Lindsay Corporation: An affair to remember

Crystal D. Vogt | May 02, 2008 3:31pm EDT | Comment

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Lindsay Corporation (NYSE:LNN)
Omaha, Neb.
http://www.lindsaymanufacturing.com

52-week low / high: $29.78/$131.14
Shares Outstanding: 11.92 million
Market Capitalization: $1.21 billion

Who knew that crop irrigation and traffic flow could be such a fateful match? Lindsay Corporation (NYSE:LNN) has successfully melded the two segments under its umbrella of self-propelled center pivots and crash cushions, proving that a love affair between apples and oranges can exist under the right conditions.

Lindsay manufactures the joints of the irrigation industry – in the form of lateral move irrigation systems and self-propelled center pivots, both used to stabilize crop production while preserving water, energy and labor. These products are marketed domestically and internationally under its Zimmatic brand. Lindsay also makes separate lines of center pivot and lateral move irrigation equipment for use on smaller fields under its Greenfield and Stettyn brands, and hose reel travelers under the Perrot brand.

If that’s not enough to get you thinking of “greener” pastures, the company also produces irrigation controls, mini-pivots, hose reel travelers, and chemical injection systems and remote monitoring and control systems, which include remote telemetry and a Web or personal-computer-hosted data acquisition and monitoring application.

For investors wanting to plant a more industrial seed in their portfolios, Lindsay dabbles in not only irrigation, but also infrastructure. This segment produces and markets large diameter steel tubing, movable barriers for traffic lane management, and crash cushions (used at toll booths, freeway off-ramps, medians and roadside barrier ends, bridge supports, utility poles, reflective pavement tapes and other road safety devices). The company also provides outsourced manufacturing and production services to other businesses.

Lindsay’s recent results are a resounding green light to financial success. Buckle your seatbelts, profits ahead: net income for the three months ended Feb. 29, 2008 jumped a whopping 288% to $9.7 million, or $0.79 per share, from $2.5 million, or $0.21 per share. Lindsay's gross margin improved to 27.7% from 22.7% a year ago, while revenue soared more than 70% to $108.4 million. The company’s EPS of $0.79 beat the consensus by 132%. Quarterly results included revenue from recently acquired businesses Watertronics Inc. (a leader in water pumping stations and controls for the golf, landscape and municipal markets) and Snoline SpA.

"Demand for irrigation equipment is strong globally, supported by higher commodity prices, biofuel expansion and water initiatives," says Rick Parod, Lindsay's president and chief executive officer. "Infrastructure segment demand for the unique solutions provided by our products is also strong, and we continued to realize synergies from the acquisitions in this segment during the period."

With Lindsay’s segments flirting with robust demand for irrigation products in 2008 both domestically and internationally, and consistent growth of roads and highways, the pair sound like a match made in investor heaven.

For more information on the company, read Lindsay Corporation: The rainmaker.

Note: Lindsay Corporation (NYSE:LNN) is on the "Watch List" of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Lindsay displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.