Valmont Reports Fourth Quarter and Full Year 2023 Results

Provides 2024 Financial Outlook and New Long-Term Financial Targets

OMAHA, Neb.--()--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 fourth quarter and fiscal year ended December 30, 2023.

President and Chief Executive Officer Avner M. Applbaum commented, “The Valmont team delivered fourth-quarter results in line with our expectations. Despite lower sales volumes, we expanded gross profit margins year-over-year through successful pricing strategies and improved operational efficiencies in our facilities. In Infrastructure, our solid results reflect continued strong utility market demand, and we achieved another quarter of adjusted operating margin improvement year-over-year despite lower Telecommunications volumes. In Agriculture, as expected, North America sales were lower as backlog levels were more normalized this year compared to fourth quarter 2022. International sales growth was driven by Middle East project shipments and sales from our recent acquisition of HR Products, offset by lower sales in Brazil due to slowing market demand amid lower grain prices. Reflecting on the full year, our global teams performed extremely well in 2023, despite industry-wide demand challenges in North America agriculture and telecommunications markets that pressured the top line. I’m very pleased with our progress in reducing inventory, which helped deliver strong operating cash flows.”

Applbaum added, “Turning to 2024, we remain focused on what we can control. We are sustaining higher gross profit margins through ongoing improvement in operational efficiencies and commitment to our pricing strategies. We are reducing SG&A expense through the realignment program we announced last quarter. We expect these efforts to help mitigate the bottom-line impact of softer demand in agriculture and telecommunications markets, and to position our business for incremental profit when those markets normalize. Turning to the segments, in Infrastructure, demand for our products remains strong and we are making strategic capacity investments to meet the needs of our customers and take advantage of the visible opportunities ahead of us. In Agriculture, we expect lower sales this year amid more challenging global market conditions due to lower grain prices and farm income projections. Across both segments, we will continue to deliver operational efficiencies and benefit from our realigned organization. Our market leadership, combined with a relentless focus on strong cash flow generation, return on invested capital and a disciplined capital allocation framework gives us confidence in our actions to enhance shareholder value for years to come.”

Fourth Quarter 2023 Highlights (all metrics compared to Fourth Quarter 2022 unless otherwise noted)

  • Net Sales decreased 10.3% to $1.0 billion. Accounting for the 2022 divestiture of the offshore wind energy structures business, reported in the “Other” segment, Net Sales decreased 7.5%1
  • Operating Income decreased 42.1% to $63.5 million or 6.3% of net sales (decreased 11.9% to $100.2 million or 9.9% adjusted1) compared to $109.7 million or 9.7% of net sales ($113.7 million or 10.4% adjusted1)
  • Diluted Earnings per Share (“EPS”) of $1.38 ($3.18 adjusted1) compared to $1.86 ($3.57 adjusted1)
  • Generated strong operating cash flows of $115.9 million; cash and cash equivalents at the end of the fourth quarter were $203.0 million

Full Year 2023 Highlights (all metrics compared to Full Year 2022 unless otherwise noted)

  • Net Sales decreased 3.9% to $4.2 billion. Accounting for the 2022 divestiture of the offshore wind energy structures business, reported in the “Other” segment, Net Sales decreased 1.7%1
  • Operating Income decreased 32.7% to $291.6 million or 7.0% of net sales (increased 5.2% to $473.2 million or 11.3% adjusted1) compared to $433.2 million or 10.0% of net sales ($449.7 million or 10.6% adjusted1)
  • Diluted EPS of $6.78 ($14.98 adjusted1) compared to $11.62 ($13.82 adjusted1)
  • Generated strong operating cash flows of $306.8 million and free cash flow of $210.0 million1, driven by net earnings and working capital management
  • Deployed $524.2 million of capital, including $129.4 million for capital expenditures and acquisitions, and $394.8 million was returned to shareholders through dividends and share repurchases
  • Achieved Return on Invested Capital of 7.2% (14.0% adjusted1)

Key Financial Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter 2023

 

GAAP

Adjusted1

(000s except per share amounts)

 

13 weeks

 

14 weeks

 

 

 

13 weeks

 

14 weeks

 

 

 

 

12/30/2023

 

12/31/2022

 

 

 

12/30/2023

 

12/31/2022

 

 

 

 

Q4 2023

 

Q4 2022

 

vs. Q4 2022

 

Q4 2023

 

Q4 2022

 

vs. Q4 2022

Net Sales

 

$

1,015,526

 

$

1,131,516

 

(10.3

)%

 

$

1,015,526

 

$

1,098,244

 

(7.5

)%

Gross Profit

 

 

282,941

 

 

298,959

 

(5.4

)%

 

 

282,941

 

 

298,959

 

(5.4

)%

Gross Profit as a % of Net Sales

 

 

27.9

%

 

26.4

%

 

 

 

27.9

%

 

27.2

%

 

Operating Income

 

 

63,548

 

 

109,716

 

(42.1

)%

 

 

100,204

 

 

113,734

 

(11.9

)%

Operating Income as a % of Net Sales

 

 

6.3

%

 

9.7

%

 

 

 

9.9

%

 

10.4

%

 

Net Earnings1

 

 

28,587

 

 

40,332

 

(29.1

)%

 

 

66,034

 

 

77,256

 

(14.5

)%

Diluted Earnings per Share

 

 

1.38

 

 

1.86

 

(25.8

)%

 

 

3.18

 

 

3.57

 

(10.9

)%

Average Shares Outstanding

 

 

20,764

 

 

21,656

 

 

 

 

20,764

 

 

21,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Full Year 2023

 

GAAP

Adjusted1

(000s except per share amounts)

 

52 weeks

 

53 weeks

 

 

 

52 weeks

 

53 weeks

 

 

 

 

12/30/2023

 

12/31/2022

 

 

 

12/30/2023

 

12/31/2022

 

 

 

 

FY 2023

 

FY 2022

 

vs. FY 2022

 

FY 2023

 

FY 2022

 

vs. FY 2022

Net Sales

 

$

4,174,598

 

$

4,345,250

 

(3.9

)%

 

$

4,174,598

 

$

4,245,031

 

(1.7

)%

Gross Profit

 

 

1,236,034

 

 

1,126,224

 

9.8

%

 

 

1,236,034

 

 

1,126,224

 

9.8

%

Gross Profit as a % of Net Sales

 

 

29.6

%

 

25.9

%

 

 

 

29.6

%

 

26.5

%

 

Operating Income

 

 

291,557

 

 

433,249

 

(32.7

)%

 

 

473,237

 

 

449,725

 

5.2

%

Operating Income as a % of Net Sales

 

 

7.0

%

 

10.0

%

 

 

 

11.3

%

 

10.6

%

 

Net Earnings1

 

 

143,475

 

 

250,863

 

(42.8

)%

 

 

316,926

 

 

298,139

 

6.3

%

Diluted Earnings per Share

 

 

6.78

 

 

11.62

 

(41.7

)%

 

 

14.98

 

 

13.82

 

8.4

%

Average Shares Outstanding

 

 

21,159

 

 

21,580

 

 

 

 

21,159

 

 

21,580

 

 

Fourth Quarter 2023 Segment Review

Infrastructure (73.4% of Net Sales)

Products and solutions to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to protect metal products

Sales of $748.3 million decreased 3.0% year-over-year. Higher volumes in the Transmission, Distribution and Substation (TD&S) and Solar product lines were driven by continued strong market demand led by ongoing investments in the global energy transition. These volume increases, and favorable pricing across the portfolio, were more than offset by lower Telecommunications and Coatings volumes.

Operating Income decreased to $82.6 million or 11.1% of net sales ($98.7 million or 13.2% adjusted1) compared to $99.6 million or 13.0% of net sales in 2022. Favorable pricing and deliberate actions to improve overall cost of goods sold were more than offset by lower volumes.

Agriculture (26.6% of Net Sales)

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

Sales of $271.6 million decreased 18.9% year-over-year. In North America, irrigation equipment volumes were lower as the fourth quarter of 2022 benefited from the ongoing delivery of elevated backlog. Average irrigation selling prices were comparable to last year.

International sales growth was driven by higher project sales and sales from the HR Products acquisition, offset by lower sales in Brazil, due to lower grain prices and the return of backlog to a more normalized level as compared to fourth quarter 2022.

Operating Income decreased to $13.9 million, or 5.2% of net sales ($27.8 million or 10.3% adjusted1) compared to $40.5 million or 12.2% of net sales ($44.5 million or 13.4% adjusted1) in 2022 driven by lower volumes and higher SG&A.

Other

Offshore wind energy structures business

As previously announced, the divestiture of the offshore wind energy structures business was completed in December 2022. In the fourth quarter of 2022, the subsequently divested business generated sales of $33.3 million and operating income was $1.4 million.

Balance Sheet, Liquidity, and Capital Allocation

The Company generated full-year 2023 free cash flow1 of $210.0 million through earnings and effectively managing working capital. At the end of 2023, cash and cash equivalents were $203.0 million.

$178.6 million of Company stock was purchased in the fourth quarter, inclusive of the $120.0 million Accelerated Share Repurchase program executed during the quarter. $136.1 million remains on the authorized share repurchase program.

Organizational Realignment Program

As announced in October 2023, the Company initiated an organizational realignment program to better align the Company’s administrative support structure to its long-term growth strategy. The program affected both reportable segments and corporate, and was completed in 2023. Actions taken resulted in pre-tax cash expenses of $35.2 million in fiscal 2023, including $31.0 million in the fourth quarter, and are expected to be recovered through lower SG&A within 12 months.

Introducing 2024 Full Year Financial Outlook and Key Assumptions

The Company is introducing its 2024 full-year net sales and diluted earnings per share outlook and key assumptions for the year.

  • Net Sales Change (vs. prior year) of (3.0%) to flat
    • Infrastructure sales growth expected to approach mid-single digits
    • Agriculture sales expected to decrease 15-20%
  • Diluted Earnings per Share of $14.25 to $15.50
  • Effective tax rate of approximately 26%
  • Minimal expected foreign currency translation impact to net sales
  • Capital expenditures expected to be in the range of $125 to $140 million to support strategic growth initiatives

Providing New Long-Term Financial Targets

The Company is taking the opportunity to provide new long-term financial targets beyond 2024.

 

Metric

Target

Organic Net Sales Growth

Above Mid-Single Digits

Operating Margin

Approaching Mid-Teens

Return on Invested Capital (ROIC)

High-Teens

Free Cash Flow Conversion

100% of Net Earnings

Applbaum continued, “I’m excited to share our long-term financial targets for Valmont beyond 2024. We are focusing on strategic initiatives that drive sustainable growth and profitability over the long term with an ongoing commitment to value creation. We are executing a focused and disciplined plan to leverage our diversified portfolio and deliver operating margin and ROIC improvements. As evidenced by these goals, we are demonstrating higher levels of through-cycle structural profitability while making our company more resilient. This drives our position as a market leader, enabling us to achieve greater performance and create sustainable value for our shareholders.”

A live audio discussion with Avner M. Applbaum, President and Chief Executive Officer, and Timothy P. Francis, Interim Chief Financial Officer, will be accessible by telephone on Thursday, February 22, 2024 at 8:00 a.m. CT by dialing +1 877.407.6184 or +1 201.389.0877 (no Conference ID needed), or via webcast by pointing browsers to this link: Valmont Industries 4Q and Full Year 2023 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 three hours after the call at the above link or by telephone at +1 877.660.6853 or +1 201.612.7415. Please use access code 13742393. The replay will be available through 10:59 p.m. CT on February 29, 2024.

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 the pandemic 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.

Website and Social Media Disclosure

The Company uses its website and social media channels identified on its website as channels of distribution of Company information. The information that the Company posts through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following the Company’s press releases, Securities and Exchange Commission filings, and public conference calls and webcasts. The contents of the Company’s website and social media channels are not part of this press release.

1Please 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)

 

 

13 and 14 Weeks Ended

 

52 and 53 Weeks Ended

 

 

December

 

December

 

December

 

December

 

 

30, 2023

 

 

31, 2022

 

 

30, 2023

 

 

31, 2022

 

Net sales

 

$

1,015,526

 

 

$

1,131,516

 

 

$

4,174,598

 

 

$

4,345,250

 

Cost of sales

 

 

732,585

 

 

 

832,557

 

 

 

2,938,564

 

 

 

3,219,026

 

Gross profit

 

 

282,941

 

 

 

298,959

 

 

 

1,236,034

 

 

 

1,126,224

 

Selling, general, and administrative expenses

 

 

188,363

 

 

 

189,243

 

 

 

768,423

 

 

 

692,975

 

Impairment of long-lived assets

 

 

 

 

 

 

 

 

140,844

 

 

 

 

Realignment charges

 

 

31,030

 

 

 

 

 

 

35,210

 

 

 

 

Operating income

 

 

63,548

 

 

 

109,716

 

 

 

291,557

 

 

 

433,249

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(15,314

)

 

 

(13,256

)

 

 

(56,808

)

 

 

(47,534

)

Interest income

 

 

1,651

 

 

 

996

 

 

 

6,230

 

 

 

2,015

 

Gain (loss) on investments - unrealized

 

 

1,773

 

 

 

932

 

 

 

3,564

 

 

 

(3,374

)

Loss from divestiture of offshore wind energy structures business

 

 

 

 

 

(33,273

)

 

 

 

 

 

(33,273

)

Other

 

 

(6,492

)

 

 

4,268

 

 

 

(8,091

)

 

 

12,805

 

Other income (expense), net

 

 

(18,382

)

 

 

(40,333

)

 

 

(55,105

)

 

 

(69,361

)

Earnings before income taxes and equity in loss of nonconsolidated subsidiaries

 

 

45,166

 

 

 

69,383

 

 

 

236,452

 

 

 

363,888

 

Income tax expense

 

 

10,882

 

 

 

28,156

 

 

 

90,121

 

 

 

108,687

 

Equity in loss of nonconsolidated subsidiaries

 

 

(200

)

 

 

(19

)

 

 

(1,419

)

 

 

(950

)

Net earnings

 

 

34,084

 

 

 

41,208

 

 

 

144,912

 

 

 

254,251

 

Loss (earnings) attributable to redeemable noncontrolling interests

 

 

1,877

 

 

 

(876

)

 

 

5,937

 

 

 

(3,388

)

Net earnings attributable to Valmont Industries, Inc.

 

 

35,961

 

 

 

40,332

 

 

 

150,849

 

 

 

250,863

 

Change in redemption value of redeemable noncontrolling interests

 

 

(7,374

)

 

 

 

 

 

(7,374

)

 

 

 

Net earnings attributable to Valmont Industries, Inc. including change in redemption value of redeemable noncontrolling interests

 

$

28,587

 

 

$

40,332

 

 

$

143,475

 

 

$

250,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding (000s) - Basic

 

 

20,577

 

 

 

21,319

 

 

 

20,956

 

 

 

21,311

 

Earnings per share - Basic

 

$

1.39

 

 

$

1.89

 

 

$

6.85

 

 

$

11.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding (000s) - Diluted

 

 

20,764

 

 

 

21,656

 

 

 

21,159

 

 

 

21,580

 

Earnings per share - Diluted

 

$

1.38

 

 

$

1.86

 

 

$

6.78

 

 

$

11.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

0.60

 

 

$

0.55

 

 

$

2.40

 

 

$

2.20

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)

 

 

13 and 14 Weeks Ended

52 and 53 Weeks Ended

 

 

December 30,

December 31,

December 30,

December 31,

 

 

2023

 

2022

 

2023

 

2022

 

Infrastructure

 

 

 

 

 

 

 

 

 

Net sales

 

$

745,713

 

$

765,077

 

$

2,999,637

 

$

2,909,746

 

Gross profit

 

 

201,968

 

 

201,978

 

 

842,081

 

 

736,611

 

as a percent of net sales

 

 

27.1

%

 

26.4

%

 

28.1

%

 

25.3

%

Selling, general, and administrative expenses

 

 

103,227

 

 

102,387

 

 

424,997

 

 

382,112

 

as a percent of net sales

 

 

13.8

%

 

13.4

%

 

14.2

%

 

13.1

%

Impairment of long-lived assets

 

 

 

 

 

 

3,571

 

 

 

Realignment charges

 

 

16,191

 

 

 

 

17,260

 

 

 

Operating income

 

 

82,550

 

 

99,591

 

 

396,253

 

 

354,499

 

as a percent of net sales

 

 

11.1

%

 

13.0

%

 

13.2

%

 

12.2

%

 

 

 

 

 

 

 

 

 

 

Agriculture

 

 

 

 

 

 

 

 

 

Net sales

 

$

269,813

 

$

333,167

 

$

1,174,961

 

$

1,335,285

 

Gross profit

 

 

80,973

 

 

94,378

 

 

393,953

 

 

381,793

 

as a percent of net sales

 

 

30.0

%

 

28.3

%

 

33.5

%

 

28.6

%

Selling, general, and administrative expenses

 

 

58,833

 

 

53,894

 

 

230,729

 

 

202,530

 

as a percent of net sales

 

 

21.8

%

 

16.2

%

 

19.6

%

 

15.2

%

Impairment of long-lived assets

 

 

 

 

 

 

137,273

 

 

 

Realignment charges

 

 

8,194

 

 

 

 

9,101

 

 

 

Operating income

 

 

13,946

 

 

40,484

 

 

16,850

 

 

179,263

 

as a percent of net sales

 

 

5.2

%

 

12.2

%

 

1.4

%

 

13.4

%

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Net sales

 

$

 

$

33,272

 

$

 

$

100,219

 

Gross profit

 

 

 

 

2,603

 

 

 

 

7,820

 

as a percent of net sales

 

 

NM

 

 

7.8

%

 

NM

 

 

7.8

%

Selling, general, and administrative expenses

 

 

 

 

1,158

 

 

 

 

5,561

 

as a percent of net sales

 

 

NM

 

 

3.5

%

 

NM

 

 

5.5

%

Operating income

 

 

 

 

1,445

 

 

 

 

2,259

 

as a percent of net sales

 

 

NM

 

 

4.3

%

 

NM

 

 

2.3

%

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

$

26,303

 

$

31,804

 

$

112,697

 

$

102,772

 

Realignment charges

 

 

6,645

 

 

 

 

8,849

 

 

 

Operating loss

 

 

(32,948

)

 

(31,804

)

 

(121,546

)

 

(102,772

)

NM = not meaningful

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, solar, lighting, transportation, and telecommunications, along with coatings services to protect metal products.

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

In addition to these two reportable segments, the Company had a business and related activities that were not more than 10% of consolidated sales, operating income, or assets. This business, the offshore wind energy structures business, was reported in the “Other” segment until its divestiture in fiscal 2022.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in millions)
(Unaudited)

The backlog of orders for the principal products manufactured and marketed was $1,465.5 million as of December 30, 2023 and $1,656.4 million as of December 31, 2022. An order is reported in our backlog upon receipt of a purchase order from the customer or execution of a sales order contract. We anticipate that most of the fiscal 2023 backlog of orders will be filled during fiscal 2024. As of December 30, 2023 and December 31, 2022, total backlog by segment was as follows:

 

 

 

 

 

 

 

 

 

December 30,

 

December 31,

 

 

2023

 

2022

Infrastructure

 

$

1,299.6

 

$

1,339.1

Agriculture

 

 

165.9

 

 

317.3

Total backlog

 

$

1,465.5

 

$

1,656.4

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)

 

 

Thirteen weeks ended December 30, 2023

 

 

Infrastructure

 

Agriculture

 

Intersegment

 

Consolidated

Geographical Market:

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

575,166

 

$

136,378

 

$

(4,240

)

 

$

707,304

International

 

 

173,124

 

 

135,266

 

 

(168

)

 

 

308,222

Total sales

 

$

748,290

 

$

271,644

 

$

(4,408

)

 

$

1,015,526

 

 

 

 

 

 

 

 

 

 

 

 

 

Product Line:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission, Distribution, and Substation

 

$

316,674

 

$

 

$

 

 

$

316,674

Lighting and Transportation

 

 

236,210

 

 

 

 

 

 

 

236,210

Coatings

 

 

84,129

 

 

 

 

(2,409

)

 

 

81,720

Telecommunications

 

 

56,660

 

 

 

 

 

 

 

56,660

Solar

 

 

54,617

 

 

 

 

(168

)

 

 

54,449

Irrigation Equipment and Parts

 

 

 

 

244,148

 

 

(1,831

)

 

 

242,317

Technology Products and Services

 

 

 

 

27,496

 

 

 

 

 

27,496

Total sales

 

$

748,290

 

$

271,644

 

$

(4,408

)

 

$

1,015,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourteen weeks ended December 31, 2022

 

 

Infrastructure

 

Agriculture

 

Other

 

Intersegment

 

Consolidated

Geographical Market:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

588,867

 

$

202,560

 

$

 

$

(5,932

)

 

$

785,495

International

 

 

182,470

 

 

132,506

 

 

33,272

 

 

(2,227

)

 

 

346,021

Total sales

 

$

771,337

 

$

335,066

 

$

33,272

 

$

(8,159

)

 

$

1,131,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product Line:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission, Distribution, and Substation

 

$

302,444

 

$

 

$

 

$

 

 

$

302,444

Lighting and Transportation

 

 

239,453

 

 

 

 

 

 

 

 

 

239,453

Coatings

 

 

92,441

 

 

 

 

 

 

(4,032

)

 

 

88,409

Telecommunications

 

 

87,577

 

 

 

 

 

 

 

 

 

87,577

Solar

 

 

49,422

 

 

 

 

 

 

(2,228

)

 

 

47,194

Irrigation Equipment and Parts

 

 

 

 

302,965

 

 

 

 

(1,899

)

 

 

301,066

Technology Products and Services

 

 

 

 

32,101

 

 

 

 

 

 

 

32,101

Other

 

 

 

 

 

 

33,272

 

 

 

 

 

33,272

Total sales

 

$

771,337

 

$

335,066

 

$

33,272

 

$

(8,159

)

 

$

1,131,516

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)

 

 

Fifty-two weeks ended December 30, 2023

 

 

Infrastructure

 

Agriculture

 

Intersegment

 

Consolidated

Geographical Market:

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

2,318,801

 

$

587,056

 

$

(16,282

)

 

$

2,889,575

International

 

 

691,266

 

 

595,167

 

 

(1,410

)

 

 

1,285,023

Total sales

 

$

3,010,067

 

$

1,182,223

 

$

(17,692

)

 

$

4,174,598

 

 

 

 

 

 

 

 

 

 

 

 

 

Product Line:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission, Distribution, and Substation

 

$

1,243,768

 

$

 

$

 

 

$

1,243,768

Lighting and Transportation

 

 

964,072

 

 

 

 

 

 

 

964,072

Coatings

 

 

354,330

 

 

 

 

(9,020

)

 

 

345,310

Telecommunications

 

 

252,165

 

 

 

 

 

 

 

252,165

Solar

 

 

195,732

 

 

 

 

(1,410

)

 

 

194,322

Irrigation Equipment and Parts

 

 

 

 

1,069,425

 

 

(7,262

)

 

 

1,062,163

Technology Products and Services

 

 

 

 

112,798

 

 

 

 

 

112,798

Total sales

 

$

3,010,067

 

$

1,182,223

 

$

(17,692

)

 

$

4,174,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fifty-three weeks ended December 31, 2022

 

 

Infrastructure

 

Agriculture

 

Other

 

Intersegment

 

Consolidated

Geographical Market:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

2,234,339

 

$

766,929

 

$

 

$

(26,248

)

 

$

2,975,020

International

 

 

694,080

 

 

579,743

 

 

100,219

 

 

(3,812

)

 

 

1,370,230

Total sales

 

$

2,928,419

 

$

1,346,672

 

$

100,219

 

$

(30,060

)

 

$

4,345,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product Line:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission, Distribution, and Substation

 

$

1,184,660

 

$

 

$

 

$

 

 

$

1,184,660

Lighting and Transportation

 

 

940,462

 

 

 

 

 

 

 

 

 

940,462

Coatings

 

 

356,707

 

 

 

 

 

 

(15,327

)

 

 

341,380

Telecommunications

 

 

320,342

 

 

 

 

 

 

 

 

 

320,342

Solar

 

 

126,248

 

 

 

 

 

 

(3,346

)

 

 

122,902

Irrigation Equipment and Parts

 

 

 

 

1,231,587

 

 

 

 

(11,387

)

 

 

1,220,200

Technology Products and Services

 

 

 

 

115,085

 

 

 

 

 

 

 

115,085

Other

 

 

 

 

 

 

100,219

 

 

 

 

 

100,219

Total sales

 

$

2,928,419

 

$

1,346,672

 

$

100,219

 

$

(30,060

)

 

$

4,345,250

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)

 

 

December 30,

 

December 31,

 

 

2023

 

2022

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

203,041

 

$

185,406

Receivables, net

 

 

657,960

 

 

604,181

Inventories

 

 

658,428

 

 

728,762

Contract assets

 

 

175,721

 

 

174,539

Prepaid expenses and other current assets

 

 

91,754

 

 

87,697

Refundable income taxes

 

 

725

 

 

Total current assets

 

 

1,787,629

 

 

1,780,585

Property, plant, and equipment, net

 

 

617,394

 

 

595,578

Goodwill and other non-current assets

 

 

1,072,425

 

 

1,180,833

Total assets

 

$

3,477,448

 

$

3,556,996

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current installments of long-term debt

 

$

719

 

$

1,194

Notes payable to banks

 

 

3,205

 

 

5,846

Accounts payable

 

 

358,311

 

 

360,312

Accrued expenses

 

 

277,764

 

 

248,320

Contract liabilities

 

 

70,978

 

 

172,915

Income taxes payable

 

 

 

 

3,664

Dividends payable

 

 

12,125

 

 

11,742

Total current liabilities

 

 

723,102

 

 

803,993

Long-term debt, excluding current installments

 

 

1,107,885

 

 

870,935

Operating lease liabilities

 

 

162,743

 

 

155,469

Other non-current liabilities

 

 

66,646

 

 

84,887

Total liabilities

 

 

2,060,376

 

 

1,915,284

Redeemable noncontrolling interests

 

 

62,792

 

 

60,865

Shareholders' equity

 

 

1,354,280

 

 

1,580,847

Total liabilities, redeemable noncontrolling interests, and shareholders' equity

 

$

3,477,448

 

$

3,556,996

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)

 

 

52 and 53 Weeks Ended

 

 

December 30,

 

December 31,

 

 

2023

 

2022

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings

 

$

144,912

 

 

$

254,251

 

Depreciation and amortization

 

 

98,708

 

 

 

97,167

 

Contribution to defined benefit pension plan

 

 

(17,345

)

 

 

(17,155

)

Impairment of long-lived assets

 

 

140,844

 

 

 

 

Loss (gain) on divestitures

 

 

(2,994

)

 

 

33,273

 

Change in working capital

 

 

(66,342

)

 

 

(56,092

)

Other

 

 

8,992

 

 

 

14,821

 

Net cash flows provided by operating activities

 

 

306,775

 

 

 

326,265

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property, plant, and equipment

 

 

(96,771

)

 

 

(93,288

)

Proceeds from divestiture, net of cash divested

 

 

6,369

 

 

 

 

Proceeds from property damage insurance claims

 

 

7,468

 

 

 

 

Acquisitions, net of cash acquired

 

 

(32,676

)

 

 

(39,287

)

Other

 

 

329

 

 

 

495

 

Net cash flows used in investing activities

 

 

(115,281

)

 

 

(132,080

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from long-term borrowings

 

 

370,012

 

 

 

253,999

 

Principal payments on long-term borrowings

 

 

(134,748

)

 

 

(336,403

)

Net payments on short-term borrowings

 

 

(3,298

)

 

 

(7,577

)

Purchase of treasury shares

 

 

(345,279

)

 

 

(40,474

)

Dividends to redeemable noncontrolling interests

 

 

(662

)

 

 

(714

)

Purchase of redeemable noncontrolling interests

 

 

 

 

 

(7,338

)

Dividends paid

 

 

(49,515

)

 

 

(45,813

)

Other

 

 

(12,915

)

 

 

2,415

 

Net cash flows used in financing activities

 

 

(176,405

)

 

 

(181,905

)

Effect of exchange rates on cash and cash equivalents

 

 

2,546

 

 

 

(4,106

)

Net change in cash and cash equivalents

 

 

17,635

 

 

 

8,174

 

Cash and cash equivalents - beginning of period

 

 

185,406

 

 

 

177,232

 

Cash and cash equivalents - end of period

 

$

203,041

 

 

$

185,406

 

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 table below discloses the impacts of the impairment of long-lived assets, realignment charges, and non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership on net earnings for fiscal 2023, as well as the impact of the loss from Argentine peso hyperinflation and non-recurring tax benefit items on net earnings. Amounts may be impacted by rounding. 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen

 

 

 

 

Fifty-two

 

 

 

 

 

weeks ended

 

Diluted

 

weeks ended

 

Diluted

 

 

December

 

earnings per

 

December

 

earnings per

 

 

30, 2023

 

 

share1

 

30, 2023

 

 

share1

Net earnings attributable to Valmont Industries, Inc. including change in redemption value of redeemable noncontrolling interests - as reported

$

28,587

 

$

1.38

$

143,475

$

6.78

Less: Change in redemption value of redeemable noncontrolling interests

 

 

7,374

 

 

 

0.36

 

 

 

7,374

 

 

 

0.35

 

Net earnings attributable to Valmont Industries, Inc.

 

 

35,961

 

 

 

1.73

 

 

 

150,849

 

 

 

7.13

 

Impairment of long-lived assets

 

 

 

 

 

 

 

 

140,844

 

 

 

6.66

 

Realignment charges

 

 

31,030

 

 

 

1.49

 

 

 

35,210

 

 

 

1.66

 

Other non-recurring charges

 

 

5,626

 

 

 

0.27

 

 

 

5,626

 

 

 

0.27

 

Total adjustments, pre-tax

 

 

36,656

 

 

 

1.77

 

 

 

181,680

 

 

 

8.59

 

Tax effect of adjustments2

 

 

(9,118

)

 

 

(0.44

)

 

 

(14,550

)

 

 

(0.69

)

Loss from Argentine peso hyperinflation, net of tax, attributable to Valmont Industries, Inc.

 

 

2,535

 

 

 

0.12

 

 

 

2,535

 

 

 

0.12

 

Non-recurring tax benefit items

 

 

 

 

 

 

 

 

(3,588

)

 

 

(0.17

)

Net earnings attributable to Valmont Industries, Inc. - adjusted

 

$

66,034

 

 

$

3.18

 

 

$

316,926

 

 

$

14.98

 

Average shares outstanding (000s) - diluted

 

 

 

 

 

20,764

 

 

 

 

 

 

21,159

 

We previously presented non-GAAP financial measures adjusted for Prospera intangible asset amortization and stock-based compensation recognized for the Prospera employees to provide investors with a better understanding of Agriculture segment performance related to traditional segment products. The Company conducted its annual impairment testing of intangible asset value as of September 2, 2023 and significantly reduced the Prospera intangible asset value. Additionally, the Board of Directors approved certain realignment activities commencing in the third quarter of fiscal 2023 that affected the future stock compensation recognized for the Prospera employees. As a result, we do not consider our historical adjustments related to Prospera to arrive at non-GAAP financial measures to be relevant to investor understanding of fourth quarter of fiscal 2023, second half of fiscal 2023, and future segment performance. Since these items had been specific adjustments to net earnings for the first half of fiscal 2023, we removed what would otherwise have been their effect on fiscal 2023 results which is presented as “further adjusted” net earnings below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen

 

 

 

 

Fifty-two

 

 

 

 

 

weeks ended

 

Diluted

 

weeks ended

 

Diluted

 

 

December

 

earnings per

 

December

 

earnings per

 

 

30, 2023

 

share1

 

30, 2023

 

 

share1

Net earnings attributable to Valmont Industries, Inc. - adjusted

 

$

66,034

 

$

3.18

 

$

316,926

 

 

$

14.98

 

Prospera intangible asset amortization

 

 

 

 

 

 

3,290

 

 

 

0.16

 

Prospera stock-based compensation

 

 

 

 

 

 

4,278

 

 

 

0.20

 

Tax effect of adjustments2

 

 

 

 

 

 

(1,092

)

 

 

(0.05

)

Net earnings attributable to Valmont Industries, Inc. - further adjusted

 

$

66,034

 

$

3.18

 

$

323,402

 

 

$

15.28

 

Average shares outstanding (000s) - diluted

 

 

 

 

 

20,764

 

 

 

 

 

21,159

 

1Earnings per share includes rounding
2The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction.

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 impacts of the loss from the divestiture of the offshore wind energy structures business, intangible asset amortization (Prospera), and stock-based compensation recognized for the Prospera employees on net earnings for fiscal 2022 results. Amounts may be impacted by rounding. 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourteen

 

 

 

 

Fifty-three

 

 

 

 

 

weeks ended

 

Diluted

 

weeks ended

 

Diluted

 

 

December

 

earnings per

 

December

 

earnings per

 

 

31, 2022

 

 

share1

 

31, 2022

 

 

share1

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

 

$

40,332

 

 

$

1.86

 

 

$

250,863

 

 

$

11.62

 

Loss from divestiture of offshore wind energy structures business

 

 

33,273

 

 

 

1.54

 

 

 

33,273

 

 

 

1.54

 

Prospera intangible asset amortization

 

 

1,645

 

 

 

0.08

 

 

 

6,580

 

 

 

0.30

 

Prospera stock-based compensation

 

 

2,373

 

 

 

0.11

 

 

 

9,896

 

 

 

0.46

 

Total adjustments, pre-tax

 

 

37,291

 

 

 

1.72

 

 

 

49,749

 

 

 

2.31

 

Tax effect of adjustments2

 

 

(367

)

 

 

(0.02

)

 

 

(2,473

)

 

 

(0.11

)

Net earnings attributable to Valmont Industries, Inc. - adjusted

 

$

77,256

 

 

$

3.57

 

 

$

298,139

 

 

$

13.82

 

Average shares outstanding (000s) - diluted

 

 

 

 

 

21,656

 

 

 

 

 

 

21,580

 

1Earnings per share includes rounding

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

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 impacts of the impairment of long-lived assets, realignment charges, and non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership on fiscal 2023 results. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted operating income (loss) to be taken into consideration by management and investors with the related reported GAAP measures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen weeks ended December 30, 2023

 

Operating Income (Loss) Reconciliation

 

Infrastructure

 

Agriculture

 

Corporate

 

Consolidated

Operating income (loss) - as reported

 

$

82,550

 

$

13,946

 

$

(32,948

)

 

$

63,548

 

Realignment charges

 

 

16,191

 

 

8,194

 

 

6,645

 

 

 

31,030

 

Other non-recurring charges

 

 

 

 

5,626

 

 

 

 

 

5,626

 

Adjusted operating income (loss)

 

$

98,741

 

$

27,766

 

$

(26,303

)

 

$

100,204

 

Net sales - as reported

 

 

745,713

 

 

269,813

 

 

 

 

 

1,015,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) as a % of net sales

 

 

11.1

%

 

5.2

%

 

NM

 

 

 

6.3

%

Adj. operating inc. (loss) as a % of net sales

 

 

13.2

%

 

10.3

%

 

NM

 

 

 

9.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fifty-two weeks ended December 30, 2023

 

Operating Income (Loss) Reconciliation

 

Infrastructure

 

Agriculture

 

Corporate

 

Consolidated

Operating income (loss) - as reported

 

$

396,253

 

$

16,850

 

$

(121,546

)

 

$

291,557

 

Impairment of long-lived assets

 

 

3,571

 

 

137,273

 

 

 

 

 

140,844

 

Realignment charges

 

 

17,260

 

 

9,101

 

 

8,849

 

 

 

35,210

 

Other non-recurring charges

 

 

 

 

5,626

 

 

 

 

 

5,626

 

Adjusted operating income (loss)

 

$

417,084

 

$

168,850

 

$

(112,697

)

 

$

473,237

 

Net sales - as reported

 

 

2,999,637

 

 

1,174,961

 

 

 

 

 

4,174,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) as a % of net sales

 

 

13.2

%

 

1.4

%

 

NM

 

 

 

7.0

%

Adj. operating inc. (loss) as a % of net sales

 

 

13.9

%

 

14.4

%

 

NM

 

 

 

11.3

%

We previously presented non-GAAP financial measures adjusted for Prospera intangible asset amortization and stock-based compensation recognized for the Prospera employees to provide investors with a better understanding of Agriculture segment performance related to traditional segment products. The Company conducted its annual impairment testing of intangible asset value as of September 2, 2023 and significantly reduced the Prospera intangible asset value. Additionally, the Board of Directors approved certain realignment activities commencing in the third quarter of fiscal 2023 that affected the future stock compensation recognized for the Prospera employees. As a result, we do not consider our historical adjustments related to Prospera to arrive at non-GAAP financial measures to be relevant to investor understanding of fourth quarter of fiscal 2023, second half of fiscal 2023, and future segment performance. Since these items had been specific adjustments to operating income (loss) for the first half of fiscal 2023, we removed what would otherwise have been their effect on fiscal 2023 results which is presented as “further adjusted” operating income (loss) below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fifty-two weeks ended December 30, 2023

 

Operating Income (Loss) Reconciliation

 

Infrastructure

 

Agriculture

 

Corporate

 

Consolidated

Adjusted operating income (loss)

 

$

417,084

 

$

168,850

 

$

(112,697

)

 

$

473,237

 

Prospera intangible asset amortization

 

 

 

 

3,290

 

 

 

 

 

3,290

 

Prospera stock-based compensation

 

 

 

 

4,278

 

 

 

 

 

4,278

 

Further adjusted operating income (loss)

 

$

417,084

 

$

176,418

 

$

(112,697

)

 

$

480,805

 

Net sales - as reported

 

 

2,999,637

 

 

1,174,961

 

 

 

 

 

4,174,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adj. operating inc. (loss) as a % of net sales

 

 

13.9

%

 

14.4

%

 

NM

 

 

 

11.3

%

Further adj. oper. inc. (loss) as a % of net sales

 

 

13.9

%

 

15.0

%

 

NM

 

 

 

11.5

%

 

NM = not meaningful

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 impacts of the intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on 2022 results. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted operating income (loss) to be taken into consideration by management and investors with the related reported GAAP measures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourteen weeks ended December 31, 2022

 

Operating Income (Loss) Reconciliation

 

Infrastructure

 

Agriculture

 

Other

 

Corporate

 

Consolidated

Operating income (loss) - as reported

 

$

99,591

 

$

40,484

 

$

1,445

 

$

(31,804

)

 

$

109,716

 

Prospera intangible asset amortization

 

 

 

 

1,645

 

 

 

 

 

 

 

1,645

 

Prospera stock-based compensation

 

 

 

 

2,373

 

 

 

 

 

 

 

2,373

 

Adjusted operating income (loss)

 

$

99,591

 

$

44,502

 

$

1,445

 

$

(31,804

)

 

$

113,734

 

Net sales - as reported

 

 

765,077

 

 

333,167

 

 

33,272

 

 

 

 

 

1,131,516

 

Adjusted net sales

 

 

765,077

 

 

333,167

 

 

 

 

 

 

 

1,098,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) as a % of net sales

 

 

13.0

%

 

12.2

%

 

4.3

%

 

NM

 

 

 

9.7

%

Adj. operating inc. (loss) as a % of net sales

 

 

13.0

%

 

13.4

%

 

4.3

%

 

NM

 

 

 

10.1

%

Adj. operating inc. (loss) as a % of adj. net sales

 

 

13.0

%

 

13.4

%

 

NM

 

 

NM

 

 

 

10.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fifty-three weeks ended December 31, 2022

 

Operating Income (Loss) Reconciliation

 

Infrastructure

 

Agriculture

 

Other

 

Corporate

 

Consolidated

Operating income (loss) - as reported

 

$

354,499

 

$

179,263

 

$

2,259

 

$

(102,772

)

 

$

433,249

 

Prospera intangible asset amortization

 

 

 

 

6,580

 

 

 

 

 

 

 

6,580

 

Prospera stock-based compensation

 

 

 

 

9,896

 

 

 

 

 

 

 

9,896

 

Adjusted operating income (loss)

 

$

354,499

 

$

195,739

 

$

2,259

 

$

(102,772

)

 

$

449,725

 

Net sales - as reported

 

 

2,909,746

 

 

1,335,285

 

 

100,219

 

 

 

 

 

4,345,250

 

Adjusted net sales

 

 

2,909,746

 

 

1,335,285

 

 

 

 

 

 

 

4,245,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) as a % of net sales

 

 

12.2

%

 

13.4

%

 

2.3

%

 

NM

 

 

 

10.0

%

Adj. operating inc. (loss) as a % of net sales

 

 

12.2

%

 

14.7

%

 

2.3

%

 

NM

 

 

 

10.3

%

Adj. operating inc. (loss) as a % of adj. net sales

 

 

12.2

%

 

14.7

%

 

NM

 

 

NM

 

 

 

10.6

%

 

NM = not meaningful

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF EXCLUDING OTHER SEGMENT NET SALES
(Dollars in thousands)
(Unaudited)

Excluding Other segment net sales from the fourth quarter and fiscal year ended December 31, 2022, which we refer to in this reconciliation as “Adjusted Net Sales”, is a non-GAAP measure. The Other segment net sales were generated by the offshore wind energy structures business which was divested in December 2022. Adjusted Net Sales should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP, or as a measure of our operating performance or liquidity. The table below shows how Adjusted Net Sales is calculated from the Company’s Statements of Earnings. Adjusted Net Sales is calculated as total net sales less Other segment net sales. Adjusted Net Sales allows investors to analyze our operating performance in light of net sales of a divested business.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 and 14 Weeks Ended

 

 

 

 

52 and 53 Weeks Ended

 

 

 

 

 

December 30,

 

December 31,

 

Percent

 

December 30,

 

December 31,

 

Percent

 

 

2023

 

2022

 

 

Change

 

2023

 

2022

 

 

Change

Net sales

 

$

1,015,526

 

$

1,131,516

 

 

 

(10.3

)%

 

$

4,174,598

 

$

4,345,250

 

 

 

(3.9

)%

Less: Other segment net sales

 

 

 

 

(33,272

)

 

 

NM

 

 

 

 

 

(100,219

)

 

 

NM

 

Adjusted net sales

 

$

1,015,526

 

$

1,098,244

 

 

 

(7.5

)%

 

$

4,174,598

 

$

4,245,031

 

 

 

(1.7

)%

 

NM = not meaningful

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF ADJUSTED RETURN ON INVESTED CAPITAL
(Dollars in thousands)
(Unaudited)

Return on Invested Capital (“ROIC”) and Adjusted ROIC are non-GAAP measures. Accordingly, Invested Capital, ROIC, and Adjusted ROIC should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP, or as a measure of our operating performance or liquidity. The table below shows how Invested Capital, ROIC, and Adjusted ROIC are calculated from our Statements of Earnings and Balance Sheets. ROIC is calculated as after-tax operating income divided by the average of beginning and ending Invested Capital. Adjusted ROIC is calculated as after-tax operating income, adjusted for impairment of long-lived assets, realignment charges, and non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership then divided by the average of beginning and ending Invested Capital. Invested Capital represents total assets minus total liabilities (excluding interest-bearing debt and redeemable noncontrolling interests). ROIC and Adjusted ROIC are some of our key operating ratios, as they allow investors to analyze our operating performance in light of the amount of investment required to generate our operating profit. ROIC and Adjusted ROIC are also measures used to determine management incentives.

 

 

 

 

 

 

Fifty-two

 

 

weeks ended

 

 

December 30,

 

 

2023

Operating income

 

$

291,557

 

Effective tax rate

 

 

38.1

%

Tax effect on operating income

 

 

(111,124

)

After-tax operating income

 

 

180,433

 

Average invested capital

 

 

2,504,474

 

Return on invested capital

 

 

7.2

%

 

 

 

 

Operating income

 

 

291,557

 

Impairment of long-lived assets

 

 

140,844

 

Realignment charges

 

 

35,210

 

Other non-recurring charges

 

 

5,626

 

Adjusted operating income

 

 

473,237

 

Adjusted effective tax rate1

 

 

25.9

%

Tax effect on adjusted operating income

 

 

(122,665

)

After-tax adjusted operating income

 

 

350,572

 

Average invested capital

 

 

2,504,474

 

Adjusted return on invested capital

 

 

14.0

%

 

 

 

 

 

 

December 30,

 

 

2023

Total assets

 

 

3,477,448

 

Less: Accounts payable

 

 

(358,311

)

Less: Accrued expenses

 

 

(277,764

)

Less: Defined benefit pension asset

 

 

(15,404

)

Less: Deferred compensation

 

 

(32,623

)

Less: Other noncurrent liabilities

 

 

(12,818

)

Less: Dividends payable

 

 

(12,125

)

Less: Lease liability

 

 

(162,743

)

Less: Contract liability

 

 

(70,978

)

Less: Deferred tax liability

 

 

(21,205

)

Total invested capital

 

$

2,513,477

 

Beginning of year invested capital

 

$

2,495,471

 

Average invested capital

 

$

2,504,474

 

1See Regulation G Reconciliation of Adjusted Effective Tax Rate

ROIC and Adjusted ROIC, as presented, may not be comparable to similarly titled measures of other companies.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF ADJUSTED EFFECTIVE TAX RATE
(Dollars in thousands)
(Unaudited)

Excluding significant non-recurring items from the fourth quarter and fiscal year ended December 30, 2023 from the calculation of effective tax rate, which we refer to as “Adjusted Effective Tax Rate”, is a non-GAAP measure. Adjusted Effective Tax Rate should not be considered in isolation or as a substitute for the effective tax rate prepared in accordance with GAAP. The table below shows how Adjusted Effective Tax Rate is calculated from the Company’s Statements of Earnings. Adjusted Effective Tax Rate is calculated as total earnings before income taxes and equity in loss of nonconsolidated subsidiaries plus the significant non-recurring items of impairment of long-lived assets, realignment charges, non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership, the loss from Argentine peso hyperinflation, and non-recurring tax benefit items. Adjusted Effective Tax Rate allows investors to analyze our effective tax rate in light of these non-recurring items.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen weeks ended

 

Fifty-two weeks ended

 

 

December 30, 2023

 

December 30, 2023

 

 

Earnings before
income taxes
and equity in
loss of
nonconsolidated
subsidiaries

 

Income
tax
expense

 

Effective
tax rate

 

Earnings before
income taxes
and equity in
loss of
nonconsolidated
subsidiaries

 

Income
tax
expense

 

Effective
tax rate

As reported

 

$

45,166

 

$

10,882

 

 

24.1

%

 

$

236,452

 

$

90,121

 

 

38.1

%

Impairment of long-lived assets

 

 

 

 

 

 

 

 

 

140,844

 

 

4,387

 

 

 

Realignment charges

 

 

31,030

 

 

7,675

 

 

 

 

 

35,210

 

 

8,720

 

 

 

Other non-recurring charges

 

 

5,626

 

 

1,443

 

 

 

 

 

5,626

 

 

1,443

 

 

 

Loss from Argentine peso hyperinflation

 

 

5,132

 

 

1,453

 

 

 

 

 

5,132

 

 

1,453

 

 

 

Non-recurring tax benefit items

 

 

 

 

 

 

 

 

 

 

 

3,588

 

 

 

Adjusted

 

$

86,954

 

$

21,453

 

 

24.7

%

 

$

423,264

 

$

109,712

 

 

25.9

%

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF FREE CASH FLOW
(Dollars in thousands)
(Unaudited)

We use the non-GAAP measure of free cash flow, which we define as net cash flows provided by operating activities reduced by the purchase of property, plant, and equipment. We believe that free cash flow is a useful performance measure for management and useful to investors as the basis for comparing our performance with other companies. Our measure of free cash flow may not be directly comparable to similar measures used by other companies.

 

 

 

 

 

 

Fifty-two

 

 

weeks ended

 

 

December 30,

 

 

2023

 

Net cash flows provided by operating activities

 

$

306,775

 

Net cash flows used in investing activities

 

 

(115,281

)

Net cash flows used in financing activities

 

 

(176,405

)

 

 

 

 

Net cash flows provided by operating activities

 

$

306,775

 

Purchase of property, plant, and equipment

 

 

(96,771

)

Free cash flow

 

$

210,004

 

 

Contacts

Renee Campbell
renee.campbell@valmont.com

Contacts

Renee Campbell
renee.campbell@valmont.com