The roller coaster that has been agricultural commodities prices took a bite out of domestic sales of irrigation equipment at Lindsay Corp. through the first quarter of fiscal 2014.
But the Omaha-based company reported record total revenue and announced plans to invest $20 million to $25 million in capital improvements each year for the next three years.
The company said it also will grow through acquisitions on which it expects to spend $100 million to $150 million over the next three years. That’s on top of up to $150 million spent in share repurchases over the next two years.
“While we anticipate a decline from peak irrigation revenues in the near term, drivers for the company’s markets of population growth, expanded food production and efficient water use support our expectations for long-term growth,” said Rick Parod, president and CEO.
Irrigation sales in the U.S. slipped 18 percent to $79.3 million from first quarter 2013, a year the company benefited from drought conditions across the country. One year after some commodities prices achieved all-time highs, a record year for grain production in 2013 has sent commodities in the other direction.
Still, “Total company revenues remained at record levels in the first quarter,” Parod said.
First-quarter revenues were $147.7 million, compared with $147.4 million in the same period a year ago.
Net earnings were $10.2 million, or 79 cents per share, compared with $14.7 million, or $1.15 per share, in the prior year.
Parod characterized the outlook for irrigation sales as uncertain since “the decline in grain prices (is) likely to continue to result in significantly lower U.S. revenues.”
Demand for irrigation equipment in international markets helped offset the decline in domestic demand. Total irrigation equipment revenue slid just 4 percent from the same period last year to $129.2 million.
The organization’s infrastructure division also had a strong quarter, reporting $18.5 million in revenue, or a 41 percent increase.
The company announced it would double its quarterly cash dividend to 26 cents a share.