Lindsay : 2021 Annual Report

INNOVATIONDRI EN BY

DISTINGUISHED BY

EXCELLENCE

2 0 2 1 A N N U A L R E P O R T

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. Lindsay's agricultural irrigation solutions include center pivot and lateral-move systems, remote irrigation management and 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.

DIRECTION

EXECUTION

CULTURE

THE LINDSAY WAY

VISION

The innovation and market leader in our core businesses.

MISSION

Conserve natural resources, enhance the quality of life for people and expand our world's potential.

PURPOSE		PEOPLE	PROCESS	PERFORMANCE
Sustainability		Diversity, Equity	Continuous	Operating
Social		& Inclusion	Improvement	Margin
Responsibility		People	Commercial	Organic
Leadership &		Development	Excellence	Growth
Governance		People Analytics	Operational	Return on
				Excellence	Invested Capital
			STRATEGY & VALUE CREATION
VALUES & EXPECTATIONS	BEHAVIORS		PRIORITY PRACTICES
Leadership	Safety	Build Trust		Act Like an Owner
Integrity	Ethics	Unlock Creativity		Celebrate Each Other
Collaboration	Quality	Customer-First Innovation	Play to Win
Accountability		One Lindsay
Respect for Others

FINANCIAL AND OPERATING HIGHLIGHTS

	REVENUE		OPERATING INCOME	DILUTED EARNINGS PER SHARE
444.1	474.7	567.6	6.1	54.2	54.1	0.20	3.56	3.88
			$24.01
						$1.452
2019	2020	2021	2019	2020	2021	2019	2020	2021

(Dollars in millions, except per share amounts)	2021	2020	2019
OPERATING RESULTS
Operating revenues	567.6	474.7	444.1
Operating income 1	54.1	54.2	6.1
Net earnings 2	42.6	38.6	2.2
Effective tax rate 3	15.5%	20.9%	-3.1%
Diluted earnings per share 2	3.88	3.56	0.20
Cash dividends per share	1.30	1.26	1.24
FINANCIAL POSITION
Working capital	277.9	245.5	231.4
Total assets	637.2	570.5	500.3
Long-term debt, including current installments	115.7	115.9	116.1
Total shareholders' equity	338.4	298.5	268.2
Invested capital 4	454.2	414.4	384.3
FINANCIAL MEASURES
Gross margin	26.5%	32.1%	25.8%
Operating margin	9.5%	11.4%	1.4%
Return on invested capital 5	10.5%	10.7%	1.6%
Return on beginning shareholders' equity 6	14.3%	14.4%	0.8%
OTHER DATA
Diluted weighted average shares	10,985	10,861	10,810
Number of employees	1,235	1,125	1,069

1. Fiscal 2019 operating income includes costs of $15.1 million associated with the Foundation for Growth initiative ("FFG costs"), and a $2.8 million valuation adjustment for indirect tax credits in a foreign jurisdiction. On an adjusted basis, operating income was $24.0 million and operating margin was 5.4%.
2. Fiscal 2019 net earnings and diluted earnings per share include the aggregate after-tax impact of FFG costs and valuation adjustment of $13.5 million, or $1.25 per diluted share. On an adjusted basis, net earnings were $15.6 million, or $1.45 per diluted share.
3. On an adjusted basis, the effective tax rate for fiscal 2019 was 21.9%.
4. Defined as current and long-term debt plus shareholders' equity.
5. Defined as operating income after-tax (using effective tax rate) divided by the average of beginning and ending invested capital. On an adjusted basis, return on invested capital for fiscal 2019 was 4.8%.
6. Defined as net earnings divided by beginning of period shareholders' equity. On an adjusted basis, return on beginning shareholders' equity for fiscal 2019 was 5.6%.

1

TO OUR SHAREHOLDERS

Fiscal 2021 marked a year of continuous improvement infused by a commitment to sustainable practices and organizational health.

It was an extraordinary year in which our team demonstrated agility and resiliency in the face of the ongoing global pandemic. We remain highly focused on the health and safety of our global organization, where we define safety as non-negotiable.

Innovation-Driven Strategies for Growth

During the year, Lindsay grew in many ways through an empowered culture and an innovation-driven strategy fully focused on customer- first solutions. We celebrated industry-first milestones and reported strong growth during a rapidly changing macro environment. Through transformative actions taken over the past few years, we are well positioned to capitalize on market tailwinds while navigating persistent headwinds presented by the COVID-19 pandemic. From this position of strength, we reported 20 percent consolidated revenue growth and a

9 percent growth in earnings per diluted share. Operating margin reached

9.5 percent through disciplined pricing actions offset by pandemic-related project delays and high input costs, particularly in steel and freight. We believe these are extraordinary short-term pressures, and we expect to return to our operating margin goal of 11 to 12 percent.

			$567.6M	$3.88
			$3.56
	$474.7M
FY21	FY21
CONSOLIDATED				EARNINGS
REVENUE				PER SHARE
20%				9%
+				+

2020

2021

2020

2021