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<SEC-DOCUMENT>0000950137-06-003568.txt : 20061024
<SEC-HEADER>0000950137-06-003568.hdr.sgml : 20061024
<ACCEPTANCE-DATETIME>20060323095014
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950137-06-003568
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060323

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LINDSAY MANUFACTURING CO
		CENTRAL INDEX KEY:			0000836157
		STANDARD INDUSTRIAL CLASSIFICATION:	FARM MACHINERY & EQUIPMENT [3523]
		IRS NUMBER:				470554096
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2707 NORTH 108TH STREET STE 102
		CITY:			OMAHA
		STATE:			NE
		ZIP:			68644
		BUSINESS PHONE:		4024282131

	MAIL ADDRESS:	
		STREET 1:		2707 NORTH 108TH STREET STE 102
		CITY:			OMAHA
		STATE:			NE
		ZIP:			68644
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
<PAGE>

March 22, 2006

Ms. Angela Crane
Accounting Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Mail Stop 6010

      Re:   Lindsay Manufacturing Company
            Form 10-K for the fiscal year ended August 31, 2005
            filed November 14, 2005
            File No. 1-13419

Dear Ms. Crane:

      We are writing in response to your letter, dated February 28, 2006 (the
"Comment Letter"), regarding the Annual Report on Form 10-K filed by Lindsay
Manufacturing Company on November 14, 2005 (the "10-K"). Our responses to the
Staff's comments set forth in the Comment Letter are set forth below and are
preceded in each case by a recitation of the Staff's comment.

COMMENT NO. 1:    We see your critical accounting policy regarding revenue
                  recognition. However, the disclosure merely repeats the
                  policies from your significant accounting policies footnote
                  without elaboration. Please expand in future filings to
                  describe the specific factors that in your view make it
                  critical. Discuss the nature of estimates and uncertainties
                  about those estimates inherent to your revenue recognition
                  policy, including how you make those estimates. Discuss how
                  different assumptions, methods or conditions might effect your
                  financial statements.

RESPONSE NO. 1:   Approximately 90% of Lindsay Manufacturing Company's (the
                  "Company") revenue is recognized in accordance with the
                  invoiced shipping terms as discussed in the 10-K. Recognizing
                  revenue under this policy does not require a significant
                  amount of estimates. In addition, rebates, cash discounts, and
                  returns are not significant. A smaller portion approximately
                  10% of the Company's revenue is recognized on an extended
                  terms basis. The extended terms basis also does not require a
                  significant amount of estimates and does not pose more
                  uncertainty in the recognition of revenue. The criteria of SAB
                  104 is applied for proper revenue recognition as it relates to
                  all revenue recognition. In each case, evidence of an
                  arrangement exists, delivery has occurred or services have
                  been rendered, prices are fixed and determinable and
                  collectibility is reasonably assured. Based on this analysis
                  the Company

<PAGE>

Ms. Angela Crane
Securities and Exchange Commission
March 22, 2006
Page 2

                  does not believe that its revenue recognition policy meets the
                  criteria of a critical accounting policy and will remove the
                  disclosure in future filings. The Company had previously
                  included the revenue recognition policy in its critical
                  accounting policies due to the level of scrutiny revenue
                  recognition has recently received.

COMMENT NO. 2:    We note that you entered into a consent decree with the U.S.
                  Environmental Protection Agency concerning groundwater
                  contamination at your Lindsay, Nebraska facility. Please tell
                  us, and in future filings provide more details of the terms of
                  the consent degree that you entered into with the EPA and why
                  this will not materially impact your results. Please note
                  that, under SAB Topic 5-Y, a statement that the contingency is
                  not expected to be material does not satisfy the requirements
                  of SFAS 5 if there is at least a reasonable possibility that a
                  loss may have been incurred and the amount of that loss would
                  be material to a decision to buy or sell the company's
                  securities. Please advise us why you do not believe that
                  additional disclosures should be provided in the footnotes to
                  the financial statements or in MD&A.

RESPONSE NO. 2:   The Company has taken the SEC's comment under consideration
                  and will provide the following additional disclosure in the
                  footnotes to the consolidated financial statements in future
                  filings.

                  In 1992, the company entered into a consent decree with the
                  Environmental Protection Agency of the United States
                  Government ("the EPA") in which it committed to remediate
                  environmental contamination of the groundwater that was
                  discovered in 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 chemicals in the groundwater. In
                  2003, a second Five Year Review of the status of the
                  remediation of the contamination of the site was conducted by
                  the Company and the EPA. As a result of this review, the EPA
                  issued a letter placing the Company on notice that additional
                  remediation actions were required. The Company and its
                  environmental consultants have completed and submitted a
                  supplemental remedial action work plan that, when implemented,
                  will allow the Company and the EPA to better identify the
                  boundaries of the contaminated groundwater and will allow the
                  Company and the EPA to more effectively assure that the
                  contaminated groundwater is being contained by current and
                  planned additional wells that pump and aerate it. The Company
                  has been able to reasonably estimate the cost of completing
                  the remediation actions defined in the supplemental remedial
                  action work plan. Substantially all remediation actions were
                  completed in fiscal 2004 and the Company expects to complete
                  the outstanding actions in fiscal 2006.

<PAGE>

Ms. Angela Crane
Securities and Exchange Commission
March 22, 2006
Page 3

                  Related liabilities recognized were $133,000 and $XXXX at
                  August 31, 2005 and 2006, respectively

COMMENT NO. 3     We note significant fourth-quarter LIFO inventory adjustments
                  and physical inventory adjustments that affected earnings in
                  2005 and 2004. Please tell us, and disclose in future filings,
                  the facts and circumstances of these charges. Your disclosure
                  should explain why the fourth quarters of 2005 and 2004 were
                  the proper periods to record the charges and why these
                  adjustments should not be recorded in prior periods.

RESPONSE NO. 3:   The favorable $495,000 last-in-first-out ("LIFO") adjustment
                  at fiscal year-end 2005 was due to a change in mix within our
                  historical LIFO inventory pool. Overall first-in-first-out
                  ("FIFO") inventory balances were similar to fiscal 2005
                  levels, however, FIFO inventory quantity increases in aluminum
                  were offset by decreases in steel component inventory.
                  Aluminum carries LIFO costs which are very similar to FIFO
                  costs due to fact that it is tied to new business, which has
                  been started in fiscal 2004, and thus the base year index is
                  relatively recent. Steel component inventory carries FIFO
                  costs that are much greater than LIFO costs due to inflation
                  in steel costs since the base year index was established. The
                  year-end 2004 LIFO unfavorable adjustment of $1,380,000 was
                  due to a higher level of steel inventory as compared to fiscal
                  2003 levels. These adjustments were recorded in the fiscal 4th
                  quarter because inventories are at their lowest level. This is
                  due to cyclical and seasonal nature of the business and
                  corresponds to sales being at their lowest levels. Typically
                  inventories are higher in the other quarters due to forward
                  buys supporting higher level of sales and are not
                  representative of year-end balances.

                  The favorable physical inventory adjustment at year-end 2005
                  of $460,000 was the result of our annual physical inventory
                  that takes place at the end of the fiscal year and was caused
                  by several projects focused at improving material control and
                  utilization. The 2004 unfavorable physical inventory
                  adjustment of $330,000 was the result of the annual physical
                  inventory and was primarily related to the Brazilian
                  operations of the Company.

                  The Company's process is to analyze LIFO on a quarterly basis,
                  while projecting the year-end LIFO reserve requirement. At
                  year-end the actual LIFO calculation is performed and the
                  adjustment is recorded. The Company believes that this
                  approach is appropriate.

<PAGE>

Ms. Angela Crane
Securities and Exchange Commission
March 22, 2006
Page 4

                  Proposed additional disclosure in future filings:

                  The physical inventory adjustment was recorded in the 4th
                  fiscal quarter due to inventory being at its lowest level.
                  This is a result of the seasonal nature of the irrigation
                  business and coincides with sales being at their lowest level.
                  The Company's process is to analyze LIFO on a quarterly basis,
                  while projecting the year-end LIFO reserve requirement. At
                  year-end the actual LIFO calculation is performed and the
                  adjustment is recorded.

COMMENT NO. 4:    In this regard, tell us more about the reserve for obsolete or
                  slow moving inventory. Tell us your method of measuring
                  inventory obsolescence. Explain if your policy is the same for
                  all inventory items and categories. Confirm that all items are
                  completely written-off. For any items retained, tell us what
                  consideration have you given to the fact that subsequent sales
                  of these items could materially impact future gross profit
                  margins. With respect to these valuation allowances, confirm
                  that inventory impairment charges establish a new cost basis
                  for inventory and that charges are not subsequently reversed
                  to income even if circumstances later suggest that increased
                  carrying amounts are recoverable. Refer to SAB Topic 5-BB.

RESPONSE NO. 4:   The reserve for obsolete and slow moving inventory represents
                  those inventory items with over one year's supply based on
                  historical usage, whereby, the company estimates that it will
                  not be able to dispose of the identified inventory at or above
                  standard cost levels. For these items the estimated net
                  realizable value from disposition is reflected in the
                  Company's inventory value instead of its cost. In addition,
                  the inventory valuation is allocated on an item by item basis.
                  Once disposition of an item occurs, the net realizable value
                  is recorded to cost of goods sold and is released from
                  inventory value on the balance sheet. For items that are
                  retained in inventory the Company's net realizable value for
                  impaired inventory is not increased at any time during its
                  retention. This policy is the same for all items and
                  categories of inventory. For items that are retained but carry
                  an estimated net realizable value less than cost, inventory is
                  valued on the balance sheet at net realizable value, thereby,
                  preventing the risk of material impact on future gross profit
                  margins.

      Lindsay hereby acknowledges that:

      -     it is responsible for the adequacy and accuracy of the disclosure in
            the filings;

      -     Staff comments or changes to disclosure in response to Staff
            comments in the filings reviewed by the staff do not foreclose the
            Commission from taking any action with respect to the filing; and

      -     it may not assert Staff comments as a defense in any proceeding
            initiated by the Commission or any person under the federal
            securities laws of the United States.

<PAGE>

Ms. Angela Crane
Securities and Exchange Commission
March 22, 2006
Page 5

      We trust that the forgoing is responsive to your comments. If you have any
questions regarding the foregoing or require further information, please contact
the undersigned at (402) 827-6325 or our outside counsel Steven Amen of the
Kutak Rock LLP law firm at (402) 231-8721.

                                      Sincerely,

                                      LINDSAY MANUFACTURING COMPANY

                                      By: /s/ David B. Downing
                                          --------------------------------------
                                          David B. Downing, Chief Financial
                                          Officer
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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