Lindsay Corporation (NYSE:LNN) Q4 2023 Results Conference Call October 19, 2023 11:00 AM ET

Company Participants

Randy Wood - President, CEO

Brian Ketcham - CFO

Conference Call Participants

Nathan Jones - Stifel

Brian Wright - ROTH Capital Partners

Brian Drab - William Blair

Brett Kearney - Gabelli Funds

Operator

Hello, and welcome to the Lindsay Corporation Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Randy Wood, President and CEO. Please go ahead.

Randy Wood

Thank you, and good morning, everyone. Welcome to our fourth quarter and full year earnings call. With me today is Brian Ketcham, our Chief Financial Officer.

Fiscal 2023 marked a year of significant achievements for Lindsay. Our teams executed extremely well across both of our business segments, which helped deliver record full year net earnings and earnings per share results. Fourth quarter performance was highlighted by strong irrigation results, specifically in Brazil, which recorded record levels of revenue and operating income. Our commercial efforts, including price management, coupled with the efficiency initiatives and organic growth in our international regions helped drive record operating income and operating margins within our irrigation business. These strong income results were achieved despite difficult year-over-year comps and a lower top line when compared to 2022.

Turning to market outlook. Similar to the comments I made last quarter, our market outlook for Lindsay's business segments and key end markets remains positive in the near term. As it relates to our North American irrigation end markets, current commodity prices and U.S. net farm income projections should continue to support healthy demand as we begin our fiscal 2024. While income for growers dipped slightly when compared to the record levels we saw, growers will be profitable this year. While customers did take a wait-and-see approach this spring, we're seeing evidence of a strong fall selling season based on year-over-year order trends.

Within our international irrigation markets, we experienced strong growth during the fourth quarter, particularly across Brazil and South America. We expect international sales volume levels to remain robust in fiscal 2024 and supported by strong fundamentals in the mature markets and the continued expansion and project potential in the emerging and developing markets where irrigation presents significant opportunities for yield enhancement to address food security and weather uncertainty.

Turning to infrastructure. We continue to see positive near-term and long-term market opportunities driven by federal funding provided by the Infrastructure Investments and Jobs Act in the United States. This funding as it continues to be distributed will support necessary investments in roadway infrastructure, and we believe this will ultimately broaden our infrastructure sales and leasing pipeline. While comparisons were difficult relative to the prior year, where we benefited from a number of non-repetitive Road Zipper project wins, our focus on funnel management did generate leasing growth in 2023. Going forward, we see secular demand strength to both sales and leasing for Road Zipper and expect solid earnings support from our line of road safety products.