Lindsay Corporation (NYSE:LNN) Q1 2023 Earnings Call Transcript

Randy Wood: Yeah. We can tackle both of those, Ryan. Looking at storm volume impact last year, I will maybe let Brian quantify that when I am through, but it’s certainly — we will see that difficult comp in our fourth quarter — our fiscal fourth quarter. You always plan for some storm damage in your volume forecasting and supply chain and labor planning, but last year was really an extraordinary but particularly in the fourth quarter for us. So I will let Brian quantify that. Relative to insurance, we have seen the same types of discussions and same chatter and we have been personally in contact with a lot of the insurers, reinsurers across the industry. And there’s an ebb and a flow here, I think, just like you see in the insurance market in residential homes when there’s disasters in certain parts of the country.

Our view now is there’s always going to be a market. There’s always going to be somebody willing to provide coverage where it’s necessary. And even if the economics changed slightly on insurance premiums, when you look at that as part of the total cost of ownership compared to the benefits of irrigated agriculture production, we might see some hesitation, but we don’t view it as a significant headwind. It’s still going to be — irrigation is still going to be a requirement in a lot of parts of the country and we don’t see any incremental insurance costs driving a lot of negative sentiment right now. And Brian, maybe quantification on storm?

Brian Ketcham: Yeah. Yeah. Ryan, I think, last year, in our fourth quarter, we had — we kind of quantified that exceptional incremental storm damage in the neighborhood of around $15 million in revenue and so we would expect this year to kind of fall back into the more traditional storm season. But who knows what the kind of weather changes that we have been seeing, but that’s kind of how we are looking at things today.

Ryan Connors: Understood. Very helpful. Thanks for your time today.

Randy Wood: Thanks, Ryan.

Operator: And our next question will come from Brett Kearney with Gabelli Funds. Please go ahead.

Brett Kearney: Hi, guys. Good morning. Thanks for taking my question.

Randy Wood: Hi, Brett.

Brett Kearney: With the new partnership with Ceres Imaging, curious that option you are able to offer to customers, well, I assume that will primarily be within the North America market, at least initially? And kind of what, I guess, how do you think about the opportunity longer term to — do they have the capabilities to go into some of the other developed irrigation markets internationally, Brazil, Western Europe and how much demand is there relative to the North American opportunity for a solution like that?

Randy Wood: Yeah. Brett, we would say that the initial opportunities are going to be largely focused on North America and when you look at technology adoption in general for irrigated acreage telemetry coverage, it’s certainly the penetration rates are higher in North America. So we do see that being a short-term opportunity. The good news on technology like this is it is incredibly scalable and I think the ability for us to leverage our channel, leverage our current installed base does create some significant opportunities. And imagery is really in the early innings in our view, and there are a lot of regional strengths even if you look at just the North American market that some companies are stronger in some parts of the country relative to others.

So that’s really a key part of our strategy to offer choice for our customers and we are very excited about what Ceres is going to do for our customers and we do see some growth opportunities. But we will start in our view, with a strong base here in North America.

Brett Kearney: Sure. Thanks. Thanks so much, Randy.