린제이(LNN) 2026 회계연도 4분기 및 연간 실적 발표 컨퍼런스 콜: 매출 성장, MENA 전망

린제이 코퍼레이션(NYSE: LNN)은 북미 관개 설비 수요 호조와 도로 안전 제품 판매 증가에 힘입어 회계연도 4분기 매출과 순이익이 증가했다고 발표했습니다. 다만, 중동·북아프리카(MENA) 프로젝트 매출, 관개 설비 판매량 및 로드 지퍼(Road Zipper) 프로젝트 매출이 2025 회계연도 수준에 미치지 못하면서 연간 실적은 감소했습니다.

핵심 요약

• 2026 회계연도 4분기 매출은 전년 동기 대비 5% 증가한 1억 6,160만 달러를 기록했으며, 희석 주당순이익(EPS)은 0.99달러에서 1.10달러로 증가했습니다.
• 연간 매출은 6% 감소한 6억 3,590만 달러를 기록했습니다. 순이익은 5,570만 달러로 감소했으며, 희석 EPS는 21% 감소한 5.33달러를 기록했습니다.
• 4분기 북미 관개 매출은 판매량 증가, 고객 심리 개선, 폭풍 피해 교체 수요에 힘입어 전년 동기 대비 11% 증가한 5,540만 달러를 기록했습니다.
• 4분기 인프라 부문 매출은 13% 성장했으며, 도로 안전 제품 판매와 유리한 매출 비중 개선이 수익성을 뒷받침하면서 영업이익은 41% 증가했습니다.
• 경영진은 구조조정 프로그램을 통해 연간 800만 달러의 순비용 절감 효과가 발생할 것으로 예상하고 있으며, 절감 효과는 2027 회계연도부터 본격화될 것으로 전망하고 있습니다.
• 린제이는 현재 2027 회계연도에 대규모 MENA 프로젝트의 인도가 시작될 것으로 예상하지 않고 있으나, 소규모 프로젝트 및 기타 성장 이니셔티브를 통해 약 7,000만 달러 규모의 프로젝트 매출 공백을 최소 절반 이상 상쇄할 수 있을 것으로 보고 있습니다.

주요 재무 데이터

연말 기준 사용 가능한 유동성은 현금 및 현금성 자산 1억 8,980만 달러와 회전한도 대출을 통해 이용 가능한 5,000만 달러를 포함해 총 2억 3,980만 달러였습니다. 자본적 지출(CAPEX) 4,020만 달러 집행 후 잉여현금흐름은 순이익의 62% 수준이었습니다.

린제이는 2026 회계연도 동안 자사주 매입 8,070만 달러와 배당금 1,540만 달러를 포함해 총 9,610만 달러를 주주에게 환원했습니다. 이사회는 또한 최대 1억 5,000만 달러 규모의 새로운 자사주 매입 승인을 의결했습니다.

사업 및 영업 실적

관개 부문

분기 초 원자재 가격 상승으로 농가 심리가 개선되고 장비 구매가 활성화되면서 4분기 북미 관개 매출이 11% 증가했습니다. 폭풍 피해 교체 물량 또한 이에 기여했습니다. 평균 판매 가격은 전년과 유사한 수준이었습니다.

경영진은 이후 원자재 가격이 하락세를 보이고 관개 설비 투자가 여전히 둔화된 상태라고 경고했습니다. 지속적인 회복을 위해서는 순농가소득에 대한 가시성 확보와 고객 신뢰 회복이 선행되어야 한다고 덧붙였습니다.

4분기 해외 관개 매출은 7,830만 달러로 전년 동기와 거의 유사했습니다. MENA 프로젝트 매출 증가 및 기타 선진국 시장의 물량 호조가 브라질 시장의 수요 감소로 상쇄되었습니다.

2026 회계연도 기준 해외 관개 매출은 2년 연속 북미 관개 매출을 상회했습니다. 유리한 환율 변동 효과가 약 1,210만 달러 기여했습니다.

린제이는 해당 연도 동안 약 7,000만 달러의 MENA 프로젝트 매출을 인식하고 예정된 모든 장비 출하를 완료했습니다. 잔여 서비스 매출은 향후 12~24개월 동안 설치, 유지보수 및 기술 도입 진행 상황에 따라 인식될 것으로 예상됩니다.

농업 기술 연간 반복 매출(ARR)은 전년 대비 약 11% 증가하여 5개년 연평균 성장률(CAGR)을 15% 이상으로 이어갔습니다. 경영진은 필드넷(FieldNET) 및 필드넷 어드바이저(FieldNET Advisor)를 초기 장비 판매를 넘어 반복 매출과 고객 관계를 확장하는 핵심 도구로 강조했습니다.

브라질의 경우 고금리, 신용 제한, 농작물 수익성 악화 및 선거 관련 불확실성이 단기 수요를 지속적으로 제약했습니다. 다만, 건조한 기후 전망으로 인해 관개 설비에 대한 관심이 높아진 북부 지역을 중심으로 견적 활동은 전년 대비 개선되었습니다.

또한 린제이는 브라질의 호스릴 관개 장비 제조업체 인수 계약을 체결했습니다. 경영진은 이번 인수가 연결 기준으로는 비교적 작은 규모이지만, 포트폴리오를 확장하고 사탕수수 농가 고객에 대한 접근성을 높이며 중남미 전역에서 유통 채널 및 기술 교차 판매 기회를 창출할 것으로 기대하고 있습니다.

인프라 부문

4분기 인프라 부문의 성장은 도로 안전 제품이 견인했습니다. 매출 증가와 유리한 판매 믹스 개선에 힘입어 해당 부문의 영업이익률은 14.4%에서 17.9%로 상승했습니다.

2025 회계연도에 완료된 2,000만 달러 규모의 로드 지퍼 시스템(Road Zipper System) 프로젝트의 재발생이 없어 연간 인프라 매출은 감소했습니다. 해당 프로젝트를 제외하면 인프라 매출과 영업이익은 각각 11%, 12% 증가했습니다.

네브래스카주 공장에 위치한 린제이의 차세대 아연도금 시설은 연말 이전에 가동을 시작할 것으로 예상됩니다. 경영진은 가동 시작 후 30~60일 이내에 풀가동 상태에 도달할 수 있다고 밝혔습니다. 이번 증설은 생산성을 향상시키고 미국 중서부 지역에서의 외부 위탁 생산 및 도금 서비스를 지원하기 위해 추진되었습니다.

경영진 전망

• 경영진은 우선순위 성장 이니셔티브에 대한 재투자를 차감한 후, 구조조정 계획을 통해 연간 800만 달러의 순비용 절감 효과가 발생할 것으로 예상하고 있습니다. 관련 비용은 2026 회계연도에 전액 반영되었으며, 비용 절감 효과는 2027 회계연도부터 나타날 전망입니다.
• 린제이는 현재 2027 회계연도에 인도가 시작되는 대규모 MENA 프로젝트 수주를 예상하지 않고 있습니다. 경영진은 소규모 프로젝트 및 자체 성장 이니셔티브를 통해 약 7,000만 달러의 매출 공백 중 최소 절반 이상을 상쇄할 수 있을 것으로 보고 있습니다.
• 도로 안전 제품 매출은 인프라 투자 지속과 신제품 출시 효과에 힘입어 2027 회계연도에도 성장을 이어나갈 것으로 예상됩니다.
• 로드 지퍼(Road Zipper) 임대 매출은 프로젝트 파이프라인이 견조하게 유지되는 가운데 2026 회계연도와 전반적으로 유사한 수준을 유지할 것으로 전망됩니다.
• 원자재 등 투입 비용이 안정화된다는 가정하에 경영진은 가격 인상 조치의 효과가 완전히 실현되기까지 수 분기가 걸릴 것으로 예상하고 있습니다.
• 경영진은 2027 회계연도 실효세율이 약 24.5%~25% 수준으로 정상화될 것으로 보고 있습니다.

리스크 및 주요 점검 사항

• 원자재 가격 하락과 연료 및 비료 비용 상승이 북미 농가 수익성에 지속적인 부담으로 작용하고 있습니다.
• 원자재 및 운임 비용 상승이 이익률에 영향을 미치고 있는 반면, 가격 인상 효과는 일반적으로 시차를 두고 고객에게 반영됩니다.
• 브라질 시장의 수요는 여전히 고금리, 제한적인 신용 공급, 농작물 수익성 및 정치적 불확실성에 노출되어 있습니다.
• MENA 프로젝트는 설계, 입찰, 자금 조달 및 설치 절차가 장기간 소요되어 수주 및 매출 인식 시점에 대한 불확실성이 존재합니다.
• 도로, 지중 인프라 및 전력 관련 설치 지연으로 인해 잔여 MENA 서비스 매출의 인식 기간이 연장되었습니다.
• 인프라 재원 조달에 대한 불확실성은 지속적인 모니터링이 필요한 항목이지만, 경영진은 이것이 2027 회계연도 성장에 영향을 미치지는 않을 것으로 현재 보고 있습니다.

애널리스트 Q&A 주요 내용

경영진은 4분기 북미 관개 부문의 개선이 원자재 가격이 수익성을 뒷받침할 때 농가들이 빠르게 반응한다는 점을 보여주었다고 설명했습니다. 다만, 시장이 지속적인 상승 국면에 진입한 것으로 보기는 아직 이르다고 덧붙였습니다.

2027 회계연도 해외 관개 매출과 관련해 경영진은 1,000만~2,000만 달러 규모의 소규모 MENA 프로젝트, 기술 성장 및 성숙 시장 이니셔티브를 통해 전년도 대규모 프로젝트 매출(약 7,000만 달러)의 최소 절반 이상을 상쇄하는 데 도움이 될 것이라고 밝혔습니다.

비용 절감에 대해 린제이 측은 구조조정이 판관비와 매출원가 모두에 영향을 미쳤다고 밝혔습니다. 절감된 비용의 일부는 수요 회복 시 대응 능력을 유지하기 위해 유통 채널, 기술 및 혁신 분야에 재투자되고 있습니다.

또한 경영진은 최근 진행된 MENA 프로젝트의 성공적인 수행이 향후 대규모 프로젝트 입찰에서 린제이의 경쟁력을 강화했다고 평가했습니다. 회사 측은 튀르키예 법인이 북아프리카, 중동 및 상황 변화에 따른 러시아-우크라이나 시장 접근성을 제공한다고 믿고 있습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

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.

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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.