Consolidated Statements of Comprehensive Income for the years ended August 31, 2017, 2016, and 2015
Consolidated Balance Sheets as of August 31, 2017 and 2016
Consolidated Statements of Shareholders' Equity for the years ended August 31, 2017, 2016, and 2015
Consolidated Statements of Cash Flows for the years ended August 31, 2017, 2016, and 2015
Notes to Consolidated Financial Statements
Valuation and Qualifying Accounts – Years ended August 31, 2017, 2016, and 2015
Page
29
30
31
32
33
34
35-57
65
Financial statements and schedules other than those listed are omitted for the reason that they are not required, are not
applicable or that equivalent information has been included in the financial statements or notes thereto.
64
(a)(2) Financial Statement Schedules.
Lindsay Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
Years ended August 31, 2017, 2016, and 2015
(in thousands)
Year ended August 31, 2017:
Deducted in the balance sheet from the
assets to which they apply:
Allowance for doubtful accounts (1)
Allowance for inventory obsolescence (2)
Deferred tax asset valuation allowance (3)
Year ended August 31, 2016:
Deducted in the balance sheet from the
assets to which they apply:
Allowance for doubtful accounts (1)
Allowance for inventory obsolescence (2)
Deferred tax asset valuation allowance (3)
Year ended August 31, 2015:
Deducted in the balance sheet from the
assets to which they apply:
Allowance for doubtful accounts (1)
Allowance for inventory obsolescence (2)
Deferred tax asset valuation allowance (3)
Additions
Balance at
beginning of
period
Charges to
costs and
expenses
Charged to
other
accounts
Deductions
Balance at
end of
period
$
$
$
$
$
$
8,312
4,656
2,825
9,706
4,405
2,949
4,857
2,858
—
$
$
$
483
1,133
—
800
1,262
—
5,840
3,302
2,949
— $
49
—
1,348 $
827
21
7,447
5,011
2,804
— $
(30)
—
2,194 $
980
124
8,312
4,656
2,825
— $
991 $
(147)
—
1,608
—
9,706
4,405
2,949
(1) Deductions consist of uncollectible items reserved, less recoveries of items previously reserved.
(2) Deductions consist of obsolete items sold or scrapped.
(3) Deductions consist of foreign exchange rate fluctuations.
(a)(3) Exhibits. The list of the Exhibits in the Exhibit Index is incorporated into this item by reference.
65
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 13th day of October,
2017.
LINDSAY CORPORATION
/s/ BRIAN L. KETCHAM
By:
Name: Brian L. Ketcham
Title: Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated on this 13th day of October, 2017.
/s/ RICHARD W. PAROD
Richard W. Parod
/s/ BRIAN L. KETCHAM
Brian L. Ketcham
/s/ MICHAEL C. NAHL
Michael C. Nahl
Director, President and Chief Executive Officer
(Principal Executive Officer)
Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
(1)
Chairman of the Board of Directors
/s/ ROBERT E. BRUNNER
Robert E. Brunner
(1)
Director
/s/ MICHAEL N CHRISTODOLOU
Michael N. Christodolou
(1)
Director
/s/ W. THOMAS JAGODINSKI
W. Thomas Jagodinski
(1)
Director
/s/ DAVID B. RAYBURN
David B. Rayburn
/s/ MICHAEL D.WALTER
Michael D. Walter
/s/ WILLIAM F. WELSH II
William F. Welsh II
(1)
Director
(1)
Director
(1)
Director
(1) By: /s/ RICHARD W. PAROD
Richard W. Parod, Attorney-In-Fact
66
EXHIBIT INDEX
Exhibit
Number
2.1
3.1
3.2
4.1
10.1
10.2
10.3
Description
Agreement and Plan of Merger, dated November 4, 2014, by and between Lindsay Corporation, Matterhorn Merger
Sub, Inc. and Elecsys Corporation, incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form
8-K filed on November 4, 2014.
Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s
Current Report on Form 8-K filed on December 14, 2006.
Amended and Restated By-Laws of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Current
Report on Form 8-K filed on May 5, 2014.
Specimen Form of Common Stock Certificate incorporated by reference to Exhibit 4(a) to the Company’s Quarterly
Report on Form 10-Q for the fiscal quarter ended November 30, 2006.
Lindsay Corporation 2015 Long-Term Incentive Plan and forms of award agreements, incorporated by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2015.†
Lindsay Corporation 2010 Long-Term Incentive Plan and forms of award agreements, incorporated by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2011.†
Lindsay Corporation Management Incentive Umbrella Plan, incorporated by reference to Exhibit 10.2 to the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014.†
10.4**
Lindsay Corporation Management Incentive Plan (MIP), 2017 Plan Year, incorporated by reference to Exhibit 10.1 to
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2016.†
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
Form of Indemnification Agreement between the Company and its Officers and Directors, incorporated by reference
to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008.†
Employment Agreement between the Company and Richard W. Parod effective March 8, 2000, incorporated by
reference to Exhibit 10(a) to the Company’s Report on Form 10-Q for the fiscal quarter ended May 31, 2000.†
First Amendment to Employment Agreement, dated May 2, 2003, between the Company and Richard W. Parod,
incorporated by reference to Exhibit 10 (a) of Amendment No. 1 to the Company’s Report on Form 10-Q for the fiscal
quarter ended May 31, 2003.†
Second Amendment to Employment Agreement, dated December 22, 2004, between the Company and Richard W.
Parod, incorporated by reference to Exhibit 10(a) to the Company’s Current Report on Form 8-K filed on December
27, 2004.†
Third Amendment to Employment Agreement, dated March 20, 2007, between the Company and Richard W. Parod,
incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 22, 2007.†
Fourth Amendment to Employment Agreement, dated December 22, 2008, between the Company and Richard W.
Parod, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on January 30,
2009.†
Fifth Amendment to Employment Agreement, dated January 26, 2009, between the Company and Richard W. Parod,
incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on January 30, 2009.†
Restated Sixth Amendment, effective February 25, 2010, by and between the Company and Richard W. Parod,
incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
February 28, 2010.†
Seventh Amendment to Employment Agreement, dated January 31, 2011, between the Company and Richard W.
Parod, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 3,
2011.†
Eighth Amendment to Employment Agreement, dated November 29, 2012, between the Company and Richard W.
Parod, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on December 4,
2012. †
Ninth Amendment to Employment Agreement, dated January 26, 2015, between the Company and Richard W. Parod,
incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on January 27, 2015. †
Employment Agreement, dated May 5, 2011, between the Company and James Raabe, incorporated by reference to
Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on May 10, 2011.†
Employment Agreement dated February 19, 2009, by and between the Company and David B. Downing, incorporated
by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 25, 2009.†
67
10.18
10.19
10.20
10.21
10.22
10.23
10.24
21*
23*
24*
31.1*
31.2*
32*
Amended and Restated Revolving Credit Agreement, dated February 18, 2015, by and between the Company and Wells
Fargo Bank, National Association, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form
8-K filed on February 20, 2015.
First Amendment to Amended and Restated Revolving Credit Agreement, dated February 28, 2017, by and between
the Company and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed on March 1, 2017.
Note Purchase Agreement, dated as of February 19, 2015, by and among the Company and the purchasers named
therein, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 20,
2015.
Lindsay Corporation Policy on Payment of Directors Fees and Expenses, incorporated by reference to Exhibit 10.2 to
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2016.
Employment Agreement, dated May 9, 2016, between the Company and Randy A. Wood, incorporated by reference
to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2016.†
Employment Agreement, dated April 5, 2016, between the Company and Brian L. Ketcham, incorporated by reference
to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on April 5, 2016.†
Employment Agreement, dated July 17, 2017, between the Company and Timothy Hassinger, incorporated by reference
to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 21, 2017. †
Subsidiaries of the Company
Consent of KPMG LLP
The Power of Attorney authorizing Richard W. Parod to sign the Annual Report on Form 10-K for fiscal 2017 on behalf
of non-management directors.
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section
1350.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section
1350.
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 18 U.S.C. Section 1350.
101*
Interactive Data Files.
____________________________________
† Management contract or compensatory plan or arrangement required to be filed as an exhibit hereto pursuant to Item 15(b) of
Form 10-K.
* Filed herein.
** Certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text. This Exhibit has been
filed separately with the Secretary of the Commission with the redacted text pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.
68
L I N D S AY CO R P O R AT I O N
DIRECTORS
Michael C. Nahl
Director since 2003
Chairman of the Board since 2015
Retired Executive Vice President
and Chief Financial Officer,
Albany International Corp.
Director: Trans World Entertainment Corporation
Robert E. Brunner
Director since 2013
Retired Executive Vice President,
Illinois Tool Works, Inc.
Director: Leggett & Platt, Inc. and NN, Inc.
OFFICERS
Timothy L. Hassinger
Director since 2017
President and Chief Executive Officer
Joined Lindsay in 2017
Eric R. Arneson
Vice President – General Counsel and Secretary
Joined Lindsay in 2008
David B. Downing
Executive Vice President
Joined Lindsay in 2004
Michael N. Christodolou
Director since 1999
Founder and Manager, Inwood Capital
Management, LLC
Director: Omega Protein Corporation
W. Thomas Jagodinski
Director since 2008
Retired President, Chief Executive Officer
of Delta and Pine Land Company
Director: Centrus Energy Corp.
David B. Rayburn
Director since 2014
Retired President, Chief Executive Officer,
Modine Manufacturing Company
Director: Twin Disc, Inc.
Michael D. Walter
Director since 2009
President of Mike Walter & Associates
Director: Richardson International
William F. Welsh II
Director since 2001
Retired Chairman of Election
Systems & Software
C. Mike Harris
President – Industrial Water Solutions Business
Joined Lindsay in 2013
Eric J. Talmadge
Chief Information Officer
Joined Lindsay in 2012
Brian L. Ketcham
Vice President and Chief Financial Officer
Joined Lindsay in 2016
Randy A. Wood
President – Agricultural Irrigation Division
Joined Lindsay in 2008
Mark A. Roth
Vice President –
Corporate Development and Treasurer
Joined Lindsay in 2004
Lori L. Zarkowski
Corporate Controller and Chief Accounting Officer
Joined Lindsay in 2007
Annual Meeting
All shareholders are invited to attend our annual meeting, which will be
held on January 30, 2018, at 8:30 a.m. at our corporate office located at
2222 North 111th Street, Omaha, Nebraska. We look forward to meeting
shareholders and answering questions at the meeting. Any shareholder who will
be unable to attend is encouraged to send questions and comments in writing
to Eric Arneson, Secretary, at Lindsay’s corporate office.
Quarterly Calendar
The Company operates on a fiscal year ending August 31. Fiscal 2018
quarter-end dates are November 30, 2017, February 28, 2018, May 31, 2018
and August 31, 2018. Quarterly earnings are announced approximately
four weeks after the end of each quarter and audited results are announced
approximately six weeks after year end. Quarterly earnings releases are
posted to Lindsay’s Web site at www.lindsay.com.
Stock Market Information
Lindsay’s common stock is traded on the New York Stock Exchange, Inc.
(NYSE) under the ticker symbol LNN.
Certifications
The Company has filed certifications under Section 302 and Section 906 of
the Sarbanes-Oxley Act of 2002 as exhibits to its Form 10-K for fiscal year
2017. These exhibits are signed by the Principal Executive Officer and the
Principal Financial Officer, respectively. Additionally, on February 28, 2017,
the Company’s Chief Executive Officer provided his annual certification
regarding the Company’s compliance with the New York Stock Exchange
corporate governance listing standards.
Independent Auditors
KPMG LLP
Omaha, Nebraska
For Further Information
Shareholders and prospective investors are welcome to call or write Lindsay
Corporation with questions or requests for additional information. Please
direct inquiries to:
Transfer Agent and Registrar
Wells Fargo Shareowner Services
Post Office Box 64874
St. Paul, Minnesota 55164-0874
Phone: (800) 468-9716
FAX: (866) 729-7680
Research Coverage Provided By
Boenning & Scattergood, Inc.
Gabelli & Company
Monness, Crespi, Hardt & Co., Inc.
Piper Jaffray
Seaport Global Securities LLC
Sidoti & Company
Stifel Nicolaus
William Blair & Co., LLC
Brian L. Ketcham
Chief Financial Officer
2222 North 111th Street
Omaha, Nebraska 68164
(402) 827-6579
Web site
www.lindsay.com
Concerning Forward-Looking Statements
This Annual Report and Form 10-K, including the President’s letter, Management’s Discussion and Analysis of Financial Condition and Results of Operations,
contains not only historical information, but also forward-looking statements. Statements that are not historical are forward-looking and reflect expectations
for future Company performance. The words “expect,” “anticipate,” “estimate,” “believe,” “intend,” “will,” “plan,” “predict,” “project,” “outlook,” “could,”
“may,” “should,” and similar expressions generally identify forward-looking statements. For these statements throughout the Annual Report and Form 10-K, the
Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-
looking statements involve a number of risks and uncertainties, including but not limited to those discussed in the “Risk Factors” section contained in the Form
10-K. Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results or
conditions, which may not occur as anticipated. Actual results or conditions could differ materially from those anticipated in the forward-looking statements and
from historical results, due to the risks and uncertainties described herein, as well as others not now anticipated. The risks and uncertainties described herein are
not exclusive and further information concerning the Company and its businesses, including factors that potentially could materially affect the Company’s financial
results, may emerge from time to time. Except as required by law, the Company assumes no obligation to update forward-looking statements to reflect actual
results or changes in factors or assumptions affecting such forward-looking statements.
Lean, Clean and Green. Lindsay
Corporation is committed to developing
environmental awareness and
implementing sustainable practices to
reduce the use of and protect energy,
water, and all other resources.
LO C AT I O N S
L I N D S AY U S A
Lindsay Corporation
Corporate Headquarters
2222 North 111th Street
Omaha, Nebraska 68164 U.S.A.
Ph: 1-402-829-6800
Toll-free: 1-866-404-5049
www.lindsay.com
Lindsay Transportation Solutions, Inc.
180 River Road
Rio Vista, California 94571 U.S.A.
Ph: 1-707-374-6800
Toll-free: 1-888-800-3691
www.lindsaytransportationsolutions.com
Watertronics, LLC
525 East Industrial Drive
Hartland, Wisconsin 53029 U.S.A.
Ph: 1-262-367-5000
Toll-free: 1-800-356-6686
www.watertronics.com
Claude Laval Corporation (LAKOS)
1365 North Clovis Avenue
Fresno, California 93727 U.S.A.
Ph: 1-559-255-1601
www.lakos.com
IRZ Consulting, LLC
500 North First Street
Hermiston, Oregon 97838 U.S.A.
Ph: 1-541-567-0252
www.irzconsulting.com
Elecsys Corporation
846 North Mart-Way Court
Olathe, Kansas 66061 U.S.A.
Ph: 1-913-647-0158
www.elecsyscorp.com
SPF Water Engineering, LLC
300 East Mallard Drive, Suite 350
Boise, Idaho 83706 U.S.A.
Ph: 1-208-383-4140
www.spfwater.com
L I N D S AY I N T ER N AT I O N A L
Lindsay Europe SAS
72300 La Chapelle
D’Aligne, France
Ph: 33-2-4348-0202
www.lindsayeurope.com
Lindsay Africa Pty. Ltd.
6 Talana Close
Sacks Circle
Bellville South
South Africa
Ph: +27 (21) 986 8900
www.lindsayafrica.com
Lindsay América Do Sul, Ltda.
Rodovia Adhemar Pereira de Barros
SP 340 – KM 153.5
CEP 13804-830 Mogi-Mirim
Sao Paulo
Brazil
Ph: 55-19-3814-1100
www.lindsaybrazil.com
Lindsay Sulama (Turkey)
Karamehmet Mahallesi
Avrupa Serbest Bölgesi AdnanArısoy
Bulvarı NO : 11 / Z13
ERGENE / TEKİRDAĞ
Adres No : 3402119204
Turkey
Lindsay International B.V.
Weena 278
Tower B, 7th Floor
3012 NJ Rotterdam
The Netherlands
Ph: +31 (10) 870-1340
Snoline S.P.A.
Via F. Baracca 19/23
20056 Trezzo sull’Adda
Milan, Italy
Ph: 39 02 909961
www.snoline.com
Lindsay (Tianjin) Industry Co., Ltd.
169 Huanhenan Road
Tianjin Airport Economic Area (TAEA)
Tianjin 300308
China
Ph: +86 22 5867 9198
www.lindsaychina.com
Lindsay International (ANZ) Pty. Ltd.
19 Spencer Street
Toowoomba
Queensland 4350
Australia
Ph: +61 (7) 4613 5000
Lindsay International (ANZ) Pty. Ltd.
581 Taonui Road
RD 5
Feilding, 4775
New Zealand
Ph: +64 6 212 0550
www.lindsaynz.com
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