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Valmont Reports Second Quarter 2022 Results and Raises Full-Year Guidance

Achieved Record Sales and Earnings per Share

Valmont Industries, Inc. (NYSE: VMI), a global leader that provides vital infrastructure and advances agricultural productivity while driving innovation through technology, today reported financial results for the second quarter ended June 25, 2022.

Second Quarter 2022 Highlights (all metrics compared to Second Quarter 2021 unless otherwise noted)

  • Record Net Sales of $1.1 billion increased 26.9%
  • Operating Income increased to $118.7 million, or 10.5% of net sales ($122.9 million or 10.8% adjusted1) compared to $82.6 million or 9.2% of net sales ($90.9 million or 10.2% adjusted1)
  • Record Diluted Earnings per Share (EPS) of $3.53 ($3.70 adjusted1) compared to $2.89 ($3.06 adjusted1)
  • Benefited from strong market demand across the portfolio, leading to a record backlog of $2.0 billion, an increase of 24.7% since the end of fiscal 2021, and an increase of 13.4% since the end of first quarter 2022
  • Returned $21.5 million to shareholders through dividends and share repurchases
  • Incurred an effective tax rate of 27.6% compared to 19.0% in 2021, primarily due to the geographic mix of earnings and an incremental U.K. tax benefit in 2021 that did not repeat in 2022
  • Commenced production at the newly-built spun concrete pole manufacturing facility in Bristol, Indiana, that will be accompanied by a 500-kilowatt solar array expected to fully offset the site’s energy consumption
  • Acquired a majority interest in ConcealFab, a leader in 5G infrastructure and passive intermodulation (PIM) mitigation solutions for the telecommunications market

Key Financial Metrics

Second Quarter 2022

GAAP

 

Adjusted1

(000's except per share amounts)

06/25/2022

2Q 2022

 

06/26/2021

2Q 2021

 

 

vs. 2Q 2021

 

06/25/2022

2Q 2022

 

06/26/2021

2Q 2021

 

vs. 2Q 2021

Net Sales

$

1,135,532

 

 

$

894,629

 

26.9%

 

$

1,135,532

 

 

$

894,629

 

26.9%

Operating Income

 

118,719

 

 

 

82,625

 

43.7%

 

 

122,859

 

 

 

90,850

 

35.2%

Operating Income as a % of Net Sales

 

10.5

%

 

 

9.2

%

 

 

 

10.8

%

 

 

10.2

%

 

Net Earnings

 

76,108

 

 

 

62,110

 

22.5%

 

 

79,682

 

 

 

65,752

 

21.2%

Diluted Earnings Per Share

$

3.53

 

 

$

2.89

 

22.1%

 

$

3.70

 

 

$

3.06

 

20.9%

Average Shares Outstanding

 

21,541

 

 

 

21,469

 

 

 

 

21,541

 

 

 

21,469

 

 

 

 

 

 

 

 

 

 

 

 

YTD 2022

GAAP

 

Adjusted1

(000's except per share amounts)

06/25/2022

FY 2022

 

06/26/2021

FY 2021

 

vs. FY 2021

 

06/25/2022

FY 2022

 

06/26/2021

FY 2021

 

vs. FY 2021

Net Sales

$

2,116,352

 

 

$

1,669,515

 

26.8%

 

$

2,116,352

 

 

$

1,669,515

 

26.8%

Operating Income

 

213,561

 

 

 

159,836

 

33.6%

 

 

221,844

 

 

 

168,061

 

32.0%

Operating Income as a % of Net Sales

 

10.1

%

 

 

9.6

%

 

 

 

10.5

%

 

 

10.1

%

 

Net Earnings

 

138,419

 

 

 

117,124

 

18.2%

 

 

145,570

 

 

 

120,776

 

20.5%

Diluted Earnings Per Share

$

6.43

 

 

$

5.46

 

17.8%

 

$

6.77

 

 

$

5.63

 

20.2%

Average Shares Outstanding

 

21,516

 

 

 

21,449

 

 

 

 

21,516

 

 

 

21,449

 

 

"We delivered record quarterly revenue, an increase of 27% year-over-year, and record adjusted earnings per share that increased 21%," said Stephen G. Kaniewski, President and Chief Executive Officer. "Operating margin improvement was driven by our ability to successfully execute on pricing strategies, higher volumes, and better fixed-cost leverage. We continue to prioritize actions to better serve our customers by leveraging our global manufacturing footprint, strategically expanding capacity in key growth markets, and implementing sourcing strategies to help mitigate continuing supply chain volatility. We are seeing strong demand for our products and solutions across global infrastructure and agriculture markets and our Valmont teams around the world are doing an excellent job of delivering value to our customers every day. We are executing consistently on our strategy of creating sustainable growth across our businesses and long-term value for our shareholders."

Second Quarter 2022 Segment Review

Infrastructure (67.0% of Net Sales)

Products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation and telecommunications, and coatings services to preserve and protect metal products

Sales of $765.0 million grew 23.9% year-over-year with double-digit sales growth across all product lines, net of a 2.5% unfavorable foreign currency translation impact. Higher sales were driven by favorable pricing globally, primarily in the Transmission, Distribution and Substation (TD&S), Lighting and Transportation (L&T), and Telecommunications product lines, and higher volumes, notably in the Renewable Energy, Telecommunications and TD&S product lines.

Operating Income improved to $84.6 million or 11.1% of net sales compared to $61.6 million or 10.0% ($67.7 million or 11.0% adjusted1) in 2021, driven by favorable pricing and improved fixed-cost leverage, including SG&A.

On June 1, 2022, Valmont acquired a majority interest in ConcealFab, advancing the Company's growth strategy to deliver industry-leading 5G infrastructure solutions for the telecommunications market.

Agriculture (33.0% of Net Sales)

Center pivot and linear irrigation equipment for agricultural markets, including parts and tubular products; advanced technology solutions for precision agriculture

Sales of $377.8 million increased 34.0% year-over-year, led by higher average selling prices of irrigation equipment globally and higher volumes, notably in North America and Brazil. In Brazil, revenues grew more than $40.0 million year-over-year, demonstrating robust market demand for irrigation equipment and ag solar products.

Operating Income was $58.0 million, or 15.5% of net sales ($62.2 million or 16.6% adjusted1) compared to $42.0 million or 15.0% of net sales ($42.9 million or 15.3% adjusted1) in 2021. The benefit of higher average selling prices and additional volume leverage was partially offset by higher SG&A, including incremental R&D expense for technology investments.

Realignment of Reporting Segments

On April 6, 2022, the Company announced that it had realigned its reporting segment structure beginning with its first quarter 2022 financial results. The new reporting segments are Infrastructure (includes the previous segments of Utility Support Structures, Engineered Support Structures and Coatings) and Agriculture (a renaming of the previous Irrigation segment). A recast of comparable prior-year segment financial information for 2020 and 2021 affected by the change is available in a summary presentation on the Investors page at Valmont.com. The Company's historical GAAP balance sheet, income statement and cash flows are not affected.

Balance Sheet, Liquidity and Capital Allocation

The Company generated year-to-date operating cash flows of $68.0 million through strong earnings and managing working capital to mitigate supply chain volatility while supporting strong revenue growth. At the end of the second quarter, cash and cash equivalents were $154.6 million. Valmont purchased approximately $10.0 million of company stock in the second quarter and approximately $112.0 million remains on the current authorization with no expiration.

Increasing Full Year 2022 Financial Outlook and Updating Key Assumptions

The Company is increasing its 2022 full-year net sales and diluted earnings per share outlook from the previous indications that were communicated last quarter, and is providing updated key assumptions for the year.

2022 Full Year Financial Outlook

Previous Outlook

Revised Outlook

Net Sales Growth (vs. PY)

11% to 17%

20% to 21%

GAAP Diluted EPS1

$12.30 to $12.80

$12.90 to $13.30

Adjusted Diluted EPS1

$13.00 to $13.50

$13.60 to $14.00

Tax Rate

~ 26.5%

~ 27.5%

FX Translation Impact on Net Sales

0.0%

~ (2.0%)

  • Revised net sales growth is primarily due to favorable pricing to offset continued broad-based inflation
  • Now expecting a full-year tax rate of ~27.5% due to the geographic mix of earnings
  • Now expecting a ~2.0% unfavorable foreign currency translation impact on net sales vs. prior year
  • Capital expenditures continue to be in the range of $110.0 - $120.0 million to support strategic growth and Industry 4.0 advanced manufacturing initiatives

Kaniewski continued, "We've had a very strong first half of the year and are increasing our full-year outlook based on this performance and several other positive factors, including our record backlog of $2.0 billion, which reflects continued strong, global market drivers across our businesses and provides significant momentum as we look ahead to the balance of 2022 and into 2023. Additionally, broad-based market strength for infrastructure products and solutions that help deliver safety, security and reliability while also participating in the change to renewable generation sources across our markets, are driving robust demand globally. Favorable agricultural market fundamentals and continued heightened concerns over food security have led to increasing activity levels across global markets. While inflation and supply chain volatility continue, we remain focused on what we can control: leveraging the strength of our organization to deliver innovative products and solutions to our customers, maintaining cost discipline, advancing operational excellence, and executing on our pricing strategies. Additionally, our balance sheet is strong and gives us flexibility to execute our long-term strategic plan. Through our diversified business portfolio, organizational emphasis on ESG principles and return on invested capital focus, we are well-positioned to drive sustainable, profitable growth and deliver long-term value to our shareholders."

A live audio discussion with Stephen G. Kaniewski, President and Chief Executive Officer, and Avner M. Applbaum, Executive Vice President and Chief Financial Officer, will be accessible by telephone on Thursday, July 21, 2022 at 8:00 a.m. CDT by dialing 1-844-200-6205 or 1-646-904-5544 using access code 849925, or via webcast by pointing browsers to this link: Valmont Industries 2Q 2022 Earnings Conference Call. A slide presentation will simultaneously be available for download on the Investors page of valmont.com. A replay of the event can be accessed two hours after the call at the above link or by telephone at 1-866-813-9403 or 1-929-458-6194. Please use access code 917263. The replay will be available through 5:00 p.m. CDT on July 28, 2022.

About Valmont Industries, Inc.

For over 75 years, Valmont® has been a global leader in creating vital infrastructure and advancing agricultural productivity. Today, we remain committed to doing more with less by innovating through technology. Learn more about how we’re Conserving Resources. Improving Life.® at valmont.com.

Concerning Forward-Looking Statements

This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which Valmont operates, as well as management’s perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. As you read and consider this release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond Valmont’s control) and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Valmont’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include among other things, the continuing and developing effects of COVID-19 including the effects of the outbreak on the general economy and the specific economic effects on the Company’s business and that of its customers and suppliers, risk factors described from time to time in Valmont’s reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw material, availability and market acceptance of new products, product pricing, domestic and international competitive environments, geopolitical risks, and actions and policy changes of domestic and foreign governments. The Company cautions that any forward-looking statement included in this press release is made as of the date of this press release and the Company does not undertake to update any forward-looking statement.

1 Please see Reg G reconciliation to GAAP measures at end of document

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(unaudited)

 

 

Second Quarter

 

Year-to-Date

 

13 Weeks Ended

 

26 Weeks Ended

 

 

 

 

 

 

 

 

 

25-Jun-22

 

26-Jun-21

 

25-Jun-22

 

26-Jun-21

Net sales

$

1,135,532

 

 

$

894,629

 

 

$

2,116,352

 

 

$

1,669,515

 

Cost of sales

 

842,931

 

 

 

664,982

 

 

 

1,574,565

 

 

 

1,235,314

 

Gross profit

 

292,601

 

 

 

229,647

 

 

 

541,787

 

 

 

434,201

 

Selling, general and administrative expenses

 

173,882

 

 

 

147,022

 

 

 

328,226

 

 

 

274,365

 

Operating income

 

118,719

 

 

 

82,625

 

 

 

213,561

 

 

 

159,836

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

 

(11,386

)

 

 

(10,436

)

 

 

(22,649

)

 

 

(20,435

)

Interest income

 

285

 

 

 

186

 

 

 

512

 

 

 

497

 

Gain (loss) on investments (unrealized)

 

(2,342

)

 

 

1,177

 

 

 

(3,405

)

 

 

1,068

 

Other

 

2,073

 

 

 

4,204

 

 

 

5,715

 

 

 

7,653

 

Other income (expense), net

 

(11,370

)

 

 

(4,869

)

 

 

(19,827

)

 

 

(11,217

)

Earnings before income taxes

 

107,349

 

 

 

77,756

 

 

 

193,734

 

 

 

148,619

 

Income tax expense

 

29,587

 

 

 

14,740

 

 

 

52,708

 

 

 

30,242

 

Equity in loss of nonconsolidated subsidiaries

 

(555

)

 

 

(359

)

 

 

(913

)

 

 

(719

)

Net earnings

 

77,207

 

 

 

62,657

 

 

 

140,113

 

 

 

117,658

 

Less: earnings attributable to non-controlling interests

 

(1,099

)

 

 

(547

)

 

 

(1,694

)

 

 

(534

)

Net earnings attributable to Valmont Industries, Inc.

$

76,108

 

 

$

62,110

 

 

$

138,419

 

 

$

117,124

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Basic

 

21,313

 

 

 

21,193

 

 

 

21,296

 

 

 

21,186

 

Earnings per share - Basic

$

3.57

 

 

$

2.93

 

 

$

6.50

 

 

$

5.53

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Diluted

 

21,541

 

 

 

21,469

 

 

 

21,516

 

 

 

21,449

 

Earnings per share - Diluted

$

3.53

 

 

$

2.89

 

 

$

6.43

 

 

$

5.46

 

 

 

 

 

 

 

 

 

Cash dividends per share

$

0.55

 

 

$

0.50

 

 

$

1.10

 

 

$

1.00

 

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(Unaudited)

 

 

Second Quarter

 

Year-to-Date

 

13 Weeks Ended

 

26 Weeks Ended

 

25-Jun-22

 

26-Jun-21

 

25-Jun-22

 

26-Jun-21

Net sales

 

 

 

 

 

 

 

Infrastructure

$

764,950

 

 

$

617,604

 

 

$

1,445,676

 

 

$

1,167,250

 

Agriculture

 

377,765

 

 

 

281,965

 

 

 

684,345

 

 

 

511,629

 

Total

 

1,142,715

 

 

 

899,569

 

 

 

2,130,021

 

 

 

1,678,879

 

Less: Intersegment sales

 

(7,183

)

 

 

(4,940

)

 

 

(13,669

)

 

 

(9,364

)

Total

$

1,135,532

 

 

$

894,629

 

 

$

2,116,352

 

 

$

1,669,515

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

Infrastructure

$

84,643

 

 

$

61,550

 

 

$

162,150

 

 

$

115,999

 

Agriculture

 

58,046

 

 

 

41,984

 

 

 

95,521

 

 

 

80,732

 

Corporate

 

(23,970

)

 

 

(20,909

)

 

 

(44,110

)

 

 

(36,895

)

Total

$

118,719

 

 

$

82,625

 

 

$

213,561

 

 

$

159,836

 

Valmont has aggregated its business segments into two global reportable segments as follows.

Infrastructure: This segment consists of the manufacture and distribution of products and solutions to serve infrastructure markets of utility, renewable energy, lighting, transportation and telecommunications, and coatings services to preserve and protect metal products.

Agriculture: This segment consists of the manufacture of center pivot and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(Unaudited)

 

 

Thirteen weeks ended June 25, 2022

 

Infrastructure

 

Agriculture

 

Intersegment

Sales

 

Consolidated

Geographical market:

 

 

 

 

 

 

 

North America

$

559,864

 

$

203,488

 

$

(6,716

)

 

$

756,636

International

 

205,086

 

 

 

174,277

 

 

 

(467

)

 

 

378,896

 

Total

$

764,950

 

 

$

377,765

 

 

$

(7,183

)

 

$

1,135,532

 

 

 

 

 

 

 

 

 

Product line:

 

 

 

 

 

 

 

Transmission, Distribution and Substation

$

295,835

 

 

$

 

 

$

 

 

$

295,835

 

Lighting and Transportation

 

246,652

 

 

 

 

 

 

 

 

 

246,652

 

Coatings

 

90,321

 

 

 

 

 

 

(4,200

)

 

 

86,121

 

Telecommunications

 

78,539

 

 

 

 

 

 

 

 

 

78,539

 

Renewable Energy

 

53,603

 

 

 

 

 

 

 

 

 

53,603

 

Irrigation Equipment and Parts, excluding Technology

 

 

 

 

347,585

 

 

 

(2,983

)

 

 

344,602

 

Technology Products and Services

 

 

 

 

30,180

 

 

 

 

 

 

30,180

 

Total

$

764,950

 

 

$

377,765

 

 

$

(7,183

)

 

$

1,135,532

 

 

Thirteen weeks ended June 26, 2021

 

Infrastructure

 

Agriculture

 

Intersegment

Sales

 

Consolidated

Geographical market:

 

 

 

 

 

 

 

North America

$

421,168

 

$

156,037

 

$

(4,940

)

 

$

572,265

International

 

196,436

 

 

 

125,928

 

 

 

 

 

 

322,364

 

Total

$

617,604

 

 

$

281,965

 

 

$

(4,940

)

 

$

894,629

 

 

 

 

 

 

 

 

 

Product line:

 

 

 

 

 

 

 

Transmission, Distribution and Substation

$

220,458

 

 

$

 

 

$

 

 

$

220,458

 

Lighting and Transportation

 

215,247

 

 

 

 

 

 

 

 

 

215,247

 

Coatings

 

80,346

 

 

 

 

 

 

(2,796

)

 

 

77,550

 

Telecommunications

 

54,102

 

 

 

 

 

 

 

 

 

54,102

 

Renewable Energy

 

47,451

 

 

 

 

 

 

 

 

 

47,451

 

Irrigation Equipment and Parts, excluding Technology

 

 

 

 

253,450

 

 

 

(2,144

)

 

 

251,306

 

Technology Products and Services

 

 

 

 

28,515

 

 

 

 

 

 

28,515

 

Total

$

617,604

 

 

$

281,965

 

 

$

(4,940

)

 

$

894,629

 

 

Twenty-six weeks ended June 25, 2022

 

Infrastructure

 

Agriculture

 

Intersegment

Sales

 

Consolidated

Geographical market:

 

 

 

 

 

 

 

North America

$

1,065,844

 

$

385,743

 

$

(13,202

)

 

$

1,438,385

International

 

379,832

 

 

 

298,602

 

 

 

(467

)

 

 

677,967

 

Total

$

1,445,676

 

 

$

684,345

 

 

$

(13,669

)

 

$

2,116,352

 

 

 

 

 

 

 

 

 

Product line:

 

 

 

 

 

 

 

Transmission, Distribution and Substation

$

577,435

 

 

$

 

 

$

 

 

$

577,435

 

Lighting and Transportation

 

459,419

 

 

 

 

 

 

 

 

 

459,419

 

Coatings

 

172,297

 

 

 

 

 

 

(7,301

)

 

 

164,996

 

Telecommunications

 

139,935

 

 

 

 

 

 

 

 

 

139,935

 

Renewable Energy

 

96,590

 

 

 

 

 

 

 

 

 

96,590

 

Irrigation Equipment and Parts, excluding Technology

 

 

 

 

625,619

 

 

 

(6,368

)

 

 

619,251

 

Technology Products and Services

 

 

 

 

58,726

 

 

 

 

 

 

58,726

 

Total

$

1,445,676

 

 

$

684,345

 

 

$

(13,669

)

 

$

2,116,352

 

 

Twenty-six weeks ended June 26, 2021

 

Infrastructure

 

Agriculture

 

Intersegment

Sales

 

Consolidated

Geographical market:

 

 

 

 

 

 

 

North America

$

806,902

 

$

278,788

 

$

(9,364

)

 

$

1,076,326

International

 

360,348

 

 

 

232,841

 

 

 

 

 

 

593,189

 

Total

$

1,167,250

 

 

$

511,629

 

 

$

(9,364

)

 

$

1,669,515

 

 

 

 

 

 

 

 

 

Product line:

 

 

 

 

 

 

 

Transmission, Distribution and Substation

$

428,902

 

 

$

 

 

$

 

$

428,902

 

Lighting and Transportation

 

391,763

 

 

 

 

 

 

 

 

391,763

 

Coatings

 

155,139

 

 

 

 

 

 

(5,997

)

 

149,142

 

Telecommunications

 

99,742

 

 

 

 

 

 

 

 

99,742

 

Renewable Energy

 

91,704

 

 

 

 

 

 

 

 

91,704

 

Irrigation Equipment and Parts, excluding Technology

 

 

 

 

460,708

 

 

 

(3,367

)

 

457,341

 

Technology Products and Services

 

 

 

 

50,921

 

 

 

 

 

50,921

 

Total

$

1,167,250

 

 

$

511,629

 

 

$

(9,364

)

 

$

1,669,515

 

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

 

 

25-Jun-22

 

25-Dec-21

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

154,579

 

$

177,232

Accounts receivable, net

 

627,876

 

 

571,593

Inventories

 

786,600

 

 

728,834

Contract asset - costs and profits in excess of billings

 

200,522

 

 

142,643

Prepaid expenses and other assets

 

87,070

 

 

83,646

Refundable income taxes

 

 

 

8,815

Total current assets

 

1,856,647

 

 

1,712,763

Property, plant and equipment, net

 

607,563

 

 

598,605

Goodwill and other assets

 

1,210,542

 

 

1,135,881

 

$

3,674,752

 

$

3,447,249

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Current installments of long-term debt

$

3,018

 

$

4,884

Notes payable to banks

 

4,428

 

 

13,439

Accounts payable

 

388,498

 

 

347,841

Accrued expenses

 

237,222

 

 

253,330

Contract liability - billings in excess of costs and earnings

 

175,814

 

 

135,746

Income taxes payable

 

10,036

 

 

Dividend payable

 

11,743

 

 

10,616

Total current liabilities

 

830,759

 

 

765,856

Long-term debt, excluding current installments

 

995,647

 

 

947,072

Operating lease liabilities

 

154,799

 

 

147,759

Other long-term liabilities

 

140,397

 

 

172,965

Shareholders' equity

 

1,553,150

 

 

1,413,597

 

$

3,674,752

 

$

3,447,249

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

 

 

26 Weeks Ended

 

25-Jun-22

 

26-Jun-21

Cash flows from operating activities

 

 

 

Net Earnings

$

140,113

 

 

$

117,658

 

Depreciation and amortization

 

48,012

 

 

 

44,063

 

Contribution to defined benefit pension plan

 

(17,155

)

 

 

(970

)

Change in working capital

 

(115,170

)

 

 

(140,014

)

Other

 

12,219

 

 

 

49,448

 

Net cash flows from operating activities

 

68,019

 

 

 

70,185

 

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of property, plant, and equipment

 

(49,676

)

 

 

(48,824

)

Acquisitions

 

(39,297

)

 

 

(312,500

)

Other

 

1,162

 

 

 

(74

)

Net cash flows from investing activities

 

(87,811

)

 

 

(361,398

)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from long-term borrowings

 

201,462

 

 

 

149,342

 

Principal payments on long-term borrowings

 

(156,973

)

 

 

(15,421

)

Net (payments)/proceeds on short-term borrowings

 

(9,155

)

 

 

(5,049

)

Purchase of treasury shares

 

(9,776

)

 

 

(21,600

)

Purchase of noncontrolling interest

 

(4,292

)

 

 

 

Dividends paid

 

(22,337

)

 

 

(20,181

)

Other

 

1,641

 

 

 

2,969

 

Net cash flows from financing activities

 

570

 

 

 

90,060

 

Effect of exchange rates on cash and cash equivalents

 

(3,431

)

 

 

(288

)

Net change in cash and cash equivalents

 

(22,653

)

 

 

(201,441

)

Cash and cash equivalents - beginning of year

 

177,232

 

 

 

400,726

 

Cash and cash equivalents - end of period

$

154,579

 

 

$

199,285

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED RESULTS

REGULATION G RECONCILIATION

(Dollars in thousands, except per share amounts)

(unaudited)

The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2022 results. We believe the adjustments for Prospera allow for a better comparison of future Agriculture segment performance as compared to historical results. The non-GAAP tables below also disclose the impact of a write off a receivable following arbitration of a commercial transaction from 2014, acquisition diligence and restructuring expenses on segment operating income and net earnings as well as the impact of the U.K. tax rate change on net earnings (adjusts GAAP tax rate from 19.0% to 22.5%) on fiscal 2021 results. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings and operating income to be taken into consideration by management and investors with the related reported GAAP measures.

 

Thirteen weeks ended June 25, 2022

 

Diluted earnings per share

 

Twenty-six weeks ended June 25, 2022

 

Diluted earnings per share

Net earnings attributable to Valmont Industries, Inc. - as reported

$

76,108

 

 

$

3.53

 

 

$

138,419

 

 

$

6.43

 

Prospera intangible asset amortization

 

1,645

 

 

 

0.08

 

 

 

3,290

 

 

 

0.15

 

Stock-based compensation - Prospera

 

2,495

 

 

 

0.12

 

 

 

4,993

 

 

 

0.23

 

Total Adjustments, pre-tax1

 

4,140

 

 

 

0.19

 

 

 

8,283

 

 

 

0.38

 

Tax effect of adjustments2

 

(566

)

 

 

(0.03

)

 

 

(1,132

)

 

 

(0.05

)

Net earnings attributable to Valmont Industries, Inc. - Adjusted1

$

79,682

 

 

$

3.70

 

 

$

145,570

 

 

$

6.77

 

Average shares outstanding (000’s) - Diluted

 

 

 

21,541

 

 

 

 

 

21,516

 

 

Thirteen weeks ended June 26, 2021

 

Diluted earnings per share

 

Twenty-six weeks ended June 26, 2021

 

Diluted earnings per share

Net earnings attributable to Valmont Industries, Inc. - as reported

$

62,110

 

 

$

2.89

 

 

$

117,124

 

 

$

5.46

 

Write-off of a receivable, pre-tax

 

5,545

 

 

 

0.26

 

 

 

5,545

 

 

 

0.26

 

Acquisition diligence expense, pre-tax

 

1,120

 

 

 

0.05

 

 

 

1,120

 

 

 

0.05

 

Restructuring expense, pre-tax

 

1,560

 

 

 

0.07

 

 

 

1,560

 

 

 

0.07

 

Total Adjustments, pre-tax1

 

8,225

 

 

 

0.38

 

 

 

8,225

 

 

 

0.38

 

Change in U.K. statutory tax rate

 

(2,819

)

 

 

(0.13

)

 

 

(2,819

)

 

 

(0.13

)

Tax effect of adjustments2

 

(1,764

)

 

 

(0.08

)

 

 

(1,754

)

 

 

(0.08

)

Net earnings attributable to Valmont Industries, Inc. - Adjusted1

$

65,752

 

 

$

3.06

 

 

$

120,776

 

 

$

5.63

 

Average shares outstanding (000’s) - Diluted

 

 

 

21,469

 

 

 

 

 

21,449

 

1Earnings per share includes rounding

2The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction.

 

��

 

Thirteen weeks ended June 25, 2022

Operating Income Reconciliation

 

Infrastructure

 

Agriculture

 

Corporate

 

Valmont

Operating income - as reported

 

$

84,643

 

 

$

58,046

 

 

$

(23,970

)

 

$

118,719

 

Stock-based compensation - Prospera

 

 

 

 

 

2,495

 

 

 

 

 

 

2,495

 

Prospera intangible asset amortization

 

 

 

 

 

1,645

 

 

 

 

 

 

1,645

 

Adjusted Operating Income

 

$

84,643

 

 

$

62,186

 

 

$

(23,970

)

 

$

122,859

 

Net Sales - as reported

 

 

760,750

 

 

 

374,782

 

 

 

NM

 

 

 

1,135,532

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Net Sales

 

 

11.1

%

 

 

15.5

%

 

 

NM

 

 

 

10.5

%

Adjusted Operating Income as a % of Net Sales

 

 

11.1

%

 

 

16.6

%

 

 

NM

 

 

 

10.8

%

 

 

Thirteen weeks ended June 26, 2021

Operating Income Reconciliation

 

Infrastructure

 

Agriculture

 

Corporate

 

Valmont

Operating income - as reported

 

$

61,550

 

 

$

41,984

 

 

$

(20,909

)

 

$

82,625

 

Write-off of a receivable, pre-tax

 

 

5,545

 

 

 

 

 

 

 

 

 

5,545

 

Acquisition diligence expense, pre-tax

 

 

 

 

 

 

 

1,120

 

 

 

1,120

 

Restructuring expense, pre-tax

 

 

650

 

 

 

910

 

 

 

 

 

 

1,560

 

Adjusted Operating Income

 

$

67,745

 

 

$

42,894

 

 

$

(19,789

)

 

$

90,850

 

Net Sales - as reported

 

 

614,808

 

 

 

279,821

 

 

 

NM

 

 

 

894,629

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Net Sales

 

 

10.0

%

 

 

15.0

%

 

 

NM

 

 

 

9.2

%

Adjusted Operating Income as a % of Net Sales

 

 

11.0

%

 

 

15.3

%

 

 

NM

 

 

 

10.2

%

 

 

Twenty-six weeks ended June 25, 2022

Operating Income Reconciliation

 

Infrastructure

 

Agriculture

 

Corporate

 

Valmont

Operating income - as reported

 

$

162,150

 

 

$

95,521

 

 

$

(44,110

)

 

$

213,561

 

Stock-based compensation - Prospera

 

 

 

 

 

4,993

 

 

 

 

 

 

4,993

 

Prospera intangible asset amortization

 

 

 

 

 

3,290

 

 

 

 

 

 

3,290

 

Adjusted Operating Income

 

$

162,150

 

 

$

103,804

 

 

$

(44,110

)

 

$

221,844

 

Net Sales - as reported

 

 

1,438,375

 

 

 

677,977

 

 

 

NM

 

 

 

2,116,352

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Net Sales

 

 

11.3

%

 

 

14.1

%

 

 

NM

 

 

 

10.1

%

Adjusted Operating Income as a % of Net Sales

 

 

11.3

%

 

 

15.3

%

 

 

NM

 

 

 

10.5

%

 

 

Twenty-six weeks ended June 26, 2021

Operating Income Reconciliation

 

Infrastructure

 

Agriculture

 

Corporate

 

Valmont

Operating income - as reported

 

$

115,999

 

 

$

80,732

 

 

$

(36,895

)

 

$

159,836

 

Write-off of a receivable, pre-tax

 

 

5,545

 

 

 

 

 

 

 

 

 

5,545

 

Acquisition diligence expense, pre-tax

 

 

 

 

 

 

 

1,120

 

 

 

1,120

 

Restructuring expense, pre-tax

 

 

650

 

 

 

910

 

 

 

 

 

 

1,560

 

Adjusted Operating Income

 

$

122,194

 

 

$

81,642

 

 

$

(35,775

)

 

$

168,061

 

Net Sales - as reported

 

 

1,161,253

 

 

 

508,262

 

 

 

NM

 

 

 

1,669,515

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Net Sales

 

 

10.0

%

 

 

15.9

%

 

 

NM

 

 

 

9.6

%

Adjusted Operating Income as a % of Net Sales

 

 

10.5

%

 

 

16.1

%

 

 

NM

 

 

 

10.1

%

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

REGULATION G RECONCILIATION OF FORECASTED GAAP AND ADJUSTED EARNINGS

(Dollars in thousands, except per share amounts)

The non-GAAP tables below disclose the impact on the range of estimated diluted earnings per share of the (1) amortization of the intangible asset (Prospera) and (2) stock-based compensation for Prospera employees. We believe the adjustments for Prospera allow for a better comparison of future Agriculture segment performance as compared to historical results. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings to be taken into consideration by management and investors with the related reported GAAP measures.

 

 

 

 

 

 

Reconciliation of Range of Net Earnings - 2022 Guidance

Low End

 

High End

 

Adjustments

Estimated net earnings - GAAP

$

279,000

 

$

287,600

 

 

Prospera intangible asset (proprietary technology) amortization, pre-tax

 

 

 

 

 

6,800

 

Stock-based compensation - Prospera, pre-tax

 

 

 

 

 

10,000

 

Total pre-tax adjustments

 

 

 

 

 

16,800

 

Estimated tax benefit from above expenses*

 

 

 

 

 

(2,200

)

 

 

 

 

 

 

Total Adjustments, after-tax

 

 

 

 

$

14,600

 

Estimated net earnings - Adjusted

$

293,600

 

 

$

302,200

 

 

 

Diluted Earnings Per Share Range - GAAP

$

12.90

 

 

$

13.30

 

 

 

Diluted Earnings Per Share Range - Adjusted

$

13.60

 

 

$

14.00

 

 

 

__________________

* The tax effect of adjustments is calculated based on the estimated income tax rate in each applicable jurisdiction.

 

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