2023
ANNUAL REPORT
Lindsay Corporation (NYSE: LNN) is a leading global manufacturer and
distributor of irrigation and infrastructure equipment and technology. Established in 1955, the
company has been at the forefront of research and development of innovative solutions to
meet the food, fuel, fiber and transportation needs of the world’s rapidly growing population.
The Lindsay family of irrigation brands includes Zimmatic™ center pivot and lateral move
agricultural irrigation systems, FieldNET™ and FieldWise™ remote irrigation management
technology, FieldNET Advisor™ irrigation scheduling technology, and Industrial Internet of
Things (IIoT) solutions. Lindsay’s infrastructure segment manufactures equipment to improve
road safety and keep traffic moving on the world’s roads, bridges and tunnels.
FINANCIAL AND OPERATING HIGHLIGHTS
REVENUE
OPERATING INCOME
DILUTED EARNINGS PER SHARE
567.6
770.7
674.1
54.1
94.6
102.2
3.88
5.94
6.54
2021
2022
2023
2021
2022
2023
2021
2022
2023
(Dollars in millions, except per share amounts)
2023
2022
2021
OPERATING RESULTS
Operating revenues
Operating income
Net earnings
Effective tax rate
Diluted earnings per share
Cash dividends per share
FINANCIAL POSITION
Working capital
Total assets
Long-term debt, including current installments
Total shareholders’ equity
Invested capital 1
FINANCIAL MEASURES
Gross margin
Operating margin
Return on invested capital 2
Return on beginning shareholders’ equity 3
OTHER DATA
Diluted weighted average shares
Number of employees
674.1
102.2
72.4
27.9%
6.54
1.37
351.4
745.7
115.4
455.7
571.0
31.6%
15.2%
13.6%
18.4%
770.7
94.6
65.5
25.5%
5.94
1.33
316.2
710.7
115.6
393.4
508.9
25.8%
12.3%
14.6%
19.3%
567.6
54.1
42.6
15.5%
3.88
1.30
277.9
637.2
115.7
338.4
454.2
26.5%
9.5%
10.5%
14.3%
11,062
1,209
11,031
1,262
10,985
1,235
1. Defined as current and long-term debt plus shareholders’ equity.
2. Defined as operating income after-tax (using effective tax rate) divided by the average of beginning and ending invested capital.
3. Defined as net earnings divided by beginning of period shareholders’ equity.
TO OUR SHAREHOLDERS
Fiscal 2023 marked a year of solid performance,
and a year in which the Company also celebrated
its 25th year as a listed company on the New
York Stock Exchange. In the face of interest
rate headwinds, volatile commodity prices, and
lower U.S. net farm income projections, the
Company persevered to achieve new records
in net earnings and earnings per share, led by
record full year operating income and operating
margin in its irrigation business and overall gross
margin expansion. The Company’s improved
operating performance and effective working
capital management resulted in free cash flow
generation in excess of its objective for the
year, reaching 139 percent of net earnings. The
Company’s strong performance supported
its ability to pursue acquisitions, strategic
partnerships, and growth investments in
innovation, while empowering its employees,
dealers, and distributors to further the
Company’s clear and compelling mission: to
provide powerful irrigation, infrastructure, and
industrial technology solutions that conserve
natural resources, expand our world’s potential,
and enhance the quality of life for people around
the world.
We look forward to building on the strong
momentum that has been built over the last
few years. We are focused on the opportunities
ahead of us as we execute our innovation-driven
growth strategy and continue to address the
global megatrends that are driving market
demand and our business forward. What gives
our leadership team confidence is that we have
a consistent and clear strategy in place. This
strategy is centered on being the innovation
and market leader in our core irrigation and
infrastructure businesses through employee
empowerment and superior execution.
1
Alex Fraser Bridge, Greater Vancouver,
British Columbia
Assistant General Manager on Tobias
Musairiri farm in Zimbabwe
Solutions that Support Global Megatrends
There continues to be multiple attractive global megatrends that support
long-term, secular demand growth that Lindsay is uniquely positioned to
address and capitalize on. These include global food security, water scarcity
and the need for increased efficiency in water distribution, land availability,
mobility safety, aging infrastructure and increasing safety standards. We
also continue to see positive mid- and long-term market opportunities
driven by federal funding provided in the Infrastructure Investments
and Jobs Act in the United States. This funding will support necessary
investments in roadway infrastructure, and we believe this will support
growth in our infrastructure business.
Expanding our Global Reach and
Technology Penetration
Innovation and the integration of technology into our leading hardware
play a significant role when it comes to serving our customers across both
business segments. There is tangible value being created by technology
adoption worldwide, and Lindsay is at the forefront of introducing
scalability, speed and efficiency to the marketplace, while also enhancing
the value created for our customers.
We further expanded our reach this fiscal year through acquisitions and
strategic partnerships. In July of this year, we announced the acquisition of
FieldWise, LLC, a market leader in agricultural technology products, with
a focus on subscription-based, precision irrigation solutions. FieldWise™,
as part of our existing technology portfolio, will allow us to reach an
expanded set of irrigation technology customers, while simultaneously
accessing previously untapped growth markets and sales channels. We
also entered into strategic partnerships with Pessl Instruments and Ceres
Imaging, which together bring unique value-enhancing crop imaging,
intuitive data analytics, connected crop management tools, and remote
monitoring for growers. These investments strengthen Lindsay’s irrigation
market position, but also advance the Company’s integrated technological
capabilities and overall ability to reach a broader set of customers and
service providers globally.
2
Dealer in Romania testing the FieldNET connectivity
Embedding Shareholder Value for the Long-Term
Total revenues for the fiscal year ended August 31, 2023, totaled
$674.1 million, a 13 percent decrease compared to record revenues of
$770.7 million in fiscal year 2022. North America irrigation revenues
decreased 13 percent on a year-over-year basis, primarily a result of lower unit
sales volumes due to farmers delaying investment decisions and exceptionally
high storm damage replacement demand in the prior fiscal year. International
irrigation revenues decreased 11 percent, primarily from the completion of
a large Egypt project in the prior fiscal year that did not repeat, and lower
sales in Ukraine and Russia. Infrastructure revenues decreased 16 percent
versus the prior fiscal year, which was attributable to lower Road Zipper
System® sales compared to fiscal year 2022 due to projects in the prior year
that did not repeat. Despite a decline in revenue, our organizational focus
on pricing discipline and operational efficiencies combined to allow us to
expand our operating margins. Our consolidated operating income increased
8 percent, compared to the prior year, indicative of our strategic focus on
capturing strong profitability for our sales across all market environments.
This discipline allowed us to deliver record earnings per share of $6.54, an
increase of 10 percent compared to the prior fiscal year.
Lindsay’s board of directors increased the quarterly stock dividend by
3 percent in the third quarter, bringing a total of $15.1 million returned to
shareholders in fiscal 2023. Lindsay has consistently raised and continues to
pay its quarterly dividend over time as we look to reward shareholders with
distributions from our profits, while simultaneously investing in future growth.
Our balance sheet remains a key strength for our Company, and we firmly
believe it will help facilitate our strategic growth plans for fiscal 2024 and
beyond. We ended the year with $216.3 million in total available liquidity,
including $50.0 million of undrawn borrowing capacity on our revolving credit
facility. This, coupled with continued strong free cash flow generation, will
further enhance our ability to invest in growth opportunities and continue
executing our capital allocation strategy.
FY23 OPERATING
INCOME
+8%
FY23 EARNINGS
PER SHARE
+$10%
CAPITAL RETURNED TO
SHAREHOLDERS
$15.1 MILLION
3
Strong Commitment to Sustainable Practices
Lindsay is focused on moving our customers, strategic partners and communities
toward a more sustainable future. We are extremely proud of the progress we have
made on our mission to provide solutions that conserve natural resources, enhance
the quality of life for people, and expand our world’s potential. Sustainability serves
as a foundational element of our multi-faceted growth strategy and is embedded in
our business planning and operations. We are applying our long history of innovation
and commitment to sustainable practices to further invest in sustainable technologies,
improve and drive efficiencies across our operational footprint, empower and protect
our people, engage in our local communities, and operate with integrity.
At Lindsay, we are also committed to creating a culture of employee empowerment. In
fiscal 2023, Lindsay launched several initiatives to enhance our ability to recruit a diverse
workforce, retain our valuable employees, and protect the safety, health, and well-
being of our workers. This included launching our inaugural employee engagement
survey. Organizations with engaged employees report a 64 percent decrease in safety
incidents, an 18 percent increase in sales productivity and a 23 percent increase in
profitability (Gallup, 2023). We accomplished a 92% participation rate on this survey
with results that support our organization is actively engaged. Benchmarked against
approximately 5,375 companies, I’m proud to report that our organization has
demonstrated elevated performance regarding employee engagement, which has
helped create a more productive and positive work environment.
A Strong Future Ahead
Our senior leadership team is pleased with the Company’s performance in fiscal
2023, but even more excited about the opportunities for Lindsay moving forward.
As we continue to navigate an evolving, but ultimately improving, market backdrop,
we remain focused on long-term growth opportunities, with a sharp focus on
international markets. Our leadership in irrigation technology and the expanding
sales potential of our Road Zipper System® provide us with a unique competitive
advantage as we continue to enhance and optimize our core businesses.
I want to thank our employees for their personal commitment and great teamwork,
our customers for their continued trust in our products, and our shareholders for the
confidence and investment in Lindsay. We look forward to working on your behalf and
earning your support in the years ahead.
Sincerely,
Randy Wood
President & Chief Executive Officer
Gallup, Inc. (2023). What is Employee Engagement and How Do You Improve It?. Gallup. https://www.gallup.com/workplace/285674/improve-employee-engagement-workplace.aspx#
4
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, 2023
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:
Trading Symbol(s)
LNN
Title of each class
Common Stock, $1.00 par value
Name of each exchange on which registered
New York Stock Exchange, Inc.
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. Yes ☒ No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b). ☐
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 28, 2023 was $1,656,579,623.
As of October 16, 2023, 11,010,307 shares of the registrant’s Common Stock were outstanding.
Portions of the Proxy Statement pertaining to the Registrant’s annual stockholders' meeting to be held on January 9, 2024 are
incorporated by reference into Part III of this Annual Report on Form 10-K.
DOCUMENTS INCORPORATED BY REFERENCE
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.
[Reserved] ...................................................................................................................
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 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .......................
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 and Financial Statement Schedules ...............................................................
Item 16.
Form 10-K Summary ...................................................................................................
SIGNATURES
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28
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63
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3
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 firm with worldwide sales, distribution and manufacturing operations.
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 and large diameter steel tubing. 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, Industrial Internet of Things (“IIOT”) technology solutions and mobile device applications. The
Company’s primary domestic irrigation manufacturing facilities are located in Lindsay, Nebraska; Olathe, Kansas;
and Norfolk, Nebraska. Internationally, the Company has commercial and production operations in Brazil, France,
China, Türkiye (formerly Turkey), and South Africa, as well as distribution and sales operations in the Netherlands,
Egypt, Australia, and New Zealand. The Company also exports equipment from the U.S. and its global production
facilities 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, and
railroad signals and structures. The infrastructure segment also offers technology to monitor critical safety
infrastructure on roadways. 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™ brand. 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. In addition to whole systems, the Company manufactures and markets repair and replacement parts for its
irrigation systems and controls and large diameter steel tubing. Furthermore, the Company designs and manufactures
innovative IIOT 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.
4
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 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 brand names FieldNET® and
FieldWise®. FieldNET® is commercialized exclusively through Zimmatic® dealers while FieldWise® is used primarily
by non-Zimmatic® dealers and customers. These technologies enable 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
crop and irrigation science and expertise accumulated since 1955 with FieldNET’s cloud computing capabilities,
remote sensing functionality and machine learning to provide farmers with field-specific and crop-specific irrigation
recommendations.
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 majority
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. In new or developing international markets, demand
for irrigation systems can also be driven by food security concerns and the desire of some countries to become more
self-sufficient in food production.
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
5
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.
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 47 percent of the Company’s total irrigation segment revenues in both
fiscal year 2023 and 2022. The Company sells direct to consumers, as well as through an international dealer network,
and has production and sales operations serving the key markets in South America, Western and Eastern Europe,
China, Africa, Middle East, Australia, and New Zealand. The Company also exports irrigation equipment from its
global production facilities to other international markets.
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 market.
The international irrigation market includes participation and competition by the leading U.S. manufacturers, as well
as various regional manufacturers. The Company competes by continuously improving its products through ongoing
research and development activities, channel improvement initiatives, and its operational strategies. The Company
continues to strengthen irrigation product offerings through innovative technology such as GPS positioning and
guidance, variable rate irrigation, wireless irrigation management, and mobile device 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, moves
it laterally to the opposite side of the road, and sets it back down 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, motorists, pedestrians, cyclists and others using the roadway 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.
6
Crash Cushions – 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™. The crash cushions 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.
Rail Products – The Company also designs, engineers and manufactures a line of products for the railroad industry.
These products are designed to meet industry standards and include signals and lights, structures, foundations, junction
boxes and signs.
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 differs from country to country. The standardization in
performance requirements and acceptance criteria for highway safety devices adopted by the European Committee for
Standardization has lead to greater uniformity and a larger installation program. Prevention programs put in place in
various countries to lower highway traffic fatalities has 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. The Company competes
by striving to continuously improve its products through ongoing research and development activities. The Company
competes with certain products and companies in its crash cushion business, but has limited competition in its
moveable barrier line, as there is not another moveable barrier product today comparable to the Road Zipper System®.
However, the Company’s barrier product does compete with traditional “safety-shaped” concrete barriers and other
safety barriers.
Distribution Methods and Channels – The Company has dedicated production and sales operations in the United
States, Italy and the Netherlands. Sales efforts consist of both direct sales and sales programs managed by the
Company’s network of distributors and third-party representatives. The sales teams have responsibility for new
7
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, 2023, the Company had an order backlog of $78.7 million compared with $96.8 million at August
31, 2022. 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). While 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 2023, 2022, and 2021 were $18.8 million, $15.6 million, and $26.5 million,
respectively. Capital expenditures for fiscal 2024 are estimated to be between $35.0 million and $40.0 million,
including equipment replacement, productivity improvements, new product development and commercial growth
investments. An increase over recent levels of capital expenditures relates to modernization and productivity
improvements planned at certain manufacturing facilities. 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
The Company relies on a variety of intellectual property laws, confidentiality procedures, and contractual provisions
to protect its proprietary offerings and its brand.
The Company owns and, from time to time, licenses patents for many of its irrigation and infrastructure solutions, as
well as cellular communication techniques, cathodic protection measurement methods, and data compression and
transmission. The Company 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, the
Company's business is not dependent, to any material extent, on any single patent or group of patents.
The Company’s Zimmatic®, Perrot™, Road Zipper®, The Road Zipper System®, Quickchange® Moveable Barrier™,
ABSORB 350®, ABSORB-M™, FieldNET®, FieldNET Advisor®, FieldNET Crop Advisor®, FieldNET Irrigation
8
Advisor®, FieldNET VRI Advisor®, FieldNET Weather Advisor®, WatertrendSM, FieldWise®, Greenfield®,
GrowSmart® Z-TRAX®, TAU®, Universal TAU-II®, TAU-II-R™, TAU-B_NR™, TAU-M™, TAU-TUBE™, CableGuard™,
TESI™, SAB™, ArmorGuard™, PaveGuard™, DR46™, U-MAD™, Sabertooth®, RoadConnect™, ImpactAlert™, and
other trademarks, service marks, domain names, and copyrights are registered or applied for in the major markets in
which the Company sells its products.
HUMAN CAPITAL RESOURCES
The Company and its wholly-owned subsidiaries have 1,209 employees as of August 31, 2023. None of the
Company’s United States based 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. The Company believes it maintains
a sufficient number of skilled employees by offering competitive wages, benefits and training and development
programs.
We believe our commitment to empowering and developing our human capital resources is essential to becoming the
innovation and market leader in our core business. Empowering our people is one of our priority environmental,
social and governance (ESG) focus topics, highlighting three areas in particular: (1) workplace culture, (2) diversity,
equity and inclusion, and (3) employee health and safety.
Workplace Culture
We have built our culture on the foundation of the core values of leadership, integrity, collaboration, accountability,
and respect for others. Additionally, we have an annual evaluation process to measure and assess organizational health
and employee engagement. This focus on organizational health and employee engagement aims to create and sustain
employee empowerment, team collaboration, and support and service to the greater community.
Diversity, Equity and Inclusion
We are guided by our global Anti-Discrimination and Equal Employment Policy which delineates our commitment to
preventing any form of unlawful employee discrimination or harassment and our dedication to providing a workplace
where all employees, customers, partners and investors are treated with courtesy, respect, and dignity. We are
committed to building a diverse and inclusive workplace, guided by our core value of “respect for others,” and
reinforced in our Code of Business Conduct and Ethics.
Employee Health and Safety
The health and safety of our employees is an integral part of everything we do. We hold each other accountable to
actively promote a safe and healthy workplace, and report any situations that may pose a health, safety or security
risk. In Fiscal 2021 we implemented the Lindsay Safety System that we use to guide and develop our culture
focused on safety. The Lindsay Safety System is comprised of eight core elements:
•
•
•
•
•
•
Hazard ID / Assessment
Training
Audits
Policy/Procedures
Incident Investigation
Inspections
• Metrics
•
Recognition
We approach safety by looking at cultural change and engineering developments simultaneously. We conduct job
safety assessments, training and incident investigations. We also recognize and instill best practices in employee
behavior, wherever practicable. In addition, we create policies and make sure the appropriate infrastructure is in
place and maintained. Our audit and inspection processes validate best-in-class performance.
9
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
15, 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, Türkiye (formerly Turkey), and South Africa, as well as
distribution and sales operations in the Netherlands, Egypt, 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 38 and 37
percent of total consolidated Company revenues were conducted in currencies other than the U.S. dollar in fiscal 2023
and 2022, respectively. To reduce the uncertainty of foreign currency exchange rate movements on these sales and
purchase commitments conducted in local currencies, the Company monitors its risk of foreign currency fluctuations
and, at times, may enter into forward exchange or option contracts for transactions denominated in a currency other
than U.S. dollars.
In addition to the transactional foreign currency exposures mentioned above, the Company also has translation
exposure resulting from translating the financial statements of its international subsidiaries into U.S. dollars. In order
to reduce this translation exposure, the Company, at times, utilizes foreign currency forward contracts to hedge its net
investment exposure in its foreign operations. For information on the Company’s foreign currency risks, see Item 7A
of Part II of this report.
INFORMATION AVAILABLE ON THE LINDSAY WEBSITE
The Company makes available free of charge on its website homepage, under the tab “Investor Relations – SEC
Filings”, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy
Statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company electronically files such
material with, or furnishes it to, the Securities and Exchange Commission. Additionally, the Company's annual
sustainability report is available on the website under the tab "Investor Relations – Sustainability Report." 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 – Committees” and “Investor Relations – Ethics”:
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Audit Committee Charter
Corporate Governance and Nominating Committee Charter
Code of Business Conduct and Ethics
Corporate Governance Principles
Code of Ethical Conduct
Human Rights Policy
Employee Complaint Procedures for Accounting and Auditing Matters
Human Resources and Compensation Committee Charter
Supplier Code of Conduct
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 19, 2023.
Randy A. Wood
Brian L. Ketcham
J. Scott Marion
Gustavo E. Oberto
Brian J. Magnusson*
Eric R. Arneson*
Kelly M. Staup*
Lori L. Zarkowski*
Melissa G. Moreno*
Richard A. Harold*
Age
51
62
55
50
44
49
51
48
44
50
Position
President and Chief Executive Officer
Senior Vice President and Chief Financial Officer
President – Infrastructure
President – Irrigation
Senior Vice President – Strategy and Business Development
Senior Vice President – General Counsel and Secretary
Senior Vice President – Human Resources and Chief Diversity Officer
Chief Accounting Officer
Senior Vice President and Chief Information Officer
Senior Vice President – Global Operations
*
The employee is not an executive officer of the Registrant.
Mr. Randy A. Wood is the President and Chief Executive Officer of the Company, a position he has held since January
2021. Mr. Wood has also been a director of the Company since January 2021 and he is the only executive officer of
the Company serving on the Board of Directors. Between September 2020 and January 2021, Mr. Wood served as
the Chief Operating Officer of the Company. 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.
Mr. Brian L. Ketcham is the Senior Vice President and Chief Financial Officer of the Company, and has held such
positions since April 2016. Prior to joining the Company 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
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 the 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 provides IIOT
11
solutions and 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 from March 2016 to September 2019. 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. Brian J. Magnusson is the Company’s Senior Vice President – Strategy and Business Development and has held
such position since January 2023. Between May 2019 and January 2023, Mr. Magnusson served as the Company’s
Vice President, The Americas and held responsibility for the Company’s irrigation business in North and South
America. Between June 2018 and May 2019, Mr. Magnusson served as the Company’s Vice President, Technology
and Innovation. Previous to that role, Mr. Magnusson served as the Company’s Vice President, Technology, a position
he held starting with his arrival to the Company in 2015. Prior to joining the Company, Mr. Magnusson served as
Global Director, Tractor Portfolio Management at CNH Industrial for three years and spent the preceding four years
at Bain & Company advising executive teams at Fortune 500 corporations on strategic growth challenges.
Mr. Eric R. Arneson is the 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.
Ms. Kelly M. Staup is the 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.
Ms. Lori L. Zarkowski is the 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.
Dr. Melissa Moreno is the Senior Vice President and Chief Information Officer of the Company, a position she has
held since March 2021, when she joined the Company. Prior to joining the Company, Dr. Moreno served in a variety
of information technology roles with Gallup, a company that provides analytics and advisory services, from 2008 to
2021, most recently serving as Chief Information Officer, Cybersecurity and InfrastructureGallup from December
2018 to March 2021 and Executive Director, Cybersecurity and Infrastructure from February 2014 to December 2018.
Prior to joining Gallup, Dr. Moreno managed information technology functions at ConAgra Foods and Arthur
Andersen.
Mr. Richard A. Harold is the Senior Vice President – Global Operations of the Company, a position he has held since
April of 2022. Prior to joining the Company, Mr. Harold served from 2018 to 2022 with Rogers Corporation, a
company that provides specialty engineered materials, most recently as a Senior Director of Global Operations. Prior
to that time, Mr. Harold served from 2015 to 2017 as Senior Vice President of Operations at Arizona Nutritional
Supplements, and as Global Vice President of Legacy and Specialty Businesses at IDEX Corporation from 2013 to
2015. Prior to joining IDEX Corporation, Mr. Harold worked for Exterran Holdings, Inc. as Senior Manufacturing
Manager from 2010 to 2013.
12
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.
Risks Related to Business and Industry
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 yields and the resulting revenue for
farmers. As commodity 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 commodity 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.
While climate change could shift global cropping practices and open new markets for irrigated agriculture, the
changing short-term weather conditions or more prolonged climate change could adversely impact the Company’s
business and operations. The Company’s irrigation revenues are highly dependent on the agricultural industry and
weather conditions. Weather conditions, particularly leading up to the planting and early growing season, can
significantly affect the purchasing decisions of consumers of irrigation equipment. An increased frequency or duration
of extreme weather conditions, or other factors which may be the result of climate change, could adversely impact the
Company's business and operations. For example, 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.
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.
The extent of the effects of climate change, including any related compliance requirements, are uncertain but may
adversely impact the Company’s operations through the availability and cost of raw materials, increased compliance
costs, and increased costs to safeguard the Company’s facilities and assets from disruptions or damage.
13
The Company’s infrastructure revenues are highly dependent on government funding of transportation projects
and subject to compliance with government regulations. The demand for the Company’s infrastructure products
depends to a large degree on the amount of government spending authorized to improve road and highway systems.
For example, the U.S. government funds highway and road improvements through the Federal Highway Trust Fund
Program and matching funding from states may be required as a condition of federal funding. If highway funding is
reduced or delayed, it may reduce demand for the Company’s infrastructure products.
In order to be eligible for government funding or reimbursement, the Company’s infrastructure products are generally
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, standards, or expectations 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. The Company publishes
an annual Sustainability Report, which includes information about the Company’s environmental, social, and
governance (“ESG”) activities and may result in increased investor, media, and employee attention to such initiatives.
Compliance with applicable laws and regulations and the pursuit of other ESG-related objectives 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 2023, as more fully described in Note 15,
Commitments and Contingencies, to the Company’s consolidated financial statements.
The Company’s international sales efforts and profit margins are affected by international trade barriers and
subject the Company to additional compliance obligations. The Company’s international sales efforts and profit
margins are affected by international trade barriers, including governmental policies on tariffs, taxes, import or export
licensing requirements and trade sanctions. In recent years, certain of the components required for the manufacture
of the Company's products have been or may be impacted by tariffs. Other international trade disputes, changes to or
termination of existing international trade agreements, treaties or policies (e.g. the United States-Mexico-Canada
Agreement), or imposition of trade protection measures by certain countries in favor of their local producers or
competing products 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 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.
14
Risks Related to Legal Proceedings
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 15, 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 believes it maintains adequate insurance,
an unusually large liability claim or a string of claims could potentially exceed the Company’s available insurance
coverage. In addition, the availability of, and the Company’s ability to collect on, insurance coverage can be subject
to factors beyond the Company’s control. For example, any accident, incident, or lawsuit involving the Company, its
products specifically, or the industries in which the Company operates generally, even if the Company is fully insured,
contractually indemnified, or not held to be liable, could significantly affect the cost and availability of insurance to
the Company in the future.
If any of the Company’s third-party insurers fail, cancel, or refuse coverage, or otherwise are unable to provide the
Company with adequate insurance coverage, then the Company’s overall risk exposure and operational expenses
would increase and the management of the Company’s business operations would be disrupted.
Further, as insurance policies expire, increased premiums for renewed or new coverage, if such coverage can be
secured, may increase the Company’s insurance expense and/or require that the Company increase its self-insured
retention or deductibles. The Company maintains primary coverage and excess coverage policies. If the number of
claims or the dollar amounts of any such claims rise in any policy year, the Company could suffer additional costs
associated with accessing its excess coverage policies. Also, an increase in the loss amounts attributable to such claims
could expose the Company to uninsured damages if the Company was unable or elected not to insure against certain
claims because of increased premiums or other reasons.
The Company’s infrastructure products are installed along roadways in inherently dangerous applications.
Accidents involving the Company’s infrastructure products could reduce demand for such products and expose
the Company to significant damages and reputational harm. The Company is currently defending a number of
product liability lawsuits involving the Company’s X-Lite® end terminal. 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,
15
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.
General Risks
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 (including the extent of
surges, mutations, or strains of the outbreak and the efficacy of vaccination and other efforts to contain the outbreak
or treat its effects); 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; the effect on the health, wellness, and productivity of the Company’s employees; 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 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 international sales are highly dependent on foreign market conditions. International revenues are
primarily generated from Australia, New Zealand, Canada, Western and Eastern Europe, Mexico, the Middle East,
Africa, China, 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. During fiscal 2022,
sales to Russia and Belarus were paused indefinitely due to the Russian invasion of Ukraine. Sales with Russian,
Ukrainian, and Belarusian customers have historically represented less than 5% of consolidated revenues.
Commercial activities in Russia and Belarus remain on hold while hostile actions against Ukraine continue. The
collectability of international 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.
16
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.
Changes in interest rates could reduce demand for the Company’s products. Rising interest rates could have a
dampening effect on overall economic activity and/or the financial condition of the Company’s customers, either or
both of which could negatively affect customer demand for the Company’s products and customers’ ability to repay
obligations to the Company. An increase in interest rates could also make it more difficult for customers to cost-
effectively fund the purchase of new equipment, which could adversely affect the Company’s sales.
The Company’s consolidated financial results are reported in U.S. dollars while certain assets and other reported
items are denominated in the currencies of other countries, creating currency translation risk. The reporting
currency for the Company’s consolidated financial statements is the U.S. dollar. Certain of the Company’s assets,
liabilities, expenses and revenues are denominated in other countries’ currencies. Those assets, liabilities, expenses
and revenues are translated into U.S. dollars at the applicable exchange rates to prepare the Company’s consolidated
financial statements. Therefore, increases or decreases in exchange rates between the U.S. dollar and those other
currencies affect the value of those items as reflected in the Company’s consolidated financial statements. Substantial
fluctuations in the value of the U.S. dollar compared to other currencies could have a significant effect on the
Company’s results.
Security breaches and other disruptions to the Company’s information technology infrastructure could interfere
with its operations and could compromise the Company’s and its customers’ and suppliers’ information, exposing
the Company to liability that could cause its business and reputation to suffer. In the ordinary course of business,
the Company relies upon information technology networks and systems to process, transmit and store electronic
information, and to manage or support a variety of business functions, including supply chain, manufacturing,
distribution, invoicing and collection of payments. The Company uses information technology systems to record,
process and summarize financial information and results of operations for internal reporting purposes and to comply
with regulatory financial reporting, legal and tax requirements. Additionally, the Company collects and stores
sensitive data, including intellectual property, proprietary business information and the proprietary business
information of customers and suppliers, as well as personally identifiable information of customers and employees, in
data centers and on information technology networks. The secure operation of these networks and the processing and
maintenance of this information is critical to the Company’s business operations and strategy. Despite security
measures and business continuity plans, the Company’s information technology networks and infrastructure may be
vulnerable to damage, disruptions or shutdowns due to, among other reasons, attacks by hackers or breaches due to
employee error or malfeasance or other disruptions during the process of upgrading or replacing computer software
or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other
catastrophic events. The occurrence of any of these events could compromise the Company’s networks, and the
information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other
loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting
the privacy of personal information, disrupt operations, and damage the Company’s reputation, which could adversely
affect the Company’s business.
ITEM 1B — Unresolved Staff Comments
None.
17
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
Omaha, Nebraska
Lindsay, Nebraska
Own/
lease
Lease
Own
Irrigation
Irrigation
Irrigation
Irrigation
Irrigation
Irrigation
Own
Corlu, Türkiye
Lease
Tianjin, China
Own
La Chapelle, France
Bellville, South Africa Lease
Own
Mogi Mirim, Sao
Paulo, Brazil
Olathe, Kansas
Own
Square
Lease
expiration
2034
N/A
feet
Property description
55,000 Corporate headquarters
300,000 Principal U.S. manufacturing plant consists of
eight separate buildings located on 122 acres
N/A
2027
N/A
2027
N/A
283,000 Manufacturing plant for irrigation products
163,000 Manufacturing plant for irrigation products
72,000 Manufacturing plant for irrigation products
71,000 Manufacturing plant for irrigation products
67,000 Manufacturing plant for irrigation products
N/A
60,000 Manufacturing plant for machine-to-machine
products
Irrigation
Norfolk, Nebraska
Own
N/A
13,400 Manufacturing plant for on-farm telemetry
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
devices
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 15, 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 15, Commitments and Contingencies, to
the Company’s consolidated financial statements.
ITEM 4 — Mine Safety Disclosures
Not applicable.
18
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, 2023, there were approximately 139 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, 2023, 2022, and 2021. The remaining amount available under the repurchase program was $63.7
million as of August 31, 2023.
Dividends
The Company paid a total of $15.1 million and $14.6 million in dividends during fiscal 2023 and 2022, 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.
19
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, 2023. 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, 2018 and the graph shows its relative performance through August 31, 2023.
Lindsay Corporation
S&P SmallCap 600 Index
S&P 600 Construction
Machinery & Heavy Trucks
8/18
100.00
100.00
8/19
93.47
84.94
8/20
107.22
84.48
8/21
178.30
130.07
8/22
175.17
114.30
8/23
136.92
120.62
100.00
78.70
89.11
113.56
109.30
149.76
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
ITEM 6 — [Reserved]
20
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 irrigation production facilities are located in the United
States, Brazil, Türkiye (formerly Turkey), France, China and South Africa, and also has distribution and sales
operations in the Netherlands, Egypt, Australia, and New Zealand. The Company also manufactures and markets,
through distributors and direct sales to customers, various infrastructure products, including moveable barrier systems
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, Brazil and Türkiye (formerly Turkey). In addition, the Company’s infrastructure
segment produces railroad signals and structures.
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, food security concerns 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 November 2021, the Infrastructure Investment and Jobs Act was enacted and included
a five-year reauthorization of the Fixing America's Surface Transportation (FAST) Act. This legislation also
introduced $110 billion in incremental federal funding planned for roads, bridges, and other transportation projects,
which the Company anticipates may translate into higher demand for its transportation safety products.
21
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.
New Accounting Standards Issued
See Note 2, New Accounting Pronouncements, to the Company’s consolidated financial statements for information
regarding recently issued accounting pronouncements.
Critical Accounting 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:
Warranties
The Company’s accounting policy on accounting for its product warranties is critical because it includes significant
judgments and estimates by management about the amount, nature, and timing of future product-related warranty
costs.
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. 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.
The Company periodically reviews the assumptions used to determine the liabilities for product warranties and adjusts
its assumptions based upon factors such as actual failure rates and cost experience. A number of factors could affect
actual failure rates and cost experience, including the amount and timing of new product introductions, changes in
manufacturing techniques or locations, components or suppliers used. If actual costs differ from the estimates, an
adjustment may be made to the product warranty liability.
Financial Overview and Outlook
Operating revenues in fiscal 2023 were $674.1 million, a 13 percent decrease compared to $770.7 million in the prior
year. Irrigation segment revenues decreased 12 percent to $586.0 million and infrastructure segment revenues
decreased 16 percent to $88.1 million. Net earnings for fiscal 2023 increased 11 percent to $72.4 million or $6.54 per
diluted share compared with $65.5 million or $5.94 per diluted share in the prior year. Despite lower revenues,
improved net earnings resulted from gross margin improvement primarily from improved price realization, lower
inflationary impact on input costs and a more favorable margin mix of international revenues.
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, include the following primary drivers:
• Agricultural commodity prices - During fiscal 2023, agricultural commodity prices remained volatile as they
continued to be impacted by weather conditions in various regions of the world, China's fluctuating demand
for U.S. exports, and the continued conflict between Ukraine and Russia. Corn prices in August 2023 were
approximately 32 percent lower and soybean prices approximately 9 percent lower compared to August 2022.
• Net farm income - As of August 2023, the U.S. Department of Agriculture (the “USDA”) estimated U.S.
2023 net farm income to be $141.3 billion, a decrease of 22.8 percent from the USDA’s final U.S. 2022 net
farm income of $183.0 billion. The majority of this projected decrease is coming from a reduction in
22
government support payments while cash receipts for crops is projected to decrease by 4 percent. Following
record net farm income in 2022, projected net farm income in 2023 remains at a relatively high level
historically.
• Weather conditions – Demand for irrigation equipment is often positively affected by storm damage and
prolonged periods of drought conditions as producers look for ways to reduce the risk of low crop production
and crop failures. Conversely, demand for irrigation equipment can be negatively affected during periods of
more predictable or abundant natural precipitation.
• Governmental policies - A number of government laws and regulations can impact the Company’s business,
including:
o The Agricultural Improvement Act of 2018 (the “Farm Bill”) was signed into law in December 2018
and provides a degree of certainty to growers, including funding for the Environmental Quality
Incentives Program, which provides financial assistance to farmers to implement conservation
practices, and is frequently used to assist in the purchase of center pivot irrigation systems. The
Farm Bill will expire by the end of calendar 2023, when it is expected to be either extended or
replaced by new legislation. However, there can be no assurance that the Farm Bill will be extended
or renewed or that any such legislation will provide subsidies at the same levels as are currently
provided under the Farm Bill.
o Changes to U.S. income tax laws 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 initially allowing 100 percent of the cost of
equipment to be treated as an expense in the year of purchase rather than having it amortized over
its useful life. This benefit is being phased out by 20 percent per year over a five-year period,
beginning in 2023. For calendar 2023, the allowable deduction is 80 percent of the cost of
equipment.
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 June 21,
2023, the Environmental Protection Agency ("EPA") announced a final rule setting biofuel volume
requirements for the Renewable Fuels Standard (RFS) program for 2023, 2024 and 2025. The final
volume requirements reflect an increase in total gallons of renewable fuels in each successive year.
o Many international markets are affected by government policies such as subsidies and other
agriculturally related incentives. While these policies can have a significant effect on individual
markets, they typically do not have a material effect on the consolidated results of the Company.
• Currency –The value of the U.S. dollar fluctuates in relation to the value of currencies in a number of
countries to which the Company exports products and maintains local operations. The strengthening of the
dollar increases the cost in the local currency of the products exported from the U.S. into these countries and,
therefore, could negatively affect the Company’s international sales and margins. In addition, the U.S. dollar
value of sales made in any affected foreign currencies will decline as the value of the dollar rises in relation
to these other currencies.
Demand for irrigation equipment in the U.S. has declined over the prior year, as farmer sentiment has been negatively
impacted by the projected decrease in net farm income, higher interest rates and concerns regarding inflation and
general economic uncertainty. This has resulted in customers delaying capital investment decisions. The Company
believes this may shift demand for irrigation equipment to later in the calendar year as customers become better-
positioned to determine their level of profitability for the current crop year. During this period the Company has been
able to maintain its pricing while inflationary pressure on raw material and logistics costs have moderated. The
Company expects to continue to actively track these circumstances and will monitor its prices in connection with
changes in raw material and other costs.
The most significant opportunities for growth in irrigation sales over the next several years continue to be in
international markets where irrigation use is less developed and demand is driven not only by commodity prices and
farm income, but also by food security, water scarcity and population growth. While international irrigation markets
remain active with opportunities for further development and expansion, regional political and economic factors,
23
including armed conflict, currency conditions and other factors can create a challenging environment. The Company
continues to monitor the Ukraine and Russia conflict for both short and long-term implications and has suspended
new business activity in Russia and Belarus since February 2022. Sales with Russian, Ukrainian, and Belarusian
customers have historically represented less than 5% of consolidated revenues. Additionally, international results are
heavily dependent upon project sales which tend to fluctuate and can be difficult to forecast accurately.
The infrastructure business continues to be driven by the Company's transportation safety products, the demand for
which largely depends on government spending for road construction and improvements. The enactment of the
Infrastructure Investment and Jobs Act in November 2021 marked the largest infusion of federal investment into
infrastructure projects in more than a decade. This legislation introduced $110 billion in incremental federal funding,
planned for roads, bridges, and other transportation projects, which the Company anticipates may translate into higher
demand for its transportation safety products as funds are appropriated and states begin to implement projects. A
limited positive impact was experienced in fiscal 2023 results and a more positive impact is expected in fiscal 2024
and beyond.
As of August 31, 2023, the Company had an order backlog of $78.7 million compared with $96.8 million at August
31, 2022. The irrigation and infrastructure backlogs are lower compared to the prior year. The Company’s backlog
can fluctuate from period to period due to the seasonality, cyclicality, timing, and execution of contracts. Backlog
typically represents long-term projects as well as short lead-time orders; therefore, it is generally not a good indication
of the revenues to be realized in succeeding quarters.
Results of Operations
The following “Fiscal 2023 Compared to Fiscal 2022” section presents an analysis of the Company’s consolidated
operating results displayed in the Consolidated Statements of Earnings and should be read together with the
information in Note 18, Industry Segment Information, to the consolidated financial statements. A discussion
regarding our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 can be found in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of our
Annual Report on Form 10-K for the fiscal year ended August 31, 2022, filed with the Securities and Exchange
Commission (“SEC”) on October 20, 2022, which is available free of charge on the SEC’s website at www.sec.gov
and the Company’s website at www.lindsay.com under the tab “Investor Relations – SEC Filings.”
Fiscal 2023 Compared to Fiscal 2022
The following table provides highlights for fiscal 2023 compared with fiscal 2022:
($ 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
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,
2023
2022
Percent
increase
(decrease)
$
$
$
$
$
$
$
$
$
$
$
$
674,084
461,069
213,015
$
$
$
31.6 %
770,743
571,565
199,178
25.8 %
110,831
102,184
$
$
104,535
94,643
15.2 %
(1,809 ) $
$
27,996
27.9 %
72,379
$
12.3 %
(6,775 )
22,399
25.5 %
65,469
586,031
121,969
$
$
665,829
105,763
20.8 %
15.9 %
88,053
12,067
$
$
13.7 %
104,914
18,328
17.5 %
(13%)
(19%)
7%
6%
8%
(73%)
25%
11%
(12%)
15%
(16%)
(34%)
(1)
(2)
Includes corporate general and administrative expenses of $31.8 million and $29.4 million for fiscal 2023 and 2022, respectively.
See Note 18 Industry Segment Information, to the consolidated financial statements, for further details regarding segments.
24
Revenues
Operating revenues in fiscal 2023 were $674.1 million, a decrease of 13 percent or $96.7 million, compared to $770.7
million in fiscal 2022. Irrigation segment revenues of $586.0 million, increased $79.8 million, or 12 percent, and
infrastructure revenues increased $16.9 million, or 16 percent, compared to the prior fiscal year. The irrigation
segment provided 87 percent of Company revenue in fiscal 2023 as compared to 86 percent in fiscal 2022.
North America irrigation revenues in fiscal 2023 were $309.5 million a decrease of 13 percent or $46.1 million, from
$355.7 million in fiscal 2022. The decrease resulted from lower unit sales volume which was partially offset by higher
average selling prices compared to the prior year. Lower unit sales volume in the current year resulted primarily from
farmers delaying capital investment decisions due to a number of factors, including a projected decrease in net farm
income, higher interest rates and concerns regarding inflation, and general economic uncertainty, as well as a higher
level of storm damage replacement demand in the prior year. Higher average selling prices compared to the prior year
resulted from the pass through of higher raw material and other costs to customers.
International irrigation revenues in fiscal 2023 were $276.5 million, a decrease of 11 percent or $33.7 million, from
$310.1 million in fiscal 2022. The decrease resulted primarily from the completion of a large Egypt project in the prior
year that did not repeat and from lower sales in Ukraine, Russia and Australia. This decrease was partially offset by
higher sales in South America. The current year was also impacted by the unfavorable effects of foreign currency
translation of approximately $3.9 million compared to the prior fiscal year.
Infrastructure segment revenues in fiscal 2023 were $88.1 million a decrease of $16.9 million, or 16 percent, from
$104.9 million in fiscal 2022. The decrease resulted primarily from lower Road Zipper System sales compared to the
prior year as there were a number of projects in the prior year that did not repeat. This decrease was partially offset
by an increase in Road Zipper System lease revenue and higher sales of road safety products compared to the prior
year.
Gross Profit
Gross profit was $213.0 million for fiscal 2023, an increase of $13.8 million, or 7 percent, compared to $199.2 million
in fiscal 2022. Gross margin was 31.6 percent of sales for fiscal 2023 compared to 25.8 percent of sales for fiscal
2022. Increased gross profit and gross margin in irrigation resulted primarily from improved price realization, lower
inflationary impact on input costs and a more favorable margin mix of international revenues, which more than offset
the impact of lower revenues compared to the prior year. Prior year irrigation gross margin was negatively impacted
by higher raw material costs, which included approximately $7.8 million in additional expense resulting from the
effect of the LIFO method of accounting for certain inventory, compared to a reduction of expense of approximately
$2.0 million due to the use of LIFO in fiscal 2023. In addition, costs of approximately $1.8 million were incurred in
the prior year related to non-recurring factory maintenance and outside consulting services that did not repeat.
Decreased gross profit and gross margin in infrastructure resulted primarily from lower Road Zipper System sales
compared to the prior year. This decrease was partially offset by improved price realization and lower inflationary
impact on input costs compared to the prior year.
Operating Expenses
The Company’s operating expenses of $110.8 million for fiscal 2023 increased $6.3 million, or 6 percent, compared
to fiscal 2022 operating expenses of $104.5 million. The increase resulted primarily from higher employee incentive
expense attributable to improved business results, increased spending on new product development and increased
personnel costs compared to the prior year.
Other Expense, net
Other expense of $1.8 million for fiscal 2023 decreased $5.0 million compared to $6.8 million in fiscal 2022. The
decrease resulted from lower interest expense, higher interest income and a more favorable impact from foreign
currency transaction changes compared to the prior year.
Income Taxes
The Company recorded income tax expense of $28.0 million and $22.4 million for fiscal 2023 and 2022, respectively.
The effective tax rate was 27.9 percent and 25.5 percent for fiscal 2023 and 2022, respectively. The higher effective
income tax rate in fiscal 2023 reflects an increased proportion of earnings in higher rate foreign jurisdictions, primarily
Brazil, compared to the prior year.
25
Net Earnings
Net earnings for fiscal 2023 were $72.4 million, or $6.54 per diluted share, compared to $65.5 million, or $5.94 per
diluted share, for fiscal 2022.
Liquidity and Capital Resources
The Company’s cash, cash equivalents, and marketable securities totaled $166.3 million at August 31, 2023 compared
with $116.5 million at August 31, 2022. The increase resulted primarily from an increase in net earnings and a
reduction in inventories, along with other changes 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 composed 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. In the normal course of business, the Company enters into contracts and
commitments which obligate the Company to make future payments. 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. 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 $64.6 million and $49.0
million as of August 31, 2023, and 2022, 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 $351.4 million at August 31, 2023 as compared with $316.2 million at August 31, 2022.
Cash flows provided by operating activities totaled $119.7 million during the year ended August 31, 2023 compared
to $3.0 million provided by operating activities during the prior fiscal year. An increase in cash flows provided by
operating activities resulted from an increase in net earnings compared to the prior year, a reduction in inventories
compared to an increase in the prior year, and other changes in assets and liabilities compared to the prior year.
Cash flows used in investing activities totaled $47.4 million during the year ended August 31, 2023 compared to $9.0
million during the prior fiscal year. The majority of the increase resulted from $30.8 million for the acquisition of a
business in fiscal 2023. Capital spending was $18.8 million in fiscal 2023 compared to $15.6 million in fiscal 2022.
Cash flows used in financing activities totaled $17.3 million during the year ended August 31, 2023 compared to
$12.7 million during the prior fiscal year. The change was primarily the result of lower proceeds from the exercise of
stock options compared to the prior year. Cash flows used in financing activities consists primarily of dividend
payments. Dividends paid in fiscal 2023 increased by $0.5 million over fiscal 2022.
Capital Allocation Plan
The Company’s capital allocation plan is to continue investing in revenue and earnings growth, combined with a
defined process for enhancing returns to stockholders. Priorities for the use of cash under the Company’s capital
allocation plan include:
•
Investment in organic growth including capital expenditures and expansion of international markets,
• Synergistic acquisitions that provide attractive returns to stockholders,
• Dividends to stockholders, along with expectations to increase dividends over time, and
• Opportunistic share repurchases taking into account cyclical and seasonal fluctuations.
Capital Expenditures
Capital expenditures for fiscal 2024 are expected to be between $35.0 million and $40.0 million, including equipment
replacement, productivity improvements, new product development and commercial growth investments. An increase
over recent levels of capital expenditures relates to modernization and productivity improvements planned at certain
26
manufacturing facilities. 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 2023, the Company paid cash dividends of $1.37 per common share or $15.1 million to stockholders as
compared to $1.33 per common share or $14.6 million to stockholders in fiscal 2022.
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, 2023, 2022 and 2021. The remaining amount available under the repurchase program was $63.7 million as of
August 31, 2023.
Long-Term Borrowing Facilities
Senior Notes. The Company has outstanding $115.0 million in aggregate principal amount of unsecured 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 August 26, 2026. The Company intends to use borrowings under the Revolving Credit Facility for working
capital purposes and to fund future acquisitions. At August 31, 2023 and 2022, 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, 2023, the Company had the ability to borrow up to $50.0 million under the Revolving Credit Facility. The
Revolving Credit Facility may be increased by up to an additional $50.0 million at any time, subject to additional
commitment approval. The Revolving Credit Facility was amended to transition the benchmark rate from the London
Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). Borrowings under the
Revolving Credit Facility bear interest at a variable rate equal to the SOFR plus a margin of between 100 and 210
basis points depending on the Company’s leverage ratio then in effect (which resulted in a variable rate of 6.66 percent
at August 31, 2023), 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 on the unused portion of the Revolving Credit Facility. The fee is between 0.125 percent and 0.2 percent (0.125
percent at August 31, 2023) on the unused balance depending on the Company’s leverage ratio then in effect.
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 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, 2023 and 2022, the Company was in compliance with all financial
loan covenants contained in its credit arrangements in place as of each of those dates.
Inflation
The Company is subject to the effects of changing prices. During fiscal 2022, the Company experienced pricing
volatility for purchases of certain commodities, in particular steel and zinc products used in the production of its
products, in addition to the availability of labor and logistics. In fiscal 2023, the Company observed steel input cost
stabilization and while the overall 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. However, competitive market pressures may affect the Company’s ability to pass price adjustments along
to its customers.
27
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, 2023, the Company’s derivative counterparty had an investment grade credit rating.
The Company has manufacturing operations in the United States, Brazil, France, Italy, China, Türkiye (formerly
Turkey), and South Africa. The Company has sold products throughout the world and purchases certain of its
components from third-party international suppliers. Export sales made from the United States are principally U.S.
dollar denominated. At times, export sales may be denominated in a currency other than the U.S. dollar. A majority
of the Company’s revenue generated from operations outside the United States is denominated in local currency.
Accordingly, these sales are not typically subject to significant foreign currency transaction risk. The Company’s
most significant transactional foreign currency exposures are the Euro, the Brazilian real, the South African rand, 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 earnings for the year ended August 31, 2023, 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 $5.8 million.
In order to reduce exposures related to changes in foreign currency exchange rates, the Company, at times, may enter
into forward exchanges, option contracts, or cross currency swaps 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. At August 31, 2023, the Company had an outstanding foreign
currency forward contract to sell a notional amount of 225.3 million South African rand at fixed prices to settle during
the next fiscal quarter.
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, 2023 and August 31, 2022, 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, 2023, and the related notes and financial statement schedules (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, 2023 and August 31, 2022, and the results of its operations and its cash
flows for each of the years in the three-year period ended August 31, 2023, 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, 2023, 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 19, 2023 expressed an unqualified
opinion on the effectiveness of the Company’s internal control over financial reporting.
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.
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 a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Evaluation of product warranty accrual
As discussed in Notes 1 and 17 to the consolidated financial statements, the Company’s product warranty
accrual as of August 31, 2023 was $14.5 million. The Company warrants a portion of its products against
certain manufacturing and other defects and estimates the amount of warranty accrual based on various
factors, including historical warranty costs and sales.
We identified the evaluation of historical claim experience used to estimate the domestic product warranty
accrual for the Irrigation segment as a critical audit matter. Subjective auditor judgment was required to
29
evaluate the relevance of historical claim experience in the determination of the estimated product warranty
accrual.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the
design and tested the operating effectiveness of certain internal controls related to the product warranty
accrual process, including controls related to the relevance and reliability of historical claim data and the
review of significant assumptions used in developing the estimate. We assessed the estimated cost of future
claims used in the estimation of product warranty liability by comparing them to the Company’s underlying
historical claims data that was assessed for relevance and reliability. To assess management’s ability to
estimate the product warranty accrual, we compared the Company’s historical product warranty estimates to
actual claim results.
/s/ KPMG LLP
We have served as the Company’s auditor since 2001.
Omaha, Nebraska
October 19, 2023
30
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
($ and shares in thousands, except per share amounts)
Operating revenues
Cost of operating revenues
Gross profit
$
2023
674,084 $
461,069
213,015
Years ended August 31,
2022
770,743 $
571,565
199,178
2021
567,646
417,441
150,205
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
Net earnings
Earnings per share:
Basic
Diluted
Shares used in computing earnings per share:
Basic
Diluted
36,201
56,412
18,218
110,831
33,920
55,470
15,145
104,535
30,816
51,923
13,359
96,098
102,184
94,643
54,107
(3,788 )
2,783
(804 )
(1,809 )
(4,269 )
622
(3,128 )
(6,775 )
(4,751 )
1,083
(53 )
(3,721 )
100,375
87,868
50,386
27,996
22,399
7,814
$
72,379 $
65,469 $
42,572
$
$
6.58 $
6.54 $
5.97 $
5.94 $
3.91
3.88
11,003
11,062
10,965
11,031
10,886
10,985
Cash dividends declared per share
$
1.37 $
1.33 $
1.30
See accompanying notes to consolidated financial statements.
31
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in thousands)
Net earnings
Other comprehensive (loss) income:
Defined benefit pension plan adjustment, net of tax
Foreign currency translation adjustment, net of
hedging activities and tax
Unrealized gain (loss) on marketable securities, net of tax
Total other comprehensive income (loss), net of tax
(benefit) expense of ($855), $1,399, and $409
Total comprehensive income
See accompanying notes to consolidated financial statements.
2023
Years ended August 31,
2022
2021
$
72,379 $
65,469 $
42,572
306
(24 )
181
566
385
(3,839 )
(267 )
2,345
(91 )
463
72,842 $
(3,540 )
61,929 $
2,639
45,211
$
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 $5,048 and $4,118, respectively
Inventories, net
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; 19,094 and
19,063 shares issued at August 31, 2023 and 2022, 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,
2023
August 31,
2022
$
$
$
160,755
5,556
144,774
155,932
20,467
487,484
99,681
27,719
83,121
17,036
10,885
19,734
745,660
44,278
226
91,604
136,108
4,382
115,164
17,689
689
15,977
290,009
105,048
11,460
138,200
193,776
28,617
477,101
94,472
18,208
67,130
19,181
9,313
25,248
710,653
60,036
222
100,684
160,942
4,892
115,341
19,810
1,054
15,256
317,295
—
—
19,094
98,508
636,297
(277,238 )
(21,010 )
455,651
745,660
$
19,063
94,006
579,000
(277,238 )
(21,473 )
393,358
710,653
$
$
$
$
33
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ and shares in thousands, except per share amounts)
Shares of
common
stock
18,918
Shares of
treasury
stock
8,083
Common
stock
$ 18,918
Capital in
excess of
stated
value
$
77,686
Retained
earnings
$ 499,724
Treasury
stock
$ (277,238 )
$
Accumulated
other
comprehensive
loss,
net
Total
shareholders’
equity
(20,572 )
$
298,518
Balance at August 31, 2020
Comprehensive income:
Net earnings
Other comprehensive income
Total comprehensive income
Cash dividends ($1.30) per share
Issuance of common shares under
share compensation plans, net
Share-based compensation expense
Balance at August 31, 2021
Comprehensive income:
Net earnings
Other comprehensive loss
Total comprehensive income
Cash dividends ($1.33) per share
Issuance of common shares under
share compensation plans, net
Share-based compensation expense
Balance at August 31, 2022
Comprehensive income:
73
73
18,991
8,083
$ 18,991
$
72
72
19,063
8,083
$ 19,063
$
Net earnings
Other comprehensive loss
Total comprehensive income
Cash dividends ($1.37) per share
Issuance of common shares under
share compensation plans, net
Share-based compensation expense
Balance at August 31, 2023
See accompanying notes to consolidated financial statements.
19,094
8,083
31
31
$ 19,094
42,572
2,639
45,211
(14,166 )
2,696
6,186
338,445
65,469
(3,540 )
61,929
(14,599 )
2,125
5,458
393,358
72,379
463
72,842
(15,082 )
(1,996 )
6,529
455,651
42,572
(14,166 )
2,639
2,623
6,186
86,495
2,053
5,458
94,006
$ 528,130
$ (277,238 )
$
(17,933 )
$
65,469
(14,599 )
(3,540 )
$ 579,000
$ (277,238 )
$
(21,473 )
$
72,379
(15,082 )
463
(2,027 )
6,529
98,508
$
$ 636,297
$ (277,238 )
$
(21,010 )
$
34
Lindsay Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
Adjustments to reconcile net earnings to net cash provided by operating
activities:
2023
Years ended August 31,
2022
2021
$
72,379
$
65,469
$
42,572
Depreciation and amortization
Provision for uncollectible accounts receivable
Deferred income taxes
Share-based compensation expense
Foreign currency transaction loss (gain)
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
Purchases of marketable securities available-for-sale
Proceeds from maturities of marketable securities available-for-sale
Acquisition of business, net of cash acquired
Other investing activities, net
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options
Common stock withheld for payroll tax obligations
Proceeds from employee stock purchase plan
Principal payments on long-term debt
Dividends paid
Net cash used in financing activities
19,282
881
—
6,529
1,126
1,569
(4,926 )
40,954
4,693
(15,274 )
(9,135 )
1,629
119,707
(18,775 )
(4,932 )
10,982
(30,842 )
(3,850 )
(47,417 )
32
(2,471 )
444
(222 )
(15,082 )
(17,299 )
20,178
903
(2,063 )
5,458
2,274
695
(47,514 )
(53,803 )
1,220
13,832
186
(3,787 )
3,048
(15,595 )
(18,468 )
25,968
—
(855 )
(8,950 )
2,894
(1,181 )
412
(218 )
(14,599 )
(12,692 )
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
716
55,707
105,048
160,755
$
(3,465 )
(22,059 )
127,107
105,048
$
$
19,177
771
1,911
6,186
(1,934 )
(828 )
(11,535 )
(38,158 )
(8,132 )
17,993
18,433
(2,488 )
43,968
(26,511 )
(19,356 )
18,825
—
(577 )
(27,619 )
3,965
(1,269 )
—
(195 )
(14,166 )
(11,665 )
1,020
5,704
121,403
127,107
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid
Interest paid
NONCASH INVESTING ACTIVITIES
Issuance of notes receivable from sale of business
See accompanying notes to consolidated financial statements.
20,305
3,907
15,738
3,811
6,805
4,640
—
—
2,051
35
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 mobile device 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, Türkiye (formerly Turkey) and South Africa as well as distribution and sales operations in the Netherlands,
Egypt, 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, and railroad signals and
structures. 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 recognizes revenue 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 and records forfeitures as they occur.. 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 earnings 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, and the performance-based portion of 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. The portion of performance stock units based on
market-based metrics will have a grant-date fair value calculated through a Monte Carlo simulation model using a
number of inputs. The inputs to the Company’s Monte Carlo valuation model are summarized in Note 19 – Share-
Based Compensation.
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 and adjusts for current trends, if applicable. 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 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. Investment income is recorded within interest income on the consolidated
statements of earnings. As of August 31, 2023, approximately 96% of the Company’s marketable securities
investments mature within one year and 4% mature within one to two years.
Receivables, net
Trade receivables are reported on the balance sheet net of an allowance for expected credit losses. The allowance for
expected credit losses is based on a number of factors, including the aging of outstanding receivables and historical
losses. In addition, the Company incorporates current economic conditions and customer specific circumstances and
details in its estimate for expected credit losses. Receivables are written off against the allowance when the receivable
is deemed uncollectible and all collection efforts have been completed.
The Company’s allowance for all expected credit losses related to outstanding receivables increased to $5.0 million
at August 31, 2023 from $4.1 million at August 31, 2022. 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.
37
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, 2023, 2022, and 2021. 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 other intangible
assets are tested for impairment at least annually 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 2023, 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 2023, the Company performed a qualitative analysis of other intangible assets and
concluded there were no indicators of impairment.
Income Taxes
Income taxes are accounted for utilizing the asset and liability method. Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the financial statement
carrying value of existing assets and liabilities and their respective tax bases. These expected future tax consequences
are measured based on currently enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities
is recognized in income during the period that includes the enactment date. In assessing the ability to realize deferred
tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset
will not be realized. The Company’s evaluation of the adequacy of any potential allowance is based on facts and
circumstances available to the Company at the date the consolidated financial statements are issued and considers any
significant changes in circumstances occurring through the date that the financial statements are issued.
Net Earnings per Share
Basic net earnings per share is computed using the weighted average number of common shares outstanding during
the period. Diluted net earnings per share is computed using the weighted average number of common shares
outstanding plus dilutive potential common shares outstanding during the period.
Employee stock options, non-vested shares and similar equity instruments granted by the Company are treated as
potential common share equivalents outstanding in computing diluted net earnings per share. The Company’s diluted
common shares outstanding reported in each period includes the dilutive effect of restricted stock units, in-the-money
options, and performance stock units for which threshold performance conditions have been satisfied and is calculated
based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock
method, the amount the employee must pay for exercising stock options, and the amount of compensation cost for
future service that the Company has not yet recognized, are assumed to be used to repurchase shares.
38
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. 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.
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,
2023, the Company’s derivative counterparties 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:
• Level 1 – inputs to valuation techniques are quoted prices in active markets for identical assets or liabilities
• Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or
liabilities, either directly or indirectly
• Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities
Treasury Stock
When the Company repurchases its outstanding stock, it records the repurchased shares at cost as a reduction to
shareholders’ equity. The weighted average cost method is utilized for share re-issuances. The difference between
the cost and the re-issuance price is charged or credited to a “capital in excess of stated value – treasury stock” account
to the extent that there is a sufficient balance to absorb the charge. If the treasury stock is sold for an amount less than
its cost and there is not a sufficient balance in the capital in excess of stated value – treasury stock account, the excess
is charged to retained earnings.
Contingencies
The Company’s accounting for contingencies covers a variety of business activities including contingencies for legal
exposures and environmental exposures. The Company accrues these contingencies when its assessments indicate
that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company’s
estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results
may differ from the Company’s estimates resulting in an impact, positive or negative, on earnings.
Environmental Remediation Liabilities
Environmental remediation liabilities include costs directly associated with site investigation and clean up, such as
materials, external contractor costs and incremental internal costs directly related to the remedy. The Company
accrues the anticipated cost of environmental remediation when the obligation is probable and can be reasonably
estimated. Estimates used to record environmental remediation liabilities are based on the Company’s best estimate
of probable future costs based on site-specific facts and circumstances. Estimates of the cost for the likely remedy are
39
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.
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 Adopted
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) No. 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting and related
disclosure requirements for income taxes. The Company adopted this standard in the first quarter of its fiscal 2022.
The adoption of this ASU did not have a material impact on its consolidated financial statements.
In June 2016, the FASB issued 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 Company adopted this in the first quarter of the Company’s fiscal 2021. The adoption
of this ASU did not have a material impact on its consolidated financial statements and related disclosures.
In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates
the requirement to calculate the implied fair value of goodwill; rather, an entity will measure its goodwill impairment
by the amount the carrying value exceeds the fair value of a reporting unit. The Company adopted this in the first
quarter of the Company’s fiscal 2021. The adoption of this ASU did not have a material impact on its consolidated
financial statements and related disclosures.
Recent Accounting Guidance Not Yet Adopted
In September 2022, the FASB issued ASU No. 2022-04, Liabilities - Supplier Finance Programs, which requires
annual and interim disclosures for entities that finance its purchases with supplier finance programs. These
amendments are effective for the Company beginning it its fiscal 2024, except for the amendment on rollforward
information, which is effective for the Company beginning in its fiscal 2025. The adoption of this ASU is not expected
to have a material impact on its consolidated financial statements.
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.
For contracts with a length longer than twelve months, the unsatisfied performance obligations were $1.5 million and
$2.0 million at August 31, 2023 and 2022, respectively.
40
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.
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 remote monitoring subscription services and custom and
contract manufactured products. 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,
2023 and 2022, is as follows:
($ in thousands)
Point in time
Over time
Revenue from the contracts with customers
Lease revenue
Total operating revenues
($ in thousands)
Point in time
Over time
Revenue from the contracts with customers
Lease revenue
Total operating revenues
Irrigation
Year ended August 31, 2023
Infrastructure
Total
$
559,826 $
26,205
586,031
—
$
586,031 $
69,540 $
6,334
75,874
12,179
88,053 $
629,366
32,539
661,905
12,179
674,084
Irrigation
Year ended August 31, 2022
Infrastructure
Total
$
643,169 $
22,660
665,829
—
$
665,829 $
88,681 $
5,753
94,434
10,480
104,914 $
731,850
28,413
760,263
10,480
770,743
Further disaggregation of revenue is disclosed in the Note 18 – Industry Segment Information.
41
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, 2023 and 2022, contract assets amounted to $1.3 million and $0.9 million, respectively. These amounts
are included within other current assets on the consolidated balance sheet.
At August 31, 2023, and 2022, contract liabilities amounted to $20.5 million and $30.6 million, respectively. Contract
liabilities are included within other current liabilities and noncurrent liabilities on the consolidated balance sheet.
During the year ended August 31, 2023, the Company recognized $27.7 million of revenue that was included in the
liability as of August 31, 2022. 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
FieldWise, LLC
On July 28, 2023 ("the acquisition date"), the Company completed the acquisition of the membership interests of
FieldWise, LLC ("FieldWise"). FieldWise is a market leader in agricultural technology products with a focus on
subscription-based, precision irrigation solutions. The purchase price of $32.6 million was financed through an all
cash transaction from the Company's cash on hand.
The following table summarizes the preliminary purchase price allocation for FieldWise at the acquisition date. The
Company expects the purchase price allocation to be finalized by the end of fiscal 2024.
($ in thousands)
Cash and cash equivalents
Accounts receivable
Inventories
Property and equipment
Deferred tax asset
Intangible assets
Goodwill
Accounts payable and accrued liabilities
Deferred revenues
Non-current deferred revenues
Total purchase price
Total
$
1,779
376
2,651
2,443
94
11,400
15,589
(252 )
(1,229 )
(230 )
32,621
The acquired intangible assets include amortizable intangible assets of $10.7 million and indefinite-lived intangible
assets of $0.7 million related to tradenames. The amortizable intangible assets have a weighted average useful life of
approximately 13.1 years. The following table summarizes the identifiable intangible assets at fair value.
42
($ in thousands)
Intangible assets:
Customer relationships
Developed technology
Tradenames
Total intangible assets
Weighted average
useful life in years
Fair value of
identifiable asset
$
15.0
5.0
N/A
13.1
$
8,700
2,000
700
11,400
Goodwill related to the acquisition of FieldWise primarily relates to intangible assets that do not qualify for separate
recognition, including the experience and knowledge of FieldWise management, its assembled workforce, and its
intellectual capital and specialization with monitoring technology solutions, data acquisition and management
systems. This goodwill is included in the irrigation reporting segment and is deductible for income tax purposes. Pro
forma information related to this acquisition was not included because the impact on the Company’s consolidated
financial statements was not considered to be material.
IRZ Consulting, LLC
On August 27, 2021, the Company completed the divestiture of ownership interests in IRZ Consulting, LLC (“IRZ”).
Proceeds from the sale totaled $3.4 million, which consisted of (i) $1.3 million in cash and (ii) $2.1 million in short-
term notes. A gain of $1.1 million was recorded in general and administrative expense on the consolidated statement
of earnings in the year ended August 31, 2021.
Note 5 – Net Earnings Per Share
The following table shows the computation of basic and diluted net earnings per share for fiscal 2023, 2022, and 2021:
($ and shares in thousands, except per share amounts)
Numerator:
Net earnings
Denominator:
For the years ended August 31,
2022
2023
2021
$
72,379 $
65,469 $
42,572
Weighted average shares outstanding
Diluted effect of stock equivalents
Weighted average shares outstanding assuming dilution
11,003
59
11,062
10,965
66
11,031
10,886
99
10,985
Basic net earnings per share
Diluted net earnings per share
$
$
6.58 $
6.54 $
5.97 $
5.94 $
3.91
3.88
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 number of
securities excluded from the computation of earnings per share because their effect would have been anti-dilutive was
not significant for fiscal 2023, 2022, and 2021.
Note 6 – Accumulated Other Comprehensive Loss
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,
2023
2022
Defined benefit pension plan, net of tax benefit of $620 and $716
Foreign currency translation, net of hedging activities, net of tax
expense of $3,868 and $4,875
Unrealized loss on marketable securities, net of tax benefit of $23 and $78
Total accumulated other comprehensive loss
$
(1,971 )
(2,277 )
(18,948 )
(91 )
(21,010 ) $
(18,924 )
(272 )
(21,473 )
$
43
The following is a roll-forward of the balances in accumulated other comprehensive loss, net of tax.
($ in thousands)
Balance at August 31, 2021
Current period change
Balance at August 31, 2022
Current period change
Balance at August 31, 2023
Note 7 – Income Taxes
Foreign
currency
translation
Unrealized
gain (loss) on
marketable
securities
Defined
benefit
pension plan
$
(2,843 ) $
566
(2,277 )
306
(1,971 ) $
(15,085 ) $
(3,839 )
(18,924 )
(24 )
(18,948 ) $
$
Accumulated
other
comprehensive
loss
(17,933 )
(3,540 )
(21,473 )
463
(21,010 )
(5 ) $
(267 )
(272 )
181
(91 ) $
For financial reporting purposes earnings 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
For the years ended August 31,
2022
2023
2021
$
$
40,066 $
60,309
100,375 $
34,465 $
53,403
87,868 $
28,605
21,781
50,386
For the years ended August 31,
2022
2023
2021
$
8,119 $
1,690
18,187
27,996
(684 )
(76 )
760
—
5,678 $
1,310
17,474
24,462
244
34
(2,341 )
(2,063 )
22,399 $
2,432
733
2,738
5,903
2,251
281
(621 )
1,911
7,814
Total income tax provision
$
27,996 $
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:
2023
For the years ended August 31,
2022
2021
($ 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
Federal credits
Uncertain tax benefits
Capital gains
Other
Effective rate
Amount
$ 21,079
1,259
6,017
(103 )
(610 )
(445 )
(84 )
529
354
$ 27,996
%
Amount
%
Amount
%
21.0 $ 18,452
1.3 1,069
6.0 3,318
313
(0.1 )
—
(0.6 )
(444 )
(0.4 )
(369 )
(0.1 )
—
0.5
60
0.3
27.9 $ 22,399
21.0 $ 10,581
859
1.2
(390 )
3.8
0.4
339
— (2,169 )
(629 )
(622 )
—
(155 )
25.5 $ 7,814
(0.6 )
(0.4 )
—
0.1
21.0
1.7
(0.8 )
0.7
(4.3 )
(1.2 )
(1.2 )
—
(0.3 )
15.5
44
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
Lease liabilities
Capitalized research and development expenditures
Other
Gross deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Intangible assets
Property, plant, and equipment
Lease assets
Derivative contract
Total deferred tax liabilities
Net deferred tax assets
August 31,
2023
2022
$
11,467
3,433
1,253
2,749
1,722
935
189
1,379
1,338
3,656
2,009
1,490
31,620
(491 )
31,129
$
(5,085 ) $
(12,718 )
(2,844 )
(286 )
(20,933 ) $
12,569
3,336
1,391
2,544
1,474
773
1,208
1,422
1,122
3,868
—
878
30,585
(1,203 )
29,382
(5,389 )
(11,441 )
(2,999 )
(1,294 )
(21,123 )
10,196
$
8,259
$
$
$
$
$
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. The discrete items recorded in both fiscal 2023 and
2022 were not significant. As of August 31, 2023, the Company had a valuation allowance of $0.5 million related to
deferred tax assets in a jurisdiction where the Company does not expect to realize the deferred benefit. The Company
also had recorded a valuation allowance of $0.8 million as of August 31, 2022 related to capital losses from business
divestitures where the Company believes it is more likely than not that the benefit from the capital loss will not be
realized. The remaining valuation allowance related to deferred tax assets in a certain foreign tax jurisdiction not
subject to tax due to a free trade zone exemption.
The Company does not intend to, and has not historically, repatriated earnings of its foreign subsidiaries. Thus, the
Company has not provided a deferred income tax liability on these undistributed earnings that are indefinitely
reinvested. The Company would recognize a deferred income tax liability if the Company were to determine that such
earnings were no longer indefinitely reinvested. There are other taxes that may be incurred if the Company would
repatriate earnings of its foreign subsidiaries. It is not practicable to estimate the amount of income taxes that would
be incurred if the Company would repatriate earnings of its foreign subsidiaries.
The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon
examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater
than 50 percent likely to be realized upon settlement. Unrecognized tax benefits are tax benefits claimed in the
Company’s tax returns that do not meet these recognition and measurement standards.
45
A reconciliation of changes in unrecognized tax benefits is as follows:
($ in thousands)
Unrecognized tax benefits at beginning of the year
Increases for positions taken in current year
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 end of the year
August 31,
2023
2022
$
$
574 $
33
(15 )
(144 )
(48 )
400 $
724
158
—
(308 )
—
574
The net amount of unrecognized tax benefits at August 31, 2023 and 2022 that, if recognized, would impact the
Company’s effective tax rate was $0.3 million and $0.5 million, respectively. The Company recognized $0.2 million
and $0.4 million of interest and penalties recognized in the consolidated statement of earnings for the years ended
August 31, 2023 and 2022, respectively. The Company recognizes accrued interest and penalties related to
unrecognized tax benefits in income tax expense. Total accrued liabilities for interest and penalties included in the
unrecognized tax benefits liability were $0.3 million and $0.4 million for each of the years ended August 31, 2023
and 2022, respectively.
While it is expected that the amount of unrecognized tax benefits will change in the next twelve months as a result of
the expiration of statutes of limitations, the Company does not expect this change to have a significant impact on its
results of operations or financial position.
The Company files income tax returns in the United States and various state and foreign jurisdictions. The Company
is no longer subject to income tax examination by US federal and most state tax authorities for tax years prior to fiscal
2020. Other major jurisdictions where we conduct business generally have statutes of limitations ranging from three
to six years.
Note 8 - Inventories
($ 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,
2023
2022
$
$
83,908 $
7,820
86,793
178,521
(22,589 )
155,932 $
93,469
12,603
110,022
216,094
(22,318 )
193,776
Of the $178.5 million and $216.1 million of inventories at August 31, 2023, and 2022, respectively, $64.8 million and
$77.8 million, respectively was valued on the last-in, first-out ("LIFO") basis, and $113.8 million and $138.3 million,
respectively was valued on first-in, first-out ("FIFO") or average cost methods. In fiscal 2023, the Company recorded
a $1.2 million decrease to its cost of goods sold, or $0.11 per diluted share, related to the liquidation of LIFO inventory
quantities.
46
Note 9 – Property, Plant, and Equipment
($ 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,
2023
2022
$
$
6,144 $
57,606
99,466
8,807
26,684
8,238
206,945
(130,923 )
76,022
16,398
34,398
50,796
(27,137 )
23,659
99,681 $
5,997
51,014
93,558
7,994
25,948
10,207
194,718
(120,816 )
73,902
16,359
29,904
46,263
(25,693 )
20,570
94,472
Depreciation expense was $13.9 million, $13.5 million, and $12.7 million for fiscal 2023, 2022, and 2021,
respectively.
Note 10 – Goodwill and Other Intangible Assets
The carrying amount of goodwill by reportable segment for the year ended August 31, 2023 and August 31, 2022 is
as follows:
($ in thousands)
Balance as of August 31, 2021
Foreign currency translation
Balance as of August 31, 2022
Acquisition of FieldWise
Foreign currency translation
Balance as of August 31, 2023
Irrigation
Infrastructure
Total
51,811
$
(64 )
51,747
15,589
35
67,371
$
16,157
$
(774 )
15,383
—
367
15,750
$
67,968
(838 )
67,130
15,589
402
83,121
$
$
The components of the Company’s identifiable intangible assets and their weighted average remaining life at August
31, 2023 and 2022 are included in the table below.
Weighted Gross
Weighted Gross
2023
2022
August 31,
($ in thousands)
Definite lived intangible assets:
Patents and developed
technology
Customer relationships
Indefinite lived intangible assets:
Tradenames
Total
average
years
carrying
amount
Accumulated
amortization
average
years
carrying
amount
Accumulated
amortization
3.1 $ 28,658 $
6.8 26,030
(24,402 )
(14,506 )
3.3 $ 26,329 $
2.1 17,401
N/A 11,939
5.7 $ 66,627 $
— N/A
11,162
(38,908 )
2.7 $ 54,892 $
(24,106 )
(12,578 )
—
(36,684 )
Amortization expense for amortizable intangible assets was $2.0 million, $2.0 million, and $2.2 million for fiscal
2023, 2022, and 2021, respectively.
47
Future estimated amortization of intangible assets for the next five years is as follows:
Fiscal years
2024
2025
2026
2027
2028
Thereafter
$ in thousands
2,881
2,089
1,456
1,456
1,421
6,477
15,780
$
$
The Company updated its impairment evaluation of goodwill and intangible assets with indefinite lives at August 31,
2023. No impairment losses were indicated as a result of the annual impairment testing for fiscal 2023, 2022 and
2021.
Note 11 – Other Current Liabilities
($ in thousands)
Other current liabilities:
Compensation and benefits
Contract liabilities
Warranties
Dealer related liabilities
Tax related liabilities
Operating lease liabilities
Deferred revenue - lease
Accrued environmental liabilities
Accrued insurance
Other
Total other current liabilities
Note 12 – Credit Arrangements
August 31,
2023
2022
24,957 $
18,800
14,535
9,629
9,187
3,028
2,830
1,287
1,163
6,188
91,604 $
23,148
29,494
14,080
8,396
7,820
3,159
1,064
4,179
1,193
8,151
100,684
$
$
Senior Notes. The Company has outstanding $115.0 million in aggregate principal amount of unsecured 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 August 26, 2026. The Company intends to use borrowings under the Revolving Credit Facility for working
capital purposes and to fund future acquisitions. At August 31, 2023 and 2022, 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, 2023, the Company had the ability to borrow up to $50.0 million under the Revolving Credit Facility. The
Revolving Credit Facility may be increased by up to an additional $50.0 million at any time, subject to additional
commitment approval. The Revolving Credit Facility was amended in 2021, which changed the benchmark rate from
the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). Borrowings
under the Revolving Credit Facility bear interest at a variable rate equal to the SOFR plus a margin of between 100
and 210 basis points depending on the Company’s leverage ratio then in effect (which resulted in a variable rate of
6.66 percent at August 31, 2023), 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 on the unused portion of the Revolving Credit Facility. The fee is between 0.125 percent and
0.2 percent (0.125 percent at August 31, 2023) on the unused balance depending on the Company’s leverage ratio then
in effect.
48
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 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, 2023 and 2022, 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 $0.7
million in principal amount of industrial revenue bonds that were issued in 2006 (the “Series 2006A Bonds”).
Principal and interest on the Series 2006A Bonds are payable monthly through maturity on September 1, 2026. The
interest rate is adjustable every five years based on the yield of the 5-year United States Treasury Notes, plus 0.45
percent (1.72 percent as of August 31, 2023 through maturity). The obligations under the Series 2006A Bonds are
secured by a first priority security interest in certain real estate.
Long-term debt consists of the following:
($ in thousands)
Series A Senior Notes
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
Thereafter
Note 13 – Leases
August 31,
2023
2022
$
$
115,000 $
710
115,710
(226 )
(320 )
115,164 $
115,000
931
115,931
(222 )
(368 )
115,341
$ in thousands
226
230
235
19
115,000
115,710
$
$
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.
Short-term operating leases, which have an initial expected term of twelve months or less, are not recorded on the
consolidated balance sheet. Such fixed lease payments are recognized within the 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 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, 2023 and 2022.
49
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 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
$
$
$
August 31,
2023
2022
4,114
536
4,650
4,205
8.3 years
$
$
$
5,573
552
6,125
5,198
9.0 years
3.5 %
3.3 %
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
August 31,
2023
2022
$
17,036
$
19,181
3,028
17,689
20,717
$
3,159
19,810
22,969
$
The minimum lease payments under operating leases expiring subsequent to August 31, 2023 are as follows:
Fiscal year ending
2024
2025
2026
2027
2028
Thereafter
Total lease payments
Less: interest
Present value of lease liabilities
$ in thousands
3,715
3,395
3,086
2,660
1,913
9,397
24,166
3,449
20,717
$
$
50
Note 14 – 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, 2023 and 2022, respectively:
($ in thousands)
Cash and cash equivalents
Marketable securities:
Corporate bonds
U.S. treasury securities
Derivative asset
Derivative liability
($ in thousands)
Cash and cash equivalents
Marketable securities:
Corporate bonds
U.S. treasury securities
Derivative asset
August 31, 2023
Level 1
Level 2
Level 3
Total
$ 160,755 $
— $
— $ 160,755
—
—
—
—
4,095
1,461
1,672
(457 )
August 31, 2022
—
—
—
—
4,095
1,461
1,672
(457 )
Level 1
Level 2
Level 3
Total
$ 105,048 $
— $
— $ 105,048
—
—
—
9,668
1,792
5,505
—
—
—
9,668
1,792
5,505
The carrying value of long-term debt (including current portion) was $115.7 million and $115.9 million at August 31,
2023 and 2022, respectively. The fair value of this debt was estimated to be $102.0 million and $103.6 million as of
August 31, 2023 and 2022, respectively, based on current market rates as of the respective year-ends.
The Company enters into derivative instrument agreements, to manage risk in connection with changes in foreign
currency. The Company only enters into derivative instrument agreements with counterparties who have highly rated
credit and does not enter into derivative instrument agreements for trading or speculative purposes. The fair values
are based on inputs other than quoted prices that are observable for the asset or liability and are determined by standard
calculations and models that use readily observable market parameters. These inputs include foreign currency
exchange rates and interest rates. Industry standard data providers are the primary source for forward and spot rate
information for both interest rates and foreign currency exchange rates.
On June 12, 2023, the Company entered into a fixed-to-fixed cross currency swap with a notional amount of $25.0
million, or €23.3 million, that is set to mature on June 12, 2026. The Company elected the spot method for designating
this contract as a net investment hedge. The decrease in fair value of this contract during the period was $0.3 million,
which is net of tax impact of $0.1 million, and is reported in accumulated other comprehensive loss on the condensed
consolidated balance sheets. The fair value of this contract as of August 31, 2023, is disclosed in the table above, and
is recorded within other noncurrent assets on the consolidated balance sheets.
On March 28, 2022, the Company entered into a fixed-to-fixed cross currency swap with a notional amount of $50.0
million, or €45.6 million, that is set to mature on March 30, 2027. The Company elected the spot method for
designating this contract as a net investment hedge. The decrease in fair value of this contract during the period was
$2.9 million, which is net of tax impact of $0.9 million, and is reported in accumulated other comprehensive loss on
the consolidated balance sheets. The fair value of this contract as of August 31, 2023, is disclosed in the table above,
and is recorded within other noncurrent assets on the consolidated balance sheets.
During fiscal 2023, the Company settled foreign currency forward contracts resulting in a net loss of $0.1 million
which were recorded in the consolidated statements of earnings. At August 31, 2023 the Company had an outstanding
foreign currency forward contract to sell a notional amount of 225.3 million South African rand at fixed prices to settle
during the next fiscal quarter. The Company’s foreign currency forward contracts do not qualify as hedges of a net
investment in foreign operations.
51
Note 15 – 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.
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 reasonably 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 $11.5
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 Environmental Protection Agency (“EPA”) and the Nebraska Department of Environment and Energy
(the “NDEE”) in August 2020 to review remediation alternatives and proposed plans for the site. While the proposed
remediation plan is preliminary and has not been approved by the EPA or the NDEE, they have approved an in situ
thermal remediation pilot study that was conducted by the Company at a specific location on the site. The Company
commenced implementation of the pilot program in the second half of calendar 2022 and completed the pilot program
in the fourth quarter of fiscal 2023. A final report is expected to be submitted to the EPA and NDEE by the end of
calendar 2023. Of the total liability as of both August 31, 2023 and 2022, $8.1 million and $11.0 million, respectively,
was calculated on a discounted basis using a discount rate of 1.2%, which represents a risk-free rate. This discounted
52
portion of the liability amounts to $9.1 million and $12.4 million on an undiscounted basis at August 31, 2023 and
2022, respectively.
The Company accrues the anticipated cost of investigation and remediation when the obligation is probable and can
be reasonably estimated. While the plan has not been formally approved by the EPA, the Company believes the current
accrual is a good faith estimate of the long-term cost of remediation at this site; however, the estimate of costs and
their timing could change as a result of a number of factors, including but not limited to (1) EPA input on the proposed
remediation plan and any changes which the EPA may subsequently require, (2) refinement of cost estimates and
length of time required to complete remediation and post-remediation operations and maintenance, (3) effectiveness
of the technology chosen in remediation of the site as well as changes in technology that may be available in the future,
and (4) unforeseen circumstances existing at the site. As a result of these factors, the actual amount of costs incurred
by the Company in connection with the remediation of contamination of its Lindsay, Nebraska site could exceed the
amounts accrued for this expense at this time. While any revisions could be material to the operating results of any
fiscal quarter or fiscal year, the Company does not expect such additional expenses would have a material adverse
effect on its liquidity or financial condition.
The following table summarizes the environmental remediation liability classifications included in the consolidated
balance sheets as of August 31, 2023 and 2022:
($ in thousands)
Balance sheet location
Other current liabilities
Other noncurrent liabilities
Total environmental remediation liabilities
Note 16 – Retirement Plans
August 31,
2023
2022
$
$
1,287 $
10,175
11,462 $
4,179
10,967
15,146
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 $1.3 million, $1.2 million, and $1.3 million for the years
ended August 31, 2023, 2022, and 2021, respectively.
A supplementary non-qualified, non-funded retirement plan for five former executives is also maintained. Plan
benefits are based on the executive’s average total compensation during the three highest compensation years of
employment. This unfunded supplemental retirement plan is not subject to the minimum funding requirements of
ERISA. While the plan is unfunded, the Company has purchased life insurance policies on certain former executives
named in this supplemental retirement plan to provide funding for this liability. The cash surrender values of these
insurance policies are recorded as other noncurrent assets.
As of August 31, 2023 and 2022, the funded status of the supplemental retirement plan was recorded in the
consolidated balance sheets. The Company utilizes an August 31 measurement date for plan obligations related to the
supplemental retirement plan. As this is an unfunded retirement plan, the funded status is equal to the benefit
obligation.
The funded status of the plan and the net amount recognized in the accompanying balance sheets as of August 31 is
as follows:
($ in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year
Interest cost
Actuarial gain
Benefits paid
Benefit obligation at end of year
August 31,
2023
2022
$
$
5,422 $
211
(191 )
(530 )
4,912 $
6,284
156
(488 )
(530 )
5,422
53
Amounts recorded in the consolidated balance sheets for the pension benefit obligation consist of:
($ in thousands)
Other current liabilities
Other non-current liabilities
Net amount recognized
August 31,
2023
2022
$
$
530 $
4,382
4,912 $
530
4,892
5,422
The before-tax amounts recognized in accumulated other comprehensive loss consists of:
($ in thousands)
Net actuarial loss
August 31,
2023
2022
$
(2,591 ) $
(2,993 )
For the years ended August 31, 2023 and 2022, the Company assumed a discount rate of 5.0 percent and 4.1 percent,
respectively, for the determination of the liability. The assumptions used to determine benefit obligations and costs
are selected based on current and expected market conditions. The discount rate is based on a hypothetical portfolio
of long-term corporate bonds with cash flows approximating the timing of expected benefit payments.
For the years ended August 31, 2023, 2022, and 2021, the Company assumed a discount rate of 4.1 percent, 2.6
percent, and 2.2 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,
2022
2023
2021
$
$
211 $
211
422 $
156 $
255
411 $
146
269
415
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 2024 will be $0.2 million.
The Company’s future annual contributions to the supplemental retirement plan will be equal to expected net benefit
payments since the plan is unfunded. The following net benefit payments are expected to be paid:
Fiscal years
2024
2025
2026
2027
2028
Thereafter
Note 17 - Warranties
$ in thousands
514
503
490
477
462
2,466
4,912
$
$
Product Warranties
The Company generally warrants its products against certain manufacturing and other defects and estimates the
amount of warranty accrual based on various factors, including historical warranty costs, current claim trends, and
operating revenue. 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.
54
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,
2023
2022
$
$
14,080
10,911
(10,456 )
—
14,535
$
$
12,736
10,931
(9,393 )
(194 )
14,080
Warranty costs were $10.9 million, $10.7 million, and $7.4 million for fiscal 2023, 2022, and 2021, respectively.
Note 18 – Industry Segment Information
The Company manages its business activities in two reportable segments: Irrigation and Infrastructure. The
accounting policies of the two reportable segments are the same as those described in Note 1, Description of Business
and Significant Accounting Policies. The Company evaluates the performance of its reportable segments based on
segment sales, gross profit, and operating income, with operating income for segment purposes excluding unallocated
corporate general and administrative expenses, interest income, interest expense, other income and expenses, and
income taxes. Operating income for segment purposes does include general and administrative expenses, selling
expenses, engineering and research expenses and other overhead charges directly attributable to the segment. There
are no inter-segment sales included in the amounts disclosed.
Irrigation
This reporting segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation
systems and large diameter steel tubing, as well as various innovative technology solutions such as GPS positioning
and guidance, variable rate irrigation, remote irrigation management and scheduling technology, irrigation consulting
and design, and industrial internet of things, or "IIoT", solutions. The irrigation reporting segment consists of one
operating segment.
Infrastructure
This reporting segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash
cushions and end terminals, and road marking and road safety equipment. The infrastructure reporting segment
consists of one operating segment.
The Company has no single major customer representing ten percent or more of its total revenues during fiscal 2023,
2022, or 2021.
55
Summarized financial information concerning the Company’s reportable segments is shown in the following tables:
($ in thousands)
Operating revenues:
Irrigation:
North America
International
Irrigation total
Infrastructure
Total operating revenues
Operating income:
Irrigation
Infrastructure
Corporate
Total operating income
Total other expense
Earnings before income taxes
Total capital expenditures:
Irrigation
Infrastructure
Corporate
Depreciation and amortization:
Irrigation
Infrastructure
Corporate
2023
2022
2021
$
$
$
$
$
$
$
$
309,538 $
276,493
586,031
88,053
674,084
$
121,969 $
12,067
(31,852 )
102,184
(1,809 )
100,375 $
13,043 $
5,287
445
18,775 $
12,834 $
4,023
2,425
19,282 $
355,683 $
310,146
665,829
104,914
770,743
$
105,763 $
18,328
(29,448 )
94,643
(6,775 )
87,868 $
10,679 $
3,798
1,118
15,595 $
13,011 $
3,781
3,386
20,178 $
273,871
197,487
471,358
96,288
567,646
63,181
20,174
(29,248 )
54,107
(3,721 )
50,386
19,188
6,866
457
26,511
12,245
3,748
3,183
19,177
Summarized financial information concerning the Company’s geographical areas is shown in the following tables.
($ in thousands)
United States
International
Total revenues
($ in thousands)
2023
United States
International
Total long-lived assets
Long-lived
tangible
assets
$
$
76,428
23,253
99,681
2023
For the years ended August 31,
2022
Revenues % of total Revenues % of total Revenues % of total
$347,238
54
326,846
46
$674,084
100
51 $307,313
49 260,333
100 $567,646
52 $394,080
48 376,663
100 $770,743
2021
% of total
For the years ended August 31,
2022
2021
Long-lived
tangible
assets
% of total
Long-lived
tangible
assets
% of total
77 $ 70,643
23,829
23
100 $ 94,472
75 $ 68,526
23,471
25
100 $ 91,997
74
26
100
Total assets by reportable segment are not disclosed because such information is not used by the Company to allocate
resources or evaluate performance.
56
Note 19 – 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, 2023, 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, 2023, the Company had share-based awards outstanding
under the 2015 Plan.
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, 2023, 217,146 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. 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 2023, 2022, and 2021:
($ in thousands)
Share-based compensation expense included in cost of
operating revenues
Engineering and research
Selling
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,
2022
2023
2021
$
183
$
257
$
258
232
632
5,651
210
577
4,637
6,515
6,698
(1,574 )
5,124
$
5,424
5,681
(1,335 )
4,346
$
$
202
544
5,524
6,270
6,528
(1,534 )
4,994
As of August 31, 2023, there was $8.2 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
Fiscal 2023
Grant year
Fiscal 2022
Fiscal 2021
4.4 %
0.9 %
5
35.7 %
1.2 %
0.9 %
5
33.8 %
0.5 %
1.1 %
6
32.8 %
$
55.53
$
41.80
$
31.38
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.
57
The following table summarizes stock option activity for fiscal 2023:
Stock options outstanding at August 31, 2022
Granted
Exercised
Forfeited/cancelled
Stock options outstanding at August 31, 2023
Stock options exercisable at August 31, 2023
Number of
stock options
97,140
21,743
Average
exercise price
$
(413 )
—
118,470
76,143
$
$
Average
remaining
contractual
term (years)
Aggregate
intrinsic value
(thousands)
7.0
$
5,203
23
—
2,139
2,072
6.6
5.5
$
$
106.80
156.16
76.37
—
115.96
99.05
There were 19,617, 47,222, and 38,954 outstanding stock options that vested during fiscal 2023, 2022, and 2021,
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,
2022
2023
2021
$
$
$
$
23
32
1
40.66
$
$
$
$
1,737
2,894
140
34.19
$
$
$
$
2,125
3,965
499
25.95
Restricted stock units – The restricted stock units have a grant-date fair value equal to the fair market value of the
underlying stock on the grant date less present value of expected dividends. The restricted stock units granted to
employees vest over a three year period at approximately 33 percent per year. The restricted stock units granted to
non-employee directors generally vest over a nine month period.
The following table summarizes restricted stock unit activity for fiscal 2023:
Restricted stock units outstanding at August 31, 2022
Granted
Vested
Forfeited / Cancelled
Restricted stock units outstanding at August 31, 2023
Number of
restricted
stock units
Weighted
average grant-
date fair value
44,251 $
24,123
(24,342 )
(2,460 )
41,572 $
126.50
151.38
122.06
140.26
108.54
58
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, 2023, 2022, and 2021,
outstanding restricted stock units included 4,039, 4,412, and 4,656 units, respectively, that will be settled in cash. The
fair value of restricted stock units that vested during the period was $3.7 million and $4.1 million for each of the years
ended August 31, 2023 and 2022, respectively. Share issuances are presented net of share repurchases to cover payroll
taxes of $2.5 million, $1.2 million, and $1.3 million for each of the years ended August 31, 2023, 2022, and 2021,
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 2023:
Performance stock units outstanding at August 31, 2022
Granted
Vested
Forfeited / cancelled
Performance stock units outstanding at August 31, 2023
Number of
performance
stock units
Weighted
average grant-
date fair value
32,358 $
14,496
(9,344 )
—
37,510 $
127.78
173.17
102.28
—
151.67
Performance stock units outstanding as of August 31, 2023 and issued during fiscal 2023, 2022, and 2021 include
performance goals based on a return on invested capital 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 invested capital 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. In fiscal 2023 and 2022 performance
stock units that vested represented 18,688 and 18,998, respectively, actual shares of common stock issued. In fiscal
2021, no shares were issued related to performance stock units.
The fair value of the TSR portion of the awards granted in fiscal 2023, 2022, and 2021 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
Note 20 – Share Repurchases
Fiscal 2023
Grant year
Fiscal 2022
Fiscal 2021
3
4.5 %
38.6 %
0.9 %
3
0.7 %
39.1 %
0.9 %
3
0.2 %
38.6 %
1.2 %
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, 2023, 2022, and 2021. The remaining amount available under the repurchase program was $63.7
million as of August 31, 2023.
59
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.
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.
The Company acquired FieldWise, LLC, during fiscal 2023, which management excluded from its assessment of the
effectiveness of the internal control over financial reporting as of August 31, 2023. FieldWise, LLC's internal control
over financial reporting related to the Company's financial statements for the year ended August 31, 2023 is associated
with less than 1% of consolidated revenues and 4% of total assets.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of August
31, 2023, 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,
2023.
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
There were no changes in the Company’s internal controls over financial reporting that occurred during the quarter
ended August 31, 2023 that materially affected, or are reasonably likely to materially affect, the Company’s internal
control over financial reporting.
60
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, 2023, 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, 2023, 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, 2023 and August 31, 2022, 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, 2023, and the related notes and financial statement schedules
(collectively, the consolidated financial statements), and our report dated October 19, 2023 expressed an unqualified
opinion on those consolidated financial statements.
The Company acquired Fieldwise, LLC during fiscal 2023, and management excluded from its assessment of the
effectiveness of the Company’s internal control over financial reporting as of August 31, 2023, Fieldwise, LLC’s
internal control over financial reporting associated with less than 1% of consolidated revenues and 4% of total assets
included in the consolidated financial statements of the Company as of and for the year ended August 31, 2023. Our
audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control
over financial reporting of Fieldwise, LLC.
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.
61
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.
/s/ KPMG LLP
Omaha, Nebraska
October 19, 2023
62
ITEM 9B — Other Information
None.
ITEM 9C — Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
63
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 upcoming
Annual Meeting of Stockholders (the “Proxy Statement”) not later than 120 days after the close of its fiscal year ended
August 31, 2023. 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 Our Executive Officers” which is included therein in 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, 2023.
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, 2023 (there were no equity compensation plans not approved
by security holders as of August 31, 2023):
(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
193,513 $
193,513 $
115.96
115.96
217,146
217,146
(1)
Plans approved by stockholders include the Company’s 2010 and 2015 Long-Term Incentive Plans. While certain share-based awards remain
outstanding under the Company’s 2010 Long-Term Incentive Plan, no future equity compensation awards may be granted under such plan.
(2) Column (a) includes (i) 37,510 shares that could be issued under performance stock units (“PSU”) outstanding at August 31, 2023, and (ii)
37,533 shares that could be issued under restricted stock units (“RSU”) outstanding at August 31, 2023. The PSUs are earned and Common
Stock issued if certain predetermined performance criteria are met. Actual shares issued may be equal to, less than or greater than (but not
more than 200 percent of) the number of outstanding PSUs included in column (a), depending on actual performance. The RSUs vest and are
payable in Common Stock after the expiration of the time periods set forth in the related agreements. Column (b) does not take these PSU
and RSU awards into account because they do not have an exercise price.
ITEM 13 — Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 is incorporated by reference to the discussion responsive thereto under the
captions “Corporate Governance” and “Related Party Transactions” in the Proxy Statement.
64
ITEM 14 — Principal Accounting Fees and Services
Our independent registered public accounting firm is KPMG LLP, Omaha, Nebraska, Auditor Firm ID: 185. The
information required by this Item 14 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.
65
ITEM 15 — Exhibit and 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, 2023, 2022, and 2021 ........................
Consolidated Statements of Comprehensive Income for the years ended August 31, 2023, 2022, and 2021
Consolidated Balance Sheets as of August 31, 2023 and 2022 ......................................................................
Consolidated Statements of Shareholders' Equity for the years ended August 31, 2023, 2022, and 2021 .....
Consolidated Statements of Cash Flows for the years ended August 31, 2023, 2022, and 2021 ...................
Page
29
31
32
33
34
35
Notes to Consolidated Financial Statements ..................................................................................................
36-59
Valuation and Qualifying Accounts – Years ended August 31, 2023, 2022, and 2021 ..................................
67
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.
66
(a)(2) Financial Statement Schedules.
Lindsay Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
Years ended August 31, 2023, 2022, and 2021
(in thousands)
Year ended August 31, 2023:
Deducted in the balance sheet from the
assets to which they apply:
Additions
Balance at
beginning
of period
Charges to
costs and
expenses
Charged to
other
accounts
Deductions
Balance
at end of
period
Allowance for doubtful accounts (1)
Deferred tax asset valuation allowance (2)
$ 4,118
1,203
Year ended August 31, 2022:
Deducted in the balance sheet from the
assets to which they apply:
Allowance for doubtful accounts (1)
Deferred tax asset valuation allowance (2)
$ 3,422
1,091
Year ended August 31, 2021:
Deducted in the balance sheet from the
assets to which they apply:
Allowance for doubtful accounts (1)
Deferred tax asset valuation allowance (2)
$ 2,780
3,218
881
—
903
—
771
206
—
—
(49 ) $
(712 )
5,048
491
—
112
207 $
—
4,118
1,203
—
—
129 $
2,333
3,422
1,091
(1) Deductions consist of uncollectible items reserved, less recoveries of items previously reserved.
(2) 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 Index below.
67
EXHIBIT INDEX
Exhibit
Number
2.1
3.1
3.2
4.1
4.2
10.1
10.2
10.3
Description
Agreement and Plan of Merger, dated November 4, 2014, by and between Lindsay Corporation, Matterhorn Merger
Sub, Inc. and Elecsys Corporation, incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form
8-K filed on November 4, 2014.
Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s
Current Report on Form 8-K filed on December 14, 2006.
Amended and Restated By-Laws of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Current
Report on Form 8-K filed on August 22, 2023.
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 for the fiscal year ended August 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.†
First Amendment to Lindsay Corporation 2015 Long-Term Incentive Plan, incorporated by reference to
Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November 30,
2022.†
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.†
10.4**
Lindsay Corporation Management Incentive Plan (MIP), 2023 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, 2022.†
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
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.
Third Amendment to Amended and Restated Revolving Credit Agreement, dated August 26, 2021, 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 August 31, 2021.
Second Amended and Restated Line of Credit Note, dated August 26, 2021, by the Company in favor of Wells Fargo
Bank, National Association, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed on August 31, 2021.
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.
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.
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,
2022.
Employment Agreement, dated May 9, 2016, between the Company and Randy A. Wood, incorporated by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2016.†
Employment Agreement, dated August 17, 2020 between the Company and Randy A. Wood, incorporated by reference
to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020.†
68
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
21*
23*
24*
31.1*
31.2*
32*
Amendment to Employment Agreement, dated November 9, 2020, between the Company and Randy A. Wood,
incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 10, 2020.†
Employment Agreement, dated April 5, 2016, between the Company and Brian L. Ketcham, incorporated by reference
to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on April 5, 2016.†
Employment Agreement, dated 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.†
Employment Agreement, dated August 17, 2020, between the Company and Gustavo E. Oberto, incorporated by
reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020.
†
Consulting Agreement, dated November 9, 2020, between the Company and Timothy L. Hassinger, incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 10, 2020. †
Lindsay Corporation Nonqualified Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of the
Company's Current Report on Form 8-K filed on May 3, 2022.†
Lindsay Corporation Nonqualified Deferred Compensation Plan Adoption Agreement, incorporated by reference to
Exhibit 10.2 of the Company's Current Report on Form 8-K filed on May 3, 2022.†
Lindsay Corporation Directors Nonqualified Deferred Compensation Plan, incorporated by reference to Exhibit 10.4
of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2023.
Subsidiaries of the Company
Consent of KPMG LLP
The Power of Attorney authorizing Randy A. Wood to sign the Annual Report on Form 10-K for fiscal 2023 on behalf
of non-management directors.
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section
1350.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section
1350.
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 18 U.S.C. Section 1350.
101*
Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting
Language ("Inline XBRL").
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).
† Management contract or compensatory plan or arrangement required to be filed as an exhibit hereto pursuant to Item 15(b) of Form 10-K.
* Filed herein.
** Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets and asterisks because the identified
confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.
ITEM 16 — Form 10-K Summary
None.
69
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 19th day of October,
2023.
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 19th day of October, 2023.
/s/ RANDY A. WOOD
Randy A. Wood
Director, President and Chief Executive Officer
(Principal Executive Officer)
/s/ BRIAN L. KETCHAM
Brian L. Ketcham
Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
/s/ ROBERT E. BRUNNER
Robert E. Brunner
(1)
Chairperson of the Board of Directors
/s/ MICHAEL N. CHRISTODOLOU
Michael N. Christodolou
(1)
Director
/s/ PABLO DI SI
Pablo Di Si
/s/ IBRAHIM GOKCEN
Ibrahim Gokcen
/s/ MARY A. LINDSEY
Mary A. Lindsey
(1)
Director
(1)
Director
(1)
Director
/s/ CONSUELO E. MADERE
Consuelo E. Madere
(1)
Director
/s/ DAVID B. RAYBURN
David B. Rayburn
(1)
Director
(1) By: /s/ RANDY A. WOOD
Randy A. Wood, Attorney-In-Fact
70
CORPORATE INFORMATION
DIRECTORS
Robert E. Brunner
Director since 2013
Chairperson of the Board since 2021
Retired Executive Vice President,
Illinois Tool Works, Inc.
Director: Leggett & Platt, Inc.
Michael N. Christodolou
Director since 1999
Founder and Manager, Inwood Capital
Management, LLC
Director: NETSTREIT Corp.
Pablo Di Si
Director since 2022
President and Chief Executive Officer,
Volkswagen Group of America; Chief Executive
Officer, Volkswagen North American Region
Director: Copersucar; JHSF International
Ibrahim Gokcen
Director since 2021
Chief Data and Analytics Officer, Aon plc
Director: Maersk Tankers, PNO, and ZeroNorth
David B. Rayburn
Director since 2014
Retired President, Chief Executive Officer,
Modine Manufacturing Company
Randy A. Wood
Director since 2021
President and Chief Executive Officer
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
Retired Vice President Global Vegetables and
Asia Commercial, Monsanto
Director: Nutrien
OFFICERS
Randy A. Wood
President and Chief Executive
Officer
Joined Lindsay in 2008
Eric R. Arneson
Senior Vice President,
General Counsel and Secretary
Joined Lindsay in 2008
Richard A. Harold
Senior Vice President,
Global Operations
Joined Lindsay in 2022
Brian L. Ketcham
Senior Vice President and
Chief Financial Officer
Joined Lindsay in 2016
Brian J. Magnusson
Senior Vice President, Strategy
and Business Development
Joined Lindsay in 2015
J. Scott Marion
President - Infrastructure
Joined Lindsay in 2011
Annual Meeting
All shareholders are invited to attend our annual meeting, which will be
held on January 9, 2024, at 8:30 am CST. All shareholders are invited
to attend the annual meeting online and submit your questions during
the meeting by visiting www.virtualshareholdermeeting.com/
LNN2024. 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
2023 quarter-end dates are November 30, 2022, February 28, 2023,
May 31, 2023 and August 31, 2023. 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
Kansas City Capital Associates
Monness, Crespi, Hardt & Co., Inc.
Northcast Research
Roth Capital Partners
Stifel Nicolaus
William Blair & Co., LLC
Melissa G. Moreno
Senior Vice President and
Chief Information Officer
Joined Lindsay in 2021
Gustavo E. Oberto
President – Irrigation
Joined Lindsay in 2019
Kelly M. Staup
Senior Vice President –
Human Resources
Chief Diversity Officer
Joined Lindsay in 2011
Lori L. Zarkowski
Corporate Controller and
Chief Accounting Officer
Joined Lindsay in 2007
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 2023. These exhibits are signed by the Principal Executive
Officer and the Principal Financial Officer, respectively. Additionally,
on January 31, 2023, 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:
Brian L. Ketcham
Senior Vice President and Chief Financial Officer
18135 Burke Street, Suite 100
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.
LINDSAY USA
Lindsay Corporation
Global Headquarters
18135 Burke Street, Suite 100
Omaha, Nebraska 68022 U.S.A
Ph: 1-402-829-6800
Toll-free: 1-866-404-5049
www.lindsay.com
LINDSAY INTERNATIONAL
Lindsay Europe SAS
72300 La Chapelle
D’Aligne, France
Ph: 33-2-4348-0202
Lindsay Africa Pty. Ltd.
6 Talana Close
Sacks Circle
Bellville South, 7530
South Africa
Ph: +27 (21) 986 8900
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
Lindsay Irrigation Solutions, LLC
214 East Second Street
Lindsay, Nebraska 68644 U.S.A
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
Elecsys International, LLC
846 North Mart-Way Court
Olathe, Kansas 66061 U.S.A.
Ph: 1-913-647-0158
FieldWise, LLC
3607 Bradford Avenue
Norfolk, Nebraska 68701 U.S.A.
Ph: 1-713-300-0472
Lindsay Sulama (Türkiye)
Karamehmet Mahallesi
Avrupa Serbest Bölgesi AdnanArısoy
Bulvarı NO : 11 / Z13
Ergene-Tekirdag
Adres No : 3402119204
Türkiye
Snoline S.P.A.
Via F. Baracca 19/23
20056 Trezzo sull’Adda
Milan, Italy
Ph: 39 02 909961
Lindsay (Tianjin) Industry Co., Ltd.
169 Huanhenan Road
Tianjin Airport Economic Area (TAEA)
Tianjin 300308
China
Ph: +86 22 5867 9198
Lindsay International Holdings, B.V.
Weena 264
3012 NJ Rotterdam
The Netherlands
Ph: +31 (10) 870-1340
Lindsay International (ANZ) Pty. Ltd.
433 Logan Road
Stones Corner
Queensland 4120
Australia
Ph: +61 (7) 4613 5000
Lindsay International (ANZ) Pty. Ltd.
Level 4
20 The Square
Palmerston North, 4410
New Zealand
Ph: +64 6 212 0550
©2023 Lindsay Corporation. All rights reserved.
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