##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (MARK ONE)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended February 28, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 Commission
File Number 1-13419
 Lindsay Manufacturing Co.
  Delaware
    
    47-0554096(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)2707 North 108th Street, Suite 102, Omaha, Nebraska
    
    68164(Address of principal executive offices)
    
    (Zip Code)402-428-2131

Registrants telephone number, including area code
 þ o
  o þ o
 o þ
 ,
   1




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##### 



Lindsay Manufacturing Co. and Subsidiaries
INDEX FORM 10-Q
 Page No.Part I  FINANCIAL INFORMATIONITEM 1 Consolidated Financial StatementsConsolidated Balance Sheets, February 28, 2006 and 2005
and August 31, 2005
    
    3Consolidated Statements of Operations for the three-months
ended and six-months ended February 28, 2006 and 2005
    
    4Consolidated Statements of Cash Flows for the six-months
ended February 28, 2006 and 2005
    
    5Notes to Consolidated Financial Statements
    
    6-17ITEM
2 Managements Discussion and Analysis of Results
of Operations and Financial Condition
    
    18-24ITEM 3 Quantitative and Qualitative Disclosures about
Market Risk
    
    24-25ITEM
4 Controls and Procedures
    
    25Part II  OTHER INFORMATIONITEM 1 Legal Proceedings
    
    25ITEM 1A Risk Factors
    
    25ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    25-26ITEM
3 Defaults Upon Senior Securities
    
    26ITEM 4 Submission of Matters to a Vote of Security Holders
    
    26ITEM 5 Other Information
    
    26ITEM 6 Exhibits
    
    26-27SIGNATURE
    
    28Long-Term Incentive PlanCertification of CEOCertification of CFOCertification of CEO and CFO
  2




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##### Table of Contents



Part I
 FINANCIAL INFORMATION
 
 ITEM 1  Consolidated Financial Statements
 Lindsay Manufacturing Co. and Subsidiaries
 
 CONSOLIDATED BALANCE SHEETS
February 28, 2006 and 2005 and August 31, 2005
 (Unaudited)
    
    
    (Unaudited)February
    
    
    February
    
    
    August($ in thousands, except par values)
    
    2006
    
    
    2005
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    26,907
    
    
    $
    7,571
    
    
    $
    25,564Marketable securities
    
    
    13,104
    
    
    
    11,720
    
    
    
    14,101Receivables, net (net of allowance, $574, $1,472 and
$702, respectively)
    
    
    35,999
    
    
    
    35,680
    
    
    
    28,919Inventories, net
    
    
    26,292
    
    
    
    29,858
    
    
    
    19,311Deferred income taxes
    
    
    3,948
    
    
    
    1,288
    
    
    
    3,276Other current assets
    
    
    4,539
    
    
    
    3,343
    
    
    
    3,042Total current assets
    
    
    110,789
    
    
    
    86,460
    
    
    
    94,213Long-term marketable securities
    
    
    10,925
    
    
    
    24,517
    
    
    
    15,157Property, plant and equipment, net
    
    
    17,551
    
    
    
    16,724
    
    
    
    17,268Other noncurrent assets
    
    
    6,933
    
    
    
    9,158
    
    
    
    8,201Total assets
    
    $
    146,198
    
    
    $
    139,859
    
    
    $
    134,839LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    14,215
    
    
    $
    11,010
    
    
    $
    6,704Other current liabilities
    
    
    14,743
    
    
    
    13,849
    
    
    
    13,434Total current liabilities
    
    
    28,958
    
    
    
    24,859
    
    
    
    20,138Pension benefits liabilities
    
    
    5,217
    
    
    
    4,664
    
    
    
    5,142Other noncurrent liabilities
    
    
    169
    
    
    
    161
    
    
    
    229Total liabilities
    
    
    34,344
    
    
    
    29,684
    
    
    
    25,509Shareholders equity:Preferred stock, ($1 par value, 2,000,000 shares
authorized, no shares issued and outstanding)
    
    
    
    
    
    
    
    
    
    
    Common stock, ($1 par value, 25,000,000 shares authorized,
17,573,531, 17,521,272 and 17,568,084 shares issued in
February 2006 and 2005 and August 2005, respectively)
    
    
    17,573
    
    
    
    17,521
    
    
    
    17,568Capital in excess of stated value
    
    
    4,500
    
    
    
    3,092
    
    
    
    3,690Retained earnings
    
    
    184,290
    
    
    
    180,700
    
    
    
    183,444Less treasury stock (at cost, 6,048,448, 5,862,569 and
6,048,448 shares,
respectively
    
    
    (96,547
    )
    
    
    (93,073
    )
    
    
    (96,547
    )Accumulated other comprehensive income, net
    
    
    2,038
    
    
    
    1,935
    
    
    
    1,175Total shareholders equity
    
    
    111,854
    
    
    
    110,175
    
    
    
    109,330Total liabilities and shareholders equity
    
    $
    146,198
    
    
    $
    139,859
    
    
    $
    134,839
  3




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Lindsay Manufacturing Co. and Subsidiaries
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
For the three-months and six-months ended February 28, 2006 and 2005
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedFebruary
    
    
    February
    
    
    February
    
    
    February(in thousands, except per share amounts)
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Operating revenues
    
    $
    54,912
    
    
    $
    41,487
    
    
    $
    94,416
    
    
    $
    81,254Cost of operating revenues
    
    
    45,048
    
    
    
    33,721
    
    
    
    77,125
    
    
    
    66,915Gross profit
    
    
    9,864
    
    
    
    7,766
    
    
    
    17,291
    
    
    
    14,339Operating expenses:Selling expense
    
    
    2,884
    
    
    
    2,999
    
    
    
    5,732
    
    
    
    5,746General and administrative
expense
    
    
    4,285
    
    
    
    3,397
    
    
    
    7,854
    
    
    
    6,994Engineering and research
expense
    
    
    607
    
    
    
    660
    
    
    
    1,254
    
    
    
    1,356Total operating expenses
    
    
    7,776
    
    
    
    7,056
    
    
    
    14,840
    
    
    
    14,096Operating income
    
    
    2,088
    
    
    
    710
    
    
    
    2,451
    
    
    
    243Interest income, net
    
    
    436
    
    
    
    295
    
    
    
    863
    
    
    
    556Other (loss) income, net
    
    
    (20
    )
    
    
    68
    
    
    
    (18
    )
    
    
    452Earnings before income taxes
    
    
    2,504
    
    
    
    1,073
    
    
    
    3,296
    
    
    
    1,251Income tax provision
    
    
    787
    
    
    
    473
    
    
    
    1,068
    
    
    
    476Net earnings
    
    $
    1,717
    
    
    $
    600
    
    
    $
    2,228
    
    
    $
    775Basic net earnings per share
    
    $
    0.15
    
    
    $
    0.05
    
    
    $
    0.19
    
    
    $
    0.07Diluted net earnings per
share
    
    $
    0.15
    
    
    $
    0.05
    
    
    $
    0.19
    
    
    $
    0.06Average shares outstanding
    
    
    11,522
    
    
    
    11,710
    
    
    
    11,521
    
    
    
    11,741Diluted effect of stock
options
    
    
    174
    
    
    
    168
    
    
    
    163
    
    
    
    188Average shares outstanding assuming
dilution
    
    
    11,696
    
    
    
    11,878
    
    
    
    11,684
    
    
    
    11,929Cash dividends per share
    
    $
    0.060
    
    
    $
    0.055
    
    
    $
    0.120
    
    
    $
    0.110
  4




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Lindsay Manufacturing Co. and Subsidiaries
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six-months ended February 28, 2006 and 2005
(Unaudited)
 February
    
    
    February($ in thousands)
    
    2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net earnings
    
    $
    2,228
    
    
    $
    775Adjustments to reconcile net earnings to net cash used in
operating activities:Depreciation and amortization
    
    
    1,661
    
    
    
    1,783Amortization of marketable securities,
net
    
    
    126
    
    
    
    110Loss on sale of property, plant and
equipment
    
    
    30
    
    
    
    Provision for uncollectible accounts
receivable
    
    
    36
    
    
    
    53Equity in net earnings of equity method
investments
    
    
    (4
    )
    
    
    (230
    )Deferred income taxes
    
    
    (239
    )
    
    
    (332
    )Stock-based compensation expense
    
    
    741
    
    
    
    Other, net
    
    
    (61
    )
    
    
    (50
    )Changes in assets and liabilities:Receivables, net
    
    
    (6,448
    )
    
    
    (427
    )Inventories, net
    
    
    (6,824
    )
    
    
    (8,914
    )Other current assets
    
    
    (1,392
    )
    
    
    (521
    )Accounts payable, trade
    
    
    7,503
    
    
    
    1,425Other current liabilities
    
    
    1,223
    
    
    
    (2,616
    )Current taxes payable
    
    
    (251
    )
    
    
    351Other noncurrent assets and
liabilities
    
    
    292
    
    
    
    2,528Net cash used in operating activities
    
    
    (1,379
    )
    
    
    (6,065
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and
equipment
    
    
    (1,772
    )
    
    
    (1,769
    )Sale of an equity investment
    
    
    354
    
    
    
    Proceeds from sale of property, plant and
equipment
    
    
    81
    
    
    
    7Purchases of marketable securities
available-for-sale
    
    
    
    
    
    
    (1,841
    )Proceeds from maturities or sales of marketable
securities available-for-sale
    
    
    5,113
    
    
    
    12,360Net cash provided by investing activities
    
    
    3,776
    
    
    
    8,757CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under stock
option plan
    
    
    93
    
    
    
    208Repurchases of common stock
    
    
    
    
    
    
    (3,175
    )Dividends paid
    
    
    (1,382
    )
    
    
    (1,284
    )Net cash used in financing
activities
    
    
    (1,289
    )
    
    
    (4,251
    )Effect of exchange rate changes on
cash
    
    
    235
    
    
    
    157Net increase (decrease) in cash and cash
equivalents
    
    
    1,343
    
    
    
    (1,402
    )Cash and cash equivalents, beginning of
period
    
    
    25,564
    
    
    
    8,973Cash and cash equivalents, end of
period
    
    $
    26,907
    
    
    $
    7,571
  5




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Lindsay Manufacturing Co. and Subsidiaries
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Condensed Consolidated Financial Statements
    (2) Share Based Compensation
     6




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Computation of Net Income per Share
   Share Based Compensation Program Descriptions
   7




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##### Table of Contents



General Share Based Compensation Information
  AverageRemaining
    
    
    AggregateNumber of
    
    
    Average
    
    
    Contractual Term
    
    
    Intrinsic ValueShares
    
    
    Exercise Price
    
    
    (years)
    
    
    (000s)Outstanding at August 31, 2004
    
    
    1,229,133
    
    
    $
    19.05Granted
    
    
    128,872
    
    
    
    24.45Exercised
    
    
    (81,712
    )
    
    
    12.22Cancelled
    
    
    (89,562
    )
    
    
    23.39Outstanding at August 31, 2005
    
    
    1,186,731
    
    
    
    19.84
    
    
    
    6.2GrantedStock
options
    
    
    45,000
    
    
    
    19.33Exercised
    
    
    (6,500
    )
    
    
    18.50
    
    
    
    
    
    
    $
    13Forfeitures
    
    
    (2,600
    )
    
    
    23.85Outstanding at November 30, 2005
    
    
    1,222,631
    
    
    
    19.82
    
    
    
    6.1
    
    
    
    1,769GrantedStock
options
    
    
    Exercised
    
    
    (4,600
    )
    
    
    18.30
    
    
    
    
    
    
    $
    30Forfeitures
    
    
    (4,245
    )
    
    
    23.95Outstanding at February 28, 2006
    
    
    1,213,786
    
    
    
    19.81
    
    
    
    5.8
    
    
    
    6,017Exercisable at August 31, 2005
    
    
    693,938
    
    
    $
    17.98
    
    
    
    5.0
    
    
    $
    5,203Exercisable at November 30, 2005
    
    
    729,185
    
    
    $
    18.17
    
    
    
    4.9
    
    
    $
    1,539Exercisable at February 28, 2006
    
    
    723,135
    
    
    $
    18.15
    
    
    
    4.6
    
    
    $
    4,768
 Options Outstanding
    
    
    Options ExercisableWeighted averageNumber
    
    
    remaining
    
    
    
    
    
    Number
    
    
    WeightedRange of
    
    outstanding at
    
    
    contractual life
    
    
    Weighted
    
    
    exercisable at
    
    
    averageexercise prices
    
    2/28/2006
    
    
    (years)
    
    

average price
    
    
    02/28/2006
    
    
    price$10.00-15.00
    
    
    350,000
    
    
    
    4.02
    
    
    $
    14.00
    
    
    
    300,000
    
    
    $
    14.0015.01-22.00
    
    
    440,080
    
    
    
    5.90
    
    
    
    19.39
    
    
    
    278,807
    
    
    
    18.8022.01-30.00
    
    
    423,706
    
    
    
    7.29
    
    
    
    25.05
    
    
    
    144,328
    
    
    
    25.541,213,786
    
    
    
    5.84
    
    
    $
    19.81
    
    
    
    723,135
    
    
    $
    18.15
   8




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##### Table of Contents



Weighted-AverageGrant-DateNonvested Shares
    
    Shares
    
    
    Fair ValueNonvested at September 1, 2005
    
    
    
    
    
    $
    0.00Granted
    
    
    37,266
    
    
    
    18.78Vested
    
    
    
    
    
    
    0.00Forfeited
    
    
    
    
    
    
    0.00Nonvested at November 30, 2005
    
    
    37,266
    
    
    $
    18.78Granted
    
    
    8,360
    
    
    $
    25.56Vested
    
    
    
    
    
    
    0.00Forfeited
    
    
    
    
    
    
    0.00Nonvested at February 28, 2006
    
    
    45,626
    
    
    $
    20.02
  Valuation and Expense Information under SFAS 123(R)
  Three Months
    
    
    Six MonthsEnded
    
    
    EndedFebruary 28,
    
    
    February 28,$ in thousands
    
    2006
    
    
    2006Share-based compensation expense
included in cost of operating
revenues
    
    $
    27
    
    
    $
    52Research and
development
    
    
    23
    
    
    
    45Sales and marketing
    
    
    77
    
    
    
    148General and
administrative
    
    
    258
    
    
    
    496Share-based compensation expense
included in operating expenses
    
    
    358
    
    
    
    689Total Share-based compensation expense
    
    
    385
    
    
    
    741Tax benefit
    
    
    (146
    )
    
    
    (281
    )Share-based compensation expense, net of
tax
    
    $
    239
    
    
    $
    460
 9




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##### Table of Contents



For the three-
    
    
    For the six-months ended
    
    
    months endedFebruary
    
    
    February$ in thousands
    
    2005
    
    
    2005Net earnings, as reported
(1)
    
    $
    600
    
    
    $
    775Share-based compensation
expense
    
    
    581
    
    
    
    1,163Tax benefit
    
    
    (220
    )
    
    
    (441
    )Share-based compensation expense, net tax
(2)
    
    
    361
    
    
    
    722Net income, including the effect of
share-based compensation expense
(3)
    
    $
    239
    
    
    $
    53Earnings per share:Basic net earnings per share-as reported
(1)
    
    $
    0.05
    
    
    $
    0.07Basic net earnings per share, including
the effect of share-based
compensation expense (3)
(4)
    
    $
    0.02
    
    
    $
    0.00Diluted- as reported for the prior
period (1)
    
    $
    0.05
    
    
    $
    0.06Diluted net income per share, including
the effect of share-based
compensation expense (3)
(4)
    
    $
    0.02
    
    
    $
    0.00
 
 (1)
    
    Net income and net income per share prior to fiscal 2006 did not include share-based
compensation expense under SFAS 123 because the Company did not adopt the recognition
provisions of SFAS 123.(2)
    
    Share-based compensation expense prior to fiscal 2006 was calculated based on the pro
forma application of SFAS 123.(3)
    
    Net income and net income per share prior to fiscal 2006 represents pro forma
information based on SFAS 123.(4)
    
    For the six-months ended February 28, 2005 basic and diluted net earnings per share,
including the effect of share-based compensation expense was $0.0045 and $0.0044,
respectively.    10




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##### Table of Contents



Six Months
    
    
    Six MonthsEnded
    
    
    EndedFebruary 28, 2006
    
    
    February 28, 2005Expected
volatility
    
    
    35.13
    %
    
    
    34.65 - 35.01
    %Expected dividends
    
    
    0.76
    %
    
    
    0.68
    %Expected term (in
years)
    
    
    7.00
    
    
    
    7.00Risk-free interest
rate
    
    
    4.52
    %
    
    
    4.12 - 4.30
    %
 (3) Cash Equivalents, Marketable Securities, and Long-term Marketable Securities
    Three-months ended
    
    
    Six-months endedFebruary 28,
    
    
    February 28,$ in thousands
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Gross realized
gains
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5Gross
realized losses
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (51
    )
  11




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##### Table of Contents



Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized$ in thousands
    
    cost
    
    
    gains
    
    
    losses
    
    
    Fair valueAs of February 28, 2006:Due within one
year
    
    $
    13,165
    
    
    $
    9
    
    
    $
    (70
    )
    
    $
    13,104Due after one year through five
years
    
    
    11,075
    
    
    
    5
    
    
    
    (155
    )
    
    
    10,925$
    24,240
    
    
    $
    14
    
    
    $
    (225
    )
    
    $
    24,029As of February 28, 2005:Due within one
year
    
    $
    11,705
    
    
    $
    26
    
    
    $
    (11
    )
    
    $
    11,720Due after one year through five
years
    
    
    24,650
    
    
    
    21
    
    
    
    (154
    )
    
    
    24,517$
    36,355
    
    
    $
    47
    
    
    $
    (165
    )
    
    $
    36,237As of August 31, 2005:Due within one
year
    
    $
    14,163
    
    
    $
    1
    
    
    $
    (63
    )
    
    $
    14,101Due after one year
through five
years
    
    
    15,315
    
    
    
    1
    
    
    
    (159
    )
    
    
    15,157$
    29,478
    
    
    $
    2
    
    
    $
    (222
    )
    
    $
    29,258
 (4) Inventories
  February
    
    
    February
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Inventory:First-in, first-out (FIFO)
inventory
    
    $
    21,387
    
    
    $
    22,610
    
    
    $
    15,373LIFO
reserves
    
    
    (4,417
    )
    
    
    (5,333
    )
    
    
    (4,048
    )LIFO
inventory
    
    
    16,970
    
    
    
    17,277
    
    
    
    11,325Weighted average
inventory
    
    
    9,912
    
    
    
    13,221
    
    
    
    8,599Obsolescence
reserve
    
    
    (590
    )
    
    
    (640
    )
    
    
    (613
    )Total
inventories
    
    $
    26,292
    
    
    $
    29,858
    
    
    $
    19,311
  February
    
    
    February
    
    
    August2006
    
    
    2005
    
    
    2005Raw materials
    
    
    17
    %
    
    
    30
    %
    
    
    23
    %Work in process
    
    
    7
    %
    
    
    5
    %
    
    
    6
    %Finished goods and purchased parts
    
    
    76
    %
    
    
    65
    %
    
    
    71
    %
 (5) Property, Plant and Equipment
  12




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##### Table of Contents



February
    
    
    February
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Property, plant and equipment:Land
    
    $
    336
    
    
    $
    336
    
    
    $
    336Buildings
    
    
    10,665
    
    
    
    10,460
    
    
    
    10,625Equipment
    
    
    41,585
    
    
    
    39,866
    
    
    
    38,884Other
    
    
    5,195
    
    
    
    4,661
    
    
    
    6,175Total property, plant and
equipment
    
    
    57,781
    
    
    
    55,323
    
    
    
    56,020Accumulated depreciation and
amortization
    
    
    (40,230
    )
    
    
    (38,599
    )
    
    
    (38,752
    )Property, plant and equipment, net
    
    $
    17,551
    
    
    $
    16,724
    
    
    $
    17,268
  (6) Credit Arrangements
  (7) Net Earnings per Share
   February 28, 2006
    
    February 28, 2005Weighted average
    
    Weighted averageShares
    
    price
    
    Expire
    
    Shares
    
    price
    
    Expire428,706
    
    $25.01
    
    September, 2007-
August, 2015
    
    289,250
    
    $25.81
    
    November, 2007-
August, 2014
 (8) Industry Segment Information
     13




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##### Table of Contents



For the three-months ended
    
    
    For the six-months endedFebruary
    
    
    February
    
    
    February
    
    
    February$ in thousands
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Operating revenues:Irrigation
    
    $
    49,181
    
    
    $
    36,161
    
    
    $
    83,323
    
    
    $
    71,563Diversified
products
    
    
    5,731
    
    
    
    5,326
    
    
    
    11,093
    
    
    
    9,691Total operating
revenues
    
    $
    54,912
    
    
    $
    41,487
    
    
    $
    94,416
    
    
    $
    81,254Operating income:Irrigation
    
    $
    5,968
    
    
    $
    4,149
    
    
    $
    9,748
    
    
    $
    7,660Diversified
products
    
    
    1,012
    
    
    
    618
    
    
    
    1,811
    
    
    
    933Segment operating
income
    
    
    6,980
    
    
    
    4,767
    
    
    
    11,559
    
    
    
    8,593Unallocated general &
administrative and
engineering & research
expenses
    
    
    4,892
    
    
    
    4,057
    
    
    
    9,108
    
    
    
    8,350Interest and other
income, net
    
    
    416
    
    
    
    363
    
    
    
    845
    
    
    
    1,008Earnings before income
taxes
    
    $
    2,504
    
    
    $
    1,073
    
    
    $
    3,296
    
    
    $
    1,251
 (9) Other Noncurrent Assets
 February
    
    
    February
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Cash surrender value of life
insurance policies
    
    $
    2,017
    
    
    $
    1,945
    
    
    $
    1,975Deferred income taxes
    
    
    295
    
    
    
    1,910
    
    
    
    730Equity method investments
    
    
    
    
    
    
    1,594
    
    
    
    1,621Goodwill
    
    
    1,393
    
    
    
    1,351
    
    
    
    1,364Split dollar life
insurance
    
    
    954
    
    
    
    916
    
    
    
    954Intangible pension
assets
    
    
    303
    
    
    
    373
    
    
    
    304Other intangibles,
net
    
    
    595
    
    
    
    740
    
    
    
    695Notes receivable
(1)
    
    
    1,311
    
    
    
    
    
    
    
    Other
    
    
    65
    
    
    
    329
    
    
    
    558Total noncurrent
assets
    
    $
    6,933
    
    
    $
    9,158
    
    
    $
    8,201
 
 (1)
    
    Notes receivable consists of $1.0 million note from a sold irrigation dealership (see
below) and other notes of $0.3 million.
  14




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##### Table of Contents



February
    
    
    February
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Other intangible assets:Non-compete
agreements
    
    $
    406
    
    
    $
    396
    
    
    $
    406License
    
    
    364
    
    
    
    314
    
    
    
    364Tradenames
    
    
    146
    
    
    
    145
    
    
    
    146Patent
    
    
    100
    
    
    
    100
    
    
    
    100Plans and
specifications
    
    
    75
    
    
    
    75
    
    
    
    75Other
    
    
    35
    
    
    
    34
    
    
    
    38Accumulated amortization
    
    
    (531
    )
    
    
    (324
    )
    
    
    (434
    )Total other intangibles assets,
net
    
    $
    595
    
    
    $
    740
    
    
    $
    695
 (10) Comprehensive Income
  For the three-months ended
    
    
    For the six-months endedFebruary
    
    
    February
    
    
    February
    
    
    February$ in thousands
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Comprehensive income:Net
earnings
    
    $
    1,717
    
    
    $
    600
    
    
    $
    2,228
    
    
    $
    775Other comprehensive (loss) income:Unrealized gains (losses) on
securities, net of
tax
    
    
    37
    
    
    
    (105
    )
    
    
    6
    
    
    
    (258
    )Foreign currency
translation
    
    
    492
    
    
    
    149
    
    
    
    857
    
    
    
    1,780Total comprehensive
income
    
    $
    2,246
    
    
    $
    644
    
    
    $
    3,091
    
    
    $
    2,297
 (11) Guarantees and Warranties
 Guarantees of Customer Equipment Financing
   15




---



##### Table of Contents



Guarantees on Third Party Debt Related to Equity Investment
  Product Warranties
   For the three-months endedFebruary
    
    
    February$ in thousands
    
    2006
    
    
    2005Warranties:Product warranty accrual balance, December
1
    
    $
    2,396
    
    
    $
    1,123Liabilities accrued for warranties during the
period
    
    
    616
    
    
    
    239Warranty claims paid during the
period
    
    
    (573
    )
    
    
    (198
    )Product warranty accrual balance, end of
period
    
    $
    2,439
    
    
    $
    1,164
 For the six-months endedFebruary
    
    
    February$ in thousands
    
    2006
    
    
    2005Warranties:Product warranty accrual balance, September
1
    
    $
    2,456
    
    
    $
    1,339Liabilities accrued for warranties during the
period
    
    
    893
    
    
    
    429Warranty claims paid during the
period
    
    
    (910
    )
    
    
    (604
    )Product warranty accrual balance, end of
period
    
    $
    2,439
    
    
    $
    1,164
 
 The warranty accrual increased approximately $1.5 million in the fourth quarter of fiscal year 2005
due to a voluntary repair campaign relating to the end gun solenoid valves on Zimmatic irrigation
systems. (12) Retirement Plan
  16




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##### Table of Contents



For the three-months ended
    
    
    For the six-months endedFebruary
    
    
    February
    
    
    February
    
    
    February$ in thousands
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Net periodic benefit cost:Service
cost
    
    $
    5
    
    
    $
    9
    
    
    $
    10
    
    
    $
    18Interest
cost
    
    
    67
    
    
    
    67
    
    
    
    134
    
    
    
    134Net amortization and
deferral
    
    
    39
    
    
    
    76
    
    
    
    78
    
    
    
    152Total net periodic benefit
cost
    
    $
    111
    
    
    $
    152
    
    
    $
    222
    
    
    $
    304
 (13) Commitments and Contingencies
  (14) Income Taxes
    17




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##### Table of Contents



ITEM 2  Managements Discussion and Analysis of Results of Operations and Financial Condition
 Concerning Forward-Looking Statements
   Accounting Policies
   Overview
 Zimmatic Greenfield Stettyn Perrot Greenfield GrowSmart
 18




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##### Table of Contents



Results of Operations
  For the three-months ended
    
    
    For the six-months endedPercent
    
    
    
    
    
    
    
    
    
    
    PercentFebruary
    
    
    February
    
    
    Increase
    
    
    February
    
    
    February
    
    
    Increase($ in thousands)
    
    2006
    
    
    2005
    
    
    (decrease)
    
    
    2006
    
    
    2005
    
    
    (decrease)Consolidated
Operating
revenues
    
    $
    54,912
    
    
    $
    41,487
    
    
    
    32.4
    %
    
    $
    94,416
    
    
    $
    81,254
    
    
    
    16.2
    %Cost of operating
revenues
    
    $
    45,048
    
    
    $
    33,721
    
    
    
    33.6
    
    
    $
    77,125
    
    
    $
    66,915
    
    
    
    15.3Gross
profit
    
    $
    9,864
    
    
    $
    7,766
    
    
    
    27.0
    
    
    $
    17,291
    
    
    $
    14,339
    
    
    
    20.6Gross
margin
    
    
    18.0
    %
    
    
    18.7
    %
    
    
    
    
    
    
    18.3
    %
    
    
    17.6
    %Operating
expenses
    
    $
    7,776
    
    
    $
    7,056
    
    
    
    10.2
    
    
    $
    14,840
    
    
    $
    14,096
    
    
    
    5.3Operating
income
    
    $
    2,088
    
    
    $
    710
    
    
    
    194.1
    
    
    $
    2,451
    
    
    $
    243
    
    
    
    908.6Operating
margin
    
    
    3.8
    %
    
    
    1.7
    %
    
    
    
    
    
    
    2.6
    %
    
    
    0.3
    %Interest income,
net
    
    $
    436
    
    
    $
    295
    
    
    
    47.8
    
    
    $
    863
    
    
    $
    556
    
    
    
    55.2Other (loss) income,
net
    
    $
    (20
    )
    
    $
    68
    
    
    
    (129.4
    )
    
    $
    (18
    )
    
    $
    452
    
    
    
    (104.0
    )Income tax
provision
    
    $
    787
    
    
    $
    473
    
    
    
    66.4
    
    
    $
    1,068
    
    
    $
    476
    
    
    
    124.4Effective income tax
rate
    
    
    31.4
    %
    
    
    44.1
    %
    
    
    
    
    
    
    32.4
    %
    
    
    38.1
    %Net
earnings
    
    $
    1,717
    
    
    $
    600
    
    
    
    186.2
    
    
    $
    2,228
    
    
    $
    775
    
    
    
    187.5Irrigation
Equipment Segment (1)Operating revenues
    
    $
    49,181
    
    
    $
    36,161
    
    
    
    36.0
    
    
    $
    83,323
    
    
    $
    71,563
    
    
    
    16.4Operating
income
    
    $
    5,968
    
    
    $
    4,149
    
    
    
    43.8
    
    
    $
    9,748
    
    
    $
    7,660
    
    
    
    27.3Operating
margin
    
    
    12.1
    %
    
    
    11.5
    %
    
    
    
    
    
    
    11.7
    %
    
    
    10.7
    %Diversified
Products Segment (1)Operating revenues
    
    $
    5,731
    
    
    $
    5,326
    
    
    
    7.6
    
    
    $
    11,093
    
    
    $
    9,691
    
    
    
    14.5Operating
income
    
    $
    1,012
    
    
    $
    618
    
    
    
    63.8
    
    
    $
    1,811
    
    
    $
    933
    
    
    
    94.1Operating
margin
    
    
    17.7
    %
    
    
    11.6
    %
    
    
    
    
    
    
    16.3
    %
    
    
    9.6
    %
 
  For the Three-Months ended February 28, 2006
 Revenues
   19




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##### Table of Contents



Gross Margin
  Operating Expenses
  Interest Income, Other Income, and Taxes
   20




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##### Table of Contents



Net Earnings
  Share-Based Compensation Expense
  Three-Months EndedFebruary 28,$ in thousands
    
    2006Share-based compensation expense included in cost of operating revenues
    
    $
    27Research and development
    
    
    23Sales and marketing
    
    
    77General and administrative
    
    
    258Share-based compensation expense included in operating expenses
    
    
    358Total Share-based compensation expense
    
    
    385Tax benefit
    
    
    (146
    )Share-based compensation expense, net of tax
    
    $
    239
  For the Six-Months ended February 28, 2006
 Revenues
    21




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##### Table of Contents



Gross Margin
  Operating Expenses
  Interest Income, Other Income, and Taxes
     Net Earnings
  22




---



##### Table of Contents



Share-Based Compensation Expense
  Six-Months EndedFebruary 28,$ in thousands
    
    2006Share-based compensation expense included in cost of operating revenues
    
    $
    52Research and development
    
    
    45Sales and marketing
    
    
    148General and administrative
    
    
    496Share-based compensation expense included in operating expenses
    
    
    689Total Share-based compensation expense
    
    
    741Tax benefit
    
    
    (281
    )Share-based compensation expense, net of tax
    
    $
    460
 Liquidity and Capital Resources
      23




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##### Table of Contents



Off-Balance Sheet Arrangements
  Contractual Obligations and Commercial Commitments
  Market Conditions and Fiscal 2006 Outlook
  Recently Issued Accounting Pronouncements
 The Meaning of Other-Than-Temporary Impairment and Its Application to
Certain Investments
  
 ITEM 3  Quantitative and Qualitative Disclosures About Market Risk
   24




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##### Table of Contents



ITEM 4
 Controls and Procedures
   
 Part
II  OTHER INFORMATION
 
 ITEM 1
 Legal Proceedings
   
 ITEM
1A  Risk Factors
  
 ITEM 2
 Unregistered Sales of Equity Securities and Use of Proceeds
  25




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##### Table of Contents



ITEM 3
 Defaults Upon Senior Securities
  
 ITEM 4
 Submission of Matters to a Vote of Security Holders
  1.
    
    
    Election of Directors:
    
    Larry H. Cunningham
    
    For  9,945,045
    
    Withheld  378,199Richard W. Parod
    
    For  9,989,705
    
    Withheld  333,5392.
    
    
    Approval of 2006 Long-Term Incentive PlanFor  6,822,493
    
    Against  1,568,059
    
    Abstain  279,099
    
    Broker Non-Vote  1,653,5933.
    
    
    Auditors: Ratification of the appointment of KPMG LLP as independent auditors for the fiscal year ended August 31, 2006.For  10,241,474
    
    Against  68,832
    
    Abstain  12,938
    
    Broker Non-Vote  0
 
 ITEM 5
 Other Information
  
 ITEM 6
 Exhibits
 3(a)
    
    Restated Certificate of Incorporation of the Company, incorporated by
reference to Exhibit 3(a) to the Companys Report on Form 10-Q for the fiscal quarter
ended February 28, 1997.3(b)
    
    By-Laws of the Company amended and restated by the Board of Directors on
December 16, 2004, incorporated by reference to Exhibit 3(b) of the Companys Report on
Form 8-K filed on December 22, 2004.3(c)
    
    Certificate of Amendment of the Restated Certificate of Incorporation of
Lindsay Manufacturing Co. dated February 7, 1997, incorporated by reference to Exhibit
3(b) to the Companys Report on Form 10-Q for the fiscal quarter ended February 28,
1997.4(a)
    
    Specimen Form of Common Stock Certificate incorporated by reference to Exhibit
4 to the Companys report on Form 10-Q for the fiscal quarter ended November 30, 1997.10(a)*
    
    Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan and forms of award
agreements.31(a)
    
    Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.
 26




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##### Table of Contents



31(b)
    
    Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.32(a)
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.
 
 *
    
    - filed herein 27




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##### Table of Contents



SIGNATURE
 th
 LINDSAY MANUFACTURING CO.By:
    
    /s/ david b. downingName:
    
    David B. DowningTitle:
    
    Vice President, Chief Financial Officer(Principal Financial Officer)
 28