##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended May 31, 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
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
 o þ
 ,




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##### Table of Contents



Lindsay Manufacturing Co. and Subsidiaries
INDEX FORM 10-Q
  
 Page No.Part I  FINANCIAL INFORMATIONITEM 1 Condensed Consolidated Financial StatementsConsolidated Balance Sheets, May 31, 2006 and 2005
and August 31, 2005
    
    3Consolidated Statements of Operations for the three-months
ended and nine-months ended May 31, 2006 and 2005
    
    4Consolidated Statements of Cash Flows for the nine-months
ended May 31, 2006 and 2005
    
    5Notes to Condensed 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
    
    24ITEM 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
    
    25ITEM 3-Defaults Upon Senior Securities
    
    25ITEM 4-Submission of Matters to a Vote of Security Holders
    
    26ITEM 5-Other Information
    
    26ITEM 6-Exhibits
    
    26SIGNATURE
    
    27CertificationCertificationCertification
 - 2 -




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##### Table of Contents



Part I  FINANCIAL INFORMATION
 
 ITEM 1   Condensed Consolidated Financial Statements
 Lindsay Manufacturing Co. and Subsidiaries
 
 CONSOLIDATED BALANCE SHEETS
 May 31, 2006 and 2005 and August 31, 2005
 (Unaudited)
    
    
    (Unaudited)May
    
    
    May
    
    
    August($ in thousands, except par values)
    
    2006
    
    
    2005
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    30,088
    
    
    $
    19,755
    
    
    $
    25,564Marketable securities
    
    
    11,941
    
    
    
    11,759
    
    
    
    14,101Receivables, net (net of allowance, $573, $732 and
$702, respectively)
    
    
    42,387
    
    
    
    32,392
    
    
    
    28,919Inventories, net
    
    
    24,803
    
    
    
    22,684
    
    
    
    19,311Deferred income taxes
    
    
    4,441
    
    
    
    1,684
    
    
    
    3,276Other current assets
    
    
    3,926
    
    
    
    3,426
    
    
    
    3,042Total current assets
    
    
    117,586
    
    
    
    91,700
    
    
    
    94,213Long-term marketable securities
    
    
    10,857
    
    
    
    22,154
    
    
    
    15,157Property, plant and equipment, net
    
    
    17,489
    
    
    
    16,732
    
    
    
    17,268Other noncurrent assets
    
    
    7,415
    
    
    
    8,654
    
    
    
    8,201Total assets
    
    $
    153,347
    
    
    $
    139,240
    
    
    $
    134,839LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    9,726
    
    
    $
    10,398
    
    
    $
    6,704Other current liabilities
    
    
    20,515
    
    
    
    14,234
    
    
    
    13,434Total current liabilities
    
    
    30,241
    
    
    
    24,632
    
    
    
    20,138Pension benefits liabilities
    
    
    5,251
    
    
    
    4,733
    
    
    
    5,142Other noncurrent liabilities
    
    
    179
    
    
    
    155
    
    
    
    229Total liabilities
    
    
    35,671
    
    
    
    29,520
    
    
    
    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,
17,584,031, 17,565,184 and 17,568,084 shares issued in
May 2006 and 2005 and August 2005, respectively)
    
    
    17,584
    
    
    
    17,565
    
    
    
    17,568Capital in excess of stated value
    
    
    5,144
    
    
    
    3,500
    
    
    
    3,690Retained earnings
    
    
    190,013
    
    
    
    183,834
    
    
    
    183,444Less treasury stock (at cost, 6,048,448 shares)
    
    
    (96,547
    )
    
    
    (96,547
    )
    
    
    (96,547
    )Accumulated other comprehensive income, net
    
    
    1,482
    
    
    
    1,368
    
    
    
    1,175Total shareholders equity
    
    
    117,676
    
    
    
    109,720
    
    
    
    109,330Total liabilities and shareholders equity
    
    $
    153,347
    
    
    $
    139,240
    
    
    $
    134,839
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##### Table of Contents



Lindsay Manufacturing Co. and Subsidiaries
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
For the three-months and nine-months ended May 31, 2006 and 2005
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedMay
    
    
    May
    
    
    May
    
    
    May(in thousands, except per share amounts)
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Operating revenues
    
    $
    75,013
    
    
    $
    55,985
    
    
    $
    169,429
    
    
    $
    137,239Cost of operating revenues
    
    
    57,977
    
    
    
    43,792
    
    
    
    135,102
    
    
    
    110,707Gross profit
    
    
    17,036
    
    
    
    12,193
    
    
    
    34,327
    
    
    
    26,532Operating expenses:Selling expense
    
    
    3,530
    
    
    
    2,692
    
    
    
    9,262
    
    
    
    8,438General and administrative
expense
    
    
    4,446
    
    
    
    3,421
    
    
    
    12,300
    
    
    
    10,415Engineering and research
expense
    
    
    697
    
    
    
    714
    
    
    
    1,951
    
    
    
    2,070Total operating expenses
    
    
    8,673
    
    
    
    6,827
    
    
    
    23,513
    
    
    
    20,923Operating income
    
    
    8,363
    
    
    
    5,366
    
    
    
    10,814
    
    
    
    5,609Interest income, net
    
    
    511
    
    
    
    264
    
    
    
    1,374
    
    
    
    820Other income (loss), net
    
    
    268
    
    
    
    (137
    )
    
    
    250
    
    
    
    315Earnings before income taxes
    
    
    9,142
    
    
    
    5,493
    
    
    
    12,438
    
    
    
    6,744Income tax provision
    
    
    2,727
    
    
    
    1,723
    
    
    
    3,795
    
    
    
    2,199Net earnings
    
    $
    6,415
    
    
    $
    3,770
    
    
    $
    8,643
    
    
    $
    4,545Basic net earnings per share
    
    $
    0.56
    
    
    $
    0.33
    
    
    $
    0.75
    
    
    $
    0.39Diluted net earnings per
share
    
    $
    0.55
    
    
    $
    0.32
    
    
    $
    0.74
    
    
    $
    0.38Average shares outstanding
    
    
    11,529
    
    
    
    11,596
    
    
    
    11,524
    
    
    
    11,693Diluted effect of stock
options
    
    
    219
    
    
    
    83
    
    
    
    174
    
    
    
    155Average shares outstanding assuming
dilution
    
    
    11,748
    
    
    
    11,679
    
    
    
    11,698
    
    
    
    11,848Cash dividends per share
    
    $
    0.060
    
    
    $
    0.055
    
    
    $
    0.180
    
    
    $
    0.165
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Lindsay Manufacturing Co. and Subsidiaries
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine-months ended May 31, 2006 and 2005
(Unaudited)
 May
    
    
    May($ in thousands)
    
    2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net earnings
    
    $
    8,643
    
    
    $
    4,545Adjustments to reconcile net earnings to net cash provided by
operating activities:Depreciation and amortization
    
    
    2,585
    
    
    
    2,639Amortization of marketable securities,
net
    
    
    178
    
    
    
    176Loss on sale of property, plant and
equipment
    
    
    37
    
    
    
    21Provision for uncollectible accounts
receivable
    
    
    66
    
    
    
    72Equity in net earnings of equity method
investments
    
    
    (4
    )
    
    
    (201
    )Deferred income taxes
    
    
    (1,272
    )
    
    
    (158
    )Stock-based compensation expense
    
    
    1,298
    
    
    
    Other, net
    
    
    3
    
    
    
    28Changes in assets and liabilities:Receivables, net
    
    
    (12,790
    )
    
    
    2,664Inventories, net
    
    
    (5,298
    )
    
    
    (2,454
    )Other current assets
    
    
    (949
    )
    
    
    (438
    )Accounts payable, trade
    
    
    2,952
    
    
    
    803Other current liabilities
    
    
    6,714
    
    
    
    (2,931
    )Current taxes payable
    
    
    (300
    )
    
    
    1,370Other noncurrent assets and liabilities
    
    
    406
    
    
    
    2,640Net cash provided by operating activities
    
    
    2,269
    
    
    
    8,776CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (2,713
    )
    
    
    (2,903
    )Proceeds from sale of an equity investment
    
    
    354
    
    
    
    Proceeds from sale of property, plant and
equipment
    
    
    111
    
    
    
    24Purchases of marketable securities
available-for-sale
    
    
    
    
    
    
    (1,841
    )Proceeds from maturities or sales of marketable securities
available-for-sale
    
    
    6,304
    
    
    
    14,500Net cash provided by investing activities
    
    
    4,056
    
    
    
    9,780CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under stock option
plan
    
    
    194
    
    
    
    561Repurchases of common stock
    
    
    
    
    
    
    (6,649
    )Dividends paid
    
    
    (2,074
    )
    
    
    (1,920
    )Net cash used in financing activities
    
    
    (1,880
    )
    
    
    (8,008
    )Effect of exchange rate changes on cash
    
    
    79
    
    
    
    234Net increase in cash and cash equivalents
    
    
    4,524
    
    
    
    10,782Cash and cash equivalents, beginning of
period
    
    
    25,564
    
    
    
    8,973Cash and cash equivalents, end of period
    
    $
    30,088
    
    
    $
    19,755
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Lindsay Manufacturing Co. and Subsidiaries
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (1) Condensed Consolidated Financial Statements
    (2) Share Based Compensation
   6




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##### Table of Contents



Nine-Months
    
    Nine-MonthsEnded
    
    EndedMay 31, 2006
    
    May 31, 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
    %
    Three-Months
    
    
    Nine-MonthsEnded
    
    
    Ended$ in thousands
    
    May 31, 2006
    
    
    May 31, 2006Share-based compensation expense
included in cost of operating
revenues
    
    $
    39
    
    
    $
    91Research and
development
    
    
    33
    
    
    
    77Sales and marketing
    
    
    111
    
    
    
    260General and
administrative
    
    
    374
    
    
    
    870Share-based compensation expense
included in operating expenses
    
    
    518
    
    
    
    1207Total Share-based compensation expense
    
    
    557
    
    
    
    1,298Tax benefit
    
    
    (211
    )
    
    
    (492
    )Share-based compensation expense, net of
tax
    
    $
    346
    
    
    $
    806
 7




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##### Table of Contents



Three-Months
    
    
    Nine-MonthsEnded
    
    
    Ended$ in thousands
    
    May 31, 2005
    
    
    May 31, 2005Net earnings, as reported (1)
    
    $
    3,770
    
    
    $
    4,545Share-based compensation expense
    
    
    386
    
    
    
    1,549Tax benefit
    
    
    (146
    )
    
    
    (587
    )Share-based compensation expense, net tax (2)
    
    
    240
    
    
    
    962Net income, including the effect of share-based compensation expense
(3)
    
    $
    3,530
    
    
    $
    3,583Earnings per share:Basic net earnings per share-as reported (1)
    
    $
    0.33
    
    
    $
    0.39Basic net earnings per share, including the effect of
share-based compensation expense (3)
    
    $
    0.30
    
    
    $
    0.31Diluted- as reported for the prior period (1)
    
    $
    0.32
    
    
    $
    0.38Diluted net income per share, including the effect of
share-based compensation expense (3)
    
    $
    0.30
    
    
    $
    0.30
 
 (1)
    
    Net income and net income per share prior to fiscal 2006 did not include share-based
compensation expense under SFAS 123(R) because the Company did not adopt the recognition
provisions of SFAS 123(R) until the beginning of fiscal 2006.(2)
    
    Share-based compensation expense prior to fiscal 2006 was calculated based on the pro
forma application of SFAS 123(R).(3)
    
    Net income and net income per share prior to fiscal 2006 represents pro forma
information based on SFAS 123(R). Computation of Net Income per Share
   Share Based Compensation Program Descriptions
  8




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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
    
    
    $
    19.05
    
    
    
    
    
    
    $
    7,517Granted
    
    
    128,872
    
    
    
    24.45Exercised
    
    
    (81,712
    )
    
    
    12.22Cancelled
    
    
    (89,562
    )
    
    
    23.39Outstanding at August 31, 2005
    
    
    1,186,731
    
    
    
    19.84
    
    
    
    6.2
    
    
    
    6,651Granted
    
    
    45,000
    
    
    
    19.33Exercised
    
    
    (6,500
    )
    
    
    18.50
    
    
    
    
    
    
    
    13Forfeitures
    
    
    (2,600
    )
    
    
    23.85Outstanding at November 30, 2005
    
    
    1,222,631
    
    
    
    19.82
    
    
    
    6.1
    
    
    
    1,769Granted
    
    
    Stock options
    
    
    Exercised
    
    
    (4,600
    )
    
    
    18.30
    
    
    
    
    
    
    
    30Forfeitures
    
    
    (4,245
    )
    
    
    23.95Outstanding at February 28, 2006
    
    
    1,213,786
    
    
    
    19.81
    
    
    
    5.8
    
    
    
    6,017Granted
    
    
    Stock options
    
    
    Exercised
    
    
    (10,500
    )
    
    
    15.31
    
    
    
    
    
    
    
    125Forfeitures
    
    
    (3,405
    )
    
    
    23.76Outstanding at May 31, 2006
    
    
    1,199,881
    
    
    
    19.84
    
    
    
    5.6
    
    
    
    3,914Exercisable 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
    
    
    $
    4,768Exercisable at May 31, 2006
    
    
    790,385
    
    
    $
    18.64
    
    
    
    4.6
    
    
    $
    3,325
 9




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##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted averageNumber
    
    
    remaining
    
    
    
    
    
    
    Number
    
    
    WeightedRange of
    
    outstanding at
    
    
    contractual life
    
    
    Weighted
    
    
    exercisable at
    
    
    averageexercise prices
    
    5/31/2006
    
    
    (years)
    
    
    average price
    
    
    5/31/2006
    
    
    price$10.00-15.00
    
    
    350,000
    
    
    
    3.77
    
    
    $
    14.00
    
    
    
    300,000
    
    
    $
    14.0015.01-22.00
    
    
    429,030
    
    
    
    5.72
    
    
    
    19.49
    
    
    
    308,407
    
    
    
    19.1022.01-30.00
    
    
    420,851
    
    
    
    7.02
    
    
    
    25.05
    
    
    
    181,978
    
    
    
    25.491,199,881
    
    
    
    5.61
    
    
    $
    19.84
    
    
    
    790,385
    
    
    $
    18.64
   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
    
    
    $
    19.25Granted
    
    
    2,500
    
    
    $
    25.76Vested
    
    
    
    
    
    
    0.00Forfeited
    
    
    (300
    )
    
    
    18.78Nonvested at May 31, 2006
    
    
    47,826
    
    
    $
    20.31
   (3) Cash Equivalents, Marketable Securities, and Long-term Marketable Securities
   10




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##### Table of Contents



Three-months ended
    
    Nine-months endedMay 28,
    
    May 28,$ in thousands
    
    2006
    
    2005
    
    2006
    
    2005Gross realized
gains
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5Gross realized
(losses)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (51
    )
  Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized$ in thousands
    
    cost
    
    
    gains
    
    
    (losses)
    
    
    Fair valueAs of May 31, 2006:Due within one
year
    
    $
    11,974
    
    
    $
    9
    
    
    $
    (42
    )
    
    $
    11,941Due after one year
through five
years
    
    
    11,021
    
    
    
    
    
    
    
    (164
    )
    
    
    10,857$
    22,995
    
    
    $
    9
    
    
    $
    (206
    )
    
    $
    22,798As of May 31, 2005:Due within one
year
    
    $
    11,783
    
    
    $
    3
    
    
    $
    (27
    )
    
    $
    11,759Due after one year
through five
years
    
    
    22,366
    
    
    
    1
    
    
    
    (213
    )
    
    
    22,154$
    34,149
    
    
    $
    4
    
    
    $
    (240
    )
    
    $
    33,913As 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
  May
    
    
    May
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Inventory:First-in, first-out (FIFO)
inventory
    
    $
    19,907
    
    
    $
    16,722
    
    
    $
    15,373LIFO reserves
    
    
    (4,417
    )
    
    
    (4,546
    )
    
    
    (4,048
    )LIFO inventory
    
    
    15,490
    
    
    
    12,176
    
    
    
    11,325Weighted average
inventory
    
    
    10,001
    
    
    
    11,232
    
    
    
    8,599Obsolescence
reserve
    
    
    (688
    )
    
    
    (724
    )
    
    
    (613
    )Total
inventories
    
    $
    24,803
    
    
    $
    22,684
    
    
    $
    19,311
 11




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##### Table of Contents



May
    
    May
    
    August2006
    
    2005
    
    2005Raw materials
    
    
    17
    %
    
    
    25
    %
    
    
    23
    %Work in process
    
    
    5
    %
    
    
    5
    %
    
    
    6
    %Finished goods and purchased parts
    
    
    78
    %
    
    
    70
    %
    
    
    71
    %
 (5) Property, Plant and Equipment
  May
    
    
    May
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Property, plant and equipment:Land
    
    $
    336
    
    
    $
    336
    
    
    $
    336Buildings
    
    
    11,489
    
    
    
    10,612
    
    
    
    10,625Equipment
    
    
    41,535
    
    
    
    39,694
    
    
    
    38,884Other
    
    
    4,772
    
    
    
    5,323
    
    
    
    6,175Total property, plant and
equipment
    
    
    58,132
    
    
    
    55,965
    
    
    
    56,020Accumulated depreciation and
amortization
    
    
    (40,643
    )
    
    
    (39,233
    )
    
    
    (38,752
    )Property, plant and equipment, net
    
    $
    17,489
    
    
    $
    16,732
    
    
    $
    17,268
  (6) Credit Arrangements
  Subsequent Event
 (7) Net Earnings per Share
  12




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##### Table of Contents



May 31, 2006
    
    May 31, 2005Weighted average
    
    
    
    
    
    
    
    Weighted averageShares
    
    price
    
    Expire
    
    Shares
    
    price
    
    Expire420,856
    
    $
    25.05
    
    
    September, 2007-August, 2015
    
    
    524,372
    
    
    $
    24.04
    
    
    September, 2007- October, 2014
 (8) Industry Segment Information
       For the three-months ended
    
    
    For the nine-months endedMay
    
    
    May
    
    
    May
    
    
    May$ in thousands
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Operating revenues:Irrigation
    
    $
    69,067
    
    
    $
    49,978
    
    
    $
    152,390
    
    
    $
    121,541Diversified
products
    
    
    5,946
    
    
    
    6,007
    
    
    
    17,039
    
    
    
    15,698Total operating
revenues
    
    $
    75,013
    
    
    $
    55,985
    
    
    $
    169,429
    
    
    $
    137,239Operating income:Irrigation
    
    $
    12,320
    
    
    $
    8,671
    
    
    $
    22,068
    
    
    $
    16,331Diversified
products
    
    
    1,186
    
    
    
    830
    
    
    
    2,997
    
    
    
    1,763Segment operating
income
    
    
    13,506
    
    
    
    9,501
    
    
    
    25,065
    
    
    
    18,094Unallocated general &
administrative and engineering &
research
expenses
    
    
    5,143
    
    
    
    4,135
    
    
    
    14,251
    
    
    
    12,485Interest and other income,
net
    
    
    779
    
    
    
    127
    
    
    
    1,624
    
    
    
    1,135Earnings before income
taxes
    
    $
    9,142
    
    
    $
    5,493
    
    
    $
    12,438
    
    
    $
    6,744
 13




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##### Table of Contents



(9) Other Noncurrent Assets
 May
    
    
    May
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Cash surrender value of life
insurance policies
    
    $
    2,029
    
    
    $
    1,966
    
    
    $
    1,975Deferred income taxes
    
    
    854
    
    
    
    1,340
    
    
    
    730Equity method investments
    
    
    
    
    
    
    1,565
    
    
    
    1,621Goodwill
    
    
    1,388
    
    
    
    1,378
    
    
    
    1,364Notes receivable (1)
    
    
    1,311
    
    
    
    
    
    
    
    Split dollar life
insurance
    
    
    922
    
    
    
    954
    
    
    
    954Intangible pension
assets
    
    
    303
    
    
    
    373
    
    
    
    304Other intangibles,
net
    
    
    546
    
    
    
    746
    
    
    
    695Other
    
    
    62
    
    
    
    332
    
    
    
    558Total noncurrent assets
    
    $
    7,415
    
    
    $
    8,654
    
    
    $
    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 .
   May
    
    
    May
    
    
    August$ in thousands
    
    2006
    
    
    2005
    
    
    2005Other intangible assets:Non-compete
agreements
    
    $
    406
    
    
    $
    404
    
    
    $
    406License
    
    
    364
    
    
    
    364
    
    
    
    364Tradenames
    
    
    146
    
    
    
    146
    
    
    
    146Patent
    
    
    100
    
    
    
    100
    
    
    
    100Plans and
specifications
    
    
    75
    
    
    
    75
    
    
    
    75Other
    
    
    35
    
    
    
    32
    
    
    
    38Accumulated amortization
    
    
    (580
    )
    
    
    (375
    )
    
    
    (434
    )Total other intangibles assets,
net
    
    $
    546
    
    
    $
    746
    
    
    $
    695
 (10) Comprehensive Income
  14




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##### Table of Contents



For the three-months ended
    
    
    For the nine-months endedMay
    
    
    May
    
    
    May
    
    
    May$ in thousands
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Comprehensive income:Net
earnings
    
    $
    6,415
    
    
    $
    3,770
    
    
    $
    8,643
    
    
    $
    4,545Other comprehensive (loss) income:Unrealized gains (losses) on
securities, net of
tax
    
    
    8
    
    
    
    (74
    )
    
    
    14
    
    
    
    (332
    )Foreign currency
translation
    
    
    (564
    )
    
    
    (493
    )
    
    
    293
    
    
    
    1,287Total comprehensive
income
    
    $
    5,859
    
    
    $
    3,203
    
    
    $
    8,950
    
    
    $
    5,500
 (11) Guarantees and Warranties
 Guarantees of Customer Equipment Financing
     Guarantees on Third Party Debt Related to Equity Investment
  Product Warranties
  15




---



##### Table of Contents



For the three-months endedMay
    
    
    May$ in thousands
    
    2006
    
    
    2005Warranties:Product warranty accrual balance, March 1
    
    $
    2,439
    
    
    $
    1,164Liabilities accrued for warranties during the period
    
    
    451
    
    
    
    427Warranty claims paid during the period
    
    
    (566
    )
    
    
    (567
    )Product warranty accrual balance, end of period
    
    $
    2,324
    
    
    $
    1,024
 For the nine-months endedMay
    
    
    May$ in thousands
    
    2006
    
    
    2005Warranties:Product warranty accrual balance, September 1
    
    $
    2,456
    
    
    $
    1,339Liabilities accrued for warranties during the period
    
    
    1,344
    
    
    
    856Warranty claims paid during the period
    
    
    (1,476
    )
    
    
    (1,171
    )Product warranty accrual balance, end of period
    
    $
    2,324
    
    
    $
    1,024
  (12) Retirement Plan
  For the three-months ended
    
    
    For the nine-months endedMay
    
    
    May
    
    
    May
    
    
    May$ in thousands
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Net periodic benefit cost:Service
cost
    
    $
    5
    
    
    $
    9
    
    
    $
    15
    
    
    $
    27Interest
cost
    
    
    67
    
    
    
    67
    
    
    
    201
    
    
    
    201Net amortization and
deferral
    
    
    39
    
    
    
    76
    
    
    
    117
    
    
    
    228Total net periodic benefit
cost
    
    $
    111
    
    
    $
    152
    
    
    $
    333
    
    
    $
    456
 (13) Commitments and Contingencies
  (14) Income Taxes
  - 16 -




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##### Table of Contents



(15) Subsequent Event
       - 17 -




---



##### 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 nine-months endedPercent
    
    
    
    
    
    
    
    
    
    PercentMay
    
    May
    
    Increase
    
    May
    
    May
    
    Increase($ in thousands)
    
    2006
    
    2005
    
    (decrease)
    
    2006
    
    2005
    
    (decrease)ConsolidatedOperating
revenues
    
    $
    75,013
    
    
    $
    55,985
    
    
    
    34.0
    %
    
    $
    169,429
    
    
    $
    137,239
    
    
    
    23.5
    %Cost of operating
revenues
    
    $
    57,977
    
    
    $
    43,792
    
    
    
    32.4
    
    
    $
    135,102
    
    
    $
    110,707
    
    
    
    22.0Gross
profit
    
    $
    17,036
    
    
    $
    12,193
    
    
    
    39.7
    
    
    $
    34,327
    
    
    $
    26,532
    
    
    
    29.4Gross
margin
    
    
    22.7
    %
    
    
    21.8
    %
    
    
    
    
    
    
    20.3
    %
    
    
    19.3
    %Operating
expenses
    
    $
    8,673
    
    
    $
    6,827
    
    
    
    27.0
    
    
    $
    23,513
    
    
    $
    20,923
    
    
    
    12.4Operating
income
    
    $
    8,363
    
    
    $
    5,366
    
    
    
    55.9
    
    
    $
    10,814
    
    
    $
    5,609
    
    
    
    92.8Operating
margin
    
    
    11.1
    %
    
    
    9.6
    %
    
    
    
    
    
    
    6.4
    %
    
    
    4.1
    %Interest income,
net
    
    $
    511
    
    
    $
    264
    
    
    
    93.6
    
    
    $
    1,374
    
    
    $
    820
    
    
    
    67.6Other (loss) income,
net
    
    $
    268
    
    
    $
    (137
    )
    
    
    (295.6
    )
    
    $
    250
    
    
    $
    315
    
    
    
    (20.6
    )Income tax
provision
    
    $
    2,727
    
    
    $
    1,723
    
    
    
    58.3
    
    
    $
    3,795
    
    
    $
    2,199
    
    
    
    72.6Effective income tax
rate
    
    
    29.8
    %
    
    
    31.4
    %
    
    
    
    
    
    
    30.5
    %
    
    
    32.6
    %Net
earnings
    
    $
    6,415
    
    
    $
    3,770
    
    
    
    70.2
    
    
    $
    8,643
    
    
    $
    4,545
    
    
    
    90.2Irrigation Equipment Segment (1)Operating revenues
    
    $
    69,067
    
    
    $
    49,978
    
    
    
    38.2
    
    
    $
    152,390
    
    
    $
    121,541
    
    
    
    25.4Operating
income
    
    $
    12,320
    
    
    $
    8,671
    
    
    
    42.1
    
    
    $
    22,068
    
    
    $
    16,331
    
    
    
    35.1Operating
margin
    
    
    17.8
    %
    
    
    17.4
    %
    
    
    
    
    
    
    14.5
    %
    
    
    13.4
    %Diversified Products Segment (1)Operating revenues
    
    $
    5,946
    
    
    $
    6,007
    
    
    
    (1.0
    )
    
    $
    17,039
    
    
    $
    15,698
    
    
    
    8.5Operating
income
    
    $
    1,186
    
    
    $
    830
    
    
    
    42.9
    
    
    $
    2,997
    
    
    $
    1,763
    
    
    
    70.0Operating
margin
    
    
    19.9
    %
    
    
    13.8
    %
    
    
    
    
    
    
    17.6
    %
    
    
    11.2
    %
 
 (1)
    
    Excludes unallocated general & administrative and engineering & research expenses - 19 -




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##### Table of Contents



For the Three-Months ended May 31, 2006
 Revenues
     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 Ended$ in thousands
    
    May 31, 2006Share-based compensation expense included in cost
of operating revenues
    
    $
    39Research and development
    
    
    33Sales and marketing
    
    
    111General and administrative
    
    
    374Share-based compensation expense included in
operating expenses
    
    
    518Total Share-based compensation expense
    
    
    557Tax benefit
    
    
    (211
    )Share-based compensation expense, net of
tax
    
    $
    346
  For the Nine-Months ended May 31, 2006
 Revenues
    - 21 -




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##### Table of Contents



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




---



##### Table of Contents



Share-Based Compensation Expense
  Nine-Months Ended$ in thousands
    
    May 31, 2006Share-based compensation expense included in cost
of operating revenues
    
    $
    91Research and development
    
    
    77Sales and marketing
    
    
    260General and administrative
    
    
    870Share-based compensation expense included in
operating expenses
    
    
    1,207Total Share-based compensation expense
    
    
    1,298Tax benefit
    
    
    (492
    )Share-based compensation expense, net of
tax
    
    $
    806
 Liquidity and Capital Resources
      - 23 -




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##### Table of Contents



Off-Balance Sheet Arrangements
 Subsequent Event
 Contractual Obligations and Commercial Commitments
 Subsequent Event
 Market Conditions and Fiscal 2006 Outlook
  Recently Issued Accounting Pronouncements
  
 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
  
 ITEM 3  Defaults Upon Senior Securities
  - 25 -




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##### Table of Contents



ITEM 4  Submission of Matters to a Vote of Security Holders
  
 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, 1997.31
    (a)
    
    Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.31
    (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.
 - 26 -




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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)
 - 27 -