Lindsay : Fourth Quarter 2020 Earnings Slide Deck

4th Quarter Fiscal 2020 Earnings Slide Deck

Safe-Harbor Statement

This presentation contains forward-looking statements that are subject to risks and uncertainties and which reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance, financial results and planned financing. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission.

Investors should understand that a number of factors could cause future economic and industry conditions, and the Company's actual financial condition and results of operations, to differ materially from management's beliefs expressed in the forward-looking statements contained in this presentation. These factors include but are not limited to those outlined in the "Risk Factors" sections of the Company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission and the Company's quarterly report on Form 10-Q for the fiscal quarter ended February 29, 2020, and investors are urged to review these factors when considering the forward-looking statements contained in this presentation.

For these statements, the Company claims the protection of the safe harbor for forward- looking statements contained in the Private Securities Litigation Reform Act of 1995.

For full financial statement information, please see the Company's earnings release dated October 22, 2020.

2

Fourth Quarter Summary

Amounts in millions, except per share amounts
Revenue	Operating Income

Diluted EPS

$128.4

$101.9

FY19 FY20

GAAP

$17.5

13.6%

$4.1

4.0%

FY19

Adjusted*

$17.5

13.6%

$8.8

8.6%

FY20

GAAP		Adjusted*
$1.35				$1.35
				$0.54
$0.14
			FY19		FY20

• Revenues increased $26.5 million compared to prior year
• • Irrigation increased $6.1 million
  • Infrastructure increased $20.4 million
• Operating income increased $8.7 million compared to adjusted prior year results*
• • Irrigation decreased $0.5 million including negative impact of additional expenses of $1.6 million
  • Infrastructure increased $10.8 million
  • Corporate expense increased $1.6 million due mainly to incremental incentive expense

*Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.

3

Fiscal 2020 Summary

Amounts in millions, except per share amounts
Revenue	Operating Income

Diluted EPS

$474.7

$444.1

FY19 FY20

GAAP

$54.2

11.4%

$6.1

1.4%

FY19

Adjusted*
	$54.2
$24.0	11.4%
5.4%
FY20

GAAP

$3.56

$0.20

FY19

Adjusted*

$3.56

$1.45

FY20

• Revenues increased $30.6 million compared to prior year
• • Irrigation decreased $8.0 million
  • Infrastructure increased $38.6 million
• Operating income increased $30.2 million compared to adjusted prior year results*
• • Irrigation increased $6.9 million
  • Infrastructure increased $27.0 million
  • Corporate expense increased $3.7 million due mainly to incremental incentive expense

*Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.

4

Fourth Quarter and FY20 Financial Summary

	($ in millions, except per share amounts)	Q4 - FY20	Q4 - FY19	Change
	Revenue
	North America irrigation	$	39.8	$	41.5	-4%
	International irrigation	$	35.8	$	28.0	28%
	Irrigation	$	75.6	$	69.5	9%
	Infrastructure	$	52.8	$	32.4	63%
	Total revenue	$	128.4	$	101.9	26%
	Operating income	$	17.5	$	4.1	330%
	Adjusted operating income*	$	17.5	$	8.8	98%
	Net earnings	$	14.7	$	1.5	876%
	Adjusted net earnings*	$	14.7	$	5.8	152%
	Diluted earnings per share (EPS)	$	1.35	$	0.14	864%
	Adjusted diluted EPS*	$	1.35	$	0.54	150%

		FY20		FY19	Change
$	219.0	$	218.6	0%
$	124.6	$	132.9	-6%
$	343.5	$	351.5	-2%
$	131.2	$	92.6	42%
	$	474.7	$	444.1	7%
	$	54.2	$	6.1	786%
	$	54.2	$	24.0	126%
	$	38.6	$	2.2	1678%
	$	38.6	$	15.6	147%
	$	3.56	$	0.20	1665%
	$	3.56	$	1.45	145%

*Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.

5

Current Market Factors

Irrigation

• Global commodity prices declined significantly earlier in the year as a result of the COVID-19 pandemic but have recently recovered as the demand environment has improved and production estimates from the U.S. harvest have declined.
• 2020 Net Farm Income is projected by the USDA to be $102.7 billion, an increase of 22.7% from 2019. The increase is coming primarily from higher Federal government direct farm program payments.
• Under the U.S.-China Phase 1 trade deal, China pledged to increase purchases of U.S. agricultural products by $32 billion over two years. Year-to-date exports to China have increased over the prior year but remain below commitments in the trade deal.
• Ethanol demand has improved since falling earlier in the year but remains lower than a year ago.
• Food security has become an increased concern in certain international markets.

Infrastructure

• The five-year $305 billion U.S. highway bill enacted in December 2015 (the "FAST Act") was set to expire September 30, however Congress and the Administration have approved the Continuing Appropriations Act, which extended the FAST Act for one year. This provides funding certainty for road and bridge projects over this period.
• Construction activity has slowed globally because of the COVID-19 pandemic.
• Our "shift left" strategy continues to gain traction in increasing the addressable market for Road Zipper System® sales and lease opportunities.
• States continue the transition to new federal MASH testing standards for road safety products. Almost all our road safety product offerings in the U.S. have now received MASH eligibility but are pending approval in certain states.

6

Irrigation Segment - Fourth Quarter Summary

Amounts in millions

Revenue

$41.5	$39.8

North America

FY19

$35.8

$28.0

International

FY20

• North America revenue decreased $1.7 million
• • Engineering services project in prior year did not repeat
  • Increase in irrigation equipment unit volume
  • Higher sales of replacement parts
  • Lower average selling prices
• International revenue increased $7.8 million
• • Higher sales volumes in Brazil, Australia and the Middle East
  • Unfavorable currency impact of $3.4 million

Operating Income

GAAPAdjusted*

$6.3

$5.8$5.8

$3.59.0%

7.7%7.7%

• Operating income decreased $0.5 million compared to adjusted prior year results*
• • Additional expenses of $1.6 million related to an increase in the environmental remediation liability and severance costs
  • Excluding these additional expenses, operating margin was 9.8%

5.0%

FY19 FY20

*Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.

7

Infrastructure Segment - Fourth Quarter Summary

Amounts in millions

Revenue

$52.8

$32.4

FY19 FY20

Operating Income

GAAP Adjusted*

$20.1$20.1

38.0%38.0%

$9.3$9.3

28.8%28.8%

• Total revenue increased $20.4 million
• • Increase in Road Zipper System® sales
  • • Highways England project
    • Japan barrier order
  • Road safety products revenue comparable to prior year
  • Impact of COVID-19-related delays were mitigated by pulling forward other projects
• Operating income increased $10.8 million and operating margin increased to 38.0%
• • Positive mix impact from higher-margin Road Zipper System sales
  • Improved cost and pricing performance

FY19 FY20

*Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.

8

COVID-19 Update

Lindsay's products and technologies support the following critical infrastructure sectors as defined by the Department of Homeland Security (CISA.gov) and other global government agencies:

• Food and Agriculture - our irrigation business supports the production of food and the conservation of water and energy
• Transportation Systems - our infrastructure business supports the movement of people and goods efficiently, safely and securely

Lindsay's production facilities are considered "business essential" and will remain operational as long as we 1) have demand for our products, 2) are allowed to remain open by local governments, and 3) can provide for the safety of our employees. At the present time, all of our facilities are operational.

Other potential business impacts associated with COVID-19include but are not limited to: additional facility closures and the duration of such closures, supply chain disruption and additional costs, logistics delays, border closures, workforce disruption, reduced demand for our products and services, delay in the implementation of projects and other effects that may result from a general economic downturn.

Lindsay is well positioned with a strong balance sheet and sufficient liquidity as we face the uncertainty and challenges presented by the COVID-19 pandemic. As of August 31, 2020 we have:

• Available liquidity of $190.9 million, with $140.9 million in cash, cash equivalents and marketable securities and $50.0 million available under revolving credit facility
• Total debt of $115.9 million, of which $115.0 million matures in 2030
• A funded debt to EBITDA leverage ratio (as defined in our credit agreements) of 1.5 compared to a covenant limit of 3.0

9

COVID-19 Protocols in Place

Protecting the health and well-being of our employees is a top priority, as is maintaining frequent communication and providing important updates. Since the outset of the pandemic, we have:

• Created a global task force and communication strategy
• Implemented social distancing protocols
• Initiated remote work strategy for employees not essential to factory operations
• Restricted domestic and international travel for business-essential purposes
• Completed an electrostatic spray deep clean at our global headquarters
• Placed certain limitations on visitors to all our facilities
• Conducted screening questionnaires for all facility visitors
• Increased frequency and intensity of disinfecting all high-touch areas
• Implemented temperature checks at facilities in high risk locations
• Implemented staggered breaks in our factory operations
• Created a COVID-19 Manager at each facility to ensure rigid discipline of protocols
• Established protocols in the event of a confirmed COVID-19 diagnosis
• Implemented virtual or phone meeting protocols

10

Executing Long-Term Value Creation

• Deepening customer relationships through technology differentiation
• Solutions and growth aligned to market megatrends…. designed to sustain and protect our evolving world
• Foundation for Growth initiative driving margin expansion
• Empowered global culture through Vision, Values and Behaviors Framework

ONE LINDSAY

Innovative Market Leader

- Sustainable Solutions

11

Foundation for Growth Initiative

Objectives

• Raise operating margin floor
• Innovation leader in core markets
• Renewed culture and identity

1		2		3		4
Commercial		Global		Manufacturing		Lower G&A
Excellence		Sourcing		Optimization		Expenses

5 Cultural Changes	6	Strategic Choices
Margin improvement	Cost	Strategy and Culture

12

Foundation for Growth Execution

Accomplishments through Fiscal 2020

• Divested four non-core businesses; acquired Net Irrigate, LLC
• Closed and sold an infrastructure facility; consolidated activity into an existing irrigation facility
• Established a centralized sourcing & shared services organization
• Achieved 1st quartile ranking in organizational health assessment
• Delivered 11.4% operating margin

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Summary Balance Sheet

($ in millions)

August 31, 2020

August 31, 2019

Cash, cash equivalents and marketable securities	$140.9	$127.2
Current assets	$347.9	$313.5
Current liabilities	$102.4	$82.1
Net working capital	$245.5	$231.4
Long-term debt	$115.7	$115.8
Shareholders' equity	$298.5	$268.2

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Summary of Cash Flow

	($ in millions)	FY20	FY19
	Net earnings	$38.6	$2.2
	Depreciation / amortization	$19.4	$14.0
	Other non-cash adjustments	$9.0	$2.1
	Changes in assets and liabilities:
	Receivables	($9.5)	($8.0)
	Inventories	($14.0)	($16.2)
	Other	$2.5	$9.7
	Net cash provided by operations	$46.0	$3.8
	Purchases of property, plant and equipment	($21.4)	($23.2)
	Dividends paid	($13.6)	($13.4)

15

Capital Allocation - Last 10 Years

Allocation Plan

• Targeted cash balance of $60-75 million, including international accounts
• • To support cyclical and seasonal fluctuations in working capital and projected capital expenditures
• $115 million in Senior Notes maturing on 2/19/30 at annual interest rate of 3.82%
• The Company's prioritization for cash use:
• • Organic growth initiatives
  • Capital expenditures - expected to be $15-20 million in fiscal 2021

			Allocation History
$700,000
$ in thousands			$3.8						= Source of Cash
									= Use of Cash
$600,000
		$114.4		$134.2
							65% of cash from operations
$500,000							returned to shareholders
					$77.9
$400,000
						$104.6
					47% of cash from operations
$300,000		$449.8			invested in growth
							$186.3
$200,000
$100,000
										$140.9
$83.4
$-
	Beginning Cash	Cash from	Long-term Debt	Other (1)	Capital	Acquisitions net	Dividends		Share	Ending Cash(2)
(8/31/10)	Operations			Expenditures	of Divestitures		Repurchases	(8/31/20)

1. Other includes debt repayments, net cash sources/uses from note receivables, net investment hedges, stock compensation and related tax benefits.
2. Ending cash includes marketable securities

• Dividend payments
• Synergistic acquisitions that leverage core capabilities
• Excess cash invested in opportunistic share repurchases

16

Attractive Long-Term Megatrends

Water Conservation

Advancing Technology

Improve Road Safety

Population Growth

Alternative Fuels

Increase Yields

17

Regulation G Reconciliation of GAAP to Non-GAAP Financial Measures

LINDSAY CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)

The non-GAAP tables below disclose (a) the impact on diluted earnings per share of (1) consulting fees, severance costs and loss from business divestitures, associated with the Company's Foundation for Growth Initiative ("FFG costs"), and (2) a valuation adjustment for indirect tax credits in a foreign jurisdiction ("valuation adjustment"), (b) the impact on operating income of FFG costs and the valuation adjustment, and (c) the impact on segment operating income of FFG costs and the valuation adjustment. Management believes adjusted net earnings, adjusted diluted earnings per share and adjusted operating income are important indicators of the Company's business performance because they exclude items that may not be indicative of, or may be unrelated to, the Company's underlying operating results, and provide a useful baseline for analyzing trends in the business. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings, diluted earnings per share and operating income. These non-GAAP financial measures reflect an additional way of viewing the Company's operations that, when viewed with the GAAP results and the following reconciliations to the corresponding GAAP financial measures, management believes provides a more complete understanding of the Company's business.

			Three months ended			Twelve months ended
			August 31,		Diluted earnings			August 31,		Diluted earnings
(in thousands, except per share amounts)			2019			per share			2019			per share
Net earnings - reported GAAP measure	$	1,503	$	0.14	$	2,172	$	0.20
FFG costs - pre-tax		1,947			0.18			15,113			1.40
Valuation adjustment - pre-tax		2,795			0.26			2,795			0.26
Total adjustments		4,742			0.44			17,908			1.66
Tax effect of adjustments*		(428)			(0.04)			(4,454)			(0.41)
Net earnings - adjusted	$	5,817	$	0.54	$	15,626	$	1.45
Average shares outstanding - diluted					10,816						10,810

* The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction.

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Regulation G Reconciliation of GAAP to Non-GAAP Financial Measures

LINDSAY CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited) (Continued)

Operating income reconciliation				Three months ended August 31, 2019
Consolidated			Irrigation		Infrastructure			Corporate
Operating income - reported GAAP measure	$	4,060	$	3,463	$	9,340	$	(8,743)
FFG costs		1,947			-			-			1,947
Valuation adjustment		2,795			2,795			-			-
Adjusted operating income		$	8,802		$	6,258		$	9,340		$	(6,796)
Operating revenues	$	101,885	$	69,504	$	32,381	$	-
Operating income as a percent of operating revenues		4.0%			5.0%			28.8%			N/A
Adjusted operating income as a percent of operating revenues			8.6%			9.0%			28.8%			N/A

Operating income reconciliation			Twelve months ended August 31, 2019
Consolidated			Irrigation		Infrastructure			Corporate
Operating income - reported GAAP measure	$	6,115	$	29,804	$	16,599		$	(40,288)
FFG costs		15,113			676			188			14,249
Valuation adjustment		2,795			2,795			-			-
Adjusted operating income	$	24,023		$	33,275		$	16,787		$	(26,039)
Operating revenues	$	444,072	$	351,498	$	92,574		$	-
Operating income as a percent of operating revenues		1.4%			8.5%			17.9%			N/A
Adjusted operating income as a percent of operating revenues		5.4%			9.5%			18.1%			N/A

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