Lindsay Corporation (NYSE:LNN) Q2 2019 Earnings Conference Call Transcript

Apr 09, 2019 • 11:00 am ET


Lindsay Corporation (NYSE:LNN) Q2 2019 Earnings Conference Call Transcript


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Timothy L. Hassinger


Our Foundation for Growth Initiative continues to progress and is creating positive change for Lindsay. We are meeting the milestones that we laid out more than one year ago. In our last earnings call, I referred to the direction we have taken as simplify then grow. We spent most of the 2018 calendar year focused on simplifying the organization. We have achieved a lot in this area and these actions have put us in a position to focus more on growth and specifically how we strengthened our technology leadership position.

On this topic, you have heard me discuss our intent to grow FieldNET Advisor and Road Zipper given their differentiation in the market. I'm very pleased to say that we made progress this past quarter towards achieving these goals. For FieldNET Advisor, we announced commercial partnerships with Nutrien Ag Solutions and Climate Corporation, a subsidiary of Bayer to help improve our demand creation capabilities. Nutrien Ag Solutions, the world's largest provider of crop inputs and services and Lindsey Corporation, announced a partnership that will enable Nutrien Ag Solutions crop consultants, which number over 3500 to leverage Lindsay's remote irrigation management and scheduling platform to supplement Nutrien Ag Solutions offerings.

The Climate Corporation and Lindsay announced a platform agreement that will establish data connectivity between Climate FieldView digital agricultural platform and Lindsay's FieldNET platform. These two agreements with leading companies in the agronomic space that offer digital solutions are aligned with our strategy to increase the use of FieldNET Advisor.

Regarding Road Zipper, we recognized the need to address the lumpiness of this business. Our position is to address this need through growing the business and increasing the leasing percent of the total sales, and action we have taken to increase our capability to grow this business is the agreement between Lindsay and Iteris that was recently announced. By utilizing Iteris's software analytics capability, it's our desire to identify congestion issues and measure the impact of utilizing the Road Zipper system.

This agreement is matched well with our shift-left strategy to get more involved in the planning and design stage of projects where Road Zipper can be potentially utilized. I'm encouraged by the early signs of success resulting from this strategy.

These initiatives represent the change that is occurring at Lindsay. Action is being taken to create more innovation and more differentiation. So, now let's move to our Q2 results.

For that, I'll turn the call over to Brian.

Brian L. Ketcham

Thank you, Tim, and good morning, everyone. To begin, I would like to cover the costs incurred in the second quarter related to our Foundation for Growth Initiative, which were reported in corporate expense. Total pre-tax costs of $5.3 million were incurred in the quarter of which $4.8 million represents professional consulting fees.

These fees are performance based and correspond to workstream projects that have advanced through a stage gate process to the implementation stage. We expect to incur additional consulting fees in our third quarter as additional projects advanced through