Lindsay Corporation (NYSE: NYSE:LNN) reported a mixed fiscal second quarter of 2024, with net earnings of $18.1 million, or $1.64 per diluted share, on consolidated revenues of $151.5 million—a 9% decrease from the prior year. The company's North American irrigation business maintained steady demand despite market challenges in South America, particularly in Brazil.
The infrastructure segment's margin expansion was a highlight, attributed to a strategic shift towards leasing. The announcement of acquiring a 49.9% interest in Pessl Instruments and a $50 million investment in modernizing manufacturing facilities with Industry 4.0 technologies were key strategic moves. Total available liquidity stood at $200.6 million at quarter's end.
Key Takeaways
- Lindsay Corporation's consolidated revenues for the quarter stood at $151.5 million, a 9% decrease from the previous year.
- Net earnings were reported at $18.1 million, with $1.64 earnings per diluted share.
- The North American irrigation business showed resilience, while international markets, particularly Brazil, faced gross margin pressures.
- The infrastructure business experienced meaningful margin expansion, partly due to a shift towards leasing.
- A significant investment in Pessl Instruments is expected to enhance revenue growth and improve agricultural monitoring tools.
- $50 million will be invested in modernizing manufacturing facilities to increase flexibility and margin stability.
- Despite short-term challenges in Brazil, the company is optimistic about the long-term growth potential in the region and other international markets.
Company Outlook
- Lindsay Corporation is positive about growth prospects for the coming years, based on a strong project sales funnel.
- Long-term market potential in Brazil is seen as significant despite current headwinds.
- The company anticipates stable raw material costs moving forward.
Bearish Highlights
- The second quarter saw a decrease in international irrigation volumes, with Brazil experiencing notable declines.
- R&D spending declined, although attributed to timing rather than a reduction in strategic investment.
Bullish Highlights
- North America Irrigation gross margins remained stable and slightly above the previous year.
- The company's focus on price management and operational efficiencies has contributed to a stable gross margin environment.
- Strong demand in the Middle East, Eastern Europe, and Sub-Saharan Africa indicates positive market dynamics outside of Brazil.
Misses
- Irrigation segment revenues decreased by 10% to $133 million.
- Consolidated revenues fell by 9% compared to the same quarter in the previous year.
Q&A Highlights
- The company addressed short-term challenges in Brazil but reaffirmed belief in its long-term growth potential.
- Lindsay Corporation is actively engaging with state and federal governments in Brazil to navigate the current market conditions.
- Minor fluctuations in demand fundamentals are observed in markets outside Brazil, but overall, the company maintains a strong long-term outlook.
In conclusion, Lindsay Corporation's fiscal second quarter of 2024 showcased resilience in its North American operations and strategic advancements through partnerships and technology investments. Despite facing headwinds in international markets, especially in Brazil, the company's leadership remains optimistic about future growth opportunities and is taking steps to ensure long-term success.
InvestingPro Insights
Lindsay Corporation (NYSE: LNN) continues to navigate a challenging market environment, as reflected in the recent fiscal second quarter results. Let's delve into some key metrics and insights from InvestingPro that could shed light on the company's financial health and future prospects.
InvestingPro Data shows a market capitalization of $1.28 billion and a Price to Earnings (P/E) ratio of 18.6, which aligns closely with the adjusted P/E ratio for the last twelve months as of Q2 2024 at 18.53. This indicates a relatively stable valuation in terms of earnings. However, the company faces headwinds with a Revenue Growth of -13.7% for the same period, highlighting the challenges mentioned in the international irrigation business, particularly in Brazil.
Despite these challenges, Lindsay Corporation has shown financial prudence, as evidenced by an InvestingPro Tip that the company holds more cash than debt on its balance sheet. This financial position provides the company with stability and flexibility to manage short-term market fluctuations and invest in strategic initiatives like the modernization of manufacturing facilities.
Another notable InvestingPro Tip is the company's consistent dividend payments, having raised its dividend for 21 consecutive years and maintained payments for 29 consecutive years. This demonstrates a commitment to shareholder returns and financial discipline, even in the face of revenue pressures.
For those looking to dive deeper into the financials and future outlook of Lindsay Corporation, InvestingPro offers additional tips and insights. There are 9 more InvestingPro Tips available, providing a comprehensive analysis of the company's performance and projections.
Interested readers can further explore these insights and make more informed investment decisions by taking advantage of a special offer: use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
In conclusion, while Lindsay Corporation faces challenges, particularly in its international markets, the company's strong balance sheet and commitment to dividends may provide a cushion against market volatility. The strategic investments in technology and partnerships could also pave the way for future growth, making it a company to watch in the coming periods.
Full transcript - Lindsay corporation (LNN) Q2 2024:
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. Ongoing droughts in São Paulo, Mato Grosso do Sul, and Paraná have increased state-level support for irrigation. And with low penetration levels and the ability to support up to three crops per year, these markets will continue to grow. Moving to Infrastructure, as I mentioned in my opening remarks, our overall profitability continues to benefit from the strong growth of our Road Zipper System leasing business, an encouraging indicator as we move forward. Despite revenue that was comparable to the prior-year period, we captured meaningful margin improvement that Brian will touch on later. We expect continued growth in our Road Zipper lease revenue in the back-half of this year as we move into the heart of the road construction season, coupled with the strong backlog in sales pipeline for the overall infrastructure business. Additionally, as we've mentioned in prior calls, we expect our infrastructure business to benefit over time as U.S. infrastructure spending ramps up as part of the Infrastructure Investments and Jobs Act. We've only recently begun to see that dynamic play out, and we believe that we're in the early innings of a multiyear growth trajectory for infrastructure spending domestically. Turning to innovation and technology, as we announced yesterday, we've agreed to acquire a 49.9% interest in Pessl Instruments, with an option to acquire the remainder of the company in the future. Pessl is a leading developer and distributor of in-field monitoring solutions for agricultural markets. The company deploys software and IoT hardware, including weather stations and environmental sensors, supporting agricultural decision-making including pest and disease control, crop management, and irrigation management. We believe this relationship further highlights our commitment to providing world-class water management solutions to growers around the globe. Our combined platforms and integrated technologies will allow users to monitor and adjust irrigation operations based on key atmospheric conditions, while also enhancing overall predictive analytics capabilities. This further strengthens our digital water management portfolio, allowing us to reach a broader set of customers and service providers globally. Lastly, I'd like to address our recent announcement to expand and modernize our manufacturing facilities. In January, we announced our commitment to invest more than $50 million over the next two years to implement state-of-the-art technology that will greatly benefit our global operations. Our strategic plans for the modernization of our facilities include the implementation of Industry 4.0 Technologies, data connectivity, analytics, artificial intelligence, and the addition of automation and robotics. Our renovated facility will also house new equipment and the latest advancements in galvanizing a core process for manufacturing mechanized irrigation systems and road safety products. Additionally, we'll be expanding our Lindsay, Nebraska facility by 40,000 square feet to allow for increased manufacturing capacity and capabilities and metal forming. This investment is the largest in our company's history and we look forward to updating you as we invest further into operational excellence and innovation. I'd like to turn the call over to Brian to discuss our second quarter financial results. Brian?
Brian Ketcham: Thank you, Randy, and good morning everyone. Consolidated revenues for the second quarter of fiscal 2024 were $151.5 million, a decrease of 9% compared to $166.2 million in the prior year. The decrease resulted from lower irrigation segment revenues, as infrastructure revenues were comparable to the prior year second quarter. Net earnings for the quarter were $18.1 million or $1.64 per diluted share, compared to net earnings of $18.1 million or $1.63 per diluted share in the prior year. The impact of lower revenues and lower operating income was favorably offset by an increase in other income and a lower effective tax rate compared to the prior year's second quarter. Other income benefited from increased interest income and favorable foreign currency translation results compared to the prior year's second quarter. And income tax expense for the quarter was reduced by the realization of a one-time tax benefit of $1.1 million in Brazil. Turning to our segment results, Irrigation segment revenues for the quarter were $133 million, a decrease of 10% compared to $147.8 million in the prior year. North America Irrigation revenues of $82.8 million decreased 8% compared to $90.4 million in the prior year's second quarter. Most of the decrease resulted from lower sales of replacement parts, along with slightly lower average selling prices and the impact of a less favorable mix of shorter machines compared to the prior year second quarter. Sales of replacement parts in the prior year included a substantial number of MODEM and RTU upgrades connected to the sunsetting of 3G coverage that did not repeat this year. While overall selling prices in North America remained relatively stable during the quarter, we did see selective competitive discounting in some regions that we responded to. The impact of these revenue decreases was partially offset by moderately higher unit sales volume compared to the prior year's second quarter. In International Irrigation markets, revenues of $50.2 million decreased 13%, compared to revenues of $57.4 million in the prior year's second quarter. The decrease resulted primarily from lower revenues in Brazil and other Latin American markets compared to the prior year, while the impact of increases and decreases in other markets mainly offset one another. In Brazil, a 20% drop in cash soybean prices from December to February coupled with lowered yield expectations is negatively impacting the outlook for grower profitability and available liquidity as growers are indicating an unwillingness to sell their crops at current price levels. This situation is also resulting in a more constrained credit environment, which is also limiting investment in irrigation equipment in the near-term. Irrigation segment operating income for the quarter was $25.6 million, a decrease of 22% compared to the prior year. And operating margin was 19.3% of sales compared to 22.2% of sales in the prior year. Lower operating income and operating margin resulted primarily from lower revenues and the resulting impact from deleverage of fixed operating expenses. Infrastructure revenues for the quarter were $18.5 million and were comparable overall to the prior year. An increase in Road Zipper System lease revenues was offset by lower Road Zipper System project sales, and lower sales of road safety products compared to the prior-year second quarter. Infrastructure segment operating income for the quarter was $3.5 million, an increase of 74%, compared to $2 million in the prior year. Infrastructure operating margin for the quarter was 19% of sales, compared to 10.9% of sales in the prior year. The increase in operating income and operating margin resulted from a more favorable margin mix of revenues, with higher Road Zipper System lease revenues compared to the prior-year second quarter. Turning to the balance sheet and liquidity, our total available liquidity at the end of the second quarter was $200.6 million, which includes $150.6 million in cash, cash equivalents, and marketable securities, and $50 million available under our revolving credit facility. Year-to-date cash generated from operating activities has increased compared to the prior year. However, our free cash flow is being impacted by the increase in capital spending relating to the investments being made in our Lindsay Nebraska operation. Our balance sheet remains strong, and with ample access to liquid capital resources, we continue to be well-positioned to execute our capital allocation strategy to create enhanced and sustained value for our shareholders. This concludes my remarks. And at this time, I'll turn the call over to the operator to take your questions.
Operator: Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from Ryan Connors with Northcoast Research. Please go ahead.
Ryan Connors: Hey, good morning. Thanks for taking my questions; got a few. The first is, you made some comments regarding pricing and softness there, and can you elaborate on that at all, Randy, in terms of either quantification or any additional color you can give us on where that is, and magnitude of that, and how you expect -- how that's trended as we move into the third quarter here?
Brian Ketcham: Yes, Ryan, this is Brian Ketcham, I'll take that one. As I mentioned in my remarks, I think what we've seen during the quarter is, I'd say it's more regional, some selective discounting that we've seen. And when it affects protecting our market share, we've said before that we'll protect our market share, and match that on an as-need basis. But I would say, overall, we haven't reduced our overall prices. Our general prices remain steady. I would say looking outside the U.S., and in Brazil, with the softness that we've seen in that market, I would say that competitive pricing pressures there have probably been -- well, they have been more significant than what we've seen in the U.S. But I would say, in the U.S. when you look at just the North America margins, I would say a minimal impact overall on the revenue.
Ryan Connors: Got it. Okay, I appreciate that, Brian. And then, another one on the P&L there, the gross margin really held up pretty here I think, despite we're stacking two years of double-digit negative revenue declines now. It seems like the gross margins have held up pretty well. What's the view there? Are we sort of in a new normal? I know you've done some things on the manufacturing side, efficiencies, and so forth. Is this a new level that we're going to be at irregardless of what happens in the top line revenue situation, going forward?
Brian Ketcham: Yes, I would say when you look at overall, obviously there's some benefit that we got from on the Infrastructure side. North America Irrigation gross margins, I would say, were at or even slightly above last year in the second quarter. I think where we're seeing some of the gross margin pressures in international, with the decline that we've seen in volume, particularly in Brazil, that's having a deleverage impact there. But I think some of the things that we've done over the last couple of years with from a price management standpoint, as well as just operational efficiencies that we've gained both in the U.S. and internationally, I think to your point, I think we do feel like we've got a more stable gross margin environment going forward that it's sustainable. Obviously, you're going to have the impact of the volume leverage and deleverage. And at the present time, I think pricing is holding up. Raw material costs, if anything, have stabilized. Last couple of months, steel has softened just a bit, but we view raw materials to be stable going forward. So, I think that supports where we're at from a margin level.
Ryan Connors: Got it. And then, one last one, if I could, a smaller item on the P&L, but I was a little surprised to see R&D declined year-over-year by almost 15% and dipped below 4 million for the first time in a while, because I know that's an area that you've been focused on, on a precision technology side. And what are we to read into that? Is that just some efficiencies, like, some synergies from field-wise, or why would we be seeing a decline there?
Randy Wood: Yes. Good morning, Ryan. This is Randy. I'll take that one. And there isn't any substantial shifts. I think, obviously, we're being cautious with spending, but in the areas of technology and innovation in particular, we continue to invest. So, what you see there is really just timing and not a strategic shift or drop in big picture spending. We have a lot of testing expenses in the infrastructure business that hit when we conduct those tests. So, it's really, again, just timing.
Ryan Connors: Got it. Thanks for your time.
Randy Wood: Thanks.
Operator: Thank you. The next question is from Brian Drab with William Blair. Please go ahead.
Tyler Hutin: Hey, good morning. This is Tyler Hutin for Brian. Thanks for taking my question. It was mentioned that about $20 million worth of orders in your backlog are not expected to be fulfilled within the next 12 months. I'm just wondering what those orders are mostly related to.
Brian Ketcham: Yes, I'd say the increase year-over-year in that category is roughly 15 million and that is primarily related to a multi-year lease that we've signed on the roads of Versailles, the renewal of a lease that we've had in Texas that is a multiyear lease.
Tyler Hutin: Okay, thank you. And what's driving the lower sales of road safety products in the international markets?
Brian Ketcham: That's really again, in Europe, being the winter months, things like weather can impact the timing of that. We did see an increase in the U.S., and again, supported by additional federal funding and U.S. Road Construction. We expected to see road safety products grow in the US. But that, I would say, more or less in Europe in the quarter it was more timing and weather-related.
Tyler Hutin: Got it. And just a couple more, I understand the timing of roads that persist in the project. Do you just have any details on how that pipeline is evolving?
Brian Ketcham: Yes. I do think as we've moved into the fiscal year now we do have an improved line of sight to projects moving forward in that funnel and we do feel good that we'll see some projects recognized in fiscal 2024, most likely in Q4 at this point. I think timing will dictate how much of that gets into our fiscal 2024 versus how much spills into 2025, but you But as Randy mentioned in his comments, we feel good about the growth prospects for this year, but also the next few years based on our project sales funnel.
Tyler Hutin: Thank you. And then, lastly, just in the tough environment, kind of following on one of the previous questions, so you have operating margin above 14% in the quarter. Is it probably pretty safe to say that you'll finish the fiscal year above 14% despite some of the near-term headwinds in domestic and international irrigation? Thank you.
Brian Ketcham: I'm not sure I caught the question completely, Tyler.
Tyler Hutin: I'm just wondering, do you think you'll likely finish above 14% for operating margin in the fiscal year? Kind of in line with your five-year average target?
Brian Ketcham: Yes, I mean, I think there's quarter-to-quarter there's definitely seasonality fourth quarter being our lowest in the U.S. So, I think we feel good about where we're at from a margin standpoint. I think that the impact of some of the volume decreases that we've seen particularly in Brazil will have an impact on us and based on our ability to react to that from a spending standpoint, I mean, our objective is to protect our operating margins. But I think we feel like we've done a pretty good job up to this point.
Brian Ketcham: Okay. Thank you. I'll pass it along.
Operator: Thank you very much. The next question is from Jon Braatz with Kansas City Capital. Please go ahead.
Jon Braatz: Good morning, Randy. Good morning, Brian.
Randy Wood: Hi, Jon.
Brian Ketcham: Hi, Jon.
Jon Braatz: Randy, on the $50 million investment that you're making in your facility, obviously you've done a good job over the past couple of years in improving margins and manufacturing margins. Incrementally, what will that $50 million get you in the years ahead?
Randy Wood: I think there's a few interesting areas that we've talked about. Obviously, we detailed some new facilities, really connected the capacity and capabilities. We're making some big investments, modernizing, galvanizing. We're increasing automation, robotics, improving material flow. In the end, we think this is really going to position us to react faster and maybe more efficiently than we have in the past to market demand, whether that's up or down. Some of the new industry 4.0 technologies that monitor the production equipment, and the way I like to think about it, we're really taking FieldNET and FieldNET Advisor and the tools that we've developed for our customers, and we're leveraging those similar types of technologies inside of our factory. So, we'll have better monitoring of machine performance, stay ahead of maintenance, those types of things. And of course, we're always very mindful of any opportunity to improve safety for the employees. So, I think that flexibility in automation, the modernization, leveraging some new capabilities in both data and production equipment, we're excited about the investments. And I can tell you, we had a wonderful groundbreaking ceremony last week, and the people inside the facility, they're pretty energized and excited about it too.
Jon Braatz: So, Randy, let's say over the cycle your margin in that facility is X. With this $50 million investment, what do you think you can -- how much do you think you can improve that margin over the cycle?
Brian Ketcham: Hey, Jon, this is Brian. I'll jump in on that one. It does, and near-term gives us that ability to flex up and flex down without really having to add or remove a lot of labor. And so, that's a big part of it. I think I would view it as more, in the near-term, being more stabilizing for margins. I mean, obviously, you're going to have an increase in depreciation that offsets some of the productivity savings that we have. But I think as you, let's say demand increases significantly like it did a couple of years ago, our ability to flex up we should be able to pick up some margin just because of the less reliance on having to go out and find labor, which in Nebraska is difficult with the low unemployment rate.
Jon Braatz: Okay. Brian, about less than two years ago, you established a relationship with Pessl. Am I pronouncing that correctly?
Brian Ketcham: Pessl, yes.
Jon Braatz: Okay. What have you seen in these past two years that resulted in you guys taking a 49.9% investment? What have you seen that has encouraged you?
Randy Wood: Yes, I'll take that one, Jon. This is Randy. And that relationship actually has been formalized within the last year, so it's still relatively early. But when you look at kind of the synergies of being able to move their hardware and software services through our channel, they're a global company, we're a global company, but we don't overlap in a lot of those areas. So, we do see some immediate opportunities to help both companies. And I think the exciting part is really about the data and the digital opportunities that the acquisition, the investment creates. And we can improve tools like FieldNet Advisor, using input from field sensors. We can expand data analytics and the models that we have to provide better water management and guidance. And they've got over 80,000 installed devices around the world. And that creates some tremendous revenue opportunities for annual recurring revenue and the broader integration with the FieldNET platform. So, we feel we've got a great company, great founder, and ownership, and we're really going to hit the ground running.
Jon Braatz: Okay. Brian, I assume it's going to be accounted for as an equity investment?
Brian Ketcham: Yes, that's correct.
Jon Braatz: Okay. All right. Thank you.
Operator: Thank you. The next question comes from Brett Kearney with American Rebirth Opportunity Partners. Please go ahead.
Brett Kearney: Hi, Randy, Brian, Alicia. Good morning. Thank you for taking my question.
Randy Wood: Hi, Brett.
Brian Ketcham: Hi, Brett.
Brett Kearney: I just had a follow-up on the Pessl instruments agreement. Congratulations. It seems like a great way to deepen the partnership there. Just curious geographically those 80,000 installed devices they have, would you say given where they're based, it's more geared towards Europe and opportunity, obviously, Lindsay is strong globally, but more you're able to bring them into your existing relationships North America, Brazil and they have some customers maybe you're not as well penetrated in the European region?
Randy Wood: Yes, I think their footprint I would say is weighted in Europe, but when you look at the map they're everywhere and they're involved a little more in the specialty crops, orchards, vineyards, fruits and nuts those types of things. So, we see them maybe in different areas of North America than our current footprint. But their equipment, their technology, the ability to integrate with FieldNET, FieldNET Advisor and then the other digital platforms, we think we can take them everywhere in the world with us, Brett.
Brett Kearney: Excellent. Very helpful. Thank you, Randy.
Randy Wood: You bet.
Operator: Thank you. [Operator Instructions] The next question comes from Nathan Jones with Stifel. Please go ahead.
Adam Farley: Good morning. This is Adam Farley on for Nathan. I want to start on Brazil. What is your expectation for the Brazilian market over the near-term? Should we expect Brazil to maybe get incrementally worse?
Randy Wood: In our view, Adam, Brazil is tricky in the short-term and some of the factors that Brian mentioned in his notes, we view all of those really as being short-term headwinds in that market. Weather this year was tricky depending on whether you were in the north or the south, it was too wet, it was too dry. But a lot of what we see again is it's very short-term. So, when we look at mid to long-term outlook for that market, it's still in our view going to be one of the significant growth markets in the world and just their ability to generate three crops. We've met with a lot of state officials here in Omaha over the past several months. We've got other visits planned for the next couple of weeks. And when you see the amount of land that they have, most of these large ag production states are less than 2%, less than 4% penetrated with irrigation. So, we do see more interest from state level governments and certainly continue to have support from federal government there. So, we've made a lot of investments in Brazil. Some of our strongest team members are there and we're bullish on Brazil in the long-term just navigating kind of the short-term headwinds right now.
Adam Farley: All right. Thank you for that color. Maybe looking outside of Brazil, could you give us an update on demand fundamentals for the markets outside of Brazil and South America and maybe also the international project funnel?
Randy Wood: Sure. And then, we comment on Brazil and South America because they really are the big movers now when big needle movers now when you look at international revenues. When you go around the rest of the world, there is a lot of puts and takes. And nothing that is up significantly, nothing that is down significantly. But a lot of the other markets kind of offset the minor ups and downs. The project demand that in our view is still very strong both the near and the long-term, and when we talk about project activity, we're talking about specific pieces of land, specific purchasers, specific designs that are being worked on and depending on which project we talk about, Middle East obviously is very strong, Eastern Europe, Northern and Sub-Saharan Africa. Some of those we're actively quoting along with several competitors depending on where we are in the world. Some of those we're working through confirmed letters of credits and arranging financing and delivery details. Same disclaimer as always on those, that timing is really tough to predict, but we do like what we see in the project funnel and both short and long-term project activity.
Adam Farley: Okay. Thank you for taking my questions.
Randy Wood: You bet. Thanks, Adam.
Operator: Thank you. This concludes our question-and-answer session. I would like to turn the call back over to Randy Wood for closing remarks.
Randy Wood: Well, thank you all for joining us today. We're very pleased with our results year-to-date and I want to thank our global team for all of their efforts and accomplishments. Despite a tempered near-term outlook in a few of our international irrigation markets, we remain optimistic about the company's long-term prospects. We appreciate your interest in Lindsay and look forward to updating you on our continued progress following the close of our fiscal 2024 third quarter. Thanks for joining us.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
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