Oct 22, 2026 earnings call — Setorial acquisition and Q4 earnings
Q4 total revenue rose 5% to $161.6 million.
Revenue $0.2B (est $0.1B) · EPS $1.10 (est $1.00)
Key quotes
"In North America, we saw encouraging signs of improvement in the fourth quarter with irrigation revenues increasing 11%, driven primarily by higher unit volumes and storm damage."
"Annual recurring revenue grew approximately 11% year-over-year, extending our 5-year CAGR to more than 15%."
"We expect these actions to generate $8 million in net annualized cost reductions after reinvesting a portion of the savings in our highest-priority growth initiatives."
Analyst Q&A 5
Pricing and timing amid higher input costs
Q (Adam Farley · Stifel): The analyst asked if the company expects to be price-cost neutral given renewed inflation and how quickly pricing will flow through. He also asked how domestic irrigation demand might move with crop prices and other factors.
A: Management said they keep passing input cost increases to customers but operating margins are still pressured. Higher North America volume in Q4 helped by fixed cost absorption. They said price realization is delayed and, assuming input costs stabilize, it could take a couple of quarters to flow through.
"So assuming we start to see some stabilization in input costs, we would anticipate it to take a couple of quarters for price realization to actually flow through." — Alicia Pfeifer (CFO)
International projects and highway funding timing
Q (Brian Drab · William Blair): He asked why management said they don't expect a large international project to ship in fiscal '27 and what that implies for international irrigation revenue. He also asked about nuance on highway funding expiring at end of 2026 and whether disbursements could continue.
A: Management said there are active projects in MENA but projects take months from design to confirmed letters of credit, so they do not expect a large project to reach revenue in fiscal '27. They noted last year's $70 million project leaves an immediate hole, and they expect to cover at least half of that with smaller projects and other initiatives. On highway funding, they said the money will carry over and not immediately stop projects, but the funding mechanism is a future risk to watch.
"But right now, we don't see one large one that we expect is going to get right to the finish line and be recognized in revenue in fiscal '27." — Randy Wood (CEO)
Cost cuts, Brazil deal, MENA delay, tax rate
Q (Ryan Connors · Northcoast): He asked for details on the cost-reduction actions: where the cuts were and what functions they hit. He also asked about the Setorial hose-reel acquisition, the timing of the remaining MENA project piece, and the spike in the tax rate.
A: Management said the cost actions were broad: they removed costs across SG&A and COGS, reorganized and simplified the company, and are reinvesting some savings. Alicia said the costs of the program were fully realized in the fiscal 2026 results and those identified savings will start to materialize in fiscal 2027. On Setorial, they view hose reels as a complementary product for small or irregular fields and a way to expand irrigation offerings in Brazil; the remaining MENA revenue is delayed by installation and infrastructure work though equipment is shipped; and the tax increase was a one-time item expected to normalize back to the 24.5%, 25% range.
"So we took cost out of a number of areas of the business, both on an SG&A basis and a COGS basis, without impacting our ability to continue executing our key strategies." — Randy Wood (CEO)
Setorial size and galvanizing capacity/timing
Q (Jon Braatz · Kansas City Capital): He asked how large the Setorial acquisition is and whether the new Nebraska galvanizing facility can take outside business. He also asked when the galvanizing will be operational and whether the R&D drop was from restructuring.
A: Management said Setorial is relatively small on a consolidated basis but could open channel synergies. The new galvanizing plant will have extra capacity to run outside products and absorb overhead. They expect to have zinc molten and dipping before the end of the year, with maybe 30, 60 days before full utilization, and the R&D drop was calendarization, not a major structural change.
"So we should have zinc in there molten and be dipping before the end of the year." — Randy Wood (CEO)
Middle East execution and Brazil election impact
Q (Brett Kearney · American River Opportunity): He asked whether the team's execution and Turkey location help win future projects and affect shipping costs. He also asked what farmers in Brazil are saying ahead of the election and whether that could move irrigation demand.
A: Management said strong execution on past Middle East projects gives them a reputation that helps win future large projects and positions them well geographically to serve North Africa, the Middle East and nearby markets. On Brazil, they said both runoff candidates are pro-agriculture, the right-leaning candidate may be preferred by the ag community, and customers are ready; weather risks like El Niño could make irrigation investment more important this year.
"I think right now, our team has a stellar reputation in that part of the world because of 2 back-to-back projects, significant projects in a region with a lot of complexity." — Randy Wood (CEO)