Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~March 19,~~December 22, 2018, ~~10,757,318~~10,786,339 shares of the registrant’s common stock were outstanding.

	Three months ended							Six months ended						Three months ended
($ and shares in thousands, except per share amounts)	February 28, 2018				February 28, 2017			February 28, 2018			February 28, 2017			November 30, 2018			November 30, 2017
Operating revenues	$	130,339			$	124,125		$	254,865		$	234,515		$	111,951		$	124,526
Cost of operating revenues		95,023				91,184			187,152			173,200			83,303			92,129
Gross profit		35,316				32,941			67,713			61,315			28,648			32,397

Operating expenses:
Selling expense		10,020				10,132			20,245			20,114			7,982			10,225
General and administrative expense		14,311				10,230			26,229			21,585			15,058			11,918
Engineering and research expense		3,919				4,057			7,972			8,359			3,568			4,053
Total operating expenses		28,250				24,419			54,446			50,058			26,608			26,196

Operating income		7,066				8,522			13,267			11,257			2,040			6,201

Other income (expense):
Interest expense		(1,095	)			(1,201	)		(2,331	)		(2,410	)		(1,205	)		(1,181	)
Interest income		311				171			686			336			654			320
Other (expense) income, net		(606	)			144			(1,154	)		(212	)		192			(548	)

Earnings before income taxes		5,676		��		7,636			10,468			8,971			1,681			4,792

Income tax expense		3,941				2,624			5,548			3,086			469			1,607

Net earnings	$	1,735			$	5,012		$	4,920		$	5,885		$	1,212		$	3,185

Earnings per share:
Basic	$	0.16			$	0.47		$	0.46		$	0.55		$	0.11		$	0.30
Diluted	$	0.16			$	0.47		$	0.46		$	0.55		$	0.11		$	0.30

Shares used in computing earnings per share:
Basic		10,743				10,657			10,724			10,647			10,766			10,705
Diluted		10,765				10,674			10,752			10,670			10,806			10,740

Cash dividends declared per share	$	0.30			$	0.29		$	0.60		$	0.58		$	0.31		$	0.30

	Three months ended				Six months ended				Three months ended
($ in thousands)	February 28, 2018		February 28, 2017		February 28, 2018		February 28, 2017		November 30, 2018		November 30, 2017
Net earnings	$	1,735	$	5,012	$	4,920	$	5,885	$	1,212	$	3,185
Other comprehensive income:
Other comprehensive income (loss):
Defined benefit pension plan adjustment, net of tax		37		38		69		75		29		32
Foreign currency translation adjustment, net of hedging activities and tax		1,814		1,947		780		513		1,106		(1,034	)
Total other comprehensive income, net of tax (benefit) expense of ($306), $87, ($274) and $653, respectively		1,851		1,985		849		588
Total other comprehensive (loss) income, net of tax expense of $226 and $32, respectively										1,135		(1,002	)
Total comprehensive income	$	3,586	$	6,997	$	5,769	$	6,473	$	2,347	$	2,183

($ and shares in thousands, except par values)	February 28, 2018			February 28, 2017			August 31, 2017			November 30, 2018			November 30, 2017			August 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	102,211		$	102,825		$	121,620		$	137,217		$	109,450		$	160,787
Receivables, net of allowance of $7,736, $7,473, and $7,447, respectively		96,738			78,828			73,850
Receivables, net of allowance of $3,324, $7,524, and $3,585, respectively											84,864			79,774			69,107
Inventories, net		102,975			82,847			86,155			88,912			93,994			79,233
Prepaid expenses		5,339			5,208			4,384			3,199			3,555			3,883
Assets held-for-sale											2,744			—			10,837
Other current assets		6,092			15,968			6,925			8,386			9,461			7,204
Total current assets		313,355			285,676			292,934			325,322			296,234			331,051

Property, plant, and equipment:
Cost		192,898			185,714			189,140			176,669			190,028			171,450
Less accumulated depreciation		(120,220	)		(110,082	)		(114,642	)		(116,187	)		(117,088	)		(114,202	)
Property, plant, and equipment, net		72,678			75,632			74,498			60,482			72,940			57,248

Intangibles, net		40,677			44,890			42,808			26,576			41,702			27,376
Goodwill		77,296			76,577			77,131			64,557			77,127			64,671
Deferred income tax assets		5,773			3,094			5,311			5,639			3,111			6,645
Other noncurrent assets		12,575			4,747			13,350			19,943			12,293			13,265
Total assets	$	522,354		$	490,616		$	506,032		$	502,519		$	503,407		$	500,256

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	46,599		$	44,254		$	36,717		$	41,338		$	41,046		$	30,530
Current portion of long-term debt		203			199			201			206			202			205
Liabilities held-for-sale											—			—			2,424
Other current liabilities		57,720			46,350			55,119			41,480			48,875			46,935
Total current liabilities		104,522			90,803			92,037			83,024			90,123			80,094

Pension benefits liabilities		6,152			6,708			6,295			5,803			6,223			5,874
Long-term debt		116,673			116,876			116,775			116,518			116,724			116,570
Deferred income tax liabilities		1,179			1,678			1,191			1,048			1,649			1,083
Other noncurrent liabilities		20,768			20,995			19,679			19,451			19,456			19,769
Total liabilities		249,294			237,060			235,977			225,844			234,175			223,390

Shareholders' equity:
Preferred stock of $1 par value -
Authorized 2,000 shares; no shares issued and outstanding		—			—			—			—			—			—
Common stock of $1 par value - authorized 25,000 shares; 18,841, 18,746, and 18,780 shares issued, respectively		18,841			18,746			18,780
Common stock of $1 par value - authorized 25,000 shares; 18,870, 18,805, and 18,841 shares issued, respectively											18,870			18,805			18,841
Capital in excess of stated value		66,625			59,002			63,006			68,710			63,191			68,465
Retained earnings		476,091			466,630			477,615			483,811			477,584			484,886
Less treasury stock - at cost, 8,083, 8,083, and 8,083 shares, respectively		(277,238	)		(277,238	)		(277,238	)
Less treasury stock - at cost, 8,083 shares											(277,238	)		(277,238	)		(277,238	)
Accumulated other comprehensive loss, net		(11,259	)		(13,584	)		(12,108	)		(17,478	)		(13,110	)		(18,088	)
Total shareholders' equity		273,060			253,556			270,055			276,675			269,232			276,866
Total liabilities and shareholders' equity	$	522,354		$	490,616		$	506,032		$	502,519		$	503,407		$	500,256

Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ and shares in thousands, except per share amounts)
	Shares of common stock		Shares of treasury stock		Common stock		Capital in excess of stated value			Retained earnings			Treasury stock			Accumulated other comprehensive (loss) income, net			Total shareholders’ equity
Balance at August 31, 2018		18,841		8,083	$	18,841	$	68,465		$	484,886		$	(277,238	)	$	(18,088	)	$	276,866
Comprehensive income:
Net earnings											1,212									1,212
Other comprehensive income																	1,135			1,135
Total comprehensive income																				2,347
Cash dividends ($0.31) per share											(3,344	)								(3,344	)
Issuance of common shares under share compensation plans, net	29				29			(972	)											(943	)
Share-based compensation expense								1,217												1,217
Cumulative impact of ASC 606 adoption										532										532
Cumulative impact of ASU 2018-02 adoption										525							(525	)		—
Balance at November 30, 2018		18,870		8,083	$	18,870	$	68,710		$	483,811		$	(277,238	)	$	(17,478	)	$	276,675

See accompanying notes to condensed consolidated financial statements.

		Six months ended						Three months ended
($ in thousands)		February 28, 2018			February 28, 2017			November 30, 2018			November 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$	4,920		$	5,885		$	1,212		$	3,185
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			8,599			8,120			3,424			4,335
Loss on sale of business									67			—
Provision for uncollectible accounts receivable	��		228			(609	)		(159	)		112
Deferred income taxes			(931	)		1,707			742			2,111
Share-based compensation expense			1,887			1,815			1,303			1,001
Other, net			45			(594	)		(1,053	)		614
Changes in assets and liabilities:
Receivables			(23,084	)		2,710			(14,782	)		(6,526	)
Inventories			(15,239	)		(7,368	)		(11,387	)		(8,672	)
Prepaid expenses and other current assets			(1,731	)		3,375			298			(15	)
Accounts payable			9,728			11,926			13,917			4,642
Other current liabilities			5,313			(14,122	)		(7,106	)		(6,156	)
Other noncurrent assets and liabilities			1,368			(2,123	)		(792	)		399
Net cash (used in) provided by operating activities			(8,897	)		10,722
Net cash used in operating activities									(14,316	)		(4,970	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment			(4,715	)		(4,194	)		(5,701	)		(1,991	)
Proceeds from settlement of net investment hedges			101			2,054			962			101
Payments for settlement of net investment hedges			(1,967	)		(482	)		—			(1,176	)
Other investing activities, net			137			136			8			74
Net cash used in investing activities			(6,444	)		(2,486	)		(4,731	)		(2,992	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			2,788			647			177			132
Common stock withheld for payroll tax obligations			(833	)		(635	)		(1,120	)		(828	)
Principal payments on long-term debt			(100	)		(98	)		(51	)		(50	)
Dividends paid			(6,444	)		(6,181	)		(3,344	)		(3,216	)
Net cash used in financing activities			(4,589	)		(6,267	)		(4,338	)		(3,962	)

Effect of exchange rate changes on cash and cash equivalents			521			(390	)		(185	)		(246	)
Net change in cash and cash equivalents			(19,409	)		1,579			(23,570	)		(12,170	)
Cash and cash equivalents, beginning of period			121,620			101,246			160,787			121,620
Cash and cash equivalents, end of period		$	102,211		$	102,825		$	137,217		$	109,450

SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid		$	2,141		$	7,233		$	553		$	213
Interest paid		$	2,301		$	2,383		$	83		$	123

The condensed consolidated financial statements are presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and do not include all of the disclosures normally required by U.S. generally accepted accounting principles (“U.S. GAAP”) as contained in Lindsay Corporation’s (the “Company”) Annual Report on Form 10-K. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended August 31, ~~2017.~~2018.

In the opinion of management, the condensed consolidated financial statements of the Company reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and the results of operations and cash flows for the periods presented. The results for interim periods are not necessarily indicative of trends or results expected by the Company for a full year. The condensed consolidated financial statements were prepared using U.S. GAAP. These principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from these estimates. Certain reclassifications have been made to prior financial statements and notes to conform to the current year presentation.

In ~~May 2014,~~February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) ~~No. 2014-09,~~ ~~Revenue from Contracts with Customers.~~ ~~In August 2015, the FASB issued ASU No. 2015-14,~~ ~~Revenue from Contracts with Customers: Deferral of the Effective Date.~~ The standard provides a single model for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of goods or services. The ASU will replace existing revenue recognition guidance in U.S. GAAP and becomes effective in the first quarter of the Company’s fiscal 2019. Early adoption is permitted only in fiscal 2018. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment.

The Company is currently in the assessment phase, reviewing a representative sample of contracts, holding discussions with key stakeholders, and cataloging potential impacts on the Company’s operations, accounting policies, internal control over financial reporting, and financial statements. The Company has identified that the key changes in the ASU that could potentially impact the Company’s revenue recognition relates to the allocation of contract revenues between various products and services, the timing of when those revenues are recognized, and the deferral of incremental costs to obtain a contract. The Company is continuing to evaluate the impact of the ASU on the consolidated statements of earnings, financial position, and financial statement disclosures, as well as the adoption method.

~~In February 2016, the FASB issued ASU~~ No. 2016-02, Leases (Topic 842). The standard requires a lessee to recognize assets and liabilities arising from an operating lease on the balance sheet. Additionally, companies are permitted to make an accounting policy election to not recognize lease assets and liabilities for leases with a term of 12 months or less. The effective date of ASU No. 2016-02 will be the first quarter of the Company’s fiscal 2020 with early adoption permitted. The Company is currently in the assessment phase and is evaluating the effect that ~~adopting~~adoption of this standard will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The effective date of ASU No. 2016-13 will be the first quarter of the Company’s fiscal 2020 with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which modifies the financial reporting of hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU No. 2017-12 is effective in the first quarter of the Company’s fiscal 2020 with early adoption permitted. The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which had been codified in ASC Topic 606 Revenue from Contracts with Customers. The standard provides a single model for revenue arising from contracts with customers and supersedes previous revenue recognition guidance. The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of goods or services. The guidance replaces existing revenue recognition guidance in U.S. GAAP and became effective for the Company in its first quarter of fiscal 2019. Under ASC Topic 606 the timing of revenue recognition may differ from previous guidance for contracts with multiple performance obligations as revenue is recognized when control has been transferred for each performance obligation. For custom and contract manufactured products that do not have an alternate use to the Company revenue is recognized over-time when the customer agreements contain contractual termination clauses and right to payment for work performed to date which is a change from previous guidance.

The Company adopted the new standard using the modified retrospective approach effective the first day of fiscal 2019. As a result of the adoption, the Company increased retained earnings, $0.5 million, net of tax. This change relates primarily to custom and contract manufacturing arrangements for certain of the Company’s irrigation and infrastructure equipment products at various stages of production at August 31, 2018 in addition to contracts with multiple performance obligations for which control of the relevant performance obligation had been satisfied. Results for reporting periods beginning

September 1, 2018 are presented in accordance with the ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the previously applied revenue recognition guidance.

In March 2017, the FASB issued ASU No. 2017-07, Presentation of Net Periodic Benefit Cost Related to Defined Benefit Plans, which amends the income statement presentation requirements for the components of net periodic benefit cost for an entity's defined benefit pension and post-retirement plans. The Company adopted ASU No. 2017-07 ~~is effective~~ in ~~the~~ first quarter of ~~the Company’s~~ fiscal 2019, ~~with early adoption permitted.~~recognizing the net periodic pension cost within other (expense) income, net. The Company ~~does not believe this ASU will have a material impact on the consolidated financial statements.~~

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Targeted Improvements to Accounting~~also reclassified an immaterial amount of net periodic pension cost for ~~Hedging Activities~~, which improves the financial reporting of hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU 2017-12 is effective in theits first quarter of ~~the Company’s~~ fiscal ~~2020 with early adoption permitted. The Company does not believe the adoption~~2018 out of ~~this ASU will have a material impact on the consolidated financial statements.~~

~~Table of Contents~~general and administrative expense and into other (expense) income, net.

~~In February 2018, the FASB issued ASU~~ ~~2018-02,~~ ~~Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides entities with the option to eliminate the stranded tax effects associated with the change in tax rates under U.S. Tax Reform through a reclassification of the stranded tax effects from~~ ~~accumulated other comprehensive income to retained earnings.~~ ASU 2018-02 is effective in the first quarter of the Company’s fiscal 2020 with early adoption permitted. Companies should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate from U.S. Tax Reform is recognized. ~~The Company does not believe the adoption of this ASU will have a material impact on the consolidated financial statements.~~

In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Cuts and Jobs Act~~(“U.S. Tax Reform”)~~, which provides guidance on accounting for the impacts of the U.S. Tax ~~Reform.~~Cuts and Jobs Act (“U.S. Tax Reform”). SAB 118 directs companies to consider the impact of the U.S. Tax Reform as provisional when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting under ~~Accounting Standards Codification (“ASC”)~~ASC Topic 740, Income Taxes. The Company has ~~not yet~~ completed its accounting for the tax effects of ~~the~~ U.S. Tax ~~Reform; however it has made a reasonable, but provisional, estimate of the effects~~Reform as more fully explained in Note 45 to the condensed consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides entities with the option to eliminate the stranded tax effects associated with the change in tax rates under U.S. Tax Reform through a reclassification of the stranded tax effects from accumulated other comprehensive income (“AOCI”) to retained earnings. The amount of the reclassification is calculated on the basis of the difference between the historical and newly enacted tax rates for deferred tax liabilities and assets related to items within AOCI. The Company adopted ASU No. 2018-02 in the first quarter of the Company’s fiscal 2019 and reclassified $0.5 million to retained earnings for the impact of stranded tax effects resulting from U.S. Tax Reform.

The cumulative effect of initially applying the new revenue standard under ASC Topic 606 was recorded as an adjustment to the opening balance of retained earnings, which impacted the condensed consolidated balance sheet as follows:

The adoption of ASC Topic 606 had the following impact on the condensed consolidated balance sheet and condensed consolidated statement of earnings for the three months ended November 30, 2018:

The Company determines the appropriate revenue recognition for its contracts by analyzing the type, terms and conditions of each contract or arrangement with a customer. Revenue is recognized when the Company satisfies the performance obligation by transferring control over goods or services to a customer. The amount of revenue recognized is measured as the consideration the Company expects to receive in exchange for those goods or services pursuant to a contract with the customer. The Company does not recognize revenue in cases where collectability is not probable, and defers the recognition until collection is probable or payment is received. Sales taxes, value added taxes, and other taxes collected from its customers concurrent with its revenue activities are excluded from revenue.

The Company elected to use the practical expedient of treating shipping and handling costs associated with outbound freight as a fulfillment obligation instead of a separate performance obligation. Shipping and handling fees billed to the customer are reported as revenue and recorded in the same period as the associated fulfillment costs.

Customer rebates, cash discounts and other sales incentives are recorded as a reduction of revenues in the period in which the sale is recognized. The Company establishes provisions for estimated warranties and does not generally sell extended warranties for its products.

In addition, the Company elected the practical expedient to not disclose the value of unsatisfied performance obligations at the end of the period when the contract has an original expected length of service of one year or less. For contracts with a length longer than twelve months, the unsatisfied performance obligation was $0.7 million at November 30, 2018.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using the stand-alone selling price of each distinct good or service in the contract. For most performance obligations, the stand-alone selling price is directly observable as these goods or services are also sold separately by the Company. For performance obligations where the stand-alone selling price is not directly observable, the Company uses the expected cost plus a margin approach, under which the expected costs of satisfying a performance obligation are forecasted and then an appropriate margin for that distinct good or service is added.

The Company’s performance obligations are satisfied at either a point in time or over time depending on the measure of progress applied toward the complete satisfaction in the transfer of control of the related goods and services to the customer.

Revenue recognized at a point in time is derived from the sale of equipment and related parts. Revenue recognition for equipment and parts is generally at a point in time upon transfer of control of the goods to the customer which generally happens upon shipment of goods to the customer.

Revenue recognized over time is primarily derived from engineering services and remote monitoring subscription services as well as custom and contract manufactured products. For engineering services, transfer of control to the customer is continuous over time. Therefore, revenue is recognized based on the extent of progress towards completion of the performance obligation. Judgement is required when selecting the method to measure progress towards completion. For fixed price agreements, the Company recognizes revenue on an inputs basis, using total costs incurred to date as a percentage of total costs expected to be incurred. For time and material arrangements, the Company utilizes an output method of resources consumed such as the expended hours times the hourly billing rate. For remote monitoring subscription services, customers are generally billed in advance and revenue is recognized ratably over the life of the agreement.

For custom and contract manufactured products, the transfer of control is continuous over the life of the agreement and products do not have an alternate use to the Company. When the customer agreements contain contractual termination clauses and right to payment for work performed to date, the revenue from these agreements is recognized over time as the products are produced.

The Company also leases certain infrastructure property. Revenues for the lease of infrastructure property are recognized on a straight-line basis over the lease term.

A breakout by segment of revenue recognized over time versus point in time for the three months ended November 30, 2018 is as follows:

Further disaggregation of revenue is disclosed in the Note 15 – Industry Segment Information.

Contract assets arise when recorded revenue for a contract exceeds the amounts billed under the terms of such contract. Contract liabilities arise when billed amounts exceed revenue recorded. Amounts are billable to customers upon various measures of performance, including achievement of certain milestones and completion of specified units of completion of the contract.

Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date. The contract liabilities primarily relate to the advance consideration received from customers for customer contracts, for which transfer of control of products or performance of service occurs in the future, and therefore revenue is recognized upon completion of the performance obligation.

At November 30, 2018, contract assets amounted to $1.8 million. This amount is included in the other current assets line item within current assets on the condensed consolidated balance sheets. The contract asset attributable to the cumulative effect from the adoption of ASC Topic 606 was $1.1 million; the contract asset at August 31, 2018 was $0.5 million.

At November 30, 2018 and August 31, 2018, the contract liability was $6.4 million and $7.5 million, respectively. The contract liability is included in the other current liabilities on the condensed consolidated balance sheets. During the Company’s fiscal quarter ended November 30, 2018, the Company recognized $4.6 million of revenue that was included in the liability as of August 31, 2018. The revenue recognized was due to applying advance payments received for the performance obligations completed during the quarter. Amounts included here exclude deferred lease revenues that are also included within other current liabilities.

During fiscal 2018, in connection with a portfolio review of business investments, the Company committed to a plan of divestiture of its pump and filtration businesses, a Company-owned irrigation dealership, and a Company-owned water resource consulting firm, all of which are reported in the Irrigation segment. The Company completed the divestiture of its

pump and filtration businesses and the Company-owned water resource consulting firm during the fourth quarter of fiscal 2018.

The Company completed the divestiture of its Company-owned irrigation dealership during the first quarter of fiscal 2019 and recorded a loss on sale of $0.1 million included in general and administrative expense on the condensed consolidated statement of earnings for the three months ended November 30, 2018. The Company received a note of $5.8 million as proceeds for this sale. This is included as a noncash investing activity on the condensed consolidated statement of cash flows.

Additionally, during the fourth quarter of fiscal 2018, the Company closed one of its infrastructure manufacturing facilities in North America and consolidated its operations with an irrigation manufacturing facility. The building related to the closure is currently listed for sale and is included within the caption “Assets held-for-sale” in the condensed consolidated balance sheet as of November 30, 2018.

The carrying amounts of the major classes of assets and liabilities that were classified as held-for-sale at November 30, 2018, November 30, 2017, and August 31, 2018 are as follows:

Basic earnings per share is calculated on the basis of weighted average outstanding common shares. Diluted earnings per share is calculated on the basis of basic weighted average outstanding common shares adjusted for the dilutive effect of stock options, restricted stock unit awards and other dilutive securities.

The following table shows the computation of basic and diluted net earnings per share for the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017:

	Three months ended				Six months ended				Three months ended
($ and shares in thousands, except per share amounts)	February 28, 2018		February 28, 2017		February 28, 2018		February 28, 2017		November 30, 2018		November 30, 2017
Numerator:
Net earnings	$	1,735	$	5,012	$	4,920	$	5,885	$	1,212	$	3,185

Denominator:
Weighted average shares outstanding		10,743		10,657		10,724		10,647		10,766		10,705
Diluted effect of stock awards		22		17		28		23		40		35
Weighted average shares outstanding assuming dilution		10,765		10,674		10,752		10,670		10,806		10,740

Basic net earnings per share	$	0.16	$	0.47	$	0.46	$	0.55	$	0.11	$	0.30
Diluted net earnings per share	$	0.16	$	0.47	$	0.46	$	0.55	$	0.11	$	0.30

Certain stock options and restricted stock units were excluded from the computation of diluted net earnings per share because their effect would have been anti-dilutive. Performance stock units are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied. In addition, the following table

shows the securities excluded from the computation of earnings per share because their effect would have been anti-dilutive:

	Three months ended				Six months ended				Three months ended
(Units and options in thousands)	February 28, 2018		February 28, 2017		February 28, 2018		February 28, 2017		November 30, 2018		November 30, 2017
Restricted stock units		6		7		72		20		26		65
Stock options		64		119		167		133		35		102

It is the Company’s policy to report income tax expense ~~of $3.9 million and $2.6 million~~ for the three months ended February 28, 2018 and February 28, 2017, respectively. The Company recorded income tax expense of $5.5 million and $3.1 million for the six months ended February 28, 2018 and February 28, 2017, respectively. The overall income tax rate was 53.0 percent and 34.4 percent for the fiscal year-to-dateinterim periods ~~ended February 28, 2018 and February 28, 2017, respectively.~~

On December 22, 2017, the U.S. government enacted comprehensive tax legislation through U.S. Tax Reform which significantly revised the U.S. corporate income tax structure by, among other things, lowering the U.S. corporate income tax rate, repealing certain deductions, and changing the way foreign earnings are taxed. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law is enacted. As such, the Company’s estimated annual effective income tax rate for the current fiscal year includes the impact of the reduction of the U.S. corporate income tax rate from 35% to 21% beginning January 1, 2018. Asusing an August fiscal year end filer, the lower corporate income tax rate will be phased in resulting in a blended U.S. corporate income tax rate of 25.7% for the fiscal year ending August 31, 2018 (effectively the four months of September through December 2017 at 35% and the eight months of January through August 2018 at 21%).

Income tax expense for the three and six months ended February 28, 2018 includes discrete items related to the impact of U.S. Tax Reform as required by ASC Topic 740. These include a one-time mandatory deemed repatriation transition tax on previously untaxed accumulated and current earnings and profits of the Company’s foreign subsidiaries. The Company made a reasonable estimate and recorded a provisional deemed repatriation transition tax obligation of $1.8 million. The Company continues to gather information to more precisely compute the amount of the deemed repatriation transition tax.

The Company also remeasured or revalued its deferred income tax assets and liabilities during its fiscal 2018 second quarter, resulting in a provisional deferred income tax expense of $0.8 million. This provisional amount incorporates assumptions and estimates made based upon the Company’s current interpretations of U.S. Tax Reform and may change as the Company receives additional clarification and implementation guidance, and as data becomes available allowing for a more accurate scheduling of the deferred income tax assets and liabilities.

The Company’s collective provisional estimates of $2.6 million of incremental income tax expense recorded during the second quarter of fiscal 2018 represents all known and estimable impacts of U.S. Tax Reform, and may change as the Company receives additional clarification and implementation guidance, and as data becomes available. The accounting is expected to be finalized by the end of fiscal 2018.

~~Certain other provisions included in U.S. Tax Reform have later effective dates for fiscal year filers and may have an impact on the Company’s future~~ estimated annual effective income tax rate. ~~Other future adjustments to~~However, the tax effects of significant or unusual items are not considered in the estimated annual effective income tax ~~expense may include the impact of actions the Company may take as a result of U.S. Tax Reform.~~

rate. The tax effects of such discrete ~~items, such as U.S. Tax Reform, were~~events are recognized in the interim period in which the events ~~occurred for the three and six months ended February 28, 2018.~~occur. The Company recorded no material discrete items for the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 or 2017.

The Company recorded income tax expense of $0.5 million and $1.6 million for the three months ended November 30, 2018 and 2017, respectively. The estimated annual effective income tax rate was 27.9 percent and 33.5 percent for the three months ended November 30, 2018 and 2017, respectively. The decrease in the estimated annual effective income tax rate from November 2018 to November 2017 relates primarily to the reduction of the U.S corporate income tax rate from 35% to 21% due to U.S. Tax Reform.

The United States enacted significant tax reform into law on December 22, 2017. U.S. Tax Reform made complex and broad changes to the U.S. tax laws. U.S. Tax Reform required companies to pay a one-time deemed repatriation tax on certain undistributed earnings of foreign subsidiaries. The Company recorded a $1.7 million provisional expense for the deemed repatriation tax in fiscal year 2018. The Company finalized the calculations of the transition tax liability in the quarter ending November 30, 2018, with no adjustments to the provisional estimate previously recorded. U.S. Tax Reform also established new income tax provisions that will affect the Company’s fiscal year 2019, including, but not limited to, eliminating the U.S. manufacturing deduction, and establishing a new minimum tax on global intangible low-taxed income (“GILTI”). The Company has elected to account for GILTI as a period cost.

Inventories consisted of the following as of ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017:~~2018:

($ in thousands)	February 28, 2018			February 28, 2017			August 31, 2017			November 30, 2018			November 30, 2017			August 31, 2018
Raw materials and supplies	$	38,716		$	27,368		$	31,158		$	40,781		$	34,410		$	36,316
Work in process		9,371			7,570			7,113			9,601			10,074			9,176
Finished goods and purchased parts		60,925			53,587			52,382			46,925			55,590			40,197
Total inventory value before LIFO adjustment		109,012			88,525			90,653			97,307			100,074			85,689
Less adjustment to LIFO value		(6,037	)		(5,678	)		(4,498	)		(8,395	)		(6,080	)		(6,456	)
Inventories, net	$	102,975		$	82,847		$	86,155		$	88,912		$	93,994		$	79,233

The following table sets forth the outstanding principal balances of the Company’s long-term debt as of the dates shown:

($ in thousands)	February 28, 2018			February 28, 2017			August 31, 2017			November 30, 2018			November 30, 2017			August 31, 2018
Series A Senior Notes	$	115,000		$	115,000		$	115,000		$	115,000		$	115,000		$	115,000
Revolving Credit Facility		—			—			—			—			—			—
Elecsys Series 2006A Bonds		1,876			2,075			1,976			1,724			1,926			1,775
Total debt		116,876			117,075			116,976			116,724			116,926			116,775
Less current portion		(203	)		(199	)		(201	)		(206	)		(202	)		(205	)
Total long-term debt	$	116,673		$	116,876		$	116,775		$	116,518		$	116,724		$	116,570

Due within	$ in thousands		$ in thousands
1 year	$	203	$	206
2 years		207		210
3 years		211		214
4 years		215		218
5 years		219		222
Thereafter		115,821		115,654
	$	116,876	$	116,724

The Company uses certain financial derivatives to mitigate its exposure to volatility in foreign currency exchange rates. The Company uses these derivative instruments to hedge exposures in the ordinary course of business and does not invest in derivative instruments for speculative purposes. The Company manages market and credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and degree of risk that may be undertaken, and by entering into transactions with counterparties that have investment grade credit ratings. Fair values of derivative instruments are as follows:

($ in thousands)	Balance sheet location	February 28, 2018			February 28, 2017			August 31, 2017			Balance sheet location	November 30, 2018			November 30, 2017			August 31, 2018
Derivatives designated as hedging instruments:
Foreign currency forward contracts	Other current assets	$	—		$	—		$	—		Other current assets	$	873		$	—		$	775
Foreign currency forward contracts	Other current liabilities		(965	)		(619	)		(1,633	)	Other current liabilities		(248	)		(365	)		—
Total derivatives designated as hedging instruments		$	(965	)	$	(619	)	$	(1,633	)		$	625		$	(365	)	$	775

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	$	19		$	—		$	9		Other current assets	$	51		$	34		$	123
Foreign currency forward contracts	Other current liabilities		(45	)		(249	)		(114	)	Other current liabilities		(45	)		(120	)		(12	)
Total derivatives not designated as hedging instruments		$	(26	)	$	(249	)	$	(105	)		$	6		$	(86	)	$	111

Accumulated other comprehensive income included realized and unrealized after-tax gains of ~~$3.0~~$5.7 million, ~~$6.3~~$4.0 million, and ~~$3.9~~$5.0 million at ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017,~~2018, respectively, related to derivative contracts designated as hedging instruments.

The amount of gain (loss) recognized in other comprehensive income is as follows:

	Three months ended						Six months ended					Three months ended
($ in thousands)	February 28, 2018			February 28, 2017			February 28, 2018			February 28, 2017		November 30, 2018		November 30, 2017
Foreign currency forward contracts, net of tax (benefit) expense of ($330), ($47), ($273), and $563	$	(1,047	)	$	(182	)	$	(924	)	$	736
Foreign currency forward contracts, net of tax expense of $161 and $57, respectively												$	651	$	123

For the three months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017, the Company settled foreign currency forward contracts resulting in an after-tax net ~~loss of $0.6 million and an after-tax net~~ gain of ~~$1.0~~$0.7 million ~~respectively, which were included in other comprehensive income as part of a currency translation adjustment. For the six months ended February 28, 2018~~ and ~~February 28, 2017, the Company settled foreign currency forward contracts resulting in an~~ after-tax net loss of ~~$1.3 million and an after-tax net gain of $0.9~~$0.7 million, respectively, which were included in other comprehensive income as part of a currency translation adjustment. There were no amounts recorded in the condensed consolidated statements of earnings related to ineffectiveness of foreign currency forward contracts related to net investment hedges for the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017.

At ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017,~~2018, the Company had outstanding foreign currency forward contracts to sell ~~32.8~~a notional amount of 32.5 million Euro, ~~32.9~~32.6 million Euro, and ~~32.8~~32.7 million Euro, respectively, at fixed prices to settle during the next fiscal quarter. At ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017,~~2018, the

Company had an outstanding foreign currency forward contract to sell a notional amount of 43.0 million South African Rand at fixed prices to settle during the next fiscal quarter. The Company’s foreign currency forward contracts qualify as hedges of a net investment in foreign operations.

The Company generally does not elect hedge accounting treatment for derivative contracts related to future settlements of foreign denominated intercompany receivables and payables. If the Company does not elect hedge accounting treatment for a derivative, the Company carries the derivative at its fair value in the condensed consolidated balance sheets and recognizes any subsequent changes in its fair value during a period through earnings in the condensed consolidated statements of earnings. At ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017,~~2018, the Company had ~~$6.2~~notional value of $1.9 million, ~~$5.6~~$6.2 million, and $5.0 million, respectively, of U.S. dollar equivalent of foreign currency forward contracts outstanding that are not designated as hedging instruments.

The following table presents the Company’s financial assets and liabilities measured at fair value, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017,~~2018, respectively. There were no transfers between any levels for the periods presented.

	February 28, 2018										November 30, 2018
($ in thousands)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	102,211	$	—		$	—	$	102,211		$	137,217	$	—		$	—	$	137,217
Derivative assets		—		19			—		19			—		924			—		924
Derivative liabilities		—		(1,010	)		—		(1,010	)		—		(293	)		—		(293	)

	February 28, 2017										November 30, 2017
($ in thousands)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	102,825	$	—		$	—	$	102,825		$	109,450	$	—		$	—	$	109,450
Derivative assets		—		—			—		—			—		34			—		34
Derivative liabilities		—		(868	)		—		(868	)		—		(485	)		—		(485	)

	August 31, 2017										August 31, 2018
($ in thousands)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	121,620	$	—		$	—	$	121,620		$	160,787	$	—		$	—	$	160,787
Derivative assets		—		9			—		9			—		898			—		898
Derivative liabilities		—		(1,747	)		—		(1,747	)		—		(12	)		—		(12	)

There were no required fair value adjustments for assets and liabilities measured at fair value on a non-recurring basis for the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 or ~~February 28,~~November 30, 2017.

In the ordinary course of its business operations, the Company enters into arrangements that obligate it to make future payments under contracts such as lease agreements. Additionally, the Company is involved, from time to time, in commercial litigation, employment disputes, administrative proceedings, business disputes and other legal proceedings. The Company has established accruals for certain proceedings where those proceedings present loss contingencies that are both probable and reasonably estimable at the time of determination. The Company believes that any such currently-pending proceedings are either covered by insurance or would not have a material effect on the business or its consolidated financial statements if decided in a manner that is unfavorable to the Company. Such proceedings are exclusive of environmental remediation matters which are discussed separately below.

The Company is currently defending a number of product liability lawsuits arising out of vehicle collisions with highway barriers incorporating the Company’s X-Lite® end terminal. Despite the September 2017 reversal of a sizable judgment against a competitor, the Company expects that the significant attention brought to the infrastructure products industry by the original judgment may lead to additional lawsuits being filed against the Company and others in the industry.

The Company intends to vigorously defend each of these allegations. The Company maintains insurance to mitigate the impact of adverse judgment exposures in the current product liability cases. Based on the information currently available to the Company, the Company does not believe that a loss is probable in any of these lawsuits; therefore, no accrual has been

included in the Company’s condensed consolidated financial statements. While it is possible that a loss may be incurred, the Company is unable to estimate a range of potential loss due to the complexity and current status of these lawsuits.

In 1992, the Company entered into a consent decree with the U.S. Environmental Protection Agency (the “EPA”) in which the Company committed to remediate environmental contamination of the groundwater that was discovered from 1982 through 1990 at and adjacent to its Lindsay, Nebraska facility (the “site”). The site was added to the EPA’s list of priority superfund sites in 1989. Between 1993 and 1995, remediation plans for the site were approved by the EPA and fully implemented by the Company. Since 1998, the primary remaining contamination at the site has been the presence of volatile organic compounds in the soil and groundwater. To date, the remediation process has consisted primarily of drilling wells into the aquifer and pumping water to the surface to allow these contaminants to be removed by aeration.

In fiscal 2012, the Company undertook an investigation to assess further potential site remediation and containment actions. In connection with the receipt of preliminary results of this investigation and other evaluations, the Company estimated that it would incur $7.2 million in remediation of source area contamination and operating costs and accrued that undiscounted amount. In addition to this source area, the Company determined that volatile organic compounds also existed under one of the manufacturing buildings on the site. Due to the location, the Company had not yet determined the extent of these compounds or the extent to which they were contributing to groundwater contamination. Based on the uncertainty of the remediation actions that might be required with respect to this affected area, the Company believed that meaningful estimates of costs or range of costs could not be made and accordingly were not accrued at that time.

In December 2014, the EPA requested that the Company prepare a feasibility study related to the site, including the area covered by the building, which resulted in a revision to the Company’s remediation timeline. In the first quarter of fiscal 2015, the Company accrued $1.5 million of incremental operating costs to reflect its updated timeline.

The Company began soil and groundwater testing in preparation for developing this feasibility study during the first quarter of fiscal 2016. During the second quarter of fiscal 2016, the Company completed its testing which clarified the extent of contamination, including the identification of a source of contamination near the manufacturing building that was not part of the area for which reserves were previously established. The Company, with the assistance of third-party environmental experts, developed and evaluated remediation alternatives, a proposed remediation plan, and estimated costs. Based on these estimates of future remediation and operating costs, the Company accrued an additional $13.0 million in the second quarter of fiscal 2016 and included the related expenses in general and administrative expenses in the condensed consolidated statements of earnings.

The current estimated aggregate accrued cost of ~~$17.2~~$16.4 million is based on consideration of several remediation options that would use different technologies, each of which the Company believes could be successful in meeting the long-term regulatory requirements of the site. The Company participated in a meeting with the EPA and the Nebraska Department of Environmental Quality (the “NDEQ”) during the third quarter of fiscal 2016 to review remediation alternatives and proposed plans for the site and submitted its remedial alternatives evaluation report to the EPA in August 2016. The proposed remediation plan is preliminary and has not been approved by the EPA or the NDEQ. Based on guidance from third-party environmental experts and further discussions with the EPA and the NDEQ, the Company anticipates that a definitive plan will not be agreed upon until later in fiscal ~~2018~~2019 or beyond.

The Company accrues the anticipated cost of investigation and remediation when the obligation is probable and can be reasonably estimated. Costs are charged against the accrual in the period in which they are paid. While the Company believes the current accrual is a good faith estimate of the long-term cost of remediation at this site based on the preliminary analysis currently available, the estimate of costs and their timing could change as a result of a number of factors, including (1) EPA and NDEQ input on the proposed remediation plan and any changes which they may subsequently require, (2) refinement of cost estimates and length of time required to complete remediation and post-remediation operations and maintenance, (3) effectiveness of the technology chosen in remediation of the site as well as changes in technology that may become available in the future, and (4) unforeseen circumstances existing at the site. As a result of these factors, the actual amount of costs incurred by the Company in connection with the remediation of contamination of its Lindsay, Nebraska site could vary from the amounts currently accrued for this expense. While any revisions could be material to the operating results of any fiscal quarter or fiscal year, the Company does not expect such additional expenses would have a material adverse effect on its liquidity or financial condition.

The following table summarizes the undiscounted environmental remediation liability classifications included in the balance sheet as of ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017:~~2018:

($ in thousands)	February 28, 2018		February 28, 2017		August 31, 2017		November 30, 2018		November 30, 2017		August 31, 2018
Other current liabilities	$	1,544	$	1,722	$	2,095	$	1,243	$	1,616	$	1,264
Other noncurrent liabilities		15,677		16,933		15,937		15,142		15,825		15,319
Total environmental remediation liabilities	$	17,221	$	18,655	$	18,032	$	16,385	$	17,441	$	16,583

	Three months ended						Six months ended						Three months ended
($ in thousands)	February 28, 2018			February 28, 2017			February 28, 2018			February 28, 2017			November 30, 2018			November 30, 2017
Product warranty accrual balance, beginning of period	$	8,187		$	7,572		$	8,411		$	7,443		$	7,109		$	8,411
Liabilities accrued for warranties during the period		647			860			2,103			1,861			1,178			1,456
Warranty claims paid during the period		(1,245	)		(1,420	)		(2,933	)		(2,621	)		(1,047	)		(1,688	)
Changes in estimates		(41	)		(74	)		(33	)		255			—			8
Product warranty accrual balance, end of period	$	7,548		$	6,938		$	7,548		$	6,938		$	7,240		$	8,187

The Company’s current share-based compensation plans, approved by the stockholders of the Company, provides for awards of stock options, restricted shares, restricted stock units (“RSUs”), stock appreciation rights, performance shares, and performance stock units (“PSUs”) to employees and non-employee directors of the Company. The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. Share-based compensation expense was ~~$0.9~~$1.3 million and ~~$0.9~~$1.0 million for the ~~three months~~three-month periods ended ~~February 28,~~November 30, 2018 and ~~February 28, 2017, respectively. Share-based compensation expense was $1.9 million and $1.8 million for the six months ended February 28, 2018 and February 28,~~November 30, 2017, respectively.

The following table illustrates the type and fair value of the share-based compensation awards granted during the ~~three month~~three-month periods ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017:

	Three months ended								Three months ended
	February 28, 2018				February 28, 2017				November 30, 2018				November 30, 2017
	Number of units granted		Weighted average grant-date fair value per award		Number of units granted		Weighted average grant-date fair value per award		Number of units granted		Weighted average grant-date fair value per award		Number of units granted		Weighted average grant-date fair value per award
Stock options		1,994	$	30.50		-	$	-		38,337	$	24.71		44,312	$	30.73
RSUs		6,401	$	89.65		7,427	$	74.47		29,013	$	88.27		69,198	$	87.06
PSUs		670	$	87.24		-	$	-		20,631	$	88.27		14,854	$	88.06

The RSUs granted during the three-months ended November 30, 2018 and November 30, 2017 consisted of 3,071 and 3,980, respectively, of awards that will be settled in cash. The weighted average stock price on the date of the grant was $91.87 and $91.56 for the three-month periods ended November 30, 2018 and 2017, respectively.

The following table provides the assumptions used in determining the fair value of the stock options awarded during the ~~three month period~~three-month periods ended ~~February 28, 2018:~~November 30, 2018 and November 30, 2017:

($ in thousands)	February 28, 2018		February 28, 2017		August 31, 2017		November 30, 2018		November 30, 2017		August 31, 2018
Other current liabilities:
Compensation and benefits	$	16,146	$	13,804	$	18,926	$	12,034	$	14,615	$	17,850
Warranties								7,240		8,187		7,109
Deferred revenues		12,322		4,873		6,166		5,047		4,370		6,337
Warranties		7,548		6,938		8,411
Dealer related liabilities								3,467		3,286		3,057
Customer deposits		6,102		4,757		4,096		2,959		3,783		2,591
Dealer related liabilities		3,445		2,724		3,500
Tax related liabilities		2,654		2,964		2,813		1,400		3,218		1,293
Accrued environmental liabilities		1,544		1,722		2,095		1,243		1,616		1,264
Other		7,959		8,568		9,112		8,090		9,800		7,434
Total other current liabilities	$	57,720	$	46,350	$	55,119	$	41,480	$	48,875	$	46,935

There were no shares repurchased during the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017 under the Company’s share repurchase program. The remaining amount available under the repurchase program was $63.7 million as of ~~February 28,~~November 30, 2018.

The Company manages its business activities in two reportable segments: irrigation and infrastructure. The Company evaluates the performance of its reportable segments based on segment sales, gross profit and operating income, with operating income for segment purposes excluding unallocated corporate general and administrative expenses, interest income, interest expense, other income and expenses and income taxes. Operating income for segment purposes includes general and administrative expenses, selling expenses, engineering and research expenses and other overhead charges directly attributable to the segment. There are no inter-segment sales included in the amounts disclosed. The Company had no single customer who represented 10 percent or more of its total revenues during the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017.

Irrigation - This reporting segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems, as well as various ~~water pumping stations, controls, filtration~~innovative technology solutions such as GPS positioning and ~~machine-to-machine technology.~~guidance, variable rate irrigation, wireless irrigation management, M2M communication technology, and smartphone applications. The irrigation reporting segment consists of ~~three~~one operating ~~segments that have similar economic characteristics and meet the aggregation criteria, including similar products, production processes, type or class of customer and methods for distribution.~~segment.

Infrastructure – This reporting segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, and road marking and road safety equipment; the ~~manufacture~~manufacturing and ~~sale~~selling of large diameter steel tubing and railroad signals and structures; and ~~the provision of~~providing outsourced manufacturing and production services. The infrastructure reporting segment consists of one operating segment.

	Three months ended						Six months ended						Three months ended
($ in thousands)	February 28, 2018			February 28, 2017			February 28, 2018			February 28, 2017			November 30, 2018			November 30, 2017
Operating revenues:
Irrigation	$	111,865		$	106,209		$	215,218		$	196,061
Irrigation:
North America													$	56,464		$	67,752
International														31,146			35,601
Irrigation total														87,610			103,353
Infrastructure		18,474			17,916			39,647			38,454			24,341			21,173
Total operating revenues	$	130,339		$	124,125		$	254,865		$	234,515		$	111,951		$	124,526

Operating income:
Irrigation	$	11,933		$	11,304		$	19,784		$	16,453		$	7,783		$	7,851
Infrastructure		2,519			1,595			5,810			4,571			4,168			3,291
Corporate		(7,386	)		(4,377	)		(12,327	)		(9,767	)		(9,911	)		(4,941	)
Total operating income		7,066			8,522			13,267			11,257			2,040			6,201

Interest and other expense, net		(1,390	)		(886	)		(2,799	)		(2,286	)		(359	)		(1,409	)
Earnings before income taxes	$	5,676		$	7,636		$	10,468		$	8,971		$	1,681		$	4,792

Capital expenditures:
Irrigation	$	2,362		$	1,796		$	4,035		$	2,746		$	2,137		$	1,673
Infrastructure		268			664			464			1,104			190			196
Corporate		94			344			216			344			3,374			122
	$	2,724		$	2,804		$	4,715		$	4,194		$	5,701		$	1,991
Depreciation and amortization:
Irrigation	$	2,994		$	2,880		$	6,073		$	5,703		$	2,332		$	3,079
Infrastructure		1,144			1,110			2,282			2,219			965			1,138
Corporate		126			95			244			198			127			118
	$	4,264		$	4,085		$	8,599		$	8,120		$	3,424		$	4,335

($ in thousands)	February 28, 2018		February 28, 2017		August 31, 2017		November 30, 2018		November 30, 2017		August 31, 2018
Total assets:
Irrigation	$	348,298	$	343,067	$	337,446	$	289,773	$	327,183	$	277,712
Infrastructure		79,342		73,280		80,187		74,671		76,488		69,919
Corporate		94,714		74,269		88,399		138,075		99,736		152,625
	$	522,354	$	490,616	$	506,032	$	502,519	$	503,407	$	500,256

ITEM 2 ‑ Management's Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical are forward-looking and reflect information concerning possible or assumed future results of operations and planned financing of the Company. In addition, forward-looking statements may be made orally or in press releases, conferences, reports, on the Company's web site, or otherwise, in the future by or on behalf of the Company. When used by or on behalf of the Company, the words “expect,” “anticipate,” “estimate,” “believe,” “intend,” “will,” “plan,” “predict,” “project,” “outlook,” “could,” “may,” “should” or similar expressions generally identify forward-looking statements. The entire section entitled “Executive Overview and Outlook” should be considered forward-looking statements. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve a number of risks and uncertainties, including but not limited to those discussed in the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the year ended August 31, ~~2017.~~2018. Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results or conditions, which may not occur as anticipated. Actual results or conditions could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein and in the Company’s other public filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended August 31, ~~2017,~~2018, as well as other risks and uncertainties not now anticipated. The risks and uncertainties described herein and in the Company’s other public filings are not exclusive and further information concerning the Company and its businesses, including factors that potentially could materially affect the Company's financial results, may emerge from time to time. Except as required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

In preparing the Company’s condensed consolidated financial statements in conformity with U.S. GAAP, management must make a variety of decisions which impact the reported amounts and the related disclosures. These decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In making these decisions, management applies its judgment based on its understanding and analysis of the relevant circumstances and the Company’s historical experience.

The Company’s accounting policies that are most important to the presentation of its results of operations and financial condition, and which require the greatest use of judgments and estimates by management, are designated as its critical accounting policies. See discussion of the Company’s critical accounting policies under Item 7 in the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended August 31, ~~2017.~~2018. Management periodically re-evaluates and adjusts its critical accounting policies as circumstances change. There were no changes in the Company’s critical accounting policies during the three ~~and six~~ months ended ~~February 28,~~November 30, 2018.

See Note 21 – ~~New Accounting Pronouncements~~Basis of Presentation and the disclosure therein of recent accounting guidance (adopted and not yet adopted) to the condensed consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Operating revenues for the three months ended ~~February 28,~~November 30, 2018 were ~~$130.3~~$112.0 million, ~~an increase~~a decrease of ~~five~~10 percent compared to ~~$124.1~~$124.5 million for the three months ended ~~February 28,~~November 30, 2017. Irrigation segment revenues ~~increased five~~decreased 15 percent to ~~$111.9~~$87.6 million and infrastructure segment revenues increased ~~three~~15 percent to ~~$18.5~~$24.3 million. Net earnings for the three months ended ~~February 28,~~November 30, 2018 were ~~$1.7~~$1.2 million, or ~~$0.16~~$0.11 per diluted share, compared to net earnings of ~~$5.0~~$3.2 million, or ~~$0.47~~$0.30 per diluted share, for the three months ended ~~February 28,~~November 30, 2017.

Net earnings for the three months ended ~~February 28,~~November 30, 2018 were reduced by ~~tax expense of $2.6 million due to the enactment of the U.S. Tax Cuts and Jobs Act (“U.S. Tax Reform”) and by~~ after-tax costs of ~~$1.7~~$2.9 million, ~~comprised of severance costs and professional consulting fees~~or $0.27 per diluted share, related to the Company’s “Foundation for Growth” ~~initiative.~~

~~Foundation for Growth is~~initiative, which was implemented in fiscal 2018 as a ~~focused~~ performance improvement initiative that includes setting strategic direction, defining priorities, and improving overall operating performance. These expenses consisted primarily of professional consulting fees, severance costs, and a loss resulting from the sale of the Company-owned irrigation dealership that occurred during the period. In addition, irrigation revenues were $14.0 million lower during the quarter compared to the same period of fiscal 2018 as a result of the business

divestitures completed in the fourth quarter of fiscal 2018 and the first quarter of fiscal 2019 as part of the Foundation for Growth initiative. The impact on net earnings related to the divestitures was minimal, and we expect the implementation of the Foundation for Growth to ultimately improve the overall operating performance of the Company. A key financial objective of the Foundation for Growth is to achieve operating margin performance of 11 percent to 12 percent in fiscal 2020 ~~without assuming improvement~~exclusive of market changes.

Results for the three months ended November 30, 2018 include pre-tax costs of $4.0 million in connection with the ~~market environment.~~

~~Additional~~which $3.8 million represents professional consulting fees with the remainder representing severance costs and loss on sale of a business. These costs, and additional future costs anticipated in connection with this initiative, ~~over each of the next several quarters,~~ are expected to be recovered through improved operating income in fiscal 2020.

The Company’s irrigation revenues are highly dependent upon the need for irrigated agricultural crop production, which, in turn, depends upon many factors, including the following primary drivers:

~~After a four year cyclical downturn in our U.S. irrigation business, indications are that~~The outlook for lower net farm income and relatively weak commodity prices signals the ~~market has reached a level~~likelihood of ~~stabilization which, along with general economic optimism, has contributed to improved grower sentiment towards investment in irrigation equipment. However, notable growth in~~continued constrained demand for irrigation equipment ~~is expected~~in North America. The U.S. agricultural sector’s well-being remains dependent on continued growth in domestic and foreign demand to ~~remain constrained until there is more significant~~sustain and ~~sustained improvement in~~improve commodity ~~prices and net farm income.~~ prices.

International markets remain active with opportunities for further development and expansion, however regional political and economic factors, currency conditions and other factors can create a challenging environment. Additionally, international results are heavily dependent upon project sales which tend to fluctuate and can be difficult to forecast accurately.

The infrastructure business has continued to generate growth and profitability improvement in an environment of constrained government spending. In December 2015, the U.S. government enacted a five-year, $305 billion highway-funding bill to fund highway and bridge projects, the first long-term national transportation spending bill in a decade. In addition, the Federal Highway Administration has changed highway safety product certification requirements. The change has required additional research and development spending and could have an impact on the competitive positioning of the Company’s highway safety products. In spite of government spending uncertainty, opportunities exist for market expansion in each of the infrastructure product lines. Demand for the Company’s transportation safety products continues to be driven by population growth and the need for improved road safety.

The backlog of unshipped orders at ~~February 28,~~November 30, 2018 was ~~$90.2~~$48.9 million compared with ~~$62.3~~$80.3 million at ~~February 28,~~November 30, 2017, with ~~higher~~lower overall backlogs in both the infrastructure and irrigation segments. Approximately $13.0 million of the reduction in backlog resulted from the business divestitures completed in the fourth quarter of fiscal 2018 and the first quarter of fiscal 2019, and $14.0 million of the reduction is from a large infrastructure ~~segments.~~project completed in the prior fiscal year. The Company’s backlog can fluctuate from period to period due to the seasonality, cyclicality, timing and execution of contracts. Backlog typically represents long-term projects as well as short lead-time orders, and therefore is generally not a good indication of the next fiscal quarter’s revenues.

The global drivers for the Company’s markets of population growth, expanded food production, efficient water use and infrastructure expansion support the Company’s long-term growth goals. The most significant opportunities for growth over the next several years are in international markets, where irrigation use is less developed and demand is driven primarily by food security, water scarcity and population growth.

For the Three Months ended ~~February 28,~~November 30, 2018 compared to the Three Months ended ~~February 28,~~November 30, 2017

The following section presents an analysis of the Company’s operating results displayed in the condensed consolidated statements of earnings for the three months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017. It should be read together with the industry segment information in Note 1415 to the condensed consolidated financial statements:

	Three months ended						Percent	Three months ended						Percent
($ in thousands)	February 28, 2018			February 28, 2017			Increase (Decrease)	November 30, 2018			November 30, 2017			Increase (Decrease)
Consolidated
Operating revenues	$	130,339		$	124,125		5%	$	111,951		$	124,526		-10%
Gross profit	$	35,316		$	32,941		7%	$	28,648		$	32,397		-12%
Gross margin		27.1	%		26.5	%			25.6	%		26.0	%

Operating expenses⁽¹⁾	$	28,250		$	24,419		16%	$	26,608		$	26,196		2%
Operating income	$	7,066		$	8,522		-17%	$	2,040		$	6,201		-67%
Operating margin		5.4	%		6.9	%			1.8	%		5.0	%

Other (expense), net	$	(1,390	)	$	(886	)	57%	$	(359	)	$	(1,409	)	-75%
Income tax expense	$	3,941		$	2,624		50%	$	469		$	1,607		-71%
Overall income tax rate		69.4	%		34.4	%			27.9	%		33.5	%
Net earnings	$	1,735		$	5,012		-65%	$	1,212		$	3,185		-62%

Irrigation Equipment Segment
Segment operating revenues	$	111,865		$	106,209		5%	$	87,610		$	103,353		-15%
Segment operating income	$	11,933		$	11,304		6%	$	7,783		$	7,851		-1%
Segment operating margin		10.7	%		10.6	%			8.9	%		7.6	%

Infrastructure Products Segment
Segment operating revenues	$	18,474		$	17,916		3%	$	24,341		$	21,173		15%
Segment operating income	$	2,519		$	1,595		58%	$	4,168		$	3,291		27%
Segment operating margin		13.6	%		8.9	%			17.1	%		15.5	%

Operating revenues for the three months ended ~~February 28,~~November 30, 2018 ~~increased five~~decreased 10 percent to ~~$130.3~~$112.0 million from ~~$124.1~~$124.5 million for the three months ended ~~February 28,~~November 30, 2017, as irrigation revenues ~~increased $5.7~~decreased $15.8 million and infrastructure revenues increased ~~$0.6~~$3.2 million. The irrigation segment provided 8678 percent of the Company’s revenue during the three months ended ~~February 28,~~November 30, 2018 ~~and February 28,~~as compared to 83 percent for the three months ended November 30, 2017.

North America irrigation revenues for the three months ended ~~February 28,~~November 30, 2018 of ~~$78.9~~$56.5 million ~~increased $14.8~~decreased $11.3 million, or 2317 percent, from ~~$64.1~~$67.8 million for the three months ended ~~February 28,~~November 30, 2017. ~~The increase in~~ North ~~American~~America irrigation revenues ~~is due primarily to an increase in irrigation equipment unit volume~~decreased $14.0 million during the quarter compared to the same prior year ~~period.~~period as a result of the business divestitures completed in the fourth quarter of fiscal 2018 and the first quarter of fiscal 2019. Excluding the impact of the divestitures, North America irrigation revenues increased five percent compared to the same prior year period, primarily due to higher average selling prices.

International irrigation revenues for the three months ended ~~February 28,~~November 30, 2018 of ~~$33.0~~$31.1 million decreased ~~$9.1~~by $4.5 million, or 2213 percent, from ~~$42.1~~$35.6 million for the three months ended ~~February 28,~~November 30, 2017. ~~The second quarter of the prior year included revenues from projects~~Revenues decreased $2.4 million, or 7 percent, due to differences in ~~developing markets that did not repeat in the current period, while demand in core markets remained stable. The impact of~~ foreign currency translation rates compared to the same prior year ~~period was insignificant.~~period. In addition, higher sales in Brazil were more than offset by lower project sales in developing markets.

Infrastructure segment revenues for the three months ended ~~February 28,~~November 30, 2018 of ~~$18.5~~$24.3 million increased ~~$0.6~~$3.1 million, or ~~three~~15 percent, from ~~$17.9~~$21.2 million for the three months ended ~~February 28,~~November 30, 2017. The increase resulted from higher Road Zipper System® sales ~~that~~which were partially offset by ~~a decline in~~lower sales ~~volume from North America~~of road safety products.

Gross profit for the three months ended February 28, 2018 of $35.3 million increased seven percent from $32.9 million for the three months ended February 28, 2017. The increase in gross profit resulted from higher revenues and an increase in gross margin to 27.1 percent for the three months ended February 28, 2018 from 26.5 percent for the three months ended February 28, 2017. Improved gross margin in the infrastructure segment was partially offset by slightly lower gross margin in the irrigation segment. Infrastructure margin improved due to a higher proportion of revenue from Road Zipper System® sales which resulted in an improved margin mix. In irrigation, improved volume leverage from higher North America irrigation system sales was partially offset by lower project sales and margins in international markets.

Operating expenses of $28.3 million for the three months ended February 28, 2018 increased by $3.8 million over operating expenses in the three months ended February 28, 2017. The increase included $2.3 million of severance costs and professional consulting fees associated with the Company’s Foundation for Growth performance improvement initiative. The remainder of the increase is due primarily to higher professional fees and healthcare costs compared to the prior year. Operating expenses were 22 percent of sales for the three months ended February 28, 2018 compared to 20 percent of sales for the three months ended February 28, 2017.

The Company recorded income tax expense of $3.9 million and $2.6 million for the three months ended February 28, 2018 and February 28, 2017, respectively. The overall income tax rate was 69.4 percent and 34.4 percent for the three months ended February 28, 2018 and February 28, 2017, respectively. Tax expense for the three months ended February 28, 2018 includes $2.6 million of incremental expense resulting from the enactment of U.S. Tax Reform, as more fully explained in Note 4 to the condensed consolidated financial statements.

~~For the Six Months ended February 28, 2018 compared to the Six Months ended February 28, 2017~~

The following section presents an analysis of the Company’s operating results displayed in the condensed consolidated statements of earnings for the six months ended February 28, 2018 and February 28, 2017. It should be read together with the industry segment information in Note 14 to the condensed consolidated financial statements:

Six months ended

Percent

($ in thousands)

February 28,
2018

February 28,
2017

Increase
(Decrease)

Consolidated

Operating revenues

$
254,865

$
234,515

9%

Gross profit

$
67,713

$
61,315

10%

Gross margin

26.6
%

26.1
%

Operating expenses⁽¹⁾

$
54,446

$
50,058

9%

Operating income

$
13,267

$
11,257

18%

Operating margin

5.2
%

4.8
%

Other (expense), net

$
(2,799
)

$
(2,286
)

22%

Income tax expense

$
5,548

$
3,086

80%

Overall income tax rate

53.0
%

34.4
%

Net earnings

$
4,920

$
5,885

-16%

Irrigation Equipment Segment

Segment operating revenues

$
215,218

$
196,061

10%

Segment operating income

$
19,784

$
16,453

20%

Segment operating margin

9.2
%

8.4
%

Infrastructure Products Segment

Segment operating revenues

$
39,647

$
38,454

3%

Segment operating income

$
5,810

$
4,571

27%

Segment operating margin

14.7
%

11.9
%

Operating revenues for the six months ended February 28, 2018 increased nine percent to $254.9 million from $234.5 million for the six months ended February 28, 2017, as irrigation revenues increased $19.2 million and infrastructure revenues increased by $1.2 million. The irrigation segment provided 84 percent of the Company’s revenue during the six months ended February 28, 2018 and February 28, 2017.

~~North America irrigation revenues for the six months ended February 28, 2018 of $146.6 million increased $29.7 million or 25 percent from $116.9 million for the six months ended February 28, 2017.~~ ~~The increase in North American irrigation revenues is due primarily to an increase in irrigation equipment unit volume compared to the prior year period.~~

International irrigation revenues for the six months ended February 28, 2018 of $68.6 million decreased $10.6 million or 13 percent from $79.2 million for the six months ended February 28, 2017. The six month period of the prior year included revenues from projects in developing markets that did not repeat in the current period, while demand in core markets remained stable. ~~The impact of foreign currency translation~~ ~~rates compared to the same prior year period was insignificant~~.

Infrastructure segment revenues for the six months ended February 28, 2018 of $39.6 million increased $1.2 million or three percent from $38.5 million for the six months ended February 28, 2017. The increase resulted from higher Road Zipper System® sales as well as overall increased demand for road safety products compared with the prior year.

Gross profit for the ~~six~~three months ended ~~February 28,~~November 30, 2018 of ~~$67.7~~$28.6 million ~~increased 10~~decreased 12 percent from ~~$61.3~~$32.4 million for the ~~six~~three months ended ~~February 28,~~November 30, 2017. The ~~increase~~decrease in gross profit resulted primarily from ~~higher~~lower revenues, ~~and an increase in gross~~including the impact of the business divestitures. Gross margin ~~to 26.6~~decreased slightly at 25.6 percent of sales for the ~~six~~three months ended ~~February 28,~~November 30, 2018 ~~from 26.1~~compared with 26.0 percent of sales for the ~~six~~three months ended ~~February 28,~~November 30, 2017. Improved gross margin in the infrastructure segment was partially offset by slightly lower gross margin in the irrigation segment. Infrastructure margin improved due to a higher proportion of revenue from Road Zipper System® sales which resulted in an improved margin mix. In the irrigation segment, improved volume leverage from higher irrigation system sales in North America was offset by lower international irrigation sales and changes in the regional mix of sales.

~~The Company’s operating~~Operating expenses of ~~$54.4~~$26.6 million for the ~~six~~three months ended ~~February 28,~~November 30, 2018 increased by ~~$4.4 million~~two percent over operating expenses ~~for~~in the ~~six~~three months ended ~~February 28,~~November 30, 2017. The increase included ~~$2.3~~costs of $4.0 million ~~of severance costs and professional consulting fees associated~~in connection with the Company’s Foundation for Growth ~~performance improvement initiative.~~initiative, of which $3.8 million represents professional consulting fees while the remainder represented severance costs and loss on sale of a business. The ~~remainder~~increase was mainly offset by the impact of the ~~increase is due primarily to higher professional fees and healthcare~~business divestitures. Excluding the impact of the Foundation for Growth costs, ~~compared to the prior year.~~ ~~Operating~~operating expenses were 2120.2 percent of sales for ~~each of~~ the ~~six~~three months ended ~~February 28,~~November 30, 2018 ~~and~~ ~~February 28, 2017~~.compared to 21.0 percent of sales for the three months ended November 30, 2017.

The Company recorded income tax expense of ~~$5.5~~$0.5 million and ~~$3.1~~$1.6 million for the ~~six~~three months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017, respectively. The overall income tax rate was ~~53.0~~27.9 percent and ~~34.4~~33.5 percent for the ~~six~~three months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017, respectively. ~~Tax expense for~~The decrease in the ~~six months ended February 28, 2018 includes $2.6 million of incremental expense resulting~~effective tax rate resulted primarily from the ~~enactment~~reduction of the U.S. corporate income tax rate from 35% to 21% due to U.S. Tax ~~Reform, as more fully explained in Note 4 to the condensed consolidated financial statements.~~Reform.

The Company's cash and cash equivalents totaled ~~$102.2~~$137.2 million at ~~February 28,~~November 30, 2018 compared with ~~$102.8~~$109.5 million at ~~February 28,~~November 30, 2017 and ~~$121.6~~$160.8 million at August 31, ~~2017.~~2018. The Company requires cash for financing its receivables and inventories, paying operating expenses and capital expenditures, and for dividends and share repurchases. The Company meets its liquidity needs and finances its capital expenditures from its available cash and funds provided by operations along with borrowings under its credit arrangements described below. The Company believes its current cash resources, projected operating cash flow, and remaining capacity under its continuing bank lines of credit are sufficient to cover all of its expected working capital needs, planned capital expenditures and dividends. The Company may require additional borrowings to fund potential acquisitions in the future.

The Company’s total cash and cash equivalents held by foreign subsidiaries were approximately ~~$25.4~~$30.2 million, ~~$32.1~~$26.1 million, and ~~$23.5~~$32.6 million as of ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017,~~2018, respectively. The Company considers earnings in foreign subsidiaries to be ~~permanently~~indefinitely reinvested and would need to accrue and pay incremental state, local, and foreign taxes if such earnings were repatriated to the United States. These incremental taxes would be in addition to the one-time mandatory deemed repatriation transition tax of $1.8 million as more fully explained in Note 4 to the condensed consolidated financial statements. The Company does not intend to repatriate the funds and does not expect these funds to have a significant impact on the Company’s overall liquidity.

Net working capital was ~~$208.8~~$242.3 million at ~~February 28,~~November 30, 2018, as compared with ~~$194.9~~$206.1 million at ~~February 28,~~November 30, 2017 and ~~$200.9~~$251.0 million at August 31, ~~2017.~~2018. Cash used in ~~operations~~operating activities totaled ~~$8.9~~$14.3 million during the ~~six~~three months ended ~~February 28,~~November 30, 2018, ~~a decrease~~an increase of ~~$19.6~~$9.3 million compared to cash ~~provided by operations~~used in operating activities of ~~$10.7~~$5.0 million during the ~~six~~three months ended ~~February 28,~~November 30, 2017. This ~~decrease~~increase was primarily due to increased working capital to support higher sales.

Cash flows used in investing activities totaled ~~$6.4~~$4.7 million during the ~~six~~three months ended ~~February 28,~~November 30, 2018 compared to ~~$2.5~~$3.0 million ~~used in investing activities~~ during the ~~six~~three months ended ~~February 28,~~November 30, 2017. The increase is primarily attributable to an increase in capital spending ~~and changes in hedging activity.~~compared to the prior year. Capital spending was ~~$4.7~~$5.7 million in the first ~~six~~three months of fiscal 2018 compared to capital spending of ~~$4.2~~$2.0 million in the same period of the prior fiscal year.

Cash flows used in financing activities totaled ~~$4.6~~$4.3 million during the ~~six~~three months ended ~~February 28,~~November 30, 2018 compared to cash flows used in financing activities of ~~$6.3~~$4.0 million during the ~~six~~three months ended ~~February 28,~~November 30, 2017. ~~The decrease in cash used in financing activities was primarily due to higher proceeds from the exercise of stock options in fiscal 2018 compared to the prior fiscal year.~~

The Company’s capital allocation plan is to continue investing in revenue and earnings growth, combined with a defined process for enhancing returns to stockholders. Under the Company’s capital allocation plan, the priorities for uses of cash include:

Capital expenditures for fiscal ~~2018~~2019 are expected to be between ~~$10.0~~$15.0 million and ~~$12.0~~$20.0 million, including equipment replacement, productivity improvements and ~~productivity improvements.~~new product development. The Company’s management does maintain flexibility to modify the amount and timing of some of the planned expenditures in response to economic conditions.

In the ~~second~~first quarter of fiscal ~~2018,~~2019, the Company paid a quarterly cash dividend of $0.31 per common share, or $3.3 million, to stockholders as compared to $0.30 per common share, or $3.2 million, ~~to stockholders as compared to $0.29 per common share, or $3.1 million,~~ in the ~~second~~first quarter of fiscal ~~2017.~~2018.

The Company’s Board of Directors authorized a share repurchase program of up to $250.0 million of common stock with no expiration date. Under the program, shares may be repurchased in privately negotiated and/or open market transactions as well as under formalized trading plans in accordance with the guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. There were no shares repurchased during the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017, respectively. The remaining amount available under the repurchase program was $63.7 million as of ~~February 28,~~November 30, 2018.

~~Series A,~~ Senior ~~Notes.~~Notes. ~~On February 19, 2015, the~~The Company ~~issued~~has outstanding $115.0 million in aggregate principal amount of Senior Notes, Series A (the “Senior Notes”). The entire principal of the Senior Notes is due and payable on February 19, 2030. Interest on the Senior Notes is payable semi-annually at a fixed annual rate of 3.82 percent and borrowings under the Senior Notes are unsecured. The Company ~~intends to use~~used the proceeds of the sale of the Senior Notes for general corporate purposes, including acquisitions and dividends.

Revolving Credit Facility. ~~On February 18, 2015, the~~The Company ~~entered into~~has outstanding a $50.0 million unsecured Amended and Restated Revolving Credit Facility (the “Revolving Credit Facility”) with Wells Fargo Bank, National Association (“Wells Fargo”). On February 28, 2017, the Company and Wells Fargo entered into an amendment to the Revolving Credit Facility which, among other things, extended the termination date of the agreement from February 18, 2018 to February 28, expiring May 31, 2020. The Company intends to use borrowings under the Revolving Credit Facility for working capital purposes and to fund acquisitions. At ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017, the Company had no outstanding borrowings under the Revolving Credit Facility. The amount of borrowings available at any time under the Revolving Credit Facility is reduced by the amount of standby letters of credit issued by Wells Fargo then outstanding. At ~~February 28,~~November 30, 2018, the Company had the ability to borrow up to $44.6 million under the Revolving Credit Facility, after consideration of outstanding standby letters of credit of $5.4 million. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to LIBOR plus 90 basis points ~~(2.56~~(3.25 percent at ~~February 28,~~November 30, 2018), subject to adjustment as set forth in the loan documents for the Revolving Credit Facility. Interest is paid on a monthly to quarterly basis depending on loan type. The Company also pays an annual commitment fee of 0.25 percent on the unused portion of the Revolving Credit Facility.

Borrowings under the Revolving Credit Facility have equal priority with borrowings under the Company’s Senior Notes. Each of the credit arrangements described above include certain covenants relating primarily to the Company’s financial condition. These financial covenants include a funded debt to EBITDA leverage ratio and an interest coverage ratio. Upon the occurrence of any event of default of these covenants, including a change in control of the Company, all amounts outstanding thereunder may be declared to be immediately due and payable. At ~~February 28,~~November 30, 2018 ~~February 28, 2017~~, and ~~August 31,~~November 30, 2017, the Company was in compliance with all financial loan covenants contained in its credit arrangements in place as of each of those dates.

~~Elecsys~~ Series 2006A Bonds. Elecsys International Corporation, a wholly owned subsidiary of the Company, has outstanding ~~$1.9~~$1.7 million in principal amount of industrial revenue bonds that were issued in 2006 (the “Series 2006A Bonds”). Principal and interest on the Series 2006A Bonds are payable monthly through maturity on September 1, 2026. The interest rate is adjustable every five years based on the yield of the 5-year United States Treasury Notes, plus 0.45 percent (1.92 percent as of ~~February 28,~~November 30, 2018). This rate was adjusted on September 1, 2016 in accordance with the terms of the bonds, and the adjusted rate will be in force until September 1, 2021. The obligations under the Series 2006A Bonds are secured by a first priority security interest in certain real estate.

There have been no material changes in the Company’s contractual obligations and commercial commitments as described in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, ~~2017.~~2018.

There have been no material changes from the Company’s quantitative and qualitative disclosures about market risk previously disclosed in the Company’s most recent Annual Report on Form 10-K. See discussion of the Company’s quantitative and qualitative disclosures about market risk under Part II, Item 7A in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, ~~2017.~~2018.

The Company carried out an evaluation under the supervision and the participation of the Company’s management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of ~~February 28,~~November 30, 2018.

Additionally, the CEO and CFO determined that there has not been any significant change to the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Effective September 1, 2018, the Company implemented ASC Topic 606, Revenue from Contracts with Customers. Management did implement changes to its processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, new training, ongoing contract review requirements, and gathering of information provided for disclosures.

See the disclosure in Note 910 – Commitments and Contingencies to the condensed consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is hereby incorporated herein by reference.

There have been no material changes from risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K. See the discussion of the Company’s risk factors under Part I, Item 1A in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, ~~2017.~~2018.

† Management contract or compensatory plan or arrangement required to be filed as an exhibit hereto pursuant to Item 6 of Part II of Form 10-Q.

** Certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text. This Exhibit has been filed separately with the Securities and Exchange Commission with the redacted text pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 299^th day of ~~March 2018.~~January 2019.

Delaware		47‑0554096
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2222 N. 111th Street, Omaha, Nebraska		68164
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☒		Accelerated filer	☐
Non‑accelerated filer	☐	~~(Do not check if smaller reporting company)~~	Smaller reporting company	☐
Emerging growth company	☐

		Page

Part I – FINANCIAL INFORMATION

	ITEM 1 – Financial Statements

	Condensed Consolidated Statements of Earnings for the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017	3

	Condensed Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017	4

	Condensed Consolidated Balance Sheets as of ~~February 28,~~November 30, 2018, ~~February 28,~~November 30, 2017, and August 31, ~~2017~~2018	5
	Condensed Consolidated Statements of Shareholders’ Equity as of November 30, 2018	56

	Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~February 28,~~November 30, 2018 and ~~February 28,~~November 30, 2017	67

	Notes to the Condensed Consolidated Financial Statements	78

	ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	1620

	ITEM 3 – Quantitative and Qualitative Disclosures about Market Risk	2326

	ITEM 4 – Controls and Procedures	2326

Part II – OTHER INFORMATION

	ITEM 1 – Legal Proceedings	2427

	ITEM 1A – Risk Factors	2427

	ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds	2427

	ITEM 3 – Defaults Upon Senior Securities	2427

	ITEM 4 – Mine Safety Disclosures	2427

	ITEM 5 – Other Information	2427

	ITEM 6 – Exhibits	2528

SIGNATURES		2629

NONCASH INVESTING ACTIVITIES:
Note receivable from sale of business		$	5,823			$	—

($ in thousands)	As Reported		ASC Topic 606 Adjustments			Balance without adoption of ASC Topic 606
Assets
Inventories, net	$	88,912	$	3,669		$	92,581
Other current assets		8,386		(1,059	)		7,327

Liabilities and Stockholders' Equity
Other current liabilities	$	41,480	$	5,489		$	46,969
Retained earnings		483,811		(2,879	)		480,932

Statement of Earnings
Operating revenues	$	111,951	$	(6,168	)	$	105,783
Operating income		2,040		(3,280	)		(1,240	)

	~~Grant Year~~
	~~2018~~
~~Weighted-average dividend yield~~		~~1.3~~	%
~~Weighted-average volatility~~		~~33.1~~	%
~~Risk-free interest rate~~		~~2.6~~	%
~~Weighted-average expected lives~~	~~7 years~~

	Grant Year
	2018			2017
Weighted-average dividend yield		1.4	%		1.3	%
Weighted-average volatility		26.3	%		34.0	%
Risk-free interest rate		3.1	%		2.2	%
Weighted-average expected lives	6 years			7 years

Exhibit
No.		Description

3.1		Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on December 14, 2006.

3.2		Amended and Restated By‑By‑Laws of the Company, effective ~~May 2, 2014,~~October 17, 2018, incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on ~~May 5, 2014.~~October 19, 2018.

4.1		Specimen Form of Common Stock Certificate, incorporated by reference to Exhibit 4(a) of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2006.

10.1*		~~Separation~~Lindsay Corporation Management Incentive Plan (MIP) 2019 Plan Year.† **
10.2*		Lindsay Corporation Policy on Payment of Director Fees and Expenses.
10.3		Form of Indemnification Agreement ~~and General Release, dated January 10, 2018, by and~~ between the Company and ~~David B. Downing.~~its Officers and Directors, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed October 19, 2018.†

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.

32.1*		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.

101*		Interactive Data Files.

			LINDSAY CORPORATION

	By:		/s/ BRIAN L. KETCHAM
	Name:		Brian L. Ketcham
	Title:		Senior Vice President and Chief Financial Officer
			(on behalf of the registrant and as principal financial officer)