Lindsay Corporation 2026 Q4 Earnings Call

Please go ahead. Thank you, and good morning, everyone.

Welcome to our fiscal 2026 fourth quarter and full year earnings call. With me today are Alicia Pfeifer and Brett Coburn, our Co-Interim Chief Financial Officers. I want to begin by recognizing our global teams for their strong execution, resilience, and operational discipline throughout the year as we remain focused on our priorities, strengthening operational performance, improving our cost structure, and making targeted investments that enhance our competitive position and support long-term growth. From expanding our agricultural technology offerings and manufacturing capabilities to pursuing strategic acquisitions and developing new infrastructure solutions, our actions are designed to position Lindsay to generate sustainable value through the market cycle. In irrigation, we executed extremely well in project markets while remaining disciplined in challenging North America and Brazil markets. In infrastructure, our team continued to leverage improving market fundamentals and stable financing conditions to deliver growth.

That same operating discipline is reflected in our safety performance. Safety is a core One Lindsay value, and this year we achieved a total recordable incident rate below 1.0, representing a world-class level of performance. Our Norfolk, Olathe, France, and Italy operations each achieved perfect safety records for the year. I am extremely proud of these accomplishments and grateful to our employees around the world for their continued commitment to work safely every day. We also strengthened our financial position by actively managing pricing, implementing structural cost reductions, and driving operational efficiencies. In June, we executed a global restructuring plan focused on streamlining operations and simplifying the organization. We expect these actions to generate $8 million in net annualized cost reductions after reinvesting a portion of the savings in our highest priority growth initiatives.

The resulting leaner operating model should improve efficiency and drive stronger operating leverage as market conditions improve. In North America, we saw encouraging signs of improvement in the fourth quarter, with irrigation revenues increasing 11%, driven primarily by higher unit volumes and storm damage. Improving commodity prices also supported stronger customer sentiment early in the quarter, with corn moving above $5 per bushel. While commodity prices have receded recently and market conditions remain below what we would consider mid-cycle, the improvement we saw during the quarter reinforces our confidence that demand can recover as farm economics strengthen. For that recovery to become more sustained, growers will need greater forward visibility and improved net farm income. Until then, we expect irrigation equipment investment to remain relatively subdued. Our agricultural technology business continued to build momentum, reflecting strong execution against our innovation strategy.

Annual recurring revenue grew approximately 11% year-over-year, extending our five-year CAGR to more than 15%. Through solutions such as FieldNET and FieldNET Advisor, we are expanding our relationships with growers beyond the initial equipment sale, providing technology that helps customers improve productivity, optimize water usage, and make more informed operating decisions. The continued growth of this business demonstrates our ability to build recurring revenue streams, deepen customer relationships, and create additional opportunities for long-term growth. In Brazil, near-term irrigation demand continues to be constrained by high interest rates, limited credit availability, and softer crop economics, with election-related uncertainty also contributing to some delayed purchasing decisions. However, we are seeing encouraging signs of underlying demand. Expectations for drier conditions in the north are increasing grower interest in irrigation, and quotation activity has improved year-over-year.

We view this as a positive leading indicator, although a more meaningful recovery will depend on improvement in financing conditions and grower economics. In the MENA region, our team completed all scheduled equipment shipments despite ongoing regional uncertainty, and we recognized approximately $70 million of revenue during the fiscal year. The remaining balance is for services revenue in the region, which we expect to recognize over the next 12 to 24 months. Our ability to provide equipment, technology, and ongoing service support is an important differentiator in these large-scale projects. We also believe this services-based model deepens our customer relationships and generates longer-term revenue. As our install base expands, we see opportunities for additional technology adoption, aftermarket products, and ongoing services, extending the value of these projects beyond the initial equipment sale.

In infrastructure, we continue to deliver solid growth and strong operating performance driven by our road safety products business. This marked our third consecutive quarter of growth as continued road infrastructure investment supported healthy demand. While the Infrastructure Investment and Jobs Act expired at the end of September, funding has been extended through the end of the calendar year. Looking ahead, as the BUILD America 250 Act progresses, we remain confident in the underlying infrastructure funding environment and the long-term growth opportunity it provides for our business. We are also encouraged by the momentum in Road Zipper leasing and continue to pursue additional project opportunities. Turning to our outlook. In North America, elevated fuel and fertilizer costs continue to pressure farm economics, but a sustained improvement in net farm income and customer confidence would provide an important catalyst for broader recovery in irrigation investments.

We continue to see Brazil as one of the most compelling long-term growth markets for global irrigation. Although financing availability and election uncertainty remain important factors in near-term demand, the underlying fundamentals continue to support our confidence in the market's long-term growth potential. Consistent with that view, we have signed a definitive agreement to acquire Setorial Irrigação, a leading Brazilian manufacturer of hose reel and irrigation equipment. This targeted investment builds on our existing capabilities in the region and advances two strategic priorities, capitalizing on growth opportunities in Brazil and creating incremental value for customers through a broader portfolio of irrigation solutions.

We believe hose reels are a natural complement to our Zimmatic center pivots, particularly for smaller and irregularly shaped fields and applications such as sugarcane, where Setorial has strong customer relationships. Over time, we see opportunities to leverage our existing dealer network to expand Setorial's reach, introduce Zimmatic solutions to Setorial customers, and grow the business across Latin America. The transaction is subject to customary closing conditions and is expected to close in the coming months. Our success in MENA continues to reinforce our confidence in the long-term opportunity in the region, supporting food security and water conservation. While the project pipeline remains active, we do not currently anticipate any large project awards to begin delivery in fiscal 2027. In infrastructure, we expect continued growth in road safety products, supported by ongoing infrastructure investment and new product introductions.

We expect Road Zipper leasing to remain generally in line with fiscal 2026, while the project pipeline remains active with a number of opportunities under development. Our major capital investment at the Lindsay, Nebraska facility continues to progress with our next generation galvanizing operation expected to be online before calendar year end. Together with our tube mill investment, these capabilities are designed to improve safety, increase capacity and productivity, and provide greater operating flexibility across the cycle. We believe the added capacity also creates new growth opportunities by enabling us to expand our contract manufacturing business and serve growing demand for galvanizing services throughout the Midwest. Lastly, I want to thank Alicia and Brett for their leadership and commitment as interim co-CFOs. Together with our board, we have made strong progress in our CFO search and are very pleased with the caliber of candidates we have evaluated.

We are now in the final stages of the process and expect to announce our selection in the coming weeks. With that, I would like to turn the call over to Alicia to discuss our fiscal fourth quarter and full year financial results.

Alicia? Thank you, Randy, and good morning, everyone.

Total revenues for the fourth quarter of fiscal 2026 were $161.6 million, an increase of 5% compared to the fourth quarter last year. Net earnings for the quarter were $11.3 million, or $1.10 per diluted share, compared to net earnings of $10.8 million, or $0.99 per diluted share in the fourth quarter last year. Total revenues for the full year 2026 were $635.9 million, a decrease of 6% compared to the prior year. Net earnings were $55.7 million compared to $74.1 million in the prior year. Earnings per share were $5.33 per diluted share, a decrease of 21% compared to the prior year. Full year results reflected lower revenues in both segments as the irrigation segment was negatively impacted by the lower comparative project size in the MENA region and lower sales volumes in North America and Brazil.