Lindsay Corporation (NYSE:LNN) Q2 2024 Earnings Conference Call April 4, 2024 11:00 AM ET

Company Participants

Randy Wood - President and Chief Executive Officer
Brian Ketcham - Chief Financial Officer

Conference Call Participants

Ryan Connors - Northcoast Research
Tyler Hutin - William Blair
Jon Braatz - Kansas City Capital
Brett Kearney - American Rebirth Opportunity Partners
Adam Farley - Stifel Nicolaus

Operator

Hello, and welcome to the Lindsay Corporation Fiscal Second Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to hand the call to Randy Wood, President and CEO. Please go ahead.

Randy Wood

Thank you, and good morning, everyone. Welcome to our fiscal 2024 second quarter earnings call. With me today is Brian Ketcham, our Chief Financial Officer. I am pleased with the consolidated performance and resilience of our business through the first-half of this fiscal year. While market conditions in South America have temporarily impacted activity across the agriculture industry, the performance of our North American irrigation business continues to be supported by steady demand amid tempered grower sentiment. Additionally, in our Infrastructure business, the continued mix shift towards leasing for our leading Road Zipper System is delivering meaningful margin expansion.

Overall, I am encouraged by our ability to execute operationally and strategically in order to drive profitability across the organization, as well as the actions we've taken to navigate suboptimal market conditions in some regions. In North America, our Irrigation business saw comparable whole goods demand versus the second quarter of last year, which was largely in line with expectations, and supported by the carryover impact of sold farm profits from last year. While stable demand in North American end markets has supported our year-to-date revenue results, we are approaching the back-half of the year with tempered expectations.

The USDA recently released its initial 2024 net farm income projections, which were significantly below initial market forecasts and expectations. While this has the potential to negatively impact farmer sentiment and the deployment of investment dollars for new equipment in the near-term, it's still very early in the season. Moving to international irrigation, where we continue to see a softening of demand. In particular, the Brazilian market has experienced reduced grower profitability, limited access to financing, and constrained investment capacity. While we're facing a challenging external operating environment in Brazil in the near-term, we're still very confident in the mid to long-term opportunities in this market.