Q1 2025 Lindsay Corp Earnings Call
and technology.
Randy Wood: I'm pleased to announce that we closed the previously announced deal to acquire a minority interest in Austria-based Pestle Inc. This partnership adds incremental capabilities to the FieldNet and FieldWise platforms and creates an opportunity to grow annual recurring revenue by leveraging their significant global installed base of devices. With the Pestle investment, we now have access to over 240,000 connected devices, which will support long-term growth and annual recurring revenue. Our teams have already begun collaborating, and we're excited about the opportunities this creates for our customers around the world.
I'm pleased to announce that we closed a previously announced deal to acquire a minority interest in Austria based personal instruments.
This partnership adds incremental capabilities to the field and field wide platforms and creates an opportunity to grow annual recurring revenue by leveraging their significant global installed base of devices with the peso investment. We now have access to over 240000 connected devices, which will support long term growth in annual recurring revenue.
The teams have already begun collaborating and we're excited about the opportunities this creates for our customers around the world.
Brian Ketcham: I'd like to now turn the call over to Brian to discuss our first quarter financial results.
I'd like to now turn the call over to Brian to discuss our first quarter financial results right.
Brian Ketcham: Brian. Thank you, Randy, and good morning, everyone. Consolidated revenues for the first quarter of fiscal 2025 increased 3% to $166.3 million, compared to $161.4 million in the prior year. Revenue growth was driven by an increase in international irrigation revenues, which was partially offset by lower North America irrigation and infrastructure revenues compared to the prior year. Net earnings for the quarter increased 14% to $17.2 million or $1.57 per diluted share compared to net earnings of $15 million or $1.36 per diluted share in the prior year. While operating income was similar to the prior year, current year results benefited from an increase in other income and a lower effective income tax rate compared to the prior year.
Brian: Thank you Randy and good morning, everyone.
Consolidated revenues for the first quarter of fiscal 2025 increased 3% to $166 3 million.
Brian: Compared to $161 $4 million in the prior year.
Brian: Revenue growth was driven by an increase in international irrigation revenues, which was partially offset by lower North America irrigation and infrastructure revenues compared to the prior year.
Brian: Net earnings for the quarter increased 14% to $17 $2 million or $1 57 per diluted share compared to net earnings of $15 million or $1.36 per diluted share in the prior year.
Brian: While operating income was similar to the prior year current year results benefited from an increase in other income and a lower effective income tax rate compared to the prior year.
Brian: Turning to our segment results.
Brian Ketcham: Turning to our segment results. Irrigation segment revenues for the quarter increased 5% to $147.1 million, compared to $140.2 million in the prior year. North America irrigation revenues of $77.7 million decreased 13% compared to the prior year. The decrease resulted primarily from lower unit sales volume of irrigation equipment as well as a less favorable mix of shorter machines and slightly lower average selling prices compared to the prior year. A reduction in net farm income for calendar 2024 continues to temper demand for irrigation equipment in the near term. In international irrigation markets, revenues of $69.4 million increased 37% compared to the prior year.
Irrigation segment revenues for the quarter increased 5% to $147 1 million compared to $142 million in the prior year.
Brian: North America irrigation revenues of $77 $7 million decreased 13% compared to the prior year.
Brian: The decrease resulted primarily from lower unit sales volume of irrigation equipment as well as a less favorable mix of shorter machines and slightly lower average selling prices compared to the prior year.
Brian: Reduction in net farm income for calendar 2024 continues to temper demand for irrigation equipment in the near term.
Brian: In international irrigation markets revenues of $69 4 million increased 37% compared to the prior year.
Brian Ketcham: The increase resulted primarily from revenues related to our large project in the MENA region, along with higher sales in Europe and certain regions of Latin America compared to the prior year. This increase was partially offset by lower revenue in Brazil, where market activity remained lower than the prior year due to lower commodity prices that have pressured grower profitability and available liquidity. Revenues in the current year quarter were also impacted by the unfavorable effects of foreign currency translation of approximately $2.1 million compared to the prior year. Irrigation segment operating income for the quarter of $24.7 million was 2% lower compared to the prior year.
Brian: The increase resulted primarily from revenues related to our large project in the Mena region, along with higher sales in Europe, and certain regions of Latin America compared to the prior year.
Brian: This increase was partially offset by lower revenue in Brazil, where market activity remained lower than the prior year due to lower commodity prices that have pressured grow our profitability and available liquidity.
Brian: Revenues in the current year quarter were also impacted by the unfavorable effects of foreign currency translation of approximately $2 1 million compared to the prior year.
Brian: Irrigation segment operating income for the quarter of $24 $7 million was 2% lower compared to the prior year and operating margin was 16, 8% of sales compared to 18, 1% of sales in the prior year.
Brian Ketcham: And operating margin was 16.8% of sales compared to 18.1% of sales in the prior year. Lower operating income and operating margin resulted primarily from a larger proportion of international project revenues compared to the prior year, which were dilutive to overall segment margin.
Brian: Lower operating income and operating margin resulted primarily from a larger proportion of international project revenues compared to the prior year, which were dilutive to overall segment margin.
Brian: Infrastructure segment revenues for the quarter of $19 $2 million were 9% lower compared to the prior year.
Brian Ketcham: Infrastructure segment revenues for the quarter of $19.2 million were 9% lower compared to the prior year. This decrease resulted primarily from a difference in the timing of road zipper system lease revenue. and lower sales of road safety products compared to the prior year. Infrastructure segment operating income for the quarter of $4.1 million increased 14% compared to the prior year. The infrastructure operating margin for the quarter was 21.5% of sales compared to 17.1% of sales in the prior year. The increase in operating income and operating margin resulted primarily from improved manufacturing efficiency. and lower operating expenses compared to the prior year.
Brian: This decrease resulted primarily from a difference in the timing of road zipper system lease revenue and lower sales of road safety products compared to the prior year.
Brian: Infrastructure segment operating income for the quarter of $4 $1 million increased 14% compared to the prior year.
Brian: In infrastructure operating margin for the quarter was 21, 5% of sales compared to 17, 1% of sales in the prior year.
Brian: The increase in operating income and operating margin resulted primarily from improved manufacturing efficiency and lower operating expenses compared to the prior year.
Brian: The large large road zipper project that Randy mentioned in his opening remarks had been contemplated in our full year fiscal 2025 outlook. However, the timing was not clear until the contract was signed after the end of our first quarter.
Brian Ketcham: The large road zipper project that Randy mentioned in his opening remarks had been contemplated in our full year fiscal 2025 outlook, however, the timing was not clear until the contract was signed after the end of our first quarter. We have been building the machine and barrier required for this project, and we expect to deliver the entire project, valued at more than $20 million, in our second fiscal quarter.
Brian: We have been building the machine and barrier required for this project and we expect to deliver the entire project valued at more than $20 million in our second fiscal quarter.
Brian: Turning to the balance sheet and liquidity, our total available liquidity at the end of the first quarter was $244 $1 million, which includes $194 $1 million in cash and cash equivalents and $50 million available under our revolving credit facility.
Brian Ketcham: Turning to the balance sheet and liquidity, our total available liquidity at the end of the first quarter was $244.1 million, which includes $194.1 million in cash and cash equivalents and $50 million available under our revolving credit Our strong balance sheet and ample access to liquid capital resources continue to serve as a strategic asset for Lindsay as we execute our capital allocation strategy to create enhanced and sustained value for our shareholders.
Brian: Our strong balance sheet and ample access to liquid capital resources continue to serve as a strategic asset for Lindsay as we execute our capital allocation strategy to create enhanced and sustained value for our shareholders.
Operator: This concludes my remarks and at this time I'll turn the call over to the operator to take your questions.
Brian: This concludes my remarks and at this time I'll turn the call over to the operator to take your questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys.
Operator: We will now begin the question and answer session.
Operator: To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.
Brian: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Brian: At this time, we will pause momentarily to assemble our roster.
Ryan Connors: And the first question will come from Ryan Connors with Northcoast Research. Please go ahead.
Ryan Connors: And the first question will come from Ryan Connors with North Coast Research. Please go ahead.
Ryan Connors: Good morning, Thanks for taking my question.
Ryan Connors: Good morning. Thanks for taking my question. So you had a comment there regarding on irrigation regarding the mixed effect of shorter systems or smaller systems and irrigation. I've heard you make that comment before.
Speaker Change: So you had a comment there regarding an irrigation regarding.
Speaker Change: The mix effect of shorter systems or smaller systems and irrigation.
Speaker Change: And then heard you make that comment before it can you call out the magnitude of that are exactly what what that is and what might be driving that that's a new one for me.
Brian Ketcham: Can you call it the magnitude of that or exactly what what that is and what might be driving that? That's a new one for me.
Brian: Yes, Brian this is Brian.
Brian Ketcham: Yeah, Ryan, this is Brian. I it's generally driven more on a regional basis, you get into places, let's say like the Pacific Northwest, where they've installed larger machines over time. And, you know, then maybe they're filling in some of the corners, or there's other odd shaped pieces of ground that they're adding irrigation to. So I would say, you know, mix like that varies from quarter to quarter, but it's it's really regional.
Brian: Generally driven more on a regional basis, you get into places let's.
Brian: Let's say like the Pacific Northwest, where they've installed larger machines over time, and then maybe they are filling in some of the corners or theres other odd shapes.
Brian: He says of ground that theyre, adding irrigation too so I would say.
Brian: Mix like that varies from quarter to quarter, but it's really regional but in terms of the revenue breakdown for the quarter. I mean, the main driver was was really just the decrease in overall volume.
Brian Ketcham: But in terms of the revenue breakdown for the quarter, I mean, the main driver was was really just the decrease in overall volume. Yeah, okay, so it was on the margin then. Yeah, okay.
Okay. So it was on the margin then.
Brian: Yes.
Brian: Yes, okay.
Randy Wood: And then one more on irrigation, and I have one on infrastructure as well. So this large project in the Middle East, you know, once that's completed, what's the follow-on service component, if any, on something like that, of that magnitude? Is that something where you'll be, you can move the needles, supplying parts and service into that on a go-forward basis, or is it just sort of once it's done, it's done, and you have to, we have to go find, look for the next one?
Brian: And then.
Brian: One more on irrigation and I had one on infrastructure as well so this large.
Brian: Project in the Middle East.
Brian: Once that's completed.
Brian: What's the follow on service component, if any on something like that of that magnitude is that something where you'll be it can move the needle supplying parts and service into that.
Brian: Go forward basis or is it just sort of once it's done it's done and you have to we have to go find that look for the next one.
Randy Wood: Yeah, good morning, Ryan.
Brian: Yes. Good morning, Ryan This is Randy I'll take that one and I think it's a combination of both comments you've made certainly the machines in this part of the world are operating a significant number of hours, they're almost irrigated around-the-clock all year. So there is going to be some parts consumption. There generally on these deals. The initial purchase will include.
Randy Wood: This is Randy, I'll take that one. And I think it's a combination of both comments you've made. Certainly, the machines in this part of the world are operating a significant number of hours, they're almost irrigating around the clock all year. So there is going to be some parts consumption there. Generally, on these deals, the initial purchase will include some stock parts for more of those fast moving maintenance items. So we may not see it right away. But I think some of the long term revenue generating potential is certainly going to include aftermarket. On the service side, that generally in all the markets is dealer revenue, not necessarily Lindsay revenue.
Brian: <unk> some stock parts for more of those fast moving maintenance items. So we may not see youre right away, but I think some of the long term revenue generating potential is certainly going to include aftermarket on the service side that generally in all the markets as dealer revenue not necessarily Lindsay revenue and I think on those military contracts in particular, they've they've been true.
Randy Wood: And I think on those military contracts, in particular, they've they've been trained, they generally take care of their own machines. So the long term revenue there is really going to be the service parts Got it.
They generally take care of their own machines. So the long term revenue there is really going to be the service parts for us.
Brian: Got it okay.
Ryan Connors: Okay. And then on infrastructure, Brian, you mentioned the timing of lease revenue as one of the one of the headwinds on the revenue line there. I mean, my understanding of the leasing model was that it's actually less volatile, less lumpy than, you know, the book ship that we had in the past. So can you explain exactly what the dynamics are that can drive, you know, timing on lease revenue to cause that kind of volatility? Yeah, it's it's really just, you know, one project ending, and then the other one not starting, you know, immediately, it's those kinds of things.
Brian: And then on infrastructure, Brian you mentioned the timing of lease revenue as one of the one of the headwinds on the.
Brian: The revenue line there.
I mean, my understanding of the leasing model was that it's actually less volatile less lumpy than.
Brian: The book ship that we had in the past. So can you explain exactly what the dynamics are that can drive tie.
Brian: Timing on lease revenue to cause that kind of volatility.
Brian: Yes, it's really just one project ending and then the other one not starting immediately it's those kinds of things.
Brian Ketcham: And, you know, in the, in the scope of, you know, the change for the revenue, I mean, we're talking about a couple of million dollars, probably, but, but that's really what drives it. I mean, we've got line of sight to continuing to add to the lease portfolio, but I think it's just as some projects end and new projects beginning, sometimes there's a small gap. Yep.
Brian: And the scope of the change for the revenue I mean, we're talking about a couple of million dollars, probably but but that's really what drives it I mean, we've got line of sight too.
Brian: Continuing to add to the lease.
Brian: Portfolio, but I think it's just as some projects and and new projects beginning sometimes there's a small gap there.
Brian: Yeah, Okay, but just to be clear so when a when a lease project is signed that becomes pretty much an annuity stream on a go forward basis. There is no real so you're just saying Theres Theres book ship projects Rolling off and Theres not lease revenue necessarily to replace it immediately but there's really no volatility associated with the leased system.
Brian Ketcham: Okay. But just to be clear, so when a lease project is signed, that becomes pretty much an annuity stream on a go-forward basis. There's no real... So you're just saying there's bookship projects rolling off and there's not lease revenue necessarily to replace it immediately, but there's really no volatility associated with a leased system once it's up and running. Is that fair? Characterization of that. We do have some situations where it's a multi-year lease. Obviously, that one's going to be very stable. But the other ones are going to, if they're tied to a construction project, it could be a nine-month project or a 12-month project.
Brian: Once it's up and running is that is that a fair.
Brian: Okay.
Brian: We do have some situations, where it's a multiyear lease obviously that one is going to be very stable, but the other ones are gonna if theyre tied to a construction project it could be nine.
Brian: Nine month project or a 12 month projects and so then when those come to an end.
Brian Ketcham: And so then when those come to an end, there can be a gap before a new project starts. But again, if you look at it over a full year basis. Got it. So it's I see so it's it's it's not a permanent installation. It's just on a specific project a lot of Incremental leases that we've added over the last year have been more directly tied to construction Got it.
Brian: There can be a gap before a new project starts but again.
Brian: If you look at it over a full year basis, it's very stable, but quarter to quarter, there could be some timing with Scott. It. So I see so it's it's it's not a permanent installation is just on the specific project a lot of income.
Brian: Oh incremental leases that we've added over the last year have been more directly tied to construction projects.
Brian: Got it okay that makes sense. Thanks for your time.
Ryan Connors: Okay, that makes sense.
Ryan Connors: Thanks for your time.
Brian: Thank you.
Speaker Change: And the next question will come from Brian Drab with William Blair. Please go ahead.
Brian Drab: And the next question will come from Brian Drab with William Blair. Please go ahead.
Brian: Yeah.
Tyler Hutin: Hey guys, Tyler on for Brian, appreciate you guys taking my questions. Just starting with the international irrigation business, so did you recognize about $60 million in revenue for the Middle East and North African project? I know that was supposed to be kind of evenly spread through the year. Just wondering if that cadence is the same. Yeah, in general, Tyler, the cadence is the same. I think we were slightly above $20 million for the quarter. And what we had said coming into the year is we were expecting roughly $20 million a quarter.
Brian: Hey, guys Tyler on for Brian I. Appreciate you guys, taking my questions.
Speaker Change: Just starting with the international irrigation business. So did you recognize about $60 million in revenue for the Middle East and North African project I know that was supposed to be kind of evenly spread through the year. Just wondering if that cadence is the same.
Speaker Change: Yes General Tyler the cadence is the same I think we were slightly above $20 million for the quarter and what we had said coming into the year as we were expecting roughly $20 million a quarter.
Speaker Change: Okay.
Speaker Change: Got it and then one more for international irrigation your European and Latin American sales were stronger as you said does that kind of change your expectations for the base International irrigation business in the first half of the year.
Tyler Hutin: Got it.
Tyler Hutin: And then one more for international irrigation, your European and Latin American sales are stronger, as you said, does that kind of change your expectations for the base international irrigation business in the first half of the year? No, I don't think it changes our expectations. I think we had seen growth opportunities in both of those regions coming into the year. It's positive to see some green shoots in some of those regions, but I don't think it, at this point, doesn't change the outlook that we have.
Speaker Change: No I don't think it changes our expectations I think we had seen.
Speaker Change: Growth opportunities in both of those.
Speaker Change: Regions coming into the year.
Speaker Change: It's positive to see some green shoots in some of those regions, but I don't think that at this point it doesn't change the outlook that we have for the full year.
Speaker Change: Okay, Great and just one more for the infrastructure segment.
Tyler Hutin: Okay, great.
Brian Ketcham: And just one more for the infrastructure segment. You clearly had some efficiency and cost savings in this quarter. I'm just wondering, like with the project activity picking up, were these OPEX savings like a one-time occurrence, or do you expect that to kind of roll through the future quarters? Thank you. Yeah, our expectation is these operational cost savings will continue. I think a big part of it also is, as I mentioned in my comments, you know, as we're building new machines, building new barrier, that's absorbing a lot of fixed costs, but we've also done some improvement.
Speaker Change: You clearly had some efficiency and cost savings in this quarter I'm, just wondering like with the project.
Speaker Change: <unk> picking up where these opex savings like a onetime occurrence or do you expect that to kind of roll through the future quarters. Thank you.
Speaker Change: Yeah. Our expectation is these operational cost savings will continue I think a big part of it also is as I mentioned in my comments.
Speaker Change: So as we're building new machines building new barrier, that's absorbing a lot of fixed cost, but we've also done some improvement.
Improvements in our factory in order to increase our overall capacity in the flow through the factory as it relates to the road zipper project or product line.
Brian Ketcham: Improvements in our factory in order to increase our overall capacity and the flow through the factory as it relates to the road zipper project line our product Okay, great.
Speaker Change: Yeah.
Speaker Change: Okay, great. Thank you for the time I'll pass it on.
Tyler Hutin: Thank you for your time.
Tyler Hutin: I'll pass it on.
Speaker Change: Uh huh.
Your next question will come from Nathan Jones with Stifel. Please go ahead.
Nathan Jones: Next question will come from Nathan Jones with CIFL. Please go ahead.
Yes. Good afternoon. This is unemployment on for Nathan.
Adam Farley: Yeah, good afternoon.
Randy Wood: This is Adam Farley on for Nathan. Maybe first looking at Brazil, you know, are there signs of it reaching a bottom here? You know, what's the expectation for the year if irrigation markets continue to stabilize there?
Speaker Change: Maybe first looking at Brazil.
Speaker Change: Are there signs of it reaching a bottom here.
Speaker Change: What's expectation for the year.
Speaker Change: International markets continued to stabilize there.
Speaker Change: Yeah. Adam This is Randy I'll, maybe start and Brian can add on if necessary and we don't see a lot of further deterioration in Brazil, we're starting to lap the strong growth that we've seen there and then some of the regression with soy prices in particular coming back.
Randy Wood: Yeah, this is Randy. I'll maybe start and Brian can add on if necessary. And we don't see a lot of further deterioration in Brazil. We're starting to lap, you know, the strong growth that we've seen there and some of the regression with soy prices in particular coming back. Access to credit has been kind of a limiting factor on market upside as well, and we kind of see all those things kind of leveling off at this point. So I think our projection would be not significantly worse, but in the near term maybe not significantly better either.
Speaker Change: Access to credit has been kind of a limiting factor on market upside as well and we kind of see all of those things kind of leveling off at this point. So I think our projection would be not significantly worse, but in the near term maybe not significantly better either in the two credit programs that we've seen we're not quite sure how quickly they are going to get rolled out.
Randy Wood: And the two credit programs that we've seen, we're not quite sure how quickly they're going to get rolled out, how quickly those funds are going to get consumed. But we do view that as some potential uplift in the market. But again, we don't see it getting significantly better or significantly worse in the near term.
Speaker Change: How quickly those those funds are going to get consumed, but we do view that as a potential uplift in the market, but but again, we don't see it getting significantly better or significantly worse in the near term.
Speaker Change: Okay. Thank you for that and then on domestic irrigation.
Adam Farley: Okay, thank you for that. And then on domestic irrigation, I think the presentation called out slightly lower ASPs in the quarter. Where are you seeing pricing pressure? And then if you think about it in aggregate, is price cost positive, neutral, or negative?
Speaker Change: I think the presentation pulled out slightly lower asp's in the quarter.
Speaker Change: Where are you seeing pricing pressure.
Speaker Change: And then if you think about it.
Speaker Change: It's price cost positive neutral.
Speaker Change: Negative.
Speaker Change: Yeah, Adam This is Brian I would say.
Brian Ketcham: Yeah, Adam, this is Brian. I would say we have not changed our selling prices. What we've seen is selective discounting, you know, and maybe it's regional, maybe it's on certain orders or whatever. I would say it's been margin neutral at this point. You know, we have seen Steel coil prices softened, but on the same token, we've got, you know, still have inflation and other raw materials. So overall, cost environment, I would say, has been stable.
Speaker Change: We have not changed our selling prices what we've seen is selective discounting.
Speaker Change: It's regional maybe it's on certain orders or whatever.
Speaker Change: I would say, it's mark it's been margin neutral at this point.
Speaker Change: We have seen.
Speaker Change: Steel coil prices softened, but on the same token we've got still have inflation in other raw materials. So overall.
Speaker Change: Cost environment, I would say has been stable but.
Brian Ketcham: really not. on ASPs, some impact on top line, but I would say margin neutral.
Speaker Change: Really not.
Speaker Change: On Asps.
Speaker Change: Some impact on top line, but I would say margin neutral overall.
Speaker Change: Alright, great. Thank you for taking my questions.
Adam Farley: All right, great.
Adam Farley: Thank you for taking my questions.
Jon Braatz: Next question will come from Jon Braatz with Kansas City Capital. Please go ahead.
John Braatz: Next question will come from John Braatz with Kansas City Capitol. Please go ahead.
Randy Wood: Good morning, Randy, Brian. Randy, since this fall, we've seen corn prices move up, at least on the board, up about 20%, and soybeans up a little bit less, a lot less, but nonetheless, they've recovered a little bit. I guess when you look at the recovery that we've seen, do you sense any change in the supply and demand? issues affecting these prices, you know, what might account for some of the price, some of the improvement? Any ideas? I would say, John, in this window, seasonally, at least, in the Northern Hemisphere, there aren't a lot of significant, certainly, movers on the supply side.
Randy Bryan: Randy Bryan.
Randy Bryan: Thanks, John.
Randy Bryan: Randy.
Randy Bryan: This fall, we've seen corn prices move up.
Randy Bryan: At least on the board up about 20% in soybeans up a little bit less but a lot less but nonetheless, they recovered a little bit.
Randy Bryan: I guess when you look at the recovery that we've seen.
Speaker Change: Do you sense any change in the supply and demand.
Speaker Change: Issues affecting these are prices.
Speaker Change: What might account for some of the price some of the improvement.
Speaker Change: Any ideas.
Speaker Change: I would say John in this window seasonally at least in the northern hemisphere, there arent a lot of significant.
Speaker Change: Certainly movers on the supply side. The harvest is done and we haven't we have anything that moves is generally going to be on the demand side. I know, we were watching like year round approval of 15 ethanol that didnt get passed as part of the package here recently that would've been certainly yeah.
Randy Wood: The harvest is done, and we have what we have. Anything that moves is generally going to be on the demand side. I know we were watching year-round approval of the E15 ethanol that didn't get passed as part of the package here recently. That would have been certainly a demand-side driver. Right now, I think we're in a holding pattern until we get to the planting intentions for next year, and there's maybe a better view on exports at that time. Are there going to be trade disruptions, tariff-related issues? There's nothing on the supply-demand side, and I always try and distill it down to those very pure supply-demand economic drivers.
Speaker Change: Demand side driver.
Right now I think we kind of we're in a holding pattern until we get to the planting intentions for next year and there is a maybe a better view on exports at that time or theyre going to be trade disruptions tariff related issues. So it's it's there's nothing on the supply demand side and I I always trying to distill it down to those very pure supply demand economic drivers Theres nothing Thats Moody's scenario.
Randy Wood: There's nothing that's moving significantly one way or the other right now.
Speaker Change: Only one one way or the other right now there is maybe some speculation in the market moving it around but I don't think we will see anything significant in either supply or demand until we get closer to next spring and understand what those planning intentions looked like John Okay, well, what about in Brazil in terms of soybean prices, what's the trend been there.
Randy Wood: There's maybe some speculation in the market moving it around, but I don't think we'll see anything significant in either supply or demand until we get closer to next spring and understand what those planting intentions are.
Randy Wood: Okay, what about in Brazil in terms of soybean prices? What's the trend been there? It's been dropping from the highs, you know, stable, maybe getting more stable than what we've seen historically. And I guess when you're on the slide, the customer view is where is it going to stop? And I think we've probably bottomed out and we know that we're not going to go past the lower threshold. So that adds to the stability comment that I made in my comments earlier. I don't think customers, again, our view is the same. It's not going to get progressively worse in the near term, but it's probably not going to get progressively better either.
Speaker Change: It's been dropping from from the highs.
Speaker Change: Stable, maybe getting more stable than what we've seen historically and I guess when you are on the slide the customer view is where is it going to stop and I think we probably bottomed out and we know that we're not going to go past the lower threshold. So that that adds to the stability comment that I made in my comments earlier I don't think customers again our view.
Speaker Change: Or is the same as it is not going to get progressively worse in the near term, but it's probably not going to get progressively better either okay.
Brian Ketcham: And Brian, in the quarter you talked a little bit about a lower tax rate and some positive other income. How do you see that going forward? Yeah, I think... Really, for the rest of the year, we expect to have a lower rate, and the primary driver of that is a pretty significant shift in our earnings from Brazil into Turkey, which Turkey is providing. The equipment for the large project in Turkey, we're in a free trade zone, so we don't have tax there. And Brazil, you know, at a 35% rate. So, you know, going forward, probably somewhere in that 23% range.
Speaker Change: And Brian in the quarter, you talked a little bit about.
Randy Bryan: A lower tax rate and some positive other income how do you see that going forward.
Speaker Change: Yes, I think.
Speaker Change: Really for the rest of the year, we expect to have a lower rate.
Right and the primary driver of that is pretty significant shift in our earnings from Brazil into Turkey, which.
Speaker Change: Turkey is providing that.
Speaker Change: The equipment for that the large project in Turkey, we are in a free trade zone. So we don't have tax there in Brazil.
Speaker Change: 35% rate so.
Speaker Change: Going forward, probably somewhere in that 23% range, okay, Okay and the other income.
Brian Ketcham: Okay.
Brian Ketcham: And the other income? The other income, I think, when you look at interest expense and interest income, I would expect that trend to continue. you know on the other side is really the currency situation that have an impact and that one Obviously hard to predict. Absolutely.
Speaker Change: The other income I think when you look at interest expense and interest income I would expect that trend to continue.
Speaker Change: On the other side is really the currency.
Speaker Change: <unk> that have an impact on that one.
Randy Bryan: Obviously hard to predict yep, yep, absolutely and Brian in the past.
Brian Ketcham: And Brian, in the past, the large infrastructure projects have typically had a nice margin to it. How do you view this $20 million project? This should be similar to some of the other projects that we've had. We expect it to be accretive to overall operating margins. for the segment, and for the company, actually. Right. Well, in the past, has it been? you know, over 30% or something like that. Yeah, it's definitely been over 30%. Yeah. Okay.
Randy Bryan: The large infrastructure projects have typically had a nice margin to it.
Randy Bryan: How do you view this this $20 million project.
This should be similar to some of the other projects that we've had we expect it to be accretive to overall operating margin for the for the segment and for the company actually right.
Randy Bryan: Well in the past.
Randy Bryan: Ben.
Randy Bryan: Over 30% or something like that.
Speaker Change: Yeah, it's definitely been over 30% yeah, Okay, Alright, alright, thank you very much.
John Braatz: All right. Thank you very much Thanks, John.
Speaker Change: Thanks, John Thanks, John.
Brett Kearney: Thanks, John Again, if you have a question, please press star, then 1. Our next question will come from Brett Kearney with American Rebirth Opportunity Partners.
Again, if you have a question. Please press Star then one.
Speaker Change: Our next question will come from Brett Kearney with American reverse opportunity partners. Please go ahead.
Brett Kearney: Please go ahead.
Brett Kearney: Hi, Randy Bryan Good morning, Thanks for taking my question.
Randy Wood: Hi Randy, Brian, good morning. Thanks for taking my question. I was just going to ask for a quick update on the CapEx projects you guys have underway this fiscal year. I know the largest one being the expansion at the Lindsay, Nebraska facility. Just how planning, procurement, you know, processes are going around that at this stage as well as the other initiatives you guys have underway. Yeah, Brett, that's something obviously we're tracking pretty closely, and all the reviews we've got at this point, we don't see any real red flags. We've had some short-term weather issues to deal with here in Nebraska, but they're part of the timeline, so nothing that we're concerned with, everything still appears to be on track.
Speaker Change: Hi, Brett.
Brett Kearney: I was just going to ask for a quick update on the.
Brett Kearney: Capex projects you guys have underway this fiscal year I know the largest one being the expansion at Lindsay Nebraska facility, just how planning procurement.
Brett Kearney: Our processes are going around that at this stage as well as the other initiatives you guys have underway.
Brett Kearney: Yeah, Brett that's something obviously, we're tracking pretty closely.
Brett Kearney: All the reviews, we've got at this point, we don't see any real Red flags, we've had some short term weather issues to deal with here in Nebraska, but they're part of the timeline. So nothing that we're concerned with everything still appears to be on track.
Brett Kearney: Okay terrific, thanks, very much Randy.
Randy Wood: OK, terrific. Thanks very much, Randy.
Brett Kearney: Okay. Thanks, Brett.
Brett Kearney: With no further questions. This concludes our question and answer session I would like to turn the conference back over to Randy would for any closing remarks.
Operator: With no further questions, this concludes our question and answer session.
Randy Wood: I would like to turn the conference back over to Randy Wood for any closing remarks. Thank you all for joining us on today's call, and while we're encouraged with our resilient financial resource this quarter, we're even more optimistic about the opportunities in front of us, and we look forward to delivering value for our customers and shareholders in fiscal 2025. Thank you.
Randy: Thank you all for joining us on today's call and while we're encouraged with our resilient financial resource this quarter, we're even more optimistic about the opportunities in front of us and we look forward to delivering value for our customers and shareholders in fiscal 2025. Thank you.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: The conference is now concluded. Thank you for attending today's presentation.
Operator: You may now disconnect.
Randy: Okay.
Randy: Okay.
Yes.
Randy: Uh huh.
Randy: [music].