2 0 2 0 A N N U A L R E P O R T
Lindsay Irrigation Solutions, LLC
214 East Second Street
Lindsay, Nebraska 68644
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LINDSAY USA
Lindsay Corporation
Global Headquarters
18135 Burke Street
Omaha, Nebraska 68022
Ph: 1-402-829-6800
Toll-free: 1-866-404-5049
www.lindsay.com
Lindsay Transportation Solutions, LLC
180 River Road
Rio Vista, California 94571 U.S.A.
Ph: 1-707-374-6800
Toll-free: 1-888-800-3691
www.lindsaytransportationsolutions.com
IRZ Consulting, LLC
500 North First Street
Hermiston, Oregon 97838 U.S.A.
Ph: 1-541-567-0252
www.irzconsulting.com
Elecsys International, LLC
846 North Mart-Way Court
Olathe, Kansas 66061 U.S.A.
Ph: 1-913-647-0158
www.elecsyscorp.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 B.V.
Weena 264, 4th Floor
Tower B
3012 NJ Rotterdam
The Netherlands
Ph: +31 (10) 870-1340
Lindsay International (ANZ) Pty. Ltd.
19 Spencer Street
Toowoomba
Queensland 4350
Australia
Ph: +61 (7) 4613 5000
581 Taonui Road
RD 5
Feilding, 4775
New Zealand
Ph: +64 6 212 0550
www.lindsaynz.com
Lindsay International (ANZ) Pty. Ltd.
LINDSAY INTERNATIONAL
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.
Rua Gustavo Amburst, No 36
CONJ 1103 E 1104
Bairro Nova Campinas
CEP 13.092-106 Campinas
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-Tekirdag
Adres No : 3402119204
Turkey
Snoline S.P.A.
Via F. Baracca 19/23
20056 Trezzo sull’Adda
Milan, Italy
Ph: 39 02 909961
www.snoline.com
FieldNET, FieldNET Advisor, FieldNET PivotWatch, Road Zipper System, Zimmatic, and WaterTrend are trademarks, servicemarks or registered trademarks of Lindsay or its subsidiaries.
©2020 Lindsay Corporation. All rights reserved.
ACLEARVISION
L E A D I N G
I N N O V A T I N G
E M P O W E R I N G
OUR VISION
Alignment to our business strategy
starts with a clear vision:
To Become the Innovation and
Market Leader through Employee
Empowerment and Superior Execution.
It is through our key values and
behaviors that we will guide our global
organization toward long-term success.
Behaviors
Build Trust
Unlock Creativity
Customer-first
Innovation
One Lindsay
Values
Leadership –We inspire others
and demonstrate courage to make
a difference.
Integrity –We are open, honest
and transparent.
Collaboration – We create more
together than as individuals.
Accountability –We set high
standards and deliver against them.
Respect for others –We foster an
inclusive culture that values each
other’s views.
CORPORATE INFORMATION
DIRECTORS
Michael C. Nahl
Director since 2003
Chairman of the Board since 2015
Retired Executive Vice President
and Chief Financial Officer,
Albany International Corp.
Robert E. Brunner
Director since 2013
Retired Executive Vice President,
Illinois Tool Works, Inc.
Director: Leggett & Platt, Inc. and NN, Inc.
Orion Engineered Carbons S.A.
Retired Senior Vice President and Chief Financial
President of Mike Walter & Associates
Founder and Manager, Inwood Capital
Retired President, Chief Executive Officer,
Michael N. Christodolou
Director since 1999
Management, LLC
Director: NETSTREIT Corp.
Mary A. Lindsey
Director since 2018
Officer, Commercial Metals Company
Director: Methode Electronics, Inc. and
Consuelo E. Madere
Director since 2018
President of Proven Leader Advisory, LLC
Director: Nutrien and S&W Seed Company
J. Scott Marion
President – Infrastructure
Joined Lindsay in 2011
Gustavo E. Oberto
President – Irrigation
Joined Lindsay in 2019
P. David Salen
Senior Vice President, Global Operations
Joined Lindsay in 2019
Kelly M. Staup
Senior Vice President – Human Resources
Joined Lindsay in 2011
David B. Rayburn
Director since 2014
Modine Manufacturing Company
Director: Twin Disc, Inc.
Michael D. Walter
Director since 2009
Director: Richardson International
Eric J. Talmadge
Senior Vice President and
Chief Information Officer
Joined Lindsay in 2012
Randy A. Wood
Chief Operating Officer
Joined Lindsay in 2008
Lori L. Zarkowski
Corporate Controller and
Chief Accounting Officer
Joined Lindsay in 2007
OFFICERS
Timothy L. Hassinger
Director since 2017
President and Chief Executive Officer
Joined Lindsay in 2017
Eric R. Arneson
Senior Vice President, General Counsel and
Secretary
Joined Lindsay in 2008
Brian L. Ketcham
Joined Lindsay in 2016
Senior Vice President and Chief Financial Officer
Annual Meeting
Stock Market Information
All shareholders are invited to attend our annual meeting, which will
Lindsay’s common stock is traded on the New York Stock Exchange, Inc.
be held on January 5, 2021, at 2:30 pm CST. All shareholders are
(NYSE) under the ticker symbol LNN.
invited to attend the annual meeting online and submit your questions
during the meeting by visiting www.virtualshareholdermeeting.com/
LNN2021. Any shareholder who will be unable to attend is encouraged
to send questions and comments to Eric Arneson, Secretary at Lindsay’s
Corporate Office.
Quarterly Calendar
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 2020. These exhibits are signed by the Principal Executive
Officer and the Principal Financial Officer, respectively. Additionally,
on January 31, 2020, the Company’s Chief Executive Officer provided
The Company operates on a fiscal year ending August 31. Fiscal 2020
his annual certification regarding the Company’s compliance with the
quarter-end dates are November 30, 2019, February 29, 2020,
New York Stock Exchange corporate governance listing standards.
May 31, 2020 and August 31, 2020. Quarterly earnings are announced
approximately four weeks after the end of each quarter and audited
results are announced approximately seven weeks after year end.
Quarterly earnings releases are posted to Lindsay’s Web site at
www.lindsay.com.
Transfer Agent and Registrar
EQ 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.
Stifel Nicolaus
Monness, Crespi, Hardt & Co., Inc.
William Blair & Co., LLC
Kansas City Capital Associates
Shareholders and prospective investors are welcome to call or
write Lindsay Corporation with questions or requests for additional
information. Please direct inquiries to:
Brian L. Ketcham
Senior Vice President and Chief Financial Officer
Independent Auditors
KPMG LLP
Omaha, Nebraska
For Further Information
18135 Burke Street
Omaha, Nebraska 68022
(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.
OUR ONE LINDSAY TEAM
DELIVERED IN A YEAR OF
MARKET CHALLENGES
+6.9%
$547.7
$518
$474.7
$444.1
2017
2018
2019
2020
+360
bps
11.4%
7.8%
8.9%
7.1%
5.4%
1.4%
2017
20181
20191
2020
+64%
$2.94
$3.56
$2.17
$1.88
$1.45
2017
20182
$0.20
20192
2020
FROM FY19
REVENUE
INCREASED
6.9%
SINCE FY17
OPERATING
MARGIN1
INCREASED
360bps
SINCE FY17
DILUTED EPS2
INCREASED
64%
Dollars in millions, except per share amounts.
1. Fiscal 2019 operating income includes costs of $15.1 million associated with the Foundation for Growth initiative (“FFG costs”), and a $2.8 million valuation adjustment for indirect tax credits in a
foreign jurisdiction. On an adjusted basis, operating income was $24.0 million and operating margin was 5.4%. Fiscal 2018 operating income includes FFG costs of $9.7 million. On an adjusted basis,
operating income was $48.7 million and operating margin was 8.9%.
2. Fiscal 2019 net earnings and diluted earnings per share include the after-tax impact of FFG costs and valuation adjustment of $13.5 million, or $1.25 per diluted share. On an adjusted basis, net
earnings were $15.6 million, or $1.45 per diluted share. Fiscal 2018 net earnings and diluted earnings per share include the after-tax impact of FFG costs of $8.8 million, or $0.82 per diluted share, and
income tax expense attributed to the enactment of the U.S. Tax Cuts and Jobs Act “U.S. Tax Reform” of $2.5 million, or $0.23 per diluted share. On an adjusted basis, net earnings were $31.7 million, or
$2.94 per diluted share.
1
TO OUR SHAREHOLDERS:
In fiscal 2020, the One Lindsay team delivered
also achieved our highest gross margin of 32.1%
on our two-year transformative journey through
since Lindsay began trading on the NYSE in 1997.
Foundation for Growth (FFG). We committed
We also executed on our innovate and collaborate
to achieving 11 percent to 12 percent operating
strategy, driving disruptive technology across our
margin, assuming market conditions similar to
businesses to accelerate growth and outperform
fiscal 2017. I am proud to report we delivered
the cycle.
on our commitment – fiscal operating margin
reached 11.4 percent in a year that tested
many assumptions caused by prolonged
market challenges and the unprecedented
global coronavirus pandemic. This represents
a 360-basis point increase from fiscal 2017
level of 7.8 percent.
Organizational Health Reaches
First Quartile Achievement
Another major milestone is our significant
transformation in organizational health.
We conducted annual employee surveys to
identify and address behavioral opportunities
At the onset of the pandemic, we mobilized
to empower our employees and propel
quickly and implemented our business continuity
improved performance. Benchmarked against
plan, establishing work-from-home procedures
approximately 2,000 companies, I am very proud
and critical safety measures across our global
that we successfully moved from the third quartile
organization. In terms of business impact,
we experienced project delays but no order
in fiscal 2018 to the first quartile in fiscal 2020.
Companies attaining this top quartile are more
cancellations. The health and safety of employees
likely to execute with efficiency and attain higher
remains our highest priority as we navigate the
margins. This is a tremendous accomplishment for
ongoing pandemic.
Overall, fiscal 2020 was a year of execution
bolstered by customer-first innovation and
an empowered team culture. Notably, we
our company that instills internal alignment, drives
greater creativity and collaboration, and fortifies
our resiliency for sustained growth.
2
LEADING Playing Offense to
Emerge Stronger
Through COVID-19
Lindsay’s businesses are classified as
Business Essential, and our products
and technologies support critical
infrastructure sectors in:
Food and Agriculture – Our irrigation
business supports the production of
food and the conservation of water
and energy.
Transportation Systems – Our
infrastructure business supports the
movement of people and goods,
efficiently, safely and securely.
Our global task force continues
to adhere to safety first measures
and manage any issues that arise
to mitigate potential risks to our
business. We’ve maintained resiliency
through the crisis.
Safety First – Prioritizing safety
with work-from-home policy,
safety practices at all locations and
restricting non-essential travel.
Business Continuity – Managing
operations to minimize customer
disruption and ensure continuity
of supply.
Financial Flexibility – Strengthening
our balance sheet and managing
leverage.
Playing Offense – Positioning Lindsay
to emerge a stronger company.
3
Addressing Megatrends by
Accelerating our Innovation Engine
Throughout our history, Lindsay has delivered
innovative solutions that meet highly relevant,
global megatrends of food security, water
scarcity, climate change, traffic congestion and
transportation safety. We have pioneered several
industry-first technology applications in agriculture
telemetry as well as across our infrastructure
solutions in response to these market forces.
And, we are continuously building our innovation
pipeline through a customer-first lens to deliver
breakthrough solutions to the market faster.
At the core of our irrigation operations is
innovation-driven growth that supports sustainable
agriculture. In fiscal 2020, we continued to elevate
our industry-leading technology position with a
powerful data-intelligence feature, FieldNET™ with
WaterTrendSM. A testament to our customer-centric
mindset, this new functionality enables growers to
make more informed irrigation decisions driven by
efficiency and environmental sustainability through
critical crop water usage insights over a seven-day
outlook.
4
Driving Market Expansion with
IIoT-Based Smart Irrigation
Aligned to our simplify and grow FFG framework,
we pivoted to acquisitive growth with the April
2020 acquisition of Net Irrigate, LLC, an agriculture
IIoT company that expands the number of acres
managed under our FieldNET™ brand of remote
irrigation monitoring and control solutions.
This further strengthens our market leadership
position in the IIoT space by increasing our remote
monitoring market share by 5 percent.
INNOVATINGREMOTE MONITORING MARKET SHARE +5% Successful Shift-Left Strategy
In infrastructure, our shift-left approach, focused on customer
engagement at the planning and design stage, has accelerated
adoption of our Road Zipper System®. Our team secured a large
contract win with Highways England to supply a movable barrier
system for use in Kent, United Kingdom. This demonstrates a key
proof point of early engagement in the design planning phase,
resulting in a customized and efficient solution to traffic congestion
and improved air quality. Additionally, harnessing our customer-first
innovation, we responded to a specific need to develop a narrow
machine design as an add-on order for our existing customer,
NEXCO-East Innovation and Commutations (NI&C), in Japan.
We continue to focus our efforts on building a robust sales
funnel, global expansion and application of our RZ solution,
and accelerating our innovation efforts to continue to deliver
differentiated infrastructure solutions. Through these efforts, we
achieved the highest revenue, operating income and operating
margin results for our Infrastructure business since we acquired
Barrier Systems in 2006.
FY20
SALES
+42%
FY20
OPERATING
INCOME
+164%
FY20
OPERATING
MARGIN
+86%
$131.2M
$92.6M
2019
2020
$43.7M
$16.6M
2019
2020
33.4%
17.9%
2019
2020
5
6
EMPOWERING Increased Optionality Through Financial Strength
Our balance sheet strength provides increased optionality to fund
growth and deliver consistent shareholder return. As part of our
capital allocation approach, we set clear priorities to drive organic
growth and respond to market opportunities via acquisitions.
Equally important is our history of dividends to maximize
shareholder returns. In the third quarter, the Board of Directors
approved a 3.2 percent increase in our quarterly cash dividend rate.
Fostering a Diverse and Inclusive Workplace
In Fiscal 2018, in connection with our FFG initiative we set three
goals specifically related to diversity and inclusion. These goals were
to increase women in leadership positions, U.S. based minorities in
leadership positions, and internal promotions over external hires.
I’m happy to report that we made tremendous progress towards
the goals that we set forth. As we look toward elevating our focus
around building a culture of diversity and inclusivity, we announced
that Kelly Staup, our SVP-Human Resources, will act as our Chief
Diversity Officer. Kelly will lead our diversity and inclusion council
and our organization as we strive to celebrate our culture of
acceptance and respect for others.
DIVERSITY AND INCLUSION GOALS BY END OF FY20
30% WOMEN IN
LEADERSHIP POSITIONS
(THREE LEVELS BELOW CEO)
20% US-BASED
MINORITIES IN
LEADERSHIP POSITIONS
(THREE LEVELS BELOW CEO)
50% INTERNAL
PROMOTIONS OVER
EXTERNAL HIRES
29%
28%
13%
13%
45%
53%
27%
FY18
FY19
FY20
12%
FY18
FY19
FY20
36%
FY18
FY19
FY20
7
Leading in the Future
I announced in November my plans to retire at the end of this
calendar year. These last three-plus years have been a tremendous
experience with an exceptional team. I watched our global
workforce embrace and create positive change, support each other
through continuous improvement initiatives, and thrive through our
transformational journey.
The Company is in good hands with Randy Wood, a seasoned
leader who knows the business well. Randy will take over as
President and CEO, and join Lindsay’s board of directors, beginning
January 1, 2021. I’m proud of our progress and our purpose-
driven impact. We continue to build momentum through a unique
combination of talented individuals working in alignment to provide
differentiated capabilities anchored in innovation and sustainable
practices. I’m confident Randy will be an excellent CEO who will
take us to the next level.
Sincerely,
Timothy Hassinger
President & Chief Executive Officer
8
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(MARK ONE)
☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2020
or
☐☐ 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)
18135 Burke Street, Suite 100, Omaha, Nebraska
(Address of principal executive offices)
47-0554096
(I.R.S. Employer
Identification No.)
68022
(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 ☒ No ☐
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 ☐ No ☒
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
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 such files). Yes ☒ No ☐
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
Accelerated filer
☐
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company ☐
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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
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 29, 2020 was $1,072,966,580.
As of October 20, 2020, 10,834,763 shares of the registrant’s Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement pertaining to the Registrant’s 2020 annual stockholders' meeting to be held on January 5, 2021
are incorporated by reference into Part III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Page(s)
Part I
Part II
Part III
Part IV
Item 1.
Business ........................................................................................................................
Item 1A.
Risk Factors ..................................................................................................................
Item 1B. Unresolved Staff Comments..........................................................................................
Item 2.
Properties .....................................................................................................................
Item 3.
Legal Proceedings ........................................................................................................
Item 4.
Mine Safety Disclosures ...............................................................................................
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.........................................................................................................
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 ......................................................................
Item 15.
Exhibits, Financial Statement Schedules......................................................................
Item 16.
Form 10-K Summary ....................................................................................................
SIGNATURES
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11
15
15
16
16
17
19
20
27
28
62
62
65
66
66
66
67
67
68
71
72
2
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. 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, irrigation scheduling, machine-to-machine
(“M2M”) communication technology solutions and smartphone applications. The Company’s primary domestic
irrigation manufacturing facilities are located in Lindsay, Nebraska and Olathe, Kansas. 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 Lindsay, 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.
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
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 GPS monitoring and other automated controls.
3
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.
The Company also markets patented technology under the FieldNET Advisor™ product name which delivers
information that helps farmers decide precisely when, where and how much to irrigate. This technology combines
more than 40 years of crop and irrigation science with FieldNET’s cloud computing capabilities, remote sensing
functionality and machine
irrigation
recommendations.
to provide farmers with field-specific and crop-specific
learning
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 36 percent and 38 percent of the Company’s total irrigation segment
revenues in fiscal 2020 and 2019, 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
projects. Sales for a highway safety or road improvement project range from $2.0 to $20.0 million, making them
significant capital investments.
5
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®; Walt™;
TAU-M™; ABSORB-M™ and TAU-TUBE™. In addition to these products the Company also offers guardrail end
terminal products such as the X-Tension®; MAX-Tension® and ATT Terminal™ 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. 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, Australia and
Asia. The Company expects to continue expanding in international markets as populations grow and markets
become more established.
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
6
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.
GENERAL
Certain information generally applicable to both of the Company’s reportable segments is set forth below.
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, 2020, the Company had an order backlog of $58.7 million compared with $55.4 million at August
31, 2019. Included in these backlogs are amounts of $6.3 million and $10.0 million, respectively, that are not
expected to be fulfilled within the subsequent fiscal year. 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 revenues to be
realized in succeeding quarters.
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 2020, 2019, and 2018 were $21.4 million, $23.2 million, and $11.1 million,
respectively. Capital expenditures for fiscal 2021 are estimated to be approximately $15.0 million to $20.0 million,
including equipment replacement, productivity improvements and commercial growth investments. 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®, The Road Zipper System®, Quickchange®
Moveable Barrier™, ABSORB 350®, ABSORB-M™, FieldNET®, FieldNET Advisor®, FieldNET Crop Advisor®,
FieldNET Irrigation Advisor®, FieldNET VRI Advisor®, FieldNET Weather Advisor®, Z-TRAX®, TAU®, Universal
TAU-II®, TAU-II-R™, TAU-B_NR™, TAU-M™, TAU-TUBE™ , MAX-Tension®, X-Tension®, X-Lite®, CableGuard™,
7
TESI™, SAB™, ArmorGuard™, PaveGuard™, DR46™, U-MAD™, Sabertooth®, 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.
HUMAN CAPITAL RESOURCES
The number of persons employed by the Company and its wholly-owned subsidiaries at the fiscal years ended 2020,
2019, and 2018 was 1,125, 1,069, and 1,412, 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. Maintaining a sufficient number of skilled employees at its various manufacturing sites is a key focus of
the Company’s human capital efforts, particularly at its manufacturing facility in Lindsay, Nebraska, which is a rural
area. The Company does this by offering competitive wages and benefits and training opportunities.
EFFECT OF GOVERNMENTAL REGULATION
The Company is subject to numerous laws and government regulations, including those that govern environmental
and occupational health and safety matters. The Company believes that its operations are substantially in
compliance with all applicable laws and regulations, and that it holds all necessary permits to operate its business in
each jurisdiction in which its facilities are located. Laws and government regulations are subject to change and
interpretation. In some cases, compliance with applicable laws and regulations 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 applicable laws or government regulations, other than the capital expenditures
relating to environmental remediation activities at its Lindsay, Nebraska plant that are more fully described in Note
16, Commitments and Contingencies, to the Company’s consolidated financial statements. The Company accrues
for the anticipated cost associated with compliance with laws and governmental regulations applicable to its
business, including investigation and remediation costs at its Lindsay, Nebraska site, when its obligation to incur
those costs 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 future capital expenses
relating to compliance with government regulations, including those for remediation of its Lindsay, Nebraska site, to
have a material adverse effect on its earnings, liquidity, financial condition or competitive position.
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 30 and 26 percent,
respectively, of total consolidated Company sales were conducted in currencies other than the U.S. dollar in fiscal
2020 and 2019. 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
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
8
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.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
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. The following table lists the Company’s executive officers and other key employees and each of their ages,
and positions as of October 21, 2020.
Timothy L. Hassinger
Eric R. Arneson*
Brian L. Ketcham
J. Scott Marion
Gustavo E. Oberto
P. David Salen*
Kelly M. Staup*
Eric J. Talmadge*
Randy A. Wood
Lori L. Zarkowski*
Age
58
46
59
52
47
58
48
57
48
45
Position
President and Chief Executive Officer
Senior Vice President, General Counsel and Secretary
Senior Vice President and Chief Financial Officer
President – Infrastructure
President – Irrigation
Senior Vice President – Global Operations
Senior Vice President – Human Resources and Chief Diversity Officer
Senior Vice President and Chief Information Officer
Chief Operating Officer
Chief Accounting Officer
*
The employee is not an executive officer of the Registrant.
Mr. Timothy L. Hassinger is the President and Chief Executive Officer of the Company, a position he has held since
October 2017. Mr. Hassinger has also been a director of the Company since October 2017 and he is the only
executive officer of the Company serving on the Board of Directors. Prior to joining the Company, Mr. Hassinger
served as President and Chief Executive Officer of Dow AgroSciences, an Indianapolis-based subsidiary of The
Dow Chemical Company, which specializes in agricultural chemicals and biotechnology solutions. During his 33-
year career at Dow AgroSciences, Mr. 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. Hassinger currently serves on the Board of Directors of AGDATA.
Mr. Eric R. Arneson is Senior 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.
Mr. Brian L. Ketcham is Senior 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., a company that provides irrigation and infrastructure equipment, most recently as Vice
9
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. J. Scott Marion is President – Infrastructure Division, a position he has held with the Company since May 2016.
Between April 2011 and May 2016, Mr. Marion served as Vice President and General Manager – Americas and
APAC (Infrastructure) of the Company. From January 2005 to April 2011, Mr. Marion served in several
management positions at Pentair. Prior to 2005, Mr. Marion spent 14 years with General Electric in a variety of sales
and managerial capacities.
Mr. Gustavo E. Oberto is the President – Irrigation Division, a position he has held since September 2020. Between
September 2019 and August 2020, Mr. Oberto served as President – Elecsys International, LLC, which is a
subsidiary of the Company. Prior to joining the Company, Mr. Oberto served in various management roles at
Conductix-Wampfler Group, an industrial equipment supplier and a division of Delachaux S.A, most recently as
Managing Director of Global Sales & Markets. During his 20-year career at Conductix-Wampfler Group, Mr.
Oberto held a series of leadership positions in international business development. Prior to joining Conductix-
Wampfler Group, Mr. Oberto worked for Travelex Global Payments and also worked as International Liaison to
Former Nebraska Governor Ben Nelson where he advised Midwestern companies on how to penetrate the Latin
America agriculture market. Mr. Oberto is currently a member of the U.S. Commercial Service District Export
Council.
Mr. P. David Salen is Senior Vice President, Global Operations of the Company, a position he has held since
November 2019. Prior to joining the Company, Mr. Salen served as Principal Advisor of The Lean Manufacturing
Resource following his work as President of The Meadville Forge Group from 2015 to 2017 and President of Titan
Wheel Corporation from 2010 to 2014. Prior to joining Titan Wheel Corporation, Mr. Salen worked for UBE
Automotive North America and Accuride..
Ms. Kelly M. Staup is Senior Vice President – Human Resources and Chief Diversity Officer, a position she has
held with the Company since January 2018. From November 2016 to January 2018, Ms. Staup served as Director –
Human Resources of the Company. From June 2011 to November 2016, Ms. Staup served as the Company’s
Organization Development and Recruiting Manager. Prior to joining the Company, Ms. Staup was an Associate
Vice President of SkillStorm from August 2008 to June 2011 and previously served in managerial roles at Ajilon
and Digital People.
Mr. Eric J. Talmadge is Senior Vice President and Chief Information Officer of the Company and has served as
Chief Information Officer since December 2012, when he joined the Company. Prior to joining the Company, Mr.
Talmadge served as Chief Information Officer of Crete Carrier Corporation from 2008 to December 2012. Prior to
joining Crete Carrier Corporation, Mr. Talmadge served in a variety of information technology roles with SiTEL,
Lozier Corporation, the University of Missouri, and the United States Air Force.
Mr. Randy A. Wood is Chief Operating Officer of the Company and has held such position since September 2020.
Between May 2016 and September 2020, Mr. Wood served as President – Irrigation of the Company. 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 the Company 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.
10
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 biofuels 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 the overall demand for motor fuels, 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 blending 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, outbreaks, 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. For example, in
2018, the U.S. and China began to impose partial tariffs on each other's products, and the trade tension between the
two countries has escalated in 2019 through 2020. Certain of the components required for the manufacture of the
Company's products have been or may be impacted by tariffs. Likewise, other international trade disputes, changes
to international trade agreements or policies, or any increased regulation on trade with Canada and Mexico resulting
from the replacement of the North American Free Trade Agreement (“NAFTA”) with the United States-Mexico-
Canada Agreement, could increase our costs, reduce our competitiveness, and have an adverse effect on the
Company’s business, financial condition and results of operations.
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
11
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.
Epidemics, pandemics, and other outbreaks (including the coronavirus (COVID-19) pandemic) can disrupt the
Company’s operations and adversely affect its business, results of operations, and cash flows. Epidemics,
pandemics, and other outbreaks of an illness, disease, or virus (including COVID-19) have adversely affected, and
could adversely affect in the future, workforces, customers, economies, and financial markets globally, potentially
leading to economic downturns. The significance of the impact on the Company’s operations of an epidemic,
pandemic, or other outbreak depends on numerous factors that the Company may not be able to accurately predict or
effectively respond to, including, without limitation: the duration and scope of the outbreak; actions taken by
governments, businesses, and individuals in response to the outbreak; the effect on economic activity and actions
taken in response; the effect on customers and their demand for the Company’s products and services; and the
Company’s ability to manufacture, sell, and service its products, including without limitation as a result of supply
chain challenges, facility closures, social distancing, restrictions on travel, fear or anxiety by the populace, and
shelter-in-place orders. These and other factors relating to or arising from an epidemic, pandemic, or other outbreak
could have a material adverse effect on the Company’s business, results of operations, and cash flows, as well as the
trading price of the Company’s securities. Please also see the discussion on the Company’s response to COVID-19
in Item 7 of Part II of this report, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations.”
The Company’s international sales and profit margins are subject to currency exchange risk. 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, the Brazilian real, the South African rand, the Turkish lira, and
the 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, tariffs, freight costs, and outbreaks, 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 aforementioned risks have been, and may continue to be,
exacerbated by the impact of COVID-19.
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.
12
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”) and state departments of transportation
have implemented 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. While infrastructure products previously accepted under NCHRP Report 350 criteria are not
required to be retested under MASH standards, they generally are no longer eligible for federal reimbursement as
the MASH standards have been implemented by FHWA and the states. The Company has incurred, and will
continue to incur, research and development and testing expense to develop products 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 government regulations,
including those 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 to operate its business in each jurisdiction in which its facilities are located. Laws and government
regulations applicable to the Company are subject to change and interpretation. Compliance with applicable laws and
regulations may require the Company to make additional capital and operational expenditures that may have a material
adverse effect on its earnings, liquidity, financial condition or competitive position. In particular, the Company may
incur costs in connection with the remediation of environmental contamination at its Lindsay, Nebraska site that exceed
the amounts that the Company has accrued for this purpose as of the end of fiscal 2020, as more fully described in Note
16, 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 16, 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.
13
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. In June 2019, the Company was informed
by letter that the Department of Justice, Civil Division, and U.S. Attorney’s Office for the Northern District of New
York, with the assistance of the Department of Transportation, Office of Inspector General, are conducting an
investigation of the Company relating to the Company’s X-Lite end terminal and potential violations of the federal
civil False Claims Act. 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, demands for
reimbursement or compensatory payments, 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 False Claims Act judgment against a competitor
(which was reversed on appeal) brought significant attention to the infrastructure products industry and may be a
factor leading to additional lawsuits, demands, and investigations being pursued against the Company and others in
the industry.
An actual or perceived issue with the Company’s infrastructure products can 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, the removal and replacement of such products from roadways by government customers and
demands for reimbursement or compensatory payments for such actions, 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, litigation, or
demands for reimbursement or compensatory payments 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.
The Company may not fully sustain targeted performance improvements and other benefits realized from the
Foundation for Growth initiative. Foundation for Growth is a focused performance improvement initiative by the
Company announced in March 2018 that includes setting strategic direction, defining priorities, and improving
overall operating performance. The Company's future success is partly dependent upon successfully executing, and
realizing performance improvements, revenue gains, cost savings and other benefits from, this initiative.
While the Company has already realized meaningful benefits and achieved operating margin improvements in large
part from the initiative, headwinds such as challenging agricultural market conditions, low commodity prices, and
trade uncertainty are largely outside of the Company’s control and continue to weigh on demand. As a result, it is
possible that the Company may not fully sustain the targeted operating margin improvements and other benefits
realized from Foundation for Growth in future periods.
Changes in interest rates could reduce demand for the Company’s products. Global interest rates have recently
been at or near historic lows. 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,
14
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.
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
Irrigation
Geographic
location(s)
Omaha, Nebraska
Lindsay, Nebraska
Own/
lease
Lease
Own
Lease
expiration
Square
feet
Property description
2034 55,000 Corporate headquarters
N/A 300,000 Principal U.S. manufacturing plant consists
of eight separate buildings located on 122
acres
Irrigation
Irrigation
Irrigation
Irrigation
Irrigation
Irrigation
Lease
Lease
Own
Corlu, Turkey
Tianjin, China
La Chapelle, France
Bellville, South Africa Lease
Mogi Mirim, Sao
Paulo, Brazil
Olathe, Kansas
Own
Own
2025 283,000 Manufacturing plant for irrigation products
2022 163,000 Manufacturing plant for irrigation products
N/A 72,000 Manufacturing plant for irrigation products
2024 71,000 Manufacturing plant for irrigation products
N/A 67,000 Manufacturing plant for irrigation products
N/A 60,000 Manufacturing plant for machine-to-machine
Infrastructure Milan, Italy
Own
N/A 45,000 Manufacturing plant for infrastructure
products
Infrastructure Rio Vista, California
Own
N/A 30,000 Manufacturing plant for infrastructure
products
products
15
ITEM 3 — Legal Proceedings
In the ordinary course of its business operations, the Company is involved, from time to time, in commercial
litigation, product liability litigation, tort 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 16, 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 16, Commitments and Contingencies,
to the Company’s consolidated financial statements.
ITEM 4 — Mine Safety Disclosures
Not applicable.
16
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 16, 2020, there were approximately 155 stockholders of record.
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, 2020, 2019, and 2018. The remaining amount available under the repurchase program was $63.7
million as of August 31, 2020.
Dividends
The Company paid a total of $13.6 million and $13.4 million in dividends during fiscal 2020 and 2019, 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.
17
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 SmallCap 600 Index and the S&P SmallCap 600
Construction, Farm Machinery and Heavy Truck Index for the five-year period ended August 31, 2020. 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, 2014 and the graph shows its relative performance through
August 31, 2020.
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
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
8/15
8/16
8/17
8/18
8/19
8/20
Lindsay Corporation
S&P Smallcap 600
S&P SmallCap 600 Construction, Farm Machinery and Heavy Truck Index
*$100 invested on 8/31/15 in stock or index, including reinvestment of dividends.
Fiscal year ending August 31.
Copyright© 2020 Standard & Poor's, a division of S&P Global. All rights reserved.
Lindsay Corporation
S&P SmallCap 600 Index
S&P SmallCap 600 Construction, Farm
Machinery and Heavy Truck Index
8/16
8/15
100.00
95.93 117.07 131.23 122.66 140.70
100.00 113.26 128.10 169.69 144.14 143.35
8/20
8/18
8/19
8/17
100.00
105.87
142.43
160.61
127.57
152.80
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
18
ITEM 6 — Selected Financial Data
($ in millions and shares in thousands,
except per share and employee amounts)
For the years ended August 31,
2020
2019 (1)
2018 (2)
2017
2016 (3)
Operating data
Operating revenues
Gross profit
Gross margin
Operating expenses
Operating income
Operating margin
Effective tax rate
Net earnings
Net margin
Per share data
Diluted net earnings per share
Cash dividends per share
Financial position
Working capital
Property, plant, and equipment, net
Total assets
Long-term debt, including current installments
Total shareholders' equity
Invested capital (4)
Cash flow data
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows from financing activities
Financial measures
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
474.7
152.5
$
32.1%
98.3
$
$
54.2
11.4%
20.9%
38.6
$
8.1%
3.56
1.26
245.5
79.6
570.5
115.9
298.5
414.4
$
$
$
$
$
$
$
$
$
444.1
114.6
$
25.8%
108.5
$
$
6.1
1.4%
-3.1%
2.2
$
0.5%
0.20
1.24
231.4
69.0
500.3
116.1
268.2
384.3
$
$
$
$
$
$
$
$
$
547.7
151.5
$
27.7%
112.5
$
$
39.0
7.1%
40.1%
20.3
$
3.7%
1.88
1.21
251.0
57.2
499.8
116.3
276.9
393.2
$
$
$
$
$
$
$
$
$
518.0
145.0
$
28.0%
104.4
$
$
40.6
7.8%
35.1%
23.2
$
4.5%
2.17
1.17
200.9
74.5
506.0
117.0
270.1
387.1
$
$
$
$
$
$
$
$
516.4
148.6
28.8%
114.2
34.4
6.7%
30.8%
20.3
3.9%
1.85
1.13
204.2
77.6
487.5
117.2
251.6
368.8
$
46.0
(38.5) $
(13.4) $
$
3.8
(21.2) $
(14.6) $
$
33.9
18.1
$
(11.3) $
$
39.4
(10.0) $
(10.3) $
33.1
(9.9)
(61.4)
Return on invested capital (5)
Return on beginning shareholders' equity (6)
10.7%
14.4%
1.6%
0.8%
6.0%
7.5%
6.9%
9.2%
6.1%
7.0%
Other Data
Diluted weighted average shares
Number of employees
10,861
1,125
10,810
1,069
10,772
1,410
10,694
1,410
10,930
1,366
(1)
(2)
(3)
(4)
(5)
(6)
Fiscal 2019 operating expenses include costs of $15.1 million ($11.6 million after-tax, or $1.07 per diluted share) in connection with the
Foundation for Growth initiative and a valuation adjustment of $2.7 million ($1.8 million after-tax, or $0.17 per diluted share) for indirect
tax credits in a foreign jurisdiction.
Fiscal 2018 operating expenses include costs of $9.7 million ($8.8 million after-tax, or $0.82 per diluted share) in connection with the
Foundation for Growth initiative. Net earnings also include tax expense of $2.5 million ($0.23 per diluted share) related to the impact of the
U.S. Tax Cuts and Jobs Act.
Fiscal 2016 operating expenses include an increase in an environmental remediation reserve of $13.0 million.
Defined as current and long-term debt plus shareholders’ equity.
Defined as operating income (after tax) divided by the average of beginning and ending invested capital.
Defined as net earnings divided by beginning-of-period shareholders' equity.
19
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, remote monitoring and irrigation
scheduling systems. These products are used by farmers to increase or stabilize crop production while conserving
water, energy, and labor. Through its acquisitions and third-party commercial arrangements, the Company has been
able to enhance its capabilities in providing innovative, turn-key solutions to customers through the integration of
designs, controls, and pump stations. 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 population growth, water conservation and environmental
sustainability, the need for increased food production, 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 (the FAST Act”) to fund highway and bridge projects. The FAST Act expired September 30, 2020 and a
one-year extension has been approved by Congress. Matching funding from the various states may be required as a
condition of federal funding.
20
The Company continues to have an ongoing, structured, acquisition process that it expects to generate additional
growth opportunities throughout the world and add to its irrigation and infrastructure capabilities. The Company is
committed to achieving earnings growth by global market expansion, improvements in margins, and strategic
acquisitions.
COVID-19 Impact
In March 2020, the World Health Organization declared coronavirus (COVID-19) a global pandemic. This outbreak,
which has continued to spread worldwide, has adversely affected workforces, customers, economies, and financial
markets globally, leading to economic uncertainty. Shelter-in-place or stay-at-home orders have been implemented
from time to time in many of the jurisdictions in which the Company operates. However, because the Company
supports critical industries, the Company’s facilities worldwide have generally been considered “business essential”
and have remained open throughout the outbreak with limited exceptions. Accordingly, COVID-19 has had a
limited impact on the Company’s manufacturing operations to date. For the fiscal year ended August 31, 2020, the
Company experienced shipment and project delays related to COVID-19 that impacted revenue by approximately
$8.0 million. In addition, the Company incurred additional expenses related to premium pay for factory workers and
new procedures to protect the health and well-being of employees. These additional costs have been mostly offset
by reductions in other expenses, such as employee travel and entertainment, resulting in a negligible impact on net
earnings.
The ultimate impact of COVID-19 on the Company’s business, results of operations, or cash flows remains
uncertain and depends on numerous evolving factors that the Company may not be able to accurately predict or
effectively respond to, including, without limitation: the duration and scope of the outbreak; actions taken by
governments, businesses, and individuals in response to the outbreak; the effect on economic activity and actions
taken in response; the effect on customers and their demand for the Company’s products and services; and the
Company’s ability to manufacture, sell, and service its products, including without limitation as a result of supply
chain challenges, facility closures, social distancing, restrictions on travel, fear or anxiety by the populace, and
shelter-in-place orders. As such, the financial impact of COVID-19 on the Company’s business, results of
operations, or cash flows cannot be reasonably estimated at this time.
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 is the accounting policy management considers critical to the Company’s
consolidated results of operations and financial condition:
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
21
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
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. Portions of the long-
term liability that are fixed and reliably determinable are discounted at a risk-free rate.
The Company accrues the anticipated cost of environmental remediation when the obligation is probable and can be
reasonably estimated. While the plan has not formally been approved by the EPA, the Company believes the current
accrual is a good faith estimate of the long-term cost of remediation at this site; however, the estimate of costs and
their timing could change as a result of a number of factors, including (1) EPA 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.
Financial Overview and Outlook
Operating revenues in fiscal 2020 were $474.7 million, a 7 percent increase compared to $444.1 million in the prior
year. Irrigation segment revenues decreased 2 percent to $343.5 million and infrastructure segment revenues
increased 42 percent to $131.2 million. Net earnings for fiscal 2020 were $38.6 million or $3.56 per diluted share
compared with $2.2 million or $0.20 per diluted share in the prior year.
Prior year net earnings were reduced by after-tax costs of $11.6 million, or $1.07 per diluted share, related to the
Company’s Foundation for Growth initiative and by after-tax costs of $1.8 million, or $0.17 per diluted share,
related to a valuation adjustment for indirect tax credits in a foreign jurisdiction.
Foundation for Growth was a focused performance improvement initiative that includes setting strategic direction,
defining priorities, and improving overall operating margin performance. Pre-tax costs of $15.1 million in fiscal
2019 associated with the initiative were comprised of professional consulting fees, net loss on business divestitures,
severance costs and plant closing costs. These costs have been substantially recovered through improved operating
income in fiscal 2020.
The global drivers for the Company’s irrigation segment are population growth and the attendant need for expanded
food production and efficient water use. The need for irrigated agricultural crop production, which depends upon
many factors, including the following primary drivers:
Agricultural commodity prices - During fiscal 2020, agricultural commodity prices declined significantly
because of impacts caused by the global coronavirus pandemic. The pandemic resulted in the shutdown of
economies globally, a significant increase in unemployment, the disruption of food supply systems and
consumption patterns, and the reduction in gasoline consumption and demand for ethanol. Under the U.S.-
China Phase 1 trade deal signed January 15, 2020, China has pledged to increase purchases of U.S.
agricultural products by $32 billion over two years, to an average annual total of $40 billion compared to the
2017 baseline of $24 billion. Commodity prices have recovered by August 2020 due to lower yield
expectations in the U.S. as well as increased exports to China, with corn prices approximately five percent
lower and soybean prices approximately seven percent higher compared to August 2019.
Net farm income - As of September 2020, the U.S. Department of Agriculture (the “USDA”) estimated
U.S. 2020 net farm income to be $102.7 billion, an increase of 22.7 percent from the USDA’s final U.S.
2019 net farm income of $83.7 billion. This increase is projected to come primarily from higher Federal
government direct farm program payments through the expansion of the Coronavirus Food Assistance
Program (“CFAP”). CFAP was designed to provide direct assistance to farmers affected by price declines
and market disruptions caused by the coronavirus pandemic.
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
22
(cid:129)
(cid:129)
(cid:129)
production and crop failures. Conversely, demand for irrigation equipment can be negatively affected
during periods of more predictable or excessive natural precipitation.
(cid:129) Governmental policies - A number of government laws and regulations can impact the Company’s
business, including:
o The Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) was signed into law in
December 2018 and continued many of the programs that were in previous federal farm bills that
are designed to provide a degree of certainty to growers. The programs include 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 U.S. Tax Reform enacted in December 2017 increased the benefit of certain tax incentives, such as
the Section 179 income tax deduction and Section 168 bonus depreciation, which are intended to
encourage equipment purchases by allowing the entire cost of equipment to be treated as an
expense in the year of purchase rather than amortized over its useful life.
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. On December
19, 2019, the U.S. Environmental Protection Agency finalized Renewable Fuels Standard (RFS)
volume requirements for 2020 that slightly increased volumes of conventional biofuels as well as
volumes for advanced and cellulosic biofuels. Demand for biofuels has been negatively impacted
in 2020 by reduced driving and fuel consumption caused by the coronavirus pandemic.
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.
(cid:129)
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.
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.
In the infrastructure segment, demand for the Company’s transportation safety products continues to be driven by
population growth and the need for improved road safety, but is largely dependent on government spending for road
construction. In December 2015, the U.S. government enacted a five-year, $305 billion highway-funding bill (the
FAST Act”) to fund highway and bridge projects. The FAST Act expired September 30, 2020 and a one-year
extension has been approved by Congress. In spite of government spending uncertainty, opportunities exist for
market expansion in each of the infrastructure product lines. In addition, the Federal Highway Administration 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.
As of August 31, 2020, the Company had an order backlog of $58.7 million compared with $55.4 million at August
31, 2019. Included in these backlogs are amounts of $6.3 million and $10.0 million, respectively, that are not
expected to be fulfilled within the subsequent fiscal year. The Company’s backlog can fluctuate from period to
period due to the seasonality, cyclicality, timing, and execution of contracts. Backlog typically represents long-term
projects as well as short lead-time orders; therefore, it is generally not a good indication of the revenues to be
realized in succeeding quarters.
23
Results of Operations
The following “Fiscal 2020 Compared to Fiscal 2019” section presents an analysis of the Company’s consolidated
operating results displayed in the Consolidated Statements of Earnings and should be read together with the
information in Note 17, Industry Segment Information, to the consolidated financial statements. A discussion
regarding our financial condition and results of operations for fiscal 2019 compared to fiscal 2018 can be found in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of
our Annual Report on Form 10-K for the fiscal year ended August 31, 2019, filed with the Securities and Exchange
Commission (“SEC”) on October 31, 2019, which is available free of charge on the SEC’s website at www.sec.gov
and the Company’s website at www.lindsay.com under the tab “Investor Relations – SEC Filings.”
Fiscal 2020 Compared to Fiscal 2019
The following table provides highlights for fiscal 2020 compared with fiscal 2019:
($ in thousands)
Consolidated
Operating revenues
Cost of operating revenues
Gross profit
Gross margin
Operating expenses (1)
Operating income
Operating margin
Other expense
Income tax expense (benefit)
Effective income tax rate
Net earnings
Irrigation segment (2)
Operating revenues
Operating income
Operating margin
Infrastructure segment (2)
Operating revenues
Operating income
Operating margin
$
$
$
$
$
$
$
$
$
$
$
$
For the years ended
August 31,
2020
2019
Percent
increase
(decrease)
474,692
322,149
152,543
98,341
54,202
$
$
$
32.1%
$
$
11.4%
(5,359) $
$
10,214
20.9%
$
38,629
444,072
329,464
114,608
25.8%
7%
-2%
33%
108,493
6,115
-9%
786%
1.4%
(4,008)
(65)
-3.1%
34%
-15814%
2,172
1678%
343,529
40,214
$
$
11.7%
351,498
29,804
-2%
35%
8.5%
131,163
43,771
$
$
33.4%
92,574
16,599
17.9%
42%
164%
(1)
(2)
Includes corporate general and administrative expenses of $29.8 million for fiscal 2020.
See Note 19 Industry Segment Information, to the consolidated financial statements, for further details regarding segments.
Revenues
Operating revenues in fiscal 2020 were $474.7 million, an increase of 7 percent or $30.6 million, compared to
$444.1 million in fiscal 2019. Irrigation segment revenues decreased $8.0 million, or 2 percent, and infrastructure
revenues increased $38.6 million, or 42 percent, compared to the prior fiscal year. The increase in infrastructure
revenues was due in part to the completion of a large project in the U.K. of approximately $27.0 million. The
irrigation segment provided 72 percent of Company revenue in fiscal 2020 as compared to 79 percent in fiscal 2019.
North America irrigation revenues in fiscal 2020 increased by $0.3 million, to $219.0 million from $218.6 million in
fiscal 2019. The impact of higher revenue from engineering project services was partially offset by a decrease of
approximately $3.3 million attributable to a business divestiture completed in the first quarter of fiscal 2019.
Irrigation system unit volume and average selling prices in fiscal 2020 were comparable to levels experienced in
fiscal 2019.
International irrigation revenues in fiscal 2020 decreased by $8.3 million, or 6 percent, to $124.6 million from
$132.9 million in fiscal 2019. Revenues decreased $8.6 million due to differences in foreign currency translation
rates compared to the prior year. Excluding the impact of foreign currency translation, international irrigation
revenues increased $0.3 million, or less than one percent, compared to the prior year. Increased sales in Brazil and
certain other markets were offset by a lower level of project activity in developing markets.
24
Infrastructure segment revenues in fiscal 2020 increased by $38.6 million, or 42 percent, to $131.2 million from
$92.6 million in fiscal 2019. The increase resulted primarily from higher Road Zipper System® sales and lease
revenues compared to the prior year, including approximately $27.0 million from a single project in the United
Kingdom.
Gross Profit
Gross profit was $152.5 million for fiscal 2020, an increase of $37.9 million, or 33 percent, compared to $114.6
million in fiscal 2019. The increase in gross profit resulted primarily from a more profitable margin mix from
higher infrastructure revenues as well as from the results of margin improvement initiatives in both segments. In
addition, gross profit for fiscal 2020 included a gain of $1.2 million on the sale of a building that had been held for
sale. Gross margin was 32.1% of sales for fiscal 2020 compared to 25.8% of sales for fiscal 2019.
Operating Expenses
The Company’s operating expenses of $98.3 million for fiscal 2020 decreased $10.2 million, or 9 percent, compared
to fiscal 2019 operating expenses of $108.5 million. Fiscal 2019 operating expenses included costs of $15.1 million
in connection with the Company’s Foundation for Growth initiative and a $2.7 million valuation adjustment for
indirect tax credits in a foreign jurisdiction that did not repeat in fiscal 2020. Excluding the impact of the non-
repeating costs, operating expenses increased 2 percent compared to the prior year primarily due to an increase in
incentive compensation that was partially offset by reductions in other areas.
Income Taxes
The Company recorded income tax expense of $10.2 million and income tax benefit of $65 thousand for fiscal 2020
and fiscal 2019, respectively. The effective tax rate for fiscal 2020 was 20.9 percent and reflected the earnings mix
between the U.S. and foreign operations, the utilization of previously reserved net operating loss carryforwards and
adjustments related to the accrual for uncertain tax positions. The income tax benefit for fiscal 2019 resulted
primarily from the impact of a change in the effective state tax rate on deferred tax assets and other discrete items.
Net Earnings
Net earnings for fiscal 2020 were $38.6 million, or $3.56 per diluted share, compared to $2.2 million, or $0.20 per
diluted share, for fiscal 2019.
Liquidity and Capital Resources
The Company’s cash, cash equivalents, and marketable securities totaled $140.9 million at August 31, 2020
compared with $127.2 million at August 31, 2019. The increase resulted primarily from current year earnings,
partially offset by increases in working capital. The Company requires cash for financing its receivables and
inventories, paying operating expenses and capital expenditures, and for dividends and share repurchases. The
Company’s investments in marketable securities are primarily comprised of United States government securities and
investment grade corporate bonds. 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, investments in marketable securities,
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 may
require additional borrowings to fund potential acquisitions in the future.
The Company’s total cash and cash equivalents held by foreign subsidiaries amounted to $37.2 million and $48.1
million as of August 31, 2020 and 2019, respectively. The Company considers earnings of foreign subsidiaries to be
indefinitely reinvested, and would need to accrue and pay incremental state, local, and foreign taxes if such earnings
were repatriated to the United States. 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 $245.5 million at August 31, 2020 as compared with $231.4 million at August 31, 2019.
Cash flows provided by operations totaled $46.0 million during the year ended August 31, 2020 compared to $3.8
million provided by operations during the same prior year period. This change was primarily due to higher earnings
and non-cash adjustments, partially offset by an increase in working capital.
Cash flows used in investing activities totaled $38.5 million during the year ended August 31, 2020 compared to
cash flows used in investing activities of $21.2 million during the same prior year period. Capital spending was
$21.4 million in fiscal 2020 compared to $23.2 million in fiscal 2019. The increase in cash flows used in investing
activities resulted primarily from the Company’s investments in marketable securities.
25
Cash flows used in financing activities totaled $13.4 million during the year ended August 31, 2020 compared to
cash flows used in financing activities of $14.6 million during the same prior year period. The change is primarily
the result of higher proceeds from the exercise of stock options. Cash flows used in financing activities consists
primarily of dividend payments. Dividends paid in fiscal 2020 increased by $0.2 million over fiscal 2019.
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:
(cid:129)
Investment in organic growth including capital expenditures,
(cid:129) Dividends to stockholders, along with expectations to increase dividends over time,
(cid:129)
Synergistic acquisitions that provide attractive returns to stockholders, and
(cid:129) Opportunistic share repurchases taking into account cyclical and seasonal fluctuations.
Capital Expenditures
In fiscal 2021, the Company expects capital expenditures of approximately $15.0 million to $20.0 million, including
equipment replacement, productivity improvements and commercial growth investments. 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 2020, the Company paid cash dividends of $1.26 per common share or $13.6 million to stockholders as
compared to $1.24 per common share or $13.4 million to stockholders in fiscal 2019.
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 years ended
August 31, 2020, 2019 and 2018. The remaining amount available under the repurchase program was $63.7 million
as of August 31, 2020.
Long-Term Borrowing Facilities
Senior Notes. The Company has outstanding $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. 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. The Company has outstanding a $50.0 million unsecured Amended and Restated
Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association (“Wells
Fargo”) expiring May 31, 2022. The Company intends to use borrowings under the Revolving Credit Facility for
working capital purposes and to fund acquisitions. At August 31, 2020 and August 31, 2019, 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, 2020, the Company had the ability to borrow up to $50.0 million under the Revolving
Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to LIBOR plus
90 basis points (1.1 percent at August 31, 2020), 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
currently pays an annual commitment fee of 0.15 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. In the event that the loan documents for the Revolving Credit Facility were to require the
Company to comply with any financial covenant that is not already included or is more restrictive than what is
26
already included in the arrangement governing the Senior Notes, then such covenant shall be deemed incorporated
by reference into the Senior Notes for the benefit of the holders of the Senior Notes. 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, 2020 and August 31, 2019, 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, LLC, a wholly owned subsidiary of the Company, has outstanding $1.6
million in principal amount of industrial revenue bonds that were issued in 2006 (the “Series 2006A Bonds”). Principal
and interest on the Series 2006A Bonds are payable monthly through maturity on September 1, 2026. The interest rate
is adjustable every five years based on the yield of the 5-year United States Treasury Notes, plus 0.45 percent (1.92
percent as of August 31, 2020). This rate was adjusted on September 1, 2016 in accordance with the terms of the
bonds, and the adjusted rate will be in force until September 1, 2021. The obligations under the Series 2006A Bonds
are secured by a first priority security interest in certain real estate.
Inflation
The Company is subject to the effects of changing prices. During fiscal 2020, the Company experienced pricing
volatility for purchases of certain commodities, in particular steel and zinc products used in the production of its
products. While the cost outlook for commodities used in the production of the Company’s products is not certain,
management believes it can manage these inflationary pressures by introducing appropriate sales price adjustments
and by actively pursuing internal cost reduction efforts, while further refining the Company’s inventory and raw
materials risk management system. However, competitive market pressures may affect the Company’s ability to
pass price adjustments along to its customers.
Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements
In the normal course of business, the Company enters into contracts and commitments which obligate the Company
to make future payments. The Company uses off-balance sheet arrangements, such as leases accounted for as
operating leases, standby letters of credit and performance bonds, where sound business principles warrant their use.
The table below sets forth the Company’s significant future obligations by time period.
($ in thousands)
Contractual obligations (1)
Operating lease obligations
Pension benefit obligations
Long-term debt
Interest
Total
Total
Less than
1 year
2-3
years
4-5
years
More than
5 years
$ 42,742 $
6,903
116,344
41,818
6,521 $ 20,119
977
4,388
456 115,255
19,772
$ 207,807 $ 11,199 $ 20,315 $ 16,759 $ 159,534
6,065 $ 10,037 $
1,017
438
8,823
521
195
4,418
8,805
(1)
Total liabilities for unrecognized tax benefits as of August 31, 2020 were $1.4 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, 2020, the Company’s derivative counterparty had an investment
grade credit rating.
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-
27
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, the Turkish lira,
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, 2020, the Company estimates the potential decrease in operating income
from a ten percent adverse change in the underlying exchange rates, in U.S. dollar terms, would be approximately
$0.6 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 no foreign currency forward contracts outstanding that
are designated as hedging instruments as of August 31, 2020.
ITEM 8 — Financial Statements and Supplementary Data
28
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Lindsay Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Lindsay Corporation and subsidiaries (the
Company) as of August 31, 2020 and 2019, 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, 2020, and the
related notes and financial statement schedule (collectively, the consolidated financial statements). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the Company as
of August 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the
three-year period ended August 31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of August 31, 2020, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated October 22, 2020 expressed an unqualified
opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for
leases in fiscal year 2020 due to the adoption of ASC Topic 842, Leases, and related amendments.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is
to express an opinion on these consolidated financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks
of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
29
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that: (1)
relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the
accounts or disclosures to which it relates.
Evaluation of the environmental remediation liability
As discussed in Note 16 to the consolidated financial statements, the Company’s environmental remediation liability
as of August 31, 2020 was $16.1 million. The environmental remediation liability represents the estimated future
remediation costs associated with the Company’s plan to reduce the level of contamination at the Lindsay, Nebraska
Superfund site. The Company uses a third-party environmental expert to assist in developing the Company’s plan to
reduce the level of contamination.
We identified the evaluation of the environmental remediation liability as a critical audit matter. Subjective auditor
judgment was required to evaluate the assumptions specifically those related to the anticipated remediation activities
and the cost of those activities. These assumptions include a range of potential outcomes and a revision to the
assumptions could have a material impact on the consolidated financial statements.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the
design and tested the operating effectiveness of certain internal controls over the Company’s process to estimate
future remediation costs. This included controls related to the development of the anticipated remediation activities
and the cost of those activities. To assess the accuracy of the liability, we compared the estimated remediation costs
for activities comprising the liability to historical costs incurred for similar activities or current estimates of their
future costs. We also involved an environmental professional with specialized skills and knowledge, who assisted in
(1) assessing the Company’s environmental specialist’s qualifications, and (2) evaluating the Company’s planned
remediation activities through comparison of the Company’s selected remediation activities to those communicated
to the governmental agencies and those commonly observed in conducting remediation.
We have served as the Company’s auditor since 2001.
/s/ KPMG LLP
Omaha, Nebraska
October 22, 2020
30
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
($ 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
Other (expense) income:
Interest expense
Interest income
Other expense, net
Total other (expense) income
Earnings before income taxes
Income tax expense (benefit)
Net earnings
Earnings per share:
Basic
Diluted
Shares used in computing earnings per share:
Basic
Diluted
$
2020
474,692 $
322,149
152,543
Years ended August 31,
2019
444,072 $
329,464
114,608
2018
547,705
396,243
151,462
31,444
52,947
13,950
98,341
54,202
(4,759)
1,956
(2,556)
(5,359)
30,820
63,737
13,936
108,493
6,115
40,885
55,533
16,032
112,450
39,012
(4,767)
2,402
(1,643)
(4,008)
(4,687)
1,640
(2,112)
(5,159)
48,843
2,107
33,853
10,214
(65)
13,576
$
38,629 $
2,172 $
20,277
$
$
3.57 $
3.56 $
0.20 $
0.20 $
1.89
1.88
10,823
10,861
10,781
10,810
10,741
10,772
Cash dividends declared per share
$
1.26 $
1.24 $
1.21
See accompanying notes to consolidated financial statements.
31
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in thousands)
Net earnings
Other comprehensive loss:
Defined benefit pension plan adjustment, net of tax
Foreign currency translation adjustment, net of
hedging activities and tax
Unrealized gains on marketable securities, net of tax
Total other comprehensive loss, net of tax
(benefit) expense of ($929), $467, and $267
Total comprehensive income
See accompanying notes to consolidated financial statements.
2020
Years ended August 31,
2019
2018
$
38,629 $
2,172 $
20,277
(310)
(192)
251
(501)
86
(1,042)
—
(725)
37,904 $
(1,234)
938 $
$
(6,231)
—
(5,980)
14,297
32
Lindsay Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
($ and shares in thousands, except par values)
ASSETS
Current assets:
Cash and cash equivalents
Marketable securities
Receivables, net of allowance of $2,780 and $2,635, respectively
Inventories, net
Assets held-for-sale
Other current assets
Total current assets
Property, plant, and equipment, net
Intangible assets, net
Goodwill
Operating lease right-of-use assets
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
Operating lease liabilities
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; 18,918 and
18,870 shares issued at August 31, 2020 and 2019, respectively
Capital in excess of stated value
Retained earnings
Less treasury stock - at cost, 8,083 shares
Accumulated other comprehensive loss, net
Total shareholders' equity
Total liabilities and shareholders' equity
See accompanying notes to consolidated financial statements.
August 31,
2020
August 31,
2019
$
$
$
121,403
19,511
84,604
104,792
—
17,625
347,935
79,581
23,477
68,004
27,457
9,935
14,137
570,526
29,554
195
72,646
102,395
6,374
115,682
25,862
889
20,806
272,008
127,204
—
75,551
92,287
2,744
15,704
313,490
68,968
24,382
64,387
—
11,758
17,329
500,314
29,434
209
52,488
82,131
6,029
115,846
—
872
27,227
232,105
—
—
18,918
77,686
499,724
(277,238)
(20,572)
298,518
570,526
$
18,870
71,684
474,740
(277,238)
(19,847)
268,209
500,314
$
$
$
$
33
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ and shares in thousands, except per share amounts)
Shares of
treasury
stock
8,083
Common
stock
$ 18,780
Capital in
excess of
stated
value
$ 63,006
Retained
earnings
$477,615
20,277
Accumulated
other
comprehensive
loss,
net
(12,108) $ 270,055
Total
shareholders’
equity
Treasury
stock
$(277,238) $
Shares of
common
stock
Balance at August 31, 2017 18,780
Comprehensive income:
Net earnings
Other comprehensive loss
Total comprehensive income
Cash dividends ($1.21) per
share
Issuance of common shares
under share compensation
plans, net
Share-based compensation
expense
Balance at August 31, 2018 18,841
Comprehensive income:
61
Net earnings
Other comprehensive loss
Total comprehensive income
Cash dividends ($1.24) per
share
Issuance of common shares
under share compensation
plans, net
Share-based compensation
expense
Cumulative effect of ASC
606 adoption
Cumulative effect of ASU
2018-02 adoption
Balance at August 31, 2019 18,870
Comprehensive income:
29
Net earnings
Other comprehensive loss
Total comprehensive income
Cash dividends ($1.26) per
share
Issuance of common shares
under share compensation
plans, net
Share-based compensation
expense
Balance at August 31, 2020 18,918
48
(5,980)
20,277
(5,980)
14,297
(13,006)
1,955
2,172
(1,234)
938
(13,375)
(947)
4,195
532
(725)
38,629
(725)
37,904
(13,645)
434
(13,006)
61
1,894
8,083
$ 18,841
3,565
$ 68,465
$484,886
$(277,238) $
3,565
(18,088) $ 276,866
2,172
(13,375)
(1,234)
29
(976)
4,195
8,083
$ 18,870
$ 71,684
532
525
$474,740
38,629
(13,645)
48
386
$(277,238) $
(525)
—
(19,847) $ 268,209
8,083
$ 18,918
5,616
$ 77,686
$499,724
$(277,238) $
5,616
(20,572) $ 298,518
See accompanying notes to consolidated financial statements.
34
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
2020
Years ended August 31,
2019
2018
$
38,629
$
2,172
$
20,277
($ in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization
(Gain) loss on sale of property and equipment
Loss on sale of businesses
Provision (benefit) for uncollectible accounts receivable
Deferred income taxes
Share-based compensation expense
Valuation adjustment for indirect tax credits
Foreign currency transaction loss
Other, net
Changes in assets and liabilities:
Receivables
Inventories
Other current assets
Accounts payable
Other current liabilities
Other noncurrent assets and liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Proceeds from sale of businesses
Proceeds from sale of assets held-for-sale
Purchases of marketable securities available-for-sale
Proceeds from maturities of marketable securities available-for-sale
Proceeds from settlement of net investment hedges
Payments for settlement of net investment hedges
Acquisition of business, net of cash acquired
Other investing activities, net
Net cash (used in) provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options
Common stock withheld for payroll tax obligations
Principal payments on long-term debt
Payment of debt issuance costs
Dividends paid
Net cash used in 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
NONCASH INVESTING ACTIVITIES
Earn-out liability related to business acquisition
Holdback related to business acquisition
Issuance of note receivable from sale of business
See accompanying notes to consolidated financial statements.
35
19,396
(1,158)
—
589
1,384
5,616
—
1,102
1,446
(9,523)
(14,039)
(6,612)
(691)
16,673
(6,778)
46,034
(21,445)
—
3,955
(28,041)
8,548
1,503
—
(3,034)
—
(38,514)
1,545
(1,111)
(227)
—
(13,645)
(13,438)
117
(5,801)
127,204
121,403
7,314
4,673
1,195
300
—
$
14,018
26
301
(496)
(5,686)
4,195
2,795
709
246
(7,969)
(16,187)
173
2,119
2,629
4,752
3,797
(23,211)
—
—
—
—
2,262
(327)
—
57
(21,219)
177
(1,124)
(205)
(115)
(13,375)
(14,642)
(1,519)
(33,583)
160,787
127,204
7,887
4,671
—
—
5,589
$
16,514
90
4,056
(2,587)
(50)
3,891
—
808
2,005
(3,714)
(8,173)
(1,150)
159
3,671
(1,863)
33,934
(11,054)
29,888
—
—
—
2,278
(3,089)
—
82
18,105
2,788
(833)
(201)
—
(13,006)
(11,252)
(1,620)
39,167
121,620
160,787
11,184
4,626
—
—
—
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 global headquarters in Omaha,
Nebraska. The Company has operations which are categorized into two 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. 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 domestic irrigation manufacturing facilities are located in
Lindsay, Nebraska and Olathe, Kansas. 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
Lindsay, 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.
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.
Revenue Recognition
The Company adopted ASC 606 – Revenue from Contracts with Customers on September 1, 2018 using the
modified retrospective transition approach. The core principle of ASC 606 is that revenue should be recognized in a
manner that depicts the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled for exchange of those goods or services. Refer to Note 3 for
additional information regarding our revenue recognition policy under ASC 606.
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.
36
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.
Marketable Securities
The Company accounts for and classifies its marketable securities in accordance with the accounting guidance
related to the accounting and classification of certain investments in marketable securities. The determination on
appropriate classification is based primarily on management’s ability and intent to sell the debt security.
The Company’s investment in marketable securities consists of United States treasury bonds and investment grade
corporate bonds. The marketable securities are classified as available-for-sale and are carried at fair value with the
change in unrealized gains and losses reported as a separate component on the condensed consolidated statements of
comprehensive income until realized. The Company determines fair value using data points that are observable, such
as quoted prices and interest rates. The amortized cost of the investments approximates fair value. Investment
income is recorded within interest income on the consolidated statements of earnings. As of August 31, 2020,
approximately 64% of the Company’s marketable securities investments mature within one year and 36% mature
within one to two years.
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.
37
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 increased to $2.8 million at August 31, 2020 from $2.6 million at August 31, 2019. 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 net realizable value. 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 40
years; equipment -- 3 to 7 years; computer hardware and software – 3 to 5 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. The Company’s internally developed software is included in computer hardware
and software. 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, 2020, 2019, and 2018. 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.
In fiscal 2020, 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. The estimated fair value of all reporting units is
substantially in excess of its carrying value. Also in fiscal 2020, 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
38
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, 2020, the Company’s derivative counterparty had investment grade credit ratings.
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:
(cid:129)
(cid:129)
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
39
(cid:129)
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.
Note 2 – New Accounting Pronouncements
Recent Accounting Guidance Not Yet Adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial
Instruments. The standard replaces the incurred loss impairment methodology in current U.S. GAAP with a
methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This
update is intended to provide financial statement users with more decision-useful information about the expected
credit losses. The effective date of ASU No. 2016-13 will be the first quarter of the Company’s fiscal 2021 with
early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its
consolidated financial statements and related disclosures.
Recent Accounting Guidance Adopted
In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize a right-of-use asset
and a lease liability for most leases and disclose key information about leasing arrangements. The new guidance
became effective for the Company in the first quarter of fiscal 2020. The Company implemented Accounting
Standards Codification (“ASC”) 842 using the modified retrospective transition method and recorded a right of use
asset and lease liability of $26.2 million and $29.5 million, respectively, upon adoption of the standard on the first
day of fiscal 2020.
40
In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities,
which modifies the financial reporting of hedging relationships through changes to both the designation and
measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU No. 2017-12
became effective in the first quarter of the Company’s fiscal 2020. The adoption of this ASU did not have a
material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform, which provides optional expedients
and exceptions for applying U.S. GAAP to contracts and transactions affected by the discontinuation of the London
Interbank Offered Rate (LIBOR) or any other rate expected to be discontinued. While there was no impact to the
Company’s consolidated financial statements at the time of adoption, the Company will apply the amendments
prospectively for applicable contracts and transactions.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which had been
codified in ASC Topic 606 Revenue from Contracts with Customers. The standard provides a single model for
revenue arising from contracts with customers and supersedes previous revenue recognition guidance. The guidance
requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of goods or
services. The guidance replaces existing revenue recognition guidance in U.S. GAAP and became effective for the
Company in its first quarter of fiscal 2019. Under ASC Topic 606 the timing of revenue recognition may differ from
previous guidance for contracts with multiple performance obligations as revenue is recognized when control has
been transferred for each performance obligation. For custom and contract manufactured products that do not have
an alternate use to the Company, revenue is recognized over-time when the customer agreements contain contractual
termination clauses and right to payment for work performed to date which is a change from previous guidance.
The Company adopted the new standard using the modified retrospective approach effective the first day of fiscal
2019. As a result of the adoption, the Company increased retained earnings, $0.5 million, net of tax. This change
relates primarily to custom and contract manufacturing arrangements for certain of the Company’s irrigation and
infrastructure equipment products at various stages of production at August 31, 2018 in addition to contracts with
multiple performance obligations for which control of the relevant performance obligation had been satisfied.
Results for reporting periods beginning September 1, 2018 are presented in accordance with ASC Topic 606, while
prior period amounts are not adjusted and continue to be reported in accordance with the previously applied revenue
recognition guidance.
Note 3 – Revenue Recognition
The Company determines the appropriate revenue recognition for its contracts by analyzing the type, terms and
conditions of each contract or arrangement with a customer. Revenue is recognized when the Company satisfies the
performance obligation by transferring control over goods or services to a customer. The amount of revenue
recognized is measured as the consideration the Company expects to receive in exchange for those goods or services
pursuant to a contract with the customer. The Company does not recognize revenue in cases where collectability is
not probable, and defers the recognition until collection is probable or payment is received. Sales taxes, value added
taxes, and other taxes collected from its customers concurrent with its revenue activities are excluded from revenue.
The Company elected to use the practical expedient of treating shipping and handling costs associated with
outbound freight as a fulfillment obligation instead of a separate performance obligation. Shipping and handling
fees billed to the customer are reported as revenue and recorded in the same period as the associated fulfillment
costs.
Customer rebates, cash discounts and other sales incentives are recorded as a reduction of revenues in the period in
which the sale is recognized. The Company establishes provisions for estimated warranties and does not generally
sell extended warranties for its products.
For contracts with a length longer than twelve months, the unsatisfied performance obligations were $11.3 million
and $7.0 million at August 31, 2020.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the
unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as
revenue when, or as, the performance obligation is satisfied.
41
For contracts with multiple performance obligations, the Company allocates the transaction price to each
performance obligation using the stand-alone selling price of each distinct good or service in the contract. For most
performance obligations, the stand-alone selling price is directly observable as these goods or services are also sold
separately by the Company. For performance obligations where the stand-alone selling price is not directly
observable, the Company uses the expected cost plus a margin approach, under which the expected costs of
satisfying a performance obligation are forecasted and then an appropriate margin for that distinct good or service is
added.
The Company’s performance obligations are satisfied at either a point in time or over time depending on the
measure of progress applied toward the complete satisfaction in the transfer of control of the related goods and
services to the customer.
Revenue recognized at a point in time is derived from the sale of equipment and related parts. Revenue recognition
for equipment and parts is generally at a point in time upon transfer of control of the goods to the customer which
generally happens upon shipment of goods to the customer.
Revenue recognized over time is primarily derived from engineering services and remote monitoring subscription
services as well as custom and contract manufactured products. For engineering services, transfer of control to the
customer is continuous over time. Therefore, revenue is recognized based on the extent of progress towards
completion of the performance obligation. Judgment is required when selecting the method to measure progress
towards completion. For fixed price agreements, the Company recognizes revenue on an inputs basis, using total
costs incurred to date as a percentage of total costs expected to be incurred. For time and material arrangements, the
Company utilizes an output method of resources consumed such as the expended hours times the hourly billing rate.
For remote monitoring subscription services, customers are generally billed in advance and revenue is recognized
ratably over the life of the agreement.
For custom and contract manufactured products, the transfer of control is continuous over the life of the agreement
and products do not have an alternate use to the Company. When the customer agreements contain contractual
termination clauses and right to payment for work performed to date, the revenue from these agreements is
recognized over time as the products are produced.
The Company also leases certain infrastructure property to customers. Revenues from the leasing of infrastructure
property are recognized on a straight-line basis over the lease term.
A breakout by segment of revenue recognized over time versus point in time for twelve months ended August 31,
2020 is as follows:
($ in thousands)
Point in time
Over time
Revenue from the contracts with customers
Lease revenue
Total operating revenues
Point in time
Over time
Revenue from the contracts with customers
Lease revenue
Total operating revenues
Irrigation
Year ended August 31, 2020
Infrastructure
Total
$
298,509
45,020
343,529
—
343,529
$
$
110,871
8,807
119,678
11,485
131,163
$
409,380
53,827
463,207
11,485
474,692
Irrigation
Year ended August 31, 2019
Infrastructure
Total
$
318,544
32,954
351,498
—
351,498
$
$
78,768
6,054
84,822
7,752
92,574
$
397,312
39,008
436,320
7,752
444,072
$
$
$
$
Further disaggregation of revenue is disclosed in the Note 19 – Industry Segment Information.
42
Contract Balances
Contract assets arise when recorded revenue for a contract exceeds the amounts billed under the terms of such
contract. Contract liabilities arise when billed amounts exceed revenue recorded. Amounts are billable to customers
upon various measures of performance, including achievement of certain milestones and completion of specified
units of completion of the contract.
Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the
reporting date. The contract liabilities primarily relate to the advance consideration received from customers for
customer contracts, for which transfer of control of products or performance of service occurs in the future, and
therefore revenue is recognized upon completion of the performance obligation. The Company has elected to
recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when
incurred.
At August 31, 2020 and 2019, contract assets amounted to $0.9 million and $1.3 million. These amounts are
included within other current assets on the consolidated balance sheet.
At August 31, 2020, the contract liability amounted to $19.6 million and $18.4 million. Contract liabilities are
included within other current liabilities and noncurrent liabilities on the consolidated balance sheet. During the year
ended August 31, 2020, the Company recognized $13.7 million of revenue that was included in the liability as of
August 31, 2019. The revenue recognized was due to performance obligations being completed during the year.
Amounts included here exclude deferred lease revenues that are also included within other current liabilities.
Note 4 – Acquisitions and Divestitures
Net Irrigate, LLC
On April 8, 2020, the Company completed the acquisition of the membership interests of Net Irrigate, LLC (“Net
Irrigate”). Net Irrigate is an agriculture technology company based in Indiana that provides remote monitoring
services for irrigation customers. The purchase price of $4.5 million consisted of (i) $3.0 million, net of cash
acquired, paid in cash at closing and financed from the Company’s cash on hand, (ii) $0.3 million of cash to be paid
within one year of closing, and (iii) an earn-out payment, initially valued at $1.2 million, based on active customers
one year subsequent to the closing date. As of August 31, 2020, the earn-out payment is valued at $1.1 million. The
fair value of the earn-out payment was calculated using the weighted average probability for each potential outcome
and has a maximum potential payout of $1.5 million.
The Company’s allocation of purchase price consists of goodwill of $3.2 million and various other assets and
liabilities amounting to $1.3 million.
Divestitures and held-for-sale
The Company completed the divestiture of its Company-owned irrigation dealership during the first quarter of fiscal
2019 and recorded a loss on the sale of $0.3 million included in general and administrative expense on the
consolidated statement of operations for the year ended August 31, 2020. The Company received a note of $5.6
million as proceeds for this sale. This is included as a noncash investing activity on the consolidated statement of
cash flows for fiscal year ended August 31, 2019.
Additionally, during the fourth quarter of fiscal 2018, the Company closed one of its infrastructure manufacturing
facilities in North America and consolidated its operations with an irrigation manufacturing facility. In the second
quarter of fiscal 2020, the Company sold the building for net proceeds of $3.9 million, resulting in a gain of $1.2
million. The gain on the sale is included in cost of goods sold on the consolidated statement of earnings for the year
ended August 31, 2020. The building was included within the caption “Assets held-for-sale” for $2.7 million in the
consolidated balance sheet as of August 31, 2019.
43
Note 5 – Net Earnings Per Share
The following table shows the computation of basic and diluted net earnings per share for fiscal 2020, 2019, and
2018:
($ and shares in thousands, except per share amounts)
Numerator:
Net earnings
Denominator:
For the years ended August 31,
2019
2018
2020
$
38,629 $
2,172 $
20,277
Weighted average shares outstanding
Diluted effect of stock equivalents
Weighted average shares outstanding assuming dilution
10,823
38
10,861
10,781
29
10,810
10,741
31
10,772
Basic net earnings per share
Diluted net earnings per share
$
$
3.57 $
3.56 $
0.20 $
0.20 $
1.89
1.88
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
Performance stock units
Note 6 – Accumulated Other Comprehensive Loss
For the years ended August 31,
2019
2018
2020
6
34
—
8
72
5
19
65
—
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:
August 31,
2020
2019
Defined benefit pension plan, net of tax benefit of $1,015 and $885
Foreign currency translation, net of hedging activities, net of tax
expense of $2,371 and $3,202
Unrealized gains on marketable securities, net of tax expense of $31 and
$0
Total accumulated other comprehensive loss
$
(3,228)
(2,916)
(17,430)
(16,931)
86
$
(20,572) $
—
(19,847)
The following is a roll-forward of the balances in accumulated other comprehensive loss, net of tax.
($ in thousands)
Balance at August 31, 2018
Current period change
Balance at August 31, 2019
Current period change
Balance at August 31, 2020
Defined
benefit
pension plan
$
Foreign
currency
translation
Unrealized Accumulated
gains on
other
marketable comprehensive
securities
(2,199) $
(717)
(2,916)
(312)
(3,228) $
(15,889) $
(1,042)
(16,931)
(499)
(17,430) $
— $
—
—
86
86 $
loss
(18,088)
(1,759)
(19,847)
(725)
(20,572)
$
44
Note 7 – Income Taxes
For financial reporting purposes earnings (losses) before income taxes include the following components:
($ in thousands)
United States
Foreign
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,
2019
2018
2020
$
$
38,928 $
9,915
48,843 $
(1,949) $
4,056
2,107 $
25,116
8,737
33,853
For the years ended August 31,
2019
2018
2020
$
$
4,231 $
1,421
3,178
8,830
2,630
121
(1,367)
1,384
10,214 $
2,190 $
324
3,107
5,621
(3,209)
(624)
(1,853)
(5,686)
(65) $
9,313
1,047
3,266
13,626
517
(47)
(520)
(50)
13,576
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:
2020
2019
2018
For the years ended August 31,
($ in thousands)
U.S. statutory rate
State and local taxes, net of federal tax benefit
Foreign tax rate differences
U.S. tax reform
Deferred tax asset valuation allowance
Domestic production activities deduction
Federal credits
Uncertain tax benefits
Other
Effective rate
Amount
$ 10,257
1,079
(292)
(165)
(479)
—
(419)
165
68
$ 10,214
% Amount
21.0 $
2.2
(0.6)
(0.3)
(1.0)
—
(0.9)
0.3
0.1
20.9 $
443
(379)
164
160
142
—
(338)
(153)
(104)
(65)
% Amount
21.0 $ 8,700
743
(18.0)
809
7.8
2,496
7.6
758
6.7
(727)
—
(375)
(16.0)
198
(7.3)
(4.9)
974
(3.1) $ 13,576
%
25.7
2.2
2.4
7.4
2.2
(2.1)
(1.1)
0.6
2.9
40.1
45
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
Warranty
Defined benefit pension plan
Inventory
Share-based compensation
Vacation
Net operating loss and capital loss carry forwards
Deferred revenue
Allowance for doubtful accounts
Other
Gross deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Intangible assets
Property, plant, and equipment
Total deferred tax liabilities
Net deferred tax assets
August 31,
2020
2019
10,376
2,439
1,767
2,362
1,185
780
3,009
2,282
683
2,233
27,116
(3,218)
23,898
(6,054)
(8,798)
(14,852)
$
$
$
$
7,791
2,118
1,705
1,445
1,146
741
3,648
2,716
687
2,074
24,071
(3,759)
20,312
(6,163)
(3,263)
(9,426)
9,046
$
10,886
$
$
$
$
$
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. The Company
has recorded a valuation allowance of $1.7 million and $2.4 million as of August 31, 2020 and 2019 respectively,
related to the net operating loss in the certain foreign tax jurisdiction. The Company has also recorded a valuation
allowance of $1.2 million and $1.4 million as of August 31, 2020 and 2019, respectively, related to capital losses
from business divestitures where the Company believes it is more likely than not that the benefit from the capital
loss will not be realized. Remaining valuation allowance relates to deferred tax assets in a certain foreign tax
jurisdiction not subject to tax due to a free trade zone exemption.
The Company does not intend to, and has not historically, repatriated earnings of its foreign subsidiaries. Thus, the
Company has not provided a deferred income tax liability on these undistributed earnings that are indefinitely
reinvested. The Company would recognize a deferred income tax liability if the Company were to determine that
such earnings were no longer indefinitely reinvested. There are other taxes that may be incurred if the Company
would repatriate earnings of its foreign subsidiaries. It is not practicable to estimate the amount of income taxes that
would be incurred if the Company would repatriate earnings of its foreign subsidiaries.
The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon
examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater
than 50 percent likely to be realized upon settlement. Unrecognized tax benefits are tax benefits claimed in the
Company’s tax returns that do not meet these recognition and measurement standards.
46
A reconciliation of changes in unrecognized tax benefits is as follows:
($ in thousands)
Unrecognized tax benefits at September 1
Increases for positions taken in current year
Increases for positions taken in prior years
Decreases 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,
2020
2019
$
$
2,389 $
52
266
(1,360)
(206)
—
1,141 $
1,399
1,457
78
(216)
(329)
—
2,389
The net amount of unrecognized tax benefits at both August 31, 2020 and 2019 that, if recognized, would impact the
Company’s effective tax rate was $0.8 million and $0.6 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 $1.1 million for each of the years ended August 31,
2020 and 2019.
While it is expected that the amount of unrecognized tax benefits will change in the next twelve months as a result
of the expiration of statutes of limitations, the Company does not expect this change to have a significant impact on
its results of operations or financial position.
The Company files income tax returns in the United States and various state and foreign jurisdictions. The Company
is no longer subject to income tax examination by US federal and most state tax authorities for tax years prior to
fiscal 2017. Other major jurisdictions where we conduct business generally have statutes of limitations ranging from
three to five years.
Note 8 - Inventories
($ 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,
2020
2019
$
$
51,205 $
6,464
51,684
109,353
(4,561)
104,792 $
49,047
4,514
46,812
100,373
(8,086)
92,287
47
Note 9 – Property, Plant, and Equipment
($ in thousands)
Operating property, plant, and equipment:
Land
Buildings
Machinery and equipment
Furniture and fixtures
Computer hardware and software
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,
2020
2019
$
$
2,639 $
40,730
85,185
8,089
20,927
10,677
168,247
(110,389)
57,858
12,457
27,403
39,860
(18,137)
21,723
79,581 $
2,775
41,284
77,715
7,706
18,956
10,953
159,389
(102,437)
56,952
8,861
20,445
29,306
(17,290)
12,016
68,968
Depreciation expense was $11.6 million, $11.1 million, and $12.5 million for fiscal 2020, 2019, and 2018,
respectively.
Note 10 – Goodwill and Other Intangible Assets
The carrying amount of goodwill by reportable segment for the year ended August 31, 2020 and August 31, 2019 is
as follows:
($ in thousands)
Balance as of August 31, 2018
Foreign currency translation
Balance as of August 31, 2019
Acquisition of Net Irrigate
Foreign currency translation
Balance as of August 31, 2020
Irrigation
Infrastructure
Total
$
$
48,591
(24)
48,567
3,265
(30)
51,802
$
$
16,080
(260)
15,820
—
382
16,202
$
$
64,671
(284)
64,387
3,265
352
68,004
The components of the Company’s identifiable intangible assets and their weighted average remaining life at August
31, 2020 and 2019 are included in the table below.
August 31,
($ in thousands)
Amortizable intangible assets:
Patents and developed technology
Customer relationships
Non-compete agreements
Unamortizable intangible assets:
Tradenames
Total
2020
Weighted Gross
average carrying Accumulated average carrying Accumulated
amortization
2019
Weighted Gross
amortization
amount
amount
years
years
4.3 $ 27,082 $ (22,905)
(10,986)
3.1 17,965
—
—
—
4.0 $ 26,547 $ (21,097)
(9,779)
3.6 16,439
(1,107)
1,132
0.4
N/A 12,321
—
3.5 $ 57,368 $ (33,891)
N/A 12,247
—
3.8 $ 56,365 $ (31,983)
Amortization expense for amortizable intangible assets was $2.5 million, $2.9 million, and $4.0 million for fiscal
2020, 2019, and 2018, respectively.
48
Future estimated amortization of intangible assets for the next five years is as follows:
Fiscal years
2021
2022
2023
2024
2025
Thereafter
$ in thousands
2,177
2,006
1,902
1,902
1,653
1,516
11,156
$
$
The Company updated its impairment evaluation of goodwill and intangible assets with indefinite useful lives at
August 31, 2020. No impairment losses were indicated as a result of the annual impairment testing for fiscal 2020,
2019 and 2018.
Note 11 – Other Current Liabilities
($ in thousands)
Other current liabilities:
Compensation and benefits
Contract liabilities
Warranties
Operating lease liabilities
Tax related liabilities
Dealer related liabilities
Deferred revenue - lease
Accrued insurance
Accrued environmental liabilities
Other
Total other current liabilities
Note 12 – Credit Arrangements
August 31,
2020
2019
$
$
20,945 $
17,296
10,765
5,123
3,726
3,664
1,822
1,348
1,115
6,842
72,646 $
13,960
14,763
8,960
—
1,469
3,246
2,985
1,482
1,243
4,380
52,488
Senior Notes. The Company has outstanding $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. The Company has outstanding a $50.0 million unsecured Amended and Restated
Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association (“Wells
Fargo”) expiring May 31, 2022. The Company intends to use borrowings under the Revolving Credit Facility for
working capital purposes and to fund acquisitions. At August 31, 2020 and August 31, 2019, 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, 2020, the Company had the ability to borrow up to $50.0 million under the Revolving
Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to LIBOR plus
90 basis points (1.1 percent at August 31, 2020), 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
currently 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. In the event that the loan documents for the Revolving Credit Facility were to require the
Company to comply with any financial covenant that is not already included or is more restrictive than what is
49
already included in the arrangement governing the Senior Notes, then such covenant shall be deemed incorporated
by reference into the Senior Notes for the benefit of the holders of the Senior Notes. 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, 2020 and August 31, 2019, 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, LLC, a wholly owned subsidiary of the Company, has outstanding $1.3
million in principal amount of industrial revenue bonds that were issued in 2006 (the “Series 2006A Bonds”). Principal
and interest on the Series 2006A Bonds are payable monthly through maturity on September 1, 2026. The interest rate
is adjustable every five years based on the yield of the 5-year United States Treasury Notes, plus 0.45 percent (1.92
percent as of August 31, 2020). This rate was adjusted on September 1, 2016 in accordance with the terms of the
bonds, and the adjusted rate will be in force until September 1, 2021. The obligations under the Series 2006A Bonds
are secured by a first priority security interest in certain real estate.
Long-term debt consists of the following:
($ in thousands)
Series A Senior Notes
Revolving Credit Facility
Elecsys Series 2006A Bonds
Total debt
Less current portion
Less debt issuance costs
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
August 31,
2020
2019
$
$
115,000 $
—
1,344
116,344
(195)
(467)
115,682 $
115,000
—
1,571
116,571
(209)
(516)
115,846
$ in thousands
195
217
221
226
230
115,255
116,344
$
$
Note 13 – Financial Derivatives
Fair values of derivative instruments are as follows:
($ in thousands)
Derivatives designated as hedging instruments:
Balance sheet location
2020
2019
August 31,
Foreign currency forward contracts
Total derivatives designated as hedging
instruments
Derivatives not designated as hedging
instruments:
Foreign currency options contracts
Total derivatives not designated as hedging
instruments
Other current assets
Other current assets
$
$
$
$
— $
— $
21 $
21 $
1,073
1,073
39
39
Accumulated other comprehensive income included realized and unrealized after-tax gains of $7.3 million, $7.0
million, and $5.0 million at August 31, 2020, 2019, and 2018, respectively, related to derivative contracts designated
as hedging instruments.
50
Net Investment Hedging Relationships
The amount of loss recognized in OCI on derivatives is as follows:
($ in thousands)
Foreign currency forward contracts, net of tax
expense of $97, $564, and $498
For the years ended August 31,
2019
2018
2020
$
330 $
(1,964) $
(1,103)
During fiscal 2020, 2019, and 2018, the Company settled foreign currency forward contracts resulting in an after-tax
net of $1.2 million, an after-tax net loss $0.6 million and $0.5 million, respectively, which were included in other
comprehensive income as part of a currency translation adjustment. There were no amounts recorded in the
condensed consolidated statements of operations related to ineffectiveness of foreign currency forward contracts
related to net investment hedges for the years ended August 31, 2020, 2019, and 2018.
At August 31, 2020 the Company had no foreign currency forward contracts qualifying as a hedge of a net
investment in foreign operations. At August 31, 2019, the Company had outstanding foreign currency forward
contracts to sell a notional amount of million Euro at fixed prices to settle during the next fiscal quarter.
Additionally, at August 31, 2019, the Company also had an outstanding foreign currency forward contract to sell a
notional amount of 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
The Company generally does not elect hedge accounting treatment for derivative contracts related to future
settlements of foreign denominated intercompany receivables and payables. If the Company does not elect hedge
accounting treatment for a derivative, the Company carries the derivative at its fair value in the condensed
consolidated balance sheets and recognizes any subsequent changes in its fair value during a period through earnings
in the condensed consolidated statements of operations. At August 31, 2020, the Company had no foreign currency
forward contracts outstanding that are designated as hedging instruments. At August 31, 2019, the Company had
notional value of $1.8 million of U.S. dollar equivalent of foreign currency forward contracts outstanding that are
not designated as hedging instruments.
During the third quarter of fiscal 2020, the Company entered into a foreign exchange option contract with a notional
amount of 15 million British Pounds to mitigate the risk related to a revenue contract and related costs denominated
in British Pounds over an approximate six-month period. The contract is not speculative and was not designated as a
hedging instrument. Gains and losses on this contract are recorded within cost of goods sold in the condensed
consolidated statement of operations.
Note 14 – Leases
The Company, as lessee, has operating leases primarily for office space, manufacturing facilities, equipment, and
vehicles. The Company determines if a contract is or contains a lease at the inception of the contract based on
whether the contract conveys the right to control the use of an identified asset over a period of time in exchange for
consideration. The Company considers disclosures related to its transactions as a lessor to not be material and has
omitted such disclosures.
The Company elected, for all classes of underlying assets, to not separate lease and non-lease components and
instead will treat the lease agreement as a single lease component for all asset classes. The Company additionally
elected practical expedients to not reassess whether existing contracts are or contain leases, the classification of any
existing leases, accounting for initial direct costs for any existing leases, and hindsight in determining the lease term
and in assessing impairment of the right-of-use (“ROU”) asset.
Short-term operating leases, which have an initial expected term of twelve months or less, are not recorded on the
condensed consolidated balance sheet. Such fixed lease payments are recognized within the condensed consolidated
statement of earnings on a straight-line basis over the lease term. Any variable payments associated with short-term
operating leases are recognized within the condensed consolidated statement of earnings as they are incurred. The
Company did not recognize any expense for such leases during the twelve months ended August 31, 2020.
51
Many of the Company’s leases contain renewal or extension options. The Company includes all renewal or
extension periods that it is reasonably certain to exercise at lease commencement within the measurement of the
ROU asset and lease liability.
The Company’s lease portfolio consists of operating leases which are included in operating lease ROU assets and
operating lease liabilities in the condensed consolidated balance sheet. Operating lease ROU assets and liabilities are
recognized at the lease commencement date based on the present value of lease payments over the lease term. To
calculate the present value of future lease payments, the Company uses an incremental borrowing rate that estimates
a collateralized rate based on the expected term of the lease.
Lease cost and other information related to the Company’s operating leases are as follows:
($ in thousands)
Operating lease cost (cost resulting from lease payments)
Variable lease cost (cost excluded from lease payments)
Total lease cost
Operating cash outflows from operating leases
Weighted average lease term - operating leases
Weighted average discount rate - operating leases
Supplemental balance sheet information related to operating leases are as follows:
($ in thousands)
Operating lease ROU assets
Classification
Operating lease right-of-use assets
Operating lease short-term liabilities
Operating lease long-term liabilities
Total lease liabilities
Other current liabilities
Operating lease liabilities
$
$
$
Year Ended
August 31, 2020
5,999
424
6,423
5,767
9.1 years
3.2%
Year Ended
August 31, 2020
27,457
$
5,123
25,862
30,985
$
The minimum lease payments under operating leases expiring subsequent to August 31, 2020 are as follows:
Fiscal year ending
2021
2022
2023
2024
2025
Thereafter
Total lease payments
Less: interest
Present value of lease liabilities
$ in thousands
5,911
5,734
4,075
3,680
2,735
14,370
36,505
5,520
30,985
$
$
As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019
and under the previous lease accounting standard, future minimum lease payments under operating leases with an
initial or remaining term in excess of one year at August 31, 2019 would have been as follows:
Fiscal year ending
2020
2021
2022
2023
2024
Thereafter
Total lease payments
$ in thousands
6,065
5,266
4,771
3,414
3,107
20,119
42,742
$
$
52
Note 15 – 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, 2020 and 2019,
respectively:
($ in thousands)
Cash and cash equivalents
Marketable securities:
Corporate bonds
U.S. treasury securities
Derivative assets
Earn-out liability
($ in thousands)
Cash and cash equivalents
Derivative assets
Derivative liabilities
Level 1
121,403 $
$
August 31, 2020
Level 2
Level 3
— $
— $
—
—
—
—
14,426
5,085
21
—
—
—
—
(1,112)
Total
121,403
14,426
5,085
21
(1,112)
$
Level 1
160,787 $
—
—
Level 2
Level 3
— $
898
(12)
— $
—
—
Total
160,787
898
(12)
The carrying value of long-term debt (including current portion) was $116.3 million and $116.6 million at August
31, 2020 and 2019, respectively. The fair value of this debt was estimated to be $122.9 million and $120.8 million
as of August 31, 2020 and 2019, based on current market rates as of the respective year-ends.
Note 16 – 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 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 arising out of vehicle collisions with
highway barriers incorporating the Company’s X-Lite® end terminal. Despite the September 2018 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.
53
The Company, certain of its subsidiaries, and certain third parties which originally designed the X-Lite end terminal
have also been named in a lawsuit filed on June 9, 2020 in the Circuit Court of Cole County, Missouri by Missouri
Highways and Transportation Commission (“MHTC”). MHTC alleges, among other things, that the X-Lite end
terminal was defectively designed and failed to perform as designed, intended, and advertised, leading to MHTC’s
removal and replacement of X-Lite end terminals from Missouri’s roadways. MHTC alleges strict liability
(defective design and failure to warn), negligence, breach of express warranties, breach of implied warranties
(merchantability and fitness for a particular purpose), fraud, and public nuisance. MHTC seeks compensatory
damages, interest, attorneys’ fees, and punitive damages.
The Company believes it has meritorious factual and legal defenses to each of the lawsuits discussed above and is
prepared to vigorously defend its interests. 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. While it is possible that a loss may be incurred, the Company is
unable to estimate a range of potential loss due to the complexity and current status of these lawsuits. However, the
Company maintains insurance coverage to mitigate the impact of adverse exposures in these lawsuits and does not
expect that these lawsuits will have a material adverse effect on its business or its consolidated financial statements.
In June 2019, the Company was informed by letter that the Department of Justice, Civil Division and U.S.
Attorney’s Office for the Northern District of New York, with the assistance of the Department of Transportation,
Office of Inspector General, are conducting an investigation of the Company relating to the Company’s X-Lite end
terminal and potential violations of the federal civil False Claims Act. Depending on the outcome of this matter,
there could be a material adverse effect on the Company’s business or its consolidated financial statements. Given
the current posture of the matter, the Company is unable to estimate a range of potential loss, if any, or to express an
opinion regarding the ultimate outcome.
Environmental Remediation
In previous years, the Company committed to a plan to remediate environmental contamination of the groundwater
at and adjacent to its Lindsay, Nebraska facility (the “site”). The current estimated aggregate accrued cost of $16.1
million is based on consideration of remediation options which the Company believes could be successful in
meeting the long-term regulatory requirements of the site. The Company submitted a revised remedial alternatives
evaluation report to the EPA and the Nebraska Department of Environment and Energy (the “NDEE”) in August
2020 to review remediation alternatives and proposed plans for the site. The proposed remediation plan is
preliminary and has not been approved by the EPA or the NDEE. Based on guidance from third-party
environmental experts and the preliminary discussions with the regulatory agencies, the Company anticipates that a
definitive plan will not be agreed upon until the first half of fiscal 2021 or later. An increase to the liability of $1.0
million was recorded within general and administrative expense on the consolidated statement of earnings for the
year ended August 31, 2020. Of the total liability, $11.0 million was calculated on a discounted basis using a
discount rate of 1.2%, which represents a risk-free rate. This discounted portion of the liability amounts to $12.4
million on an undiscounted basis.
The Company accrues the anticipated cost of investigation and remediation when the obligation is probable and can
be reasonably estimated. While the plan has not formally been approved by the EPA, the Company believes the
current accrual is a good faith estimate of the long-term cost of remediation at this site; however, the estimate of
costs and their timing could change as a result of a number of factors, including (1) EPA input on the proposed
remediation plan and any changes which they may subsequently require, (2) refinement of cost estimates and length
of time required to complete remediation and post-remediation operations and maintenance, (3) effectiveness of the
technology chosen in remediation of the site as well as changes in technology that may be available in the future,
and (4) unforeseen circumstances existing at the site. As a result of these factors, the actual amount of costs incurred
by the Company in connection with the remediation of contamination of its Lindsay, Nebraska site could exceed the
amounts accrued for this expense at this time. While any revisions could be material to the operating results of any
fiscal quarter or fiscal year, the Company does not expect such additional expenses would have a material adverse
effect on its liquidity or financial condition.
54
The following table summarizes the environmental remediation liability classifications included in the balance sheet
as of August 31, 2020 and 2019:
($ in thousands)
Balance sheet location
Other current liabilities
Other noncurrent liabilities
Total environmental remediation liabilities
Note 17 – Retirement Plans
August 31,
2020
2019
$
$
1,115 $
15,030
16,145 $
1,243
14,674
15,917
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 $1.2 million, $1.2 million,
and $1.7 million for the years ended August 31, 2020, 2019, and 2018, respectively.
A supplementary non-qualified, non-funded retirement plan for five former executives is also maintained. Plan
benefits are based on the executive’s average total compensation during the three highest compensation years of
employment. This unfunded supplemental retirement plan is not subject to the minimum funding requirements of
ERISA. While the plan is unfunded, the Company has purchased life insurance policies on certain former
executives named in this supplemental retirement plan to provide funding for this liability. The cash surrender
values of these insurance policies are recorded as other noncurrent assets.
As of August 31, 2020 and 2019, the funded status of the supplemental retirement plan was recorded in the
consolidated balance sheets. The Company utilizes an August 31 measurement date for plan obligations related to
the supplemental retirement plan. As this is an unfunded retirement plan, the funded status is equal to the benefit
obligation.
The funded status of the plan and the net amount recognized in the accompanying balance sheets as of August 31 is
as follows:
($ in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year
Interest cost
Actuarial 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,
2020
2019
6,559 $
208
667
(530)
6,904 $
6,404
246
439
(530)
6,559
August 31,
2020
2019
530 $
6,374
6,904 $
530
6,029
6,559
$
$
$
$
The before-tax amounts recognized in accumulated other comprehensive loss consists of:
($ in thousands)
Net actuarial loss
August 31,
2020
2019
$
(4,242) $
(3,801)
For the years ended August 31, 2020 and 2019, the Company assumed a discount rate of 2.2 percent and 3.3
percent, respectively, for the determination of the liability. The assumptions used to determine benefit obligations
55
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, 2020, 2019, and 2018, the Company assumed a discount rate of 3.3 percent, 4.0
percent, and 3.7 percent, respectively, for the determination of the net periodic benefit cost. The components of the
net periodic benefit cost for the supplemental retirement plan recorded within other income (expense) on the
consolidated statement of earnings are as follows:
($ in thousands)
Interest cost
Net amortization and deferral
Total
For the years ended August 31,
2019
2018
2020
$
$
208 $
226
434 $
246 $
199
445 $
243
206
449
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 2021 will be $0.3 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
2021
2022
2023
2024
2025
Thereafter
Note 18 - Warranties
$ in thousands
521
513
504
494
483
4,389
6,904
$
$
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,
2020
2019
8,960
7,895
(6,970)
880
10,765
$
$
7,109
7,263
(5,769)
357
8,960
$
$
Warranty costs were $8.8 million, $7.6 million, and $5.4 million for fiscal 2020, 2019, and 2018, respectively.
Note 19 – 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
56
expenses, selling expenses, engineering and research expenses and other overhead charges directly attributable to
the segment. There are no inter-segment sales included in the amounts disclosed.
Irrigation
This reporting segment includes the manufacture and marketing of center pivot, lateral move, and hose reel
irrigation systems, as well as various innovative technology solutions such as GPS positioning and guidance,
variable rate irrigation, wireless irrigation management, M2M communication technology, and smartphone
applications. The irrigation reporting segment consists of one operating segment.
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 ten percent or more of its total revenues during fiscal 2020,
2019, or 2018.
Summarized financial information concerning the Company’s reportable segments is shown in the following tables:
($ in thousands)
Operating revenues:
Irrigation:
North America
International
Irrigation total
Infrastructure
Total operating revenues
Operating income:
Irrigation
Infrastructure
Corporate
Total operating income
Other income (expense)
Earnings before income taxes
Total capital expenditures:
Irrigation
Infrastructure
Corporate
Depreciation and amortization:
Irrigation
Infrastructure
Corporate
Total assets:
Irrigation
Infrastructure
Corporate
2020
2019
2018
218,954 $
124,575
343,529
131,163
474,692
$
40,214 $
43,771
(29,783)
54,202
(5,359)
48,843 $
9,254 $
11,275
916
21,445 $
12,906 $
3,495
2,994
19,396 $
307,537 $
113,111
149,878
570,526 $
218,627 $
132,871
351,498
92,574
444,072
$
29,804 $
16,599
(40,288)
6,115
(4,008)
2,107 $
9,473 $
4,928
8,810
23,211 $
9,500 $
3,663
855
14,018 $
292,202 $
85,848
122,264
500,314 $
294,617
145,241
439,858
107,847
547,705
41,933
23,857
(26,778)
39,012
(5,159)
33,853
9,259
938
857
11,054
11,412
4,611
491
16,514
277,712
69,919
152,184
499,815
$
$
$
$
$
$
$
$
$
$
57
Summarized financial information concerning the Company’s geographical areas is shown in the following tables.
($ in thousands)
United States
International
Total revenues
2020
% of total
For the years ended August 31,
2019
% of total
Revenues
$ 259,557
215,135
$ 474,692
Revenues
55 $ 257,719
186,353
45
100 $ 444,072
Revenues
58 $ 321,698
226,007
42
100 $ 547,705
2018
% of total
59
41
100
($ in thousands)
2020
For the years ended August 31,
2019
2018
United States
International
Total long-lived assets
Long-lived
tangible
assets
$
$
64,857
14,724
79,581
% of total
Long-lived
tangible
assets
% of total
Long-lived
tangible
assets
% of total
81 $
19
100 $
52,187
16,781
68,968
76 $
24
100 $
39,290
17,958
57,248
69
31
100
Note 20 – 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, 2020, 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, 2020, 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, 2020, 316,093 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 2020, 2019, and 2018:
($ 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,
2019
2018
2020
$
142
$
105
$
113
207
419
5,079
5,705
5,847
(1,374)
$
4,473
221
250
3,819
4,290
4,395
(1,033)
$
3,362
150
461
3,169
3,780
3,893
(1,090)
2,803
$
58
As of August 31, 2020, there was $6.5 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 1.8
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 evenly over a three or four year period. 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 2020
Fiscal 2019
1.6%
1.3%
6
28.4%
$
24.18
3.1%
1.4%
6
26.3%
24.71
$
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.
The following table summarizes stock option activity for fiscal 2020:
Stock options outstanding at August 31, 2019
Granted
Exercised
Forfeited/cancelled
Stock options outstanding at August 31, 2020
Stock options exercisable at August 31, 2020
Number of
stock options
112,561
44,347
(21,400)
(3,364)
132,144
43,229
$
$
$
Average
exercise price
85.70
94.41
87.47
72.20
90.56
86.49
Average
remaining
contractual
term (years)
7.6
Aggregate
intrinsic value
(thousands)
$
540
721
12
1,242
581
7.9
6.9
$
$
There were 25,843, 15,496, and 27,811 outstanding stock options that vested during fiscal 2020, 2019, and 2018,
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
Weighted average grant-date fair value of stock options vested
$
$
$
$
For the years ended August 31,
2019
2018
2020
721
1,545
169
27.08
$
$
$
$
93
177
26
32.66
$
$
$
$
538
2,788
151
31.37
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.
59
The following table summarizes restricted stock unit activity for fiscal 2020:
Restricted stock units outstanding at August 31, 2019
Granted
Vested
Forfeited / Cancelled
Restricted stock units outstanding at August 31, 2020
Number of
restricted
stock units
Weighted
average grant-
date fair value
79,342 $
39,716
(40,792)
(5,543)
72,723 $
87.49
91.83
88.85
87.47
89.92
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, 2020, 2019, and 2018,
outstanding restricted stock units included 4,938, 4,103, and 6,474 units, respectively, that will be settled in cash.
The fair value of restricted stock units that vested during the period was $3.8 million and $4.1 million for each of the
years ended August 31, 2020 and 2019, respectively. Share issuances are presented net of share repurchases to cover
payroll taxes of $1.1 million, $1.1 million, and $0.8 million for each of the years ended August 31, 2020, 2019, and
2018, respectively.
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 performance stock unit activity for fiscal 2020:
Performance stock units outstanding at August 31, 2019
Granted
Forfeited / cancelled
Performance stock units outstanding at August 31, 2020
Number of
performance
stock units
Weighted
average grant-
date fair value
37,429 $
22,715
(6,216)
53,928 $
85.10
102.28
80.06
101.29
Performance stock units outstanding as of August 31, 2019 and issued prior to fiscal 2019 include performance
goals 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 2020, 2019, and
2018, no performance stock units vested.
Performance stock units outstanding as of August 31, 2020 and issued during fiscal 2020 and 2019 include
performance goals based on a return on net assets and total shareholder return (TSR) relative to the Company’s
peers 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. For
the return on net assets portion of the award, 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. For the TSR portion of the award, compensation expense is recorded ratably over the
three year term of the award based on the estimated grant date fair value.
60
The fair value of the TSR portion of the awards granted in fiscal 2020 was estimated at the grant date using a Monte
Carlo simulation model which included the following assumptions:
Expected term (years)
Risk-free interest rate
Volatility
Dividend yield
3
1.5%
29.5%
1.3%
Note 21 – 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, 2020. The remaining amount available under the repurchase program was $63.7 million as of
August 31, 2020.
Note 22 – Quarterly Results of Operations (Unaudited)
($ in thousands, except per share amounts)
Year ended August 31, 2020
Operating revenues
Cost of operating revenues
Earnings before income taxes
Net earnings
Diluted net earnings per share
Year ended August 31, 2019
Operating revenues
Cost of operating revenues
Earnings (loss) before income taxes
Net earnings (loss)
Diluted net earnings (loss) per share
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
$
$
$
$
$
$
$
$
$
$
109,393
75,319
11,255
8,345
0.77
111,951
83,303
1,681
1,212
0.11
$
$
$
$
$
$
$
$
$
$
113,788
80,382
6,867
5,516
0.51
$
$
$
$
$
123,106 $
83,410 $
12,265 $
10,094 $
0.93 $
$
109,182
84,708
$
(5,068) $
(3,440) $
(0.32) $
121,054 $
91,055 $
3,229 $
2,897 $
0.27 $
128,405
83,038
18,456
14,674
1.35
101,885
70,398
2,265
1,503
0.14
61
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 Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended. The
Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in
the reports that are filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the rules and forms of the Securities and
Exchange Commission and to ensure the information required to be disclosed is accumulated and communicated to
management, including principal executives and financial officers, as appropriate to allow timely decisions
regarding required disclosures. Based upon that evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of
the period covered by this report.
Remediation of Previously Reported Material Weaknesses in Internal Control over Financial Reporting
As previously disclosed in the Company’s Form 10-K for the year ended August 31, 2019, management identified a
material weakness related to ineffective internal control over indirect tax credits in a foreign jurisdiction.
Management has completed its implementation of new controls focused on the valuation of the tax credits. During
the fourth quarter of fiscal year 2020, the Company completed its testing of the design and implementation of the
new controls. As a result, as of August 31, 2020, management concluded that the Company had remediated the
previously reported material weakness in internal control over financial reporting.
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, 2020, 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, 2020.
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.
Changes in Internal Control over Financial Reporting
Other than the remediation of the previously identified material weakness described above, there were no changes in
the Company’s internal controls over financial reporting that occurred during the quarter ended August 31, 2020 that
materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial
reporting.
62
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Lindsay Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited Lindsay Corporation and subsidiaries’ (the Company) internal control over financial reporting as of
August 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of August 31, 2020, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2020 and 2019, 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, 2020, and the related notes and financial statement schedule
(collectively, the consolidated financial statements), and our report dated October 22, 2020 expressed an unqualified
opinion on those consolidated financial statements.
Basis for Opinion
The Company’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 are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. 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 of internal control over financial reporting 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.
Definition and Limitations of Internal Control Over Financial Reporting
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.
63
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.
Omaha, Nebraska
October 22, 2020
/s/ KPMG LLP
64
ITEM 9B — Other Information
None.
65
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 2020
Annual Meeting of Stockholders (the “Proxy Statement”) not later than 120 days after the close of its fiscal year
ended August 31, 2020. Information about the Board of Directors required by this Item 10 is incorporated by
reference to the discussion responsive thereto under the captions “Board of Directors and Committees” and
“Corporate Governance” in the Proxy Statement.
Please see the information concerning our executive officers contained in Item 1 of Part I herein under the caption
“Information About Out Executive Officers” which is included therein accordance with the Instruction to Item 401
of Regulation S-K.
Code of Ethics – 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, 2020.
ITEM 11 — Executive Compensation
The information required by this Item 11 is incorporated by reference to the discussion responsive thereto under the
captions “Compensation Discussion and Analysis,” Compensation Committee Report,” “Pay Ratio Information,”
“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 12 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, 2020 (there were no equity compensation plans not
approved by security holders as of August 31, 2020):
(a)
(b)
Plan category
Number of securities to
be issued upon exercise
of outstanding options,
warrants, and rights
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))
Equity compensation plans
approved by security holders (1) (2)
Total
253,857 $
253,857 $
90.56
90.56
316,093
316,093
(1)
(2)
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.
Column (a) includes (i) 53,928 shares that could be issued under performance stock units (“PSU”) outstanding at August 31, 2020, and (ii)
67,785 shares that could be issued under restricted stock units (“RSU”) outstanding at August 31, 2020. 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.
66
ITEM 13 — Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 is incorporated by reference to the discussion responsive thereto under the
captions “Corporate Governance” and “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 “Proposal 2 Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy
Statement.
67
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, 2020, 2019, and 2018 ............................
Consolidated Statements of Comprehensive Income for the years ended August 31, 2020, 2019, and 2018 ....
Consolidated Balance Sheets as of August 31, 2020 and 2019 ...........................................................................
Consolidated Statements of Shareholders' Equity for the years ended August 31, 2020, 2019, and 2018..........
Consolidated Statements of Cash Flows for the years ended August 31, 2020, 2019, and 2018 .......................
Page
29
31
32
33
34
35
Notes to Consolidated Financial Statements ........................................................................................................ 36-61
Valuation and Qualifying Accounts – Years ended August 31, 2020, 2019, and 2018.......................................
69
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.
68
(a)(2) Financial Statement Schedules.
Lindsay Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
Years ended August 31, 2020, 2019, and 2018
(in thousands)
Year ended August 31, 2020:
Deducted in the balance sheet from the
assets to which they apply:
Allowance for doubtful accounts (1)
Deferred tax asset valuation allowance (2)
Year ended August 31, 2019:
Deducted in the balance sheet from the
assets to which they apply:
Allowance for doubtful accounts (1)
Deferred tax asset valuation allowance (2)
Year ended August 31, 2018:
Deducted in the balance sheet from the
Valuation
Allowance for doubtful accounts (1)
Deferred tax asset valuation allowance (2)
Additions
Balance at
beginning
of period
Charges to
costs and
expenses
Charged to
other
accounts
Deductions
Balance
at end of
period
$
$
$
2,635
3,759
3,585
3,562
7,447
2,804
589
83
—
197
744
758
—
—
—
—
—
—
444 $
624
2,780
3,218
950 $
—
2,635
3,759
4,606 $
—
3,585
3,562
(1)
(2)
Deductions consist of uncollectible items reserved, less recoveries of items previously reserved.
Additions and deductions consist of changes to deferred tax assets not expected to be realized.
(a)(3) Exhibits. The list of the Exhibits in the Exhibit Index is incorporated into this item by reference.
(b) See Exhibit Listing below.
69
Exhibit
NumberDescription
EXHIBIT INDEX
2.1
3.1
3.2
4.1
4.2
10.1
10.2
10.3
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 October 19, 2018.
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.
Description of the Registrant’s Securities, incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on
Form 10-K filed on October 31, 2019.
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), 2020 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, 2019.†
10.5
10.6
10.7
10.8
Form of Indemnification Agreement between the Company and its Officers and Directors, incorporated by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2018.†
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.
Second Amendment to Amended and Restated Revolving Credit Agreement, dated May 31, 2019, 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 June 5, 2019.
10.9
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.
10.10 First Amendment to Note Purchase Agreement, dated May 31, 2019, by and among the Company and the noteholders
named therein, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 5,
2019.
10.11 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, 2018.
10.12 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.†
10.13* Employment Agreement, dated August 17, 2020 between the Company and Randy A. Wood. †
10.14 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.†
10.15 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.†
10.16 Employment Agreement, dated May 25, 2018, between the Company and J. Scott Marion, incorporated by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2018.†
10.17* Employment Agreement, dated August 17, 2020, between the Company and Gustavo E. Oberto. †
21*
23*
Subsidiaries of the Company
Consent of KPMG LLP
70
24*
The Power of Attorney authorizing Timothy Hassinger to sign the Annual Report on Form 10-K for fiscal 2020 on behalf
of non-management directors.
31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section
1350.
31.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section
1350.
32*
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.
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).
Filed herein.
† Management contract or compensatory plan or arrangement required to be filed as an exhibit hereto pursuant to Item 15(b) of Form 10-K.
*
** 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.
ITEM 16 — Form 10-K Summary
None.
71
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 22nd day of
October, 2020.
LINDSAY CORPORATION
/s/ BRIAN L. KETCHAM
By:
Name: Brian L. Ketcham
Title: Senior 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 22nd day of October, 2020.
/s/ TIMOTHY L. HASSINGER
Timothy L. Hassinger
Director, President and Chief Executive Officer
(Principal Executive Officer)
/s/ BRIAN L. KETCHAM
Brian L. Ketcham
/s/ MICHAEL C. NAHL
Michael C. Nahl
Senior 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/ MARY A. LINDSEY
Mary A. Lindsey
/s/ CONSUELO E. MADERE
Consuelo E. Madere
/s/ DAVID B. RAYBURN
David B. Rayburn
/s/ MICHAEL D. WALTER
Michael D. Walter
(1)
Director
(1)
Director
(1)
Director
(1)
Director
(1) By: /s/ TIMOTHY L. HASSINGER
Timothy L. Hassinger, Attorney-In-Fact
72
OUR VISION
Alignment to our business strategy
starts with a clear vision:
To Become the Innovation and
Market Leader through Employee
Empowerment and Superior Execution.
It is through our key values and
behaviors that we will guide our global
organization toward long-term success.
Behaviors
Build Trust
Unlock Creativity
Customer-first
Innovation
One Lindsay
Values
Leadership –We inspire others
and demonstrate courage to make
a difference.
Integrity –We are open, honest
and transparent.
Collaboration – We create more
together than as individuals.
Accountability –We set high
standards and deliver against them.
Respect for others –We foster an
inclusive culture that values each
other’s views.
CORPORATE INFORMATION
DIRECTORS
Michael C. Nahl
Director since 2003
Chairman of the Board since 2015
Retired Executive Vice President
and Chief Financial Officer,
Albany International Corp.
Robert E. Brunner
Director since 2013
Retired Executive Vice President,
Illinois Tool Works, Inc.
Director: Leggett & Platt, Inc. and NN, Inc.
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
Michael N. Christodolou
Director since 1999
Founder and Manager, Inwood Capital
Management, LLC
Director: NETSTREIT Corp.
Mary A. Lindsey
Director since 2018
Retired Senior Vice President and Chief Financial
Officer, Commercial Metals Company
Director: Methode Electronics, Inc. and
Orion Engineered Carbons S.A.
Consuelo E. Madere
Director since 2018
President of Proven Leader Advisory, LLC
Director: Nutrien and S&W Seed Company
OFFICERS
Timothy L. Hassinger
Director since 2017
President and Chief Executive Officer
Joined Lindsay in 2017
Eric R. Arneson
Senior Vice President, General Counsel and
Secretary
Joined Lindsay in 2008
Brian L. Ketcham
Senior Vice President and Chief Financial Officer
Joined Lindsay in 2016
J. Scott Marion
President – Infrastructure
Joined Lindsay in 2011
Gustavo E. Oberto
President – Irrigation
Joined Lindsay in 2019
P. David Salen
Senior Vice President, Global Operations
Joined Lindsay in 2019
Kelly M. Staup
Senior Vice President – Human Resources
Joined Lindsay in 2011
Eric J. Talmadge
Senior Vice President and
Chief Information Officer
Joined Lindsay in 2012
Randy A. Wood
Chief Operating Officer
Joined Lindsay in 2008
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 5, 2021, at 2:30 pm CST. All shareholders are
invited to attend the annual meeting online and submit your questions
during the meeting by visiting www.virtualshareholdermeeting.com/
LNN2021. Any shareholder who will be unable to attend is encouraged
to send questions and comments to Eric Arneson, Secretary at Lindsay’s
Corporate Office.
Quarterly Calendar
The Company operates on a fiscal year ending August 31. Fiscal 2020
quarter-end dates are November 30, 2019, February 29, 2020,
May 31, 2020 and August 31, 2020. Quarterly earnings are announced
approximately four weeks after the end of each quarter and audited
results are announced approximately seven 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 2020. These exhibits are signed by the Principal Executive
Officer and the Principal Financial Officer, respectively. Additionally,
on January 31, 2020, 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
EQ 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.
Monness, Crespi, Hardt & Co., Inc.
Kansas City Capital Associates
Stifel Nicolaus
William Blair & Co., LLC
Brian L. Ketcham
Senior Vice President and Chief Financial Officer
18135 Burke Street
Omaha, Nebraska 68022
(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.
2 0 2 0 A N N U A L R E P O R T
Lindsay Irrigation Solutions, LLC
214 East Second Street
Lindsay, Nebraska 68644
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LINDSAY USA
Lindsay Corporation
Global Headquarters
18135 Burke Street
Omaha, Nebraska 68022
Ph: 1-402-829-6800
Toll-free: 1-866-404-5049
www.lindsay.com
Lindsay Transportation Solutions, LLC
180 River Road
Rio Vista, California 94571 U.S.A.
Ph: 1-707-374-6800
Toll-free: 1-888-800-3691
www.lindsaytransportationsolutions.com
IRZ Consulting, LLC
500 North First Street
Hermiston, Oregon 97838 U.S.A.
Ph: 1-541-567-0252
www.irzconsulting.com
Elecsys International, LLC
846 North Mart-Way Court
Olathe, Kansas 66061 U.S.A.
Ph: 1-913-647-0158
www.elecsyscorp.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 B.V.
Weena 264, 4th Floor
Tower B
3012 NJ Rotterdam
The Netherlands
Ph: +31 (10) 870-1340
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
LINDSAY INTERNATIONAL
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.
Rua Gustavo Amburst, No 36
CONJ 1103 E 1104
Bairro Nova Campinas
CEP 13.092-106 Campinas
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-Tekirdag
Adres No : 3402119204
Turkey
Snoline S.P.A.
Via F. Baracca 19/23
20056 Trezzo sull’Adda
Milan, Italy
Ph: 39 02 909961
www.snoline.com
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