Lindsay Wins Highways England Movable-Barrier Supply Contract

Lindsay Corporation’s (NYSE:LNN) wholly-owned subsidiary Lindsay Transportation Solutions, LLC has been awarded a supply contract of a Movable Barrier System from Highways England for Kent city, U.K.

Per the terms of contract, Lindsay will provide its Road Zipper System solution, which consists of Quickchange Movable Barriers and Barrier Transfer Machines. Hence, through the Road Zipper System, movable barriers will be called into operation from their storage locations onto the M20 London-bound motorway between Junctions 9 and 7.

In an attempt to handle traffic disruption on Kent’s roads, Highways England has developed this solution. Movable barriers will be able to deploy a quick contraflow for traffic traveling in the opposite direction. The contract states that Lindsay will provide related training and periodic inspection support services.

The latest Highways England traffic management scheme is likely to be fully operational by the end of this year. Total awarded value of the contract is £21,349,035 ($28 million).

Lindsay’s Road Zipper System is a highly differentiated product that addresses key infrastructure needs, such as reducing congestion, lowering carbon emission, and increasing driver safety and consequently gaining popularity globally. The company continues to focus on building a solid pipeline of Road Zipper System projects to support growth in the infrastructure business.

Further, demand for the company’s transportation safety products continues to gain traction on population growth and the need for improved road safety. Hence, the company is focused on growing this business. Moreover, Lindsay’s agreement with Iteris supports its shift-left strategy to get more involved in the planning and design stage of projects, where Road Zipper can be potentially utilized.

On Sep 26 2019, the Federal Highway Administration repealed a 103-year old federal procurement rule, which prohibits state and local governments from using patented or proprietary products on highway and bridge projects receiving federal funding. The Road Zipper sales will, henceforth, benefit from this development.

Lindsay delivered mixed first-quarter fiscal 2020 results, wherein earnings beat the Zacks Consensus Estimate, while sales missed the same. During the quarter, the Infrastructure segment revenues increased 11.1% year over year to $27 million on higher year-over-year sales of road safety products and Road Zipper System lease revenues. Aided by stellar growth in Road Zipper, the infrastructure segment is anticipated to deliver an improved performance in the current year.

Lindsay is poised to gain from its focus on margin expansion, development of technology products, business simplification and capital-allocation plan. The company remains focused on simplifying its business in order to boost productivity. In sync with this, Lindsay’s Foundation for Growth initiative, launched in 2018, continues to progress and is bringing positive changes. The company is fully focused on gaining margin expansion in four primary areas — manufacturing footprint, G&A, the shared services activities, sourcing and commercial. The Foundation for Growth initiative is expected to drive the company’s overall net earnings in the months ahead.

Share Price Performance

Lindsay along with Deere & Company (NYSE:DE) falls under the Manufacturing – Farm Equipment industry. Lindsay’s shares have declined 24.2% over the past year compared with the industry’s drop of 26.2%.

Zacks Rank & Stocks to Consider

Lindsay currently carries a Zacks Rank #4 (Sell)

Some better-ranked stocks in the Industrial Products sector include Sharps Compliance Corp (NASDAQ:SMED) and Tetra Tech, Inc. (NASDAQ:TTEK) . While Sharps Compliance Corp sports a Zacks Rank #1 (Strong Buy), Tetra Tech carries a Zacks Rank of 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Sharps Compliance has an estimated earnings growth rate of 767% for 2020. In a year’s time, the company’s shares have gained 36%.

Tetra Tech has a projected earnings growth rate of 10.7% for the ongoing year. In the past year, the company’s shares have rallied 38%.

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