リンゼイ（LNN）2026年度第4四半期および通期決算説明会：増収とMENAの見通し

リンゼイ・コーポレーション（NYSE: LNN）が発表した第4四半期（会計年度）決算は、北米での灌漑需要の力強さや道路安全製品の売上増加に支えられ、売上高および利益ともに前年同期を上回りました。通期業績は、中東・北アフリカ（MENA）プロジェクト売上高、灌漑機器の販売数量、およびRoad Zipperプロジェクトの売上が2025年度の水準から減少したため、減収減益となりました。

主要なポイント

• 2026年度第4四半期の売上高は前年同期比5%増の1億6,160万ドルとなり、希薄化後EPS（1株当たり利益）は前年同期の0.99ドルから1.10ドルに増加しました。
• 通期の売上高は前年比6%減の6億3,590万ドルとなりました。純利益は5,570万ドルに減少し、希薄化後EPSは21%減の5.33ドルとなりました。
• 第4四半期の北米灌漑事業の売上高は、販売数量の増加、顧客マインドの改善、暴風雨被害に伴う買い替え需要に牽引され、前年同期比11%増の5,540万ドルとなりました。
• 第4四半期のインフラ事業の売上高は13%増加し、営業利益は道路安全製品の販売増加と好調な売上構成が収益性を下支えしたことで41%増加しました。
• 経営陣は、事業再編プログラムにより年間純コスト削減額が800万ドルに達すると予測しており、2027年度から削減効果が顕在化し始めると見込んでいます。
• リンゼイは現在、2027年度に大型MENAプロジェクトの納入が開始されるとは見込んでいませんが、小型プロジェクトやその他の成長施策により、約7,000万ドルのプロジェクト売上高のギャップのうち少なくとも半分は相殺できるとしています。

主要財務データ

期末時点の利用可能な流動性は2億3,980万ドルで、これには現金および現金同等物1億8,980万ドルと、リボルビング信用枠の利用可能額5,000万ドルが含まれます。4,020万ドルの設備投資を実施した後のフリーキャッシュフローは、純利益の62%に相当しました。

リンゼイは2026年度中に自社株買い8,070万ドルおよび配当金1,540万ドルを含む、総額9,610万ドルを株主に還元しました。また、取締役会は最大1億5,000万ドルの新たな自社株買い枠を承認しました。

事業および業績の動向

灌漑事業

第4四半期の北米灌漑事業の売上高は、四半期初めの商品（コモディティ）価格の上昇が生産者の心理を改善し、機器の購入を後押ししたため、前年同期比11%増加しました。暴風雨被害に伴う買い替え需要も寄与しました。平均販売価格は前年同期並みでした。

経営陣は、その後商品価格が下落し、灌漑投資は依然として低調であると注意を促しました。持続的な回復には、純農家所得の見通しの改善と顧客の信頼感の強化が必要となります。

第4四半期の海外灌漑事業の売上高は7,830万ドルとなり、前年同期からほぼ横ばいでした。MENAにおけるプロジェクト売上の増加や他の先進国市場での販売数量増加は、ブラジルでの需要減少によって相殺されました。

2026年度通期では、海外灌漑事業の売上高が2年連続で北米灌漑事業の売上高を上回りました。為替換算によるプラス効果が約1,210万ドル寄与しました。

リンゼイは当年度中に約7,000万ドルのMENAプロジェクト売上高を計上し、予定されていたすべての機器出荷を完了しました。残りのサービス売上高は、設置、保守、およびテクノロジーの導入の進捗に伴い、今後12〜24か月で計上される見込みです。

農業テクノロジーの年間リカーリングレベニュー（ARR）は前年比約11%増加し、5年間の年平均成長率（CAGR）は15%超に拡大しました。経営陣は、初期の機器販売にとどまらずリカーリングレベニューと顧客関係を拡大するツールとして、FieldNETおよびFieldNET Advisorを強調しました。

ブラジルでは、高金利、信用の収縮、作物の収益性の悪化、選挙を巡る不透明感が引き続き足元の需要を圧迫しました。しかし、見積り活動は前年比で活発化しており、特に乾燥した天候が見込まれている北部地域において灌漑への関心が高まっています。

リンゼイはまた、ホースリール灌漑機器のブラジルメーカーを買収する合意に署名しました。経営陣はこの買収取引について、連結ベースでは比較的規模が小さいと説明したものの、製品ポートフォリオの拡充、サトウキビ農家顧客へのアクセス向上、ならびに中南米全体での販売チャネルおよびテクノロジーのクロスセル機会の創出につながると期待しています。

インフラ事業

第4四半期のインフラ事業の成長は道路安全製品が牽引しました。増収と売上構成の改善により、セグメント営業利益率は前年同期の14.4%から17.9%へ上昇しました。

通期のインフラ事業の売上高は、2025年度に完了した2,000万ドル規模のRoad Zipperシステムプロジェクトの再来がなかったため減少しました。同プロジェクトの影響を除くと、インフラ事業の売上高は11%増、営業利益は12%増となりました。

リンゼイのネブラスカ施設における次世代亜鉛めっきラインは、年内に稼働を開始する見込みです。経営陣は、稼働開始から30〜60日以内にフル操業に達する可能性があると述べました。この生産能力の追加は、生産性の向上と、中西部における外部向け受託製造および亜鉛めっきサービスの拡大を目的としています。

経営陣の見通し

• 経営陣は、優先的な成長施策への再投資を行った後で、再編計画により年間800万ドルの純コスト削減効果が得られると見込んでいます。関連費用は2026年度に全額計上されており、コスト削減効果は2027年度から発生し始める見通しです。
• リンゼイは現在、2027年度に納入が開始される大型MENAプロジェクトの受注を見込んでいません。経営陣は、小型プロジェクトや社内の成長施策により、約7,000万ドルの売上高のギャップのうち少なくとも半分は相殺できると見込んでいます。
• 道路安全製品の売上高は、インフラ投資と新製品に支えられ、2027年度も成長を続ける見込みです。
• Road Zipperのリース売上高は概ね2026年度並みを維持する見込みであり、プロジェクトパイプラインは引き続き活発です。
• 原材料・資材コストが安定すると仮定すると、経営陣は価格改定の効果が完全に表れるまでに数四半期かかると予想しています。
• 経営陣は、2027年度の実効税率が約24.5%〜25%へと正常化すると見込んでいます。

リスクと注視事項

• 商品価格の下落と燃料・肥料コストの高止まりが、引き続き北米の農家経営を圧迫しています。
• 原材料費や運賃の上昇が利益率に影響を及ぼしている一方、価格改定の効果が顧客に浸透するまでには通常タイムラグが生じます。
• ブラジルの需要は、高金利、限られた信用供与、作物の収益性、および政治的不透明感のリスクに引き続き晒されています。
• MENAプロジェクトは、設計、入札、資金調達、設置に長期のプロセスを要するため、受注や売上計上の時期に関して不透明感が生じます。
• 道路、地下インフラ、電気に関連する設置の遅れにより、残りのMENAサービス売上高の計上期間が延長されています。
• インフラ資金調達に関する不透明感は引き続き注視事項となっていますが、経営陣は現時点で2027年度の成長に影響を与えるとは予想していません。

アナリスト質疑応答の要点

経営陣は、第4四半期における北米灌漑事業の改善について、商品価格が収益性を下支えすれば生産者が迅速に対応できることを示したと述べました。しかし、市場が持続的な上昇局面に突入したとはまだ捉えていません。

2027年度の海外灌漑事業の売上高について、経営陣は1,000万〜2,000万ドル規模の小型MENAプロジェクト、テクノロジーの成長、および成熟市場での施策が、前年度の大型プロジェクト売上高（約7,000万ドル）の少なくとも半分を相殺するのに役立つと述べました。

コスト削減に関して、リンゼイは事業再編が販売費及び一般管理費（SG&A）と売上原価の双方に影響を与えたと述べました。需要回復時の対応力を維持するため、削減された費用の一部は販売チャネル、テクノロジー、イノベーションに再投資されています。

また、経営陣は、最近のMENAでの実績が今後の大型プロジェクトにおけるリンゼイの競争力を強化したと述べました。同社は、トルコでの事業が北アフリカ、中東、さらには情勢の変化に応じたロシア・ウクライナ市場へのアクセスを提供すると考えています。

決算説明会文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, and welcome to the Lindsay Corporation Fiscal Fourth Quarter and Full Year 2026 Earnings Conference Call. [Operator Instructions]

Please note this event is being recorded. I would now like to turn the conference over to Randy Wood, CEO and President. Please go ahead.

Randy Wood

Thank you, and good morning, everyone. Welcome to our fiscal 2026 Fourth Quarter and Full Year Earnings Call. With me today are Alicia Pfeifer and Brett Coburn, our Co-interim Chief Financial Officer.

I want to begin by recognizing our global team for their strong execution, resilience and operational discipline throughout the year as we remain focused on our priorities, strengthening operational performance improving our cost structure and making targeted investments that enhance our competitive position and support long-term growth.

From expanding our agricultural technology offerings and manufacturing capabilities to pursuing strategic acquisitions and developing new infrastructure solutions, our actions are designed to position Lindsay to generate sustainable value through the market cycle.

In irrigation, we executed extremely well in project markets, while remaining disciplined in challenging North America and Brazil markets. In infrastructure, our team continued to leverage improving market fundamentals and stable financing conditions to deliver growth.

That same operating discipline is reflected in our safety performance. Safety is a core 1 Lindsay value, and this year, we achieved a total recordable incident rate below 1.0, representing a world-class level of performance.

Our Norfolk, Goleta, France and Italy operations each achieved perfect safety record for the year. I'm extremely proud of these accomplishments and [girl] to our employees around the world for their continued commitment to work safely every day.

We also strengthened our financial position by actively managing pricing, implementing structural cost reductions and driving operational efficiencies. In June, we executed a global restructuring plan focused on streamlining operations and simplifying the organization. We expect these actions to generate $8 million in net annualized cost reductions after reinvesting a portion of the savings in our highest priority growth initiatives.

The resulting leaner operating model should improve efficiency and drive stronger operating leverage as market conditions improve. In North America, we saw encouraging signs of improvement in the fourth quarter with irrigation revenues increasing 11%, driven primarily by higher unit volumes and storm damage.

[Imprinting] commodity prices also supported stronger customer sentiment early in the quarter with corn moving above $5 per bushel. While commodity prices have receded recently and market conditions remain below what we would consider mid-cycle, the improvement we saw during the quarter reinforces our confidence that demand can recover as farm economics strengthen.

For that recovery to become more sustained, growers will need greater forward visibility and improved net farm income. Until then, we expect irrigation equipment investment to remain relatively subdued.

Our agricultural technology business continued to build momentum, reflecting strong execution against our innovation strategy. Annual recurring revenue grew approximately 11% year-over-year, extending our 5-year CAGR to more than 15%. [Through] solutions such as [field met and Filmed Advisor], we are expanding our relationships with growers beyond the initial equipment sale, providing technology that helps customers improve productivity, optimize water usage and make more informed operating decisions.

The continued growth of this business demonstrates our ability to build recurring revenue streams, deepen customer relationships and create additional opportunities for long-term growth. In Brazil, near-term irrigation demand continues to be constrained by high interest rates, limited credit availability and softer crop economics with election-related uncertainty also contributing to some delayed purchasing decisions. However, we are seeing encouraging signs of underlying demand.

Expectations for drier conditions in the north are increasing grower interest in irrigation, and quotation activity has improved year-over-year. We view this as a positive leading indicator, although a more meaningful recovery will depend on improvement in financing conditions and grower economics.

In the MENA region, our team completed all scheduled equipment shipments despite ongoing regional uncertainty, and we recognized approximately $70 million of revenue during the fiscal year. The remaining balance is for services revenue in the region, which we expect to recognize over the next 12 to 24 months.

Our ability to provide equipment, technology and ongoing service support is an important differentiator in these large-scale projects. We also believe this services-based model deepens our customer relationships and generate longer-term revenue, and as our installed base expands, we see opportunities for additional technology adoption, aftermarket products and ongoing services as standing the value of these projects beyond the initial equipment sale. In infrastructure, we continue to deliver solid growth and strong operating performance, driven by our road safety products business.

This marked our third consecutive quarter of growth as [continued road] infrastructure investments supported healthy demand. While the Infrastructure Investments in Jobs Act expired at the end of September, funding has been extended through the end of the calendar year.

Looking ahead, as the Build America 250 Act progresses, we remain confident in the underlying infrastructure funding environment and the long-term growth opportunity it provides for our business. We're also encouraged by the momentum in Road Zipper leasing and continue to pursue additional project opportunities.

Turning to our outlook. In North America, elevated fuel and fertilizer costs continue to pressure farm economics, but a sustained improvement in net farm income and customer confidence would provide an important catalyst for broader recovery in irrigation investments. We continue to see Brazil as one of the most compelling long-term growth markets for global irrigation, although financing availability and election uncertainty remain important factors in near-term demand, the underlying fundamentals to support our confidence in the market's long-term growth potential.

Consistent with that view, we signed a definitive agreement to acquire Septoria Irigasal, a leading Brazilian manufacturer of hose real in irrigation equipment. This targeted investment builds on our existing capabilities in the region and advances two strategic priorities: capitalizing on growth opportunities in Brazil and creating incremental value for customers through a broader portfolio of irrigation solutions.

We leave hose reels are a natural complement to our Zomatic center pivots, particularly for smaller and irregularly shaped fields and applications such as sugarcane, where Sutorial has strong customer relationships. Over time, we see opportunities to leverage our existing dealer network to expand sartorial reach, introduce thematic solutions to Sartoria customers and grow the business across Latin America.

The transaction is subject to customary closing conditions and is expected to close in the come months. Our success in MENA continues to reinforce our confidence in the long-term opportunity in the region, supporting food security and water conservation. While the project pipeline remains active, we do not currently anticipate any large project awards to begin delivery in fiscal 2027.

In infrastructure, we expect continued growth in road safety products, supported by ongoing infrastructure investment and new product introductions. We expect Road Zipper leasing to remain generally in line with fiscal 2026 while the project pipeline remains active with a number of opportunities under development.

Our major capital investment at the Linde, Nebraska facility continues to progress with our next-generation galvanizing operation expected to be online before calendar year-end. Together with our two mill investment, these capabilities are designed to improve safety increase capacity and productivity and provide greater operating flexibility across the cycle.

We believe the added capacity also creates new growth opportunities by enabling us to expand our contract manufacturing business and serve growing demand for galvanizing services throughout the Midwest.

Lastly, I want to thank Alicia and Brett for their leadership and commitment as interim co-CFOs.I Together with our Board, we've made strong progress in our CFO search and are very pleased with the caliber of candidates we have evaluated.

We're now in the final stages of the process and expect to announce our selection in the coming weeks.

With that, I'd like to turn the call over to Alicia to discuss our fiscal fourth quarter and full year financial results. Alicia?

Alicia Pfeifer

Thank you, Randy, and good morning, everyone. Total revenues for the fourth quarter of fiscal 2026 were $161.6 million, an increase of 5% compared to the fourth quarter last year. Net earnings for the quarter were $11.3 million or $1.10 per diluted share compared to net earnings of $10.8 million or $0.99 per diluted share in the fourth quarter last year. Total revenues for the full year 2026 were $635.9 million, a decrease of 6% compared to the prior year.

Net earnings were $55.7 million compared to $74.1 million in the prior year. Earnings per share were $5.33 per diluted share, a decrease of 21% compared to the prior year. Full year results reflected lower revenues in both segments as the Irrigation segment was negatively impacted by the lower comparative project size in the MENA region and lower sales volumes in North America and Brazil.

Full year 2026 infrastructure results were affected by lower Road Zipper System project sales as the prior year included a $20 million project that we did not expect to repeat in 2026. We partially offset by sales growth of road safety products. Turning to our quarterly segment results. Irrigation segment revenues for the fourth quarter increased 4% and to $133.7 million compared to the prior year. North America irrigation revenues for the fourth quarter increased 11% to $55.4 million.

The increase in revenues resulted primarily from higher unit sales volume, while average selling prices were comparable to the prior year. Higher unit sales volumes were supported by near-term improvement in agricultural commodity prices, which strengthened demand and slightly higher storm damage replacement volume compared to the prior year.

In international irrigation markets, revenues for the fourth quarter were $78.3 million, a level that was comparable to prior year. Increases in project sales in the MENA region and higher sales volume in other developed markets were largely offset by the decrease in volumes from Brazil. In the MENA region, as Randy mentioned, we completed equipment delivery for the $80 million project during the quarter. Total irrigation segment operating income for the fourth quarter was $17.3 million, comparable to the prior year.

Operating margin was 12.9% of sales compared to 13.7% of sales last year. The decrease in operating margin resulted from higher input costs, which were partially offset by reductions in operating expenses compared to the prior year.

For the full fiscal year, total irrigation segment revenues decreased 5% to $541.5 million. North America irrigation revenues of $262.1 million decreased 4%, primarily due to lower unit sales volume compared to the prior year as weaker agricultural commodity pricing continued to weigh on farm incomes and demand.

International Irrigation revenues of $279.3 million decreased 5%, primarily a function of the smaller overall project scale in the MENA region and the lower sales volumes in Brazil. The favorable impact of foreign currency translation was approximately $12.1 million compared to the prior year.

International irrigation revenues exceeded North America irrigation revenues for the second consecutive fiscal year, highlighting the value of our geographic diversification and the strong growing demand for irrigation outside of North America.

Operating income in the Irrigation segment for the full fiscal year was $80.1 million, a decrease of 17% compared to the prior year, and operating margin of 14.8% of sales compared to 17.1% of sales in the prior year. The decrease in operating income resulted primarily from lower revenues, while the decrease in operating margin was a function of lower unit volume and the resulting lower fixed cost absorption as well as higher input costs.

Infrastructure segment revenues for the fourth quarter increased 13% to $27.8 million. The solid increase in revenues resulted primarily from higher sales of road safety products, which were partially offset by lower Road Zipper System sales and lease revenues compared to the prior year. Infrastructure segment operating income for the fourth quarter increased 41% to $5 million.

Infrastructure operating margin for the quarter was 17.9% of sales up compared to 14.4% of sales in the fourth quarter last year. Higher operating income and operating margin resulted from higher revenues and a more favorable margin mix of revenues compared to the prior year.

For the full fiscal year, infrastructure segment revenues decreased 13% to $94.4 million. The decrease was primarily due to a $20 million Road Zipper System project in the prior year that did not repeat. Infrastructure operating income for the full fiscal year was $16 million compared to $26.3 million in the prior year.

Operating margin for the year was 17% of sales compared to 24.3% of sales in the prior year. The decrease in operating income and operating margin resulted from the nonrepeat of last year's project sale. Excluding the impact of the large Road Zipper project sale in the prior year, revenue and operating income for the infrastructure business increased 11% and 12%, respectively, compared to the prior year.

Turning to the balance sheet and liquidity. Our total available liquidity at the end of the fourth quarter was $239.8 million. which included $189.8 million in cash and cash equivalents and $50 million available under our revolving credit facility. Free cash flow for the year was 62% of net earnings and included capital expenditures of $40.2 million.

As Randy mentioned in his opening remarks, we have entered into a definitive agreement to purchase 100% of Septoria. We expect to fund the transaction with cash on hand and closing is subject to the fulfillment of customary conditions expected to occur in the upcoming months. During fiscal 2026 we returned $96.1 million to shareholders, including $80.7 million of share repurchases and $15.4 million of dividends, representing approximately 173% of net earnings.

During the year, our Board of Directors approved a new share repurchase program of up to $150 million. Our repurchases this year exhausted a prior $250 million authorization and the $100 million available under this current program. Our strong balance sheet and cash flow generation provides the flexibility to execute against our capital allocation priorities. We remain focused on deploying capital where we believe it can generate attractive long-term returns, including investments in productivity, innovation and strategic growth opportunities while continuing to return capital to shareholders. We believe this balanced approach reflects our commitment to maintaining financial discipline in creating sustainable shareholder value throughout the cycle.

This concludes my remarks. And I will now turn the call over to the operator to take your questions.

Operator

[Operator Instructions] The first question comes from Nathan Jones with Stifel.

質疑応答

Adam Farley

This is Adam Farley on for Nathan.

Randy Wood

Hi, Adam.

Adam Farley

My first question is going to be around price cost. So in recent months, we have seen renewed inflation with increases in material prices, freight, et cetera. Do you anticipate being price cost neutral in dollars, maybe at the margin line or somewhere in between? Is there any talk of the timing dynamics that we should consider maybe here in the near term?

Alicia Pfeifer

Yes. Adam, this is Alicia. I think just in terms of pricing, we continue to pass along input cost increases to our customers. But it's pretty clear, our operating margins continue to be impacted I think kind of in the fourth quarter, specifically in North America, increased volume moving through the facility certainly helped from a favorable volume and fixed cost absorption perspective. Just however in the market, it's challenging to be able to keep up with the pricing in terms of covering the rising costs. So typically, when we do price, there's a delay in terms of how quickly that pricing becomes realized. So assuming we start to see some stabilization in input costs. We would anticipate it to take a couple of quarters for price realization to actually flow through.

Adam Farley

Okay. That's helpful. And then looking at domestic irrigation, maybe here in the near term, how should we think about the market, just given the moves in the commodity prices, should we expect that sentiment to maybe oscillate with crop prices here in the short term? Are there other factors involved that maybe help as well?

Randy Wood

Yes, Adam, this is Randy. I think a couple of perspectives on that one. I think we were pleased in the fourth quarter that when we did see some positive movement on commodity price, we saw a very near-term move in demand and volume. And I think the demand for us in the quarter, we did see some storm damage lift, but I was really pleased that we also saw some volume outside of the traditional storm volume market. So it does look like customers had a bump in sentiment. They were willing some guys maybe sold some crop at that $5-plus level and felt like they had locked in a profit, so they're willing to spend some of that.

So I think we've said pretty consistently when farm economics improve, we're going to see that volume. And right now, there's a lot of that pent-up demand developing. Now obviously, commodity prices have come back here recently, and I wouldn't say that there's a lot of optimism in the market. But right now, we've got a lot of guys looking at their tax situation, planning for year-end planning with accelerated -- with depreciation and -- but I think it would be really tough to say that the market has turned, and we're back on the upswing. I think the language we used in the prepared remarks was subdued. And I think that's probably going to continue until we see a little more sustainable level of commodity price support and a little more sustained level of net farm income.

Operator

The next question comes from Brian Drab with William Blair.

Brian Drab

First, on the international business. you made a point in the prepared remarks to say that you don't expect a large project to start shipping in fiscal '27. Wondering if you could just talk about the dynamics that are driving that comment? And obviously, I guess it has to do with the volatility in the region. And then can you set the -- do anything to set the bar for us for -- where you think that means international irrigation revenue goes in 2027? Because it kind of looks like the -- if you just take that project out and you're down pretty significantly, like double digits, like maybe around 20% year-over-year in fiscal '27, all else equal?

Randy Wood

Yes. The volume internationally related to projects, obviously, we want to be as transparent as we can with what we see. And we still see active projects across the MENA region, whether it's North Africa, the Mid East. Central Asia. The tricky part is these things don't start and end within a quarter. If there's design and engineering specifications, there may be a competitive quoting and bidding process, once you won the project, then you move into confirmed letter of credit, and these can take months from the time you see the project to the time it's closed and we're talking to you guys about a confirmed project that we're going to recognize in revenue.

So I think right now on the front end of all of that, we do see projects in that part of the world that are real people, real pieces of land, real geographies where we believe and expect projects are going to be designed and delivered got a track record here of identifying these projects and winning them and executing them extremely well.

So we're at the table for almost anything that we would see in the region. And again, right now, there are several of those in the early stages. There may be project awards within the fiscal year. And if there are, we'll certainly be willing to talk about those. But right now, we don't see one large one that we expect is going to get right to the finish line and be recognized in revenue in fiscal '27. And that was the basis of the comments. If we look at what it means to 2017 results, I think it's pretty clear that if we had a $70 million project last year that we don't have this year, that's an immediate hole that we've got to cover. And I think we're comfortable saying that we're going to get at least half of that with some smaller projects that we do expect to kind of flow through the funnel.

And to be honest, anything in that $10 million, $15 million, $20 million range, we're probably not going to identify specifically. That's kind of traditional project volume that we wouldn't talk about. But between smaller projects, some other growth initiatives, whether it's technology or other mature market initiatives, we would expect half of that $70 we'd cover with some self-help projects, Brian, but we don't see another $70 million project coming through in fiscal '27. But as that changes, we'll obviously continue to keep you updated.

Brian Drab

Okay. That's great to know. Okay. Thank you. And then -- just one other question for now. You also mentioned in the prepared remarks that the highway funding within the current bill is going to expire at the end of 2026. But isn't -- there's a nuance to that, isn't there and there's the disbursements that could benefit you can persist quite a ways beyond 2026. Isn't that right? I'm just curious why you made a point to talk about that cutoff.

Randy Wood

Yes. I think the money is going to carry over. So the faucet doesn't get turned off and all of a sudden projects stop, anything that's in the system is going to carry through and go forward. I think it's just something we keep an eye on the funding mechanism is critically important to that business and having any level of uncertainty is certainly something we work very closely with our government officials here in the state and in D.C.

So I think it's just a recognition of a potential red flag in the future, Brian. But right now, we wouldn't expect that to have any impact, and we are still projecting to see some growth in that business through fiscal '27.

Operator

The next question comes from Ryan Connors with North Coast Research.

Ryan Connors

Wanted to start off, if I could, on the cost reduction side. Can you drill down for us on the exact nature of what those moves were where they fell from a segment perspective, whether they're operational back-office sales. Just curious what the nature of those cost-cutting initiatives.

Randy Wood

Yes, I'll start and then let Alicia provide any additional granularity and really was all of the above. I think we sat with our leadership team and kind of projected forward understanding some of the project volume that wasn't going to repeat year-over-year.

If we assume that there isn't going to be a significant recovery in the domestic U.S. market, we wanted to make sure continue to maintain business quality and control the things that we could control and really challenge everybody to look at how we're organized, how work gets done, and really restructured and simplified the organization. So we took cost out of a number of areas of the business, both on an SG&A basis and a COGS basis without impacting our ability to continue executing our key strategies. And in fact, some of the savings we generated through restructuring, we're reinvesting in the business, and it's really about resource allocation and making sure that we're being smart in how we run the company in the near term, but we certainly never want to limit our ability to respond to the recovery when it comes, and we certainly don't want to take oxygen away from many of the key initiatives, particularly in channel, technology and innovation.

So I would say across the board, close look at the business, removing cost where it would impact our ability to operate or drive action of our strategies. -- really pleased with how everybody contributed. And I think we're going to see that flow through on a full year basis and Alicia anymore for any other you'd add.

Alicia Pfeifer

Yes. I mean I think the only thing I would add, Ryan, is just making sure it's clear that any of the costs associated with this program were fully realized in the fiscal 2026 results. And so those identified savings will immediately start to materialize in the fiscal 2027.

Ryan Connors

Got it. Very helpful. wanted to talk also about the Sectorial acquisition. And interesting that it's a hose real technology. Is there anything we should read into that in terms of how you think the market is moving in Brazil, and should we read that to think that you think hose reels are strategically important in terms of the growth story there? And if so, why would that be? Because I guess I've always viewed those -- that system as being more kind of the not quite sophisticated or for larger operations as a traditional center pivot.

Randy Wood

Yes, I can take that one. In Sartoria and hostiles in general, like a lot of other types of mechanized irrigation have a niche. They have a purpose and they are better in small in irregular shaped fields, where center pivots aren't necessarily going to be the best option from a design or cost per acre cost per hectare perspective.

So hose rail certainly have a place, in fact, we've got a very robust postal business in Western Europe that we acquired as part of our Lindsay France expansion 20-plus years ago. So we've got experience in this space, understand how to design, engineer managed technology and hose reals. And I think Satorial really did two things. I think it expands the irrigation solutions that we can offer in all across Latin America, really, but it also gives us another option in Brazil. And we've talked a lot about Brazil having a long-term growth trajectory.

And where we see hose rails in Brazil, they've got great penetration in the sugarcane market. And if you look at growing ethanol business there, sugarcane is going to continue to see good signs of growth, having a path to those customers now with both hose reels and center pivots, we think gives us a nice position of differentiation.

If we can overlay technology like FieldNET and field net adviser some of these whole real companies, we think that creates another growth trajectory for us as well. So to me, this is an investment in a growing market in Brazil. It's an investment in expanding our irrigation portfolio that we think is going to give us more meaningful relationships with our customers in that part of the world.

Ryan Connors

Got it. That's very clear. And then a couple of quick housekeeping items. One is going back to the MENA project that, as you mentioned, Randy, going to create that hole. But what I did notice was a bit of a change in the language around the residual piece of that. I think that the remaining $10 million where we -- I believe 3 months ago, you talked about that shipping in early in fiscal '27 and now it seems like the language is more 12 to 24 months. Anything we should read into that in terms of that final piece?

Randy Wood

Yes. So the final piece is really related to services, to installation, to maintenance, to fuel net some of the technology products as well. And we do see some delays in installations there. And the good news is, is we're fully shipped in all of the equipment but those delays on infrastructure in roads, in underground, electricity, some of those have kind of delayed how quickly the machines are getting installed and put into operation there. So nothing that operationally shifts other than we're not going to see that revenue as quickly as we thought because it will come as those installations get completed in the region.

Ryan Connors

Got it. And then one last housekeeping on the tax rate. It really jumped in the quarter, I apologize, Alicia, if I missed. I don't think you mentioned that, but are we -- I assume that's something special in the quarter and that we're going to revert to a more normal kind of low 20s level as we go into fiscal '27?

Unknown Executive

Yes, Ryan, this is Brett. I can take that one. Yes, you're right. It is a onetime item that we expect to normalize out going forward. So it just represented a disproportionate impact on the rate this year, just given some annual calculations. We finalized now having visibility to full year results. But our full year rate of just over 26% is a solid representation of the full year. And looking forward to next year, we'd expect the rate to be kind of normalized back in that 24.5%, 25% range.

Operator

The next question comes from Jon Braatz with Kansas City Capital.

Jon Braatz

Randy, back to the acquisition of Sartoria, how sizable is it? Can you give us some idea of some numbers on the acquisition?

Randy Wood

Yes, it's relatively small, particularly when you look at it on a consolidated basis. But I think, again, if it opens up good synergy opportunities in channel and product mix, and some of the customers that have trusted Sectorial with their hose business that might now trust Lindsay with their Dematic center pivot business that's where we see the opportunity. But the Sectorial number on its own is still relatively small, again, particularly on a consolidated basis.

Jon Braatz

Okay. Okay. And you've talked a little bit about the new galvanizing facility up in Nebraska and over the last 1.5 years or so, galvanizing has become a hot industry. And what are the opportunities to, let's say, bring in outside business to do more with that galvanized and beyond what you need to do internally.

Randy Wood

We are going to be blessed with some capacity. And I think when you look at the step-up in capabilities and capacity and automation we are going to have the ability to bring in some outside products. And then anything that we can do for somebody else out of Lindsay, obviously, is going to absorb the overhead and make the Lindsay business more profitable and stronger.

So we have, to be clear, added resources here, we're working throughout the Midwest market. And you're right. There is some pent-up demand here, and we are going to be very uniquely positioned in terms of geography and capabilities to run that through the facility and strengthen the business. So that's something that we look forward to keeping you updated on going forward because I do think it will become a more meaningful part of the story.

Jon Braatz

Okay. When will that be in place?

Randy Wood

So we should have zinc in there in Melton and be dipping before the end of the year. It may be 30, 60 days before we're fully utilized and up to full capacity, but we will have things going through that facility at the end of the calendar year.

Jon Braatz

Okay. Okay. One last question. Obviously, you did some restructuring in the quarter, but I noticed in the fourth quarter, your R&D, your engineering costs were -- and research were down rather sharply year-over-year and maybe sequentially, too. Was that impacted by the the restructuring, so to speak? Or how do you see that going forward?

Randy Wood

No. Some of that is just calendarization, John. There weren't any significant shifts in that part of the company.

Operator

The next question comes from Brett Kearney with American River opportunities.

Brett Kearney

It's been pretty notable. The consistent execution of your teams on the project you've had in the Middle East in spite a very fluid situation over there. Wondering whether that factors in on a going-forward basis at all, as your teams work, potential new projects in the pipeline, both the continuity of project delivery, your teams can provide as well as potentially also shipping freight costs, given your strategic location in that region of the world. whether that is an element at all going forward?

Randy Wood

We are very confident that the skills we've developed through consistent execution. I think it's obvious. If you make mistakes in that part of the world, you get noticed. If you execute well in that part of the world, you get noticed. And I think right now, our team has a stellar reputation in that part of the world because of 2 back-to-back projects, significant projects in a region with a lot of complexity I don't think FLAWLESS is the word I'd use, but they did a pretty darn good job.

And so to me, I think we're proud of that. It does become a differentiator. And if you picture a government or a private investor, investing in $70, $80 million, $100 million, million, you want to make sure you're with a partner that has a proven track record and Lindsay certainly does. So I'm proud of that team again, and I think it does give us a certain element of confidence going forward that when those projects are identified, we're going to be at the table and we're going to have the opportunity to win those based on historical performance.

Relative to geography, I don't want to jig anything, to be honest with you, but I feel very fortunate with where we are in Turkey right now, and it puts us in a good spot. -- serve North Africa, the Middle East, as we see recovery in Russia, Ukraine, obviously, that can be a pretty big market that we can service easily from there as well.

So I like where we're positioned. I like the strength of the team. We made very specific investments in people and talent and processes there that will continue to leverage going forward, Brett.

Brett Kearney

Terrific. And then just one on Brazil, Randy, given the recent engagement with Sartoria, I know you guys are always close to the farmer down there. Obviously, interest rates, crop prices, major factors, but Curious what you're hearing feeling from farmers down there in terms of potential meaningful elections coming up in that country this month. I believe one of the candidates fathers was very supportive of the farm community, not only policy-wise, but infrastructure help growers expand their fields and just physical roads to get the crop to market. Just what you're sensing whether that would move the needle at all for the farm community in Brazil.

Randy Wood

Yes. So we are watching the election results fairly closely. I think we're 3 days away here now from the final runoff. I would say both candidates are pro agriculture. You can't not be pro agriculture in that part of the world as important as it is to GP and exports. So I think both candidates are good for ag. I would say that the candidate that leads to the right Bolsonaro, the one that you mentioned is probably preferred by the ad community, and he was head of lead coming out of the first round and I guess we'll see what happens here in a couple of days.

But either way, both candidates, I think, are going to be supportive and maybe the right of center candidate, maybe a little perceived as maybe being a little stronger for ag. I think customers there generally are -- it's like they're on a launch pad and ready to go we are looking at the El Nino impact. And right now, I mentioned in my remarks, quotation volume particularly in the north where they're projecting maybe a drier year, whether it's El Nino or super El NinoI think they're looking very closely at the irrigation investment maybe being one of the most important investments that they have to make this year to protect from weather.

So Brazil, long term is obviously a high-growth market, we've commented on it, others in the industry have as well. In the near near term, we've got to get this election behind us, get some stability. And then I think we could see that market start to warm up again. But I know customers there are ready. I know that the yield improvement benefits are proven and weather is going to be a supporting factor this year. So we're ready to go.

Operator

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Randy Wood for any closing remarks.

Randy Wood

Thank you, operator. As we close today's call, I want to take a moment to reinforce why we remain confident in Lindsay's long-term outlook. We're executing a clear strategy, strengthening our core irrigation and infrastructure businesses, growing recurring technology revenue expanding in attractive international markets such as Brazil and allocating capital with discipline.

We believe our fourth quarter results demonstrate the operating leverage we're building into the business. Our balance sheet provides flexibility and we continue to return meaningful capital to shareholders. Our leadership team and Board remain focused on delivering sustainable long-term value, and we believe Lindsay is well positioned to benefit as our markets recover.

Thank you again for joining us today and for your continued interest in Lindsay. We look forward to updating you on our fiscal 2027 first quarter earnings call.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.