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Press release content from Business Wire. The AP news staff was not involved in its creation.

Valmont Reports Second Quarter 2021 Results and Increases 2021 Full-Year Guidance

July 21, 2021 GMT

OMAHA, Neb.--(BUSINESS WIRE)--Jul 21, 2021--

Valmont Industries, Inc. (NYSE: VMI), a leading global provider of engineered products and services for infrastructure development and irrigation equipment and services for agriculture, today reported financial results for the second quarter ended June 26, 2021.

Second Quarter 2021 Highlights (all metrics compared to Second Quarter 2020 unless otherwise noted)

  • Record Net Sales of $894.6 million, an increase of 29.9% with growth in all segments, led by significantly higher sales in Irrigation and Utility Support Structures
  • Operating Income improved to $82.6 million, or 9.2% of sales ($90.9 million or 10.2% adjusted 1 ) compared to $43.4 million or 6.3% of sales last year ($65.7 million or 9.5% adjusted 1 ), despite continued inflationary pressures
  • Diluted Earnings per Share (EPS) improved to $2.89 ($3.06 adjusted 1 ) compared to $1.06 ($2.00 adjusted 1 )
  • Record global backlog of more than $1.34 billion, an increase of 17.5% since the end of fiscal 2020, reflecting strong market demand
  • Received purchase orders and project awards totaling $72.0 million to supply Valmont Solar Solutions to the utility and agricultural markets
  • Generated operating cash flow of $37.0 million; cash and cash equivalents at end of second quarter were $199.3 million
  • Repurchased 42,150 shares of company stock for $10.5 million, at an average price of $248.47 per share
  • Recognized a favorable tax rate of 19.0% on a GAAP basis, primarily due to a non-recurring incremental tax benefit of $2.8 million attributed to a change in the United Kingdom tax rate; adjusted tax rate was 22.5% 1
  • Completed two acquisitions in the Irrigation segment; purchased 100% of the shares of Prospera Technologies, Ltd. and acquired 100% of the assets of PivoTrac
  • Commenced operations at a new greenfield Coatings facility in Pittsburgh, PA
  • Raising full-year Net Sales growth guidance from a range of 9% to 14%, to a range of 16% to 19% and increasing GAAP diluted EPS to $9.90 to $10.60 (Adjusted diluted EPS to $10.40 to $11.10) 1.

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Key Financial Metrics

Second Quarter

GAAP

 

Adjusted 1

(000's except per share amounts)

06/26/2021
2Q 2021

 

06/27/2020
2Q 2020

 

 

vs. 2Q 2021

 

06/26/2021
2Q 2021

 

06/27/2020
2Q 2020

 

vs. 2Q 2021

Net Sales

$

894,629

 

 

$

688,808

 

29.9

%

 

$

894,629

 

 

$

688,808

 

29.9

%

Operating Income

82,625

 

 

43,440

 

90.2

%

 

90,850

 

 

65,657

 

38.4

%

Operating Income as a % of Net Sales

9.2

%

 

6.3

%

 

 

10.2

%

 

9.5

%

 

Net Earnings

62,110

 

 

22,607

 

174.7

%

 

65,762

 

 

42,847

 

53.5

%

Diluted Earnings Per Share

$

2.89

 

 

$

1.06

 

172.6

%

 

$

3.06

 

 

$

2.00

 

53.0

%

Average Shares Outstanding

21,469

 

 

21,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-To-Date

GAAP

 

Adjusted 1

 

06/26/2021
YTD 2021

 

06/27/2020
YTD 2020

 

vs. YTD 2021

 

06/26/2021
YTD 2021

 

06/27/2020
YTD 2020

 

vs. YTD 2021

Net Sales

$

1,669,515

 

 

$

1,363,008

 

22.5

%

 

$

1,669,515

 

 

$

1,363,008

 

22.5

%

Operating Income

159,836

 

 

110,335

 

44.9

%

 

168,061

 

 

132,552

 

26.8

%

Operating Income as a % of Net Sales

9.6

%

 

8.1

%

 

 

10.1

%

 

9.7

%

 

Net Earnings

117,124

 

 

65,536

 

78.7

%

 

120,776

 

 

85,776

 

40.8

%

Diluted Earnings Per Share

$

5.46

 

 

$

3.05

 

79.0

%

 

$

5.63

 

 

$

3.99

 

41.1

%

Average Shares Outstanding

21,449

 

 

21,471

 

 

 

 

 

 

 

“We achieved record second-quarter sales, grew adjusted operating income nearly 40 percent year-over-year, despite persistent inflationary pressures that meaningfully impacted our Utility business, and delivered adjusted earnings per share growth of more than 50 percent,” said Stephen G. Kaniewski, President and Chief Executive Officer. “These solid results reflect the strength of our businesses, our continued focus on pricing actions to help offset inflation and the outstanding execution by our teams around the world. Sales growth was led by significantly higher sales in the Irrigation segment, as strong global agricultural market fundamentals continue to drive positive farmer sentiment, and deliveries of the large Egypt project continued. Higher volumes in Utility Support Structures were driven by continued strong underlying market demand for improving grid resiliency and increasing usage of renewable energy. Record second quarter sales in Engineered Support Structures and a focus on pricing, cost optimization, and the benefits of previous restructuring actions helped improve operating profit margins to nearly 12 percent. Coatings segment sales grew more than 22 percent, led by higher volumes as general economic trends are improving globally. We generated positive free cash flow despite significant increases in working capital to support robust sales growth.”

Added Kaniewski, “We completed the acquisition of Prospera Technologies during the quarter, advancing our strategy to accelerate growth and innovation through investments in recurring revenue services. Utilizing their award-winning technology and building on our successful partnership over the past two and a half years, together we have created the most global and vertically-integrated AI company in agriculture, focused on in-season crop performance. As discussed during our virtual Investor Day in May, this acquisition is a testament to our commitment to make the farm more efficient, increase productivity and dramatically improve sustainability. Together, we are expanding beyond our traditional markets, finding new ways to use less inputs in order to achieve higher crop yields. I am excited to welcome the entire Prospera team to Valmont.”

Second Quarter 2021 Segment Review

Infrastructure

Utility Support Structures Segment ( 29.9% of Sales)

Steel, concrete and composite structures for utility markets, including transmission, distribution, substations, renewable energy generation equipment and drone inspection services

Sales of $267.9 million grew 15.8% year-over-year, led by higher volumes due to increasing demand for renewable energy generation and utilities’ continued investments in grid resiliency, and increased pricing.

Operating Income was $15.0 million or 5.6% of sales ($21.2 million or 7.9% adjusted 1 ) compared to $21.7 million or 9.4% of sales ($25.3 million or 10.9% adjusted 1 ) in 2020. Higher volumes and operational efficiencies were more than offset by the impact of rapid raw material cost inflation of approximately $8.0 million that could not be fully recovered through pricing mechanisms during the quarter, and a higher mix of global generation products. GAAP operating income includes a $5.5 million receivable write-off following arbitration from a 2014 commercial transaction attributed to the offshore wind product line.

Engineered Support Structures Segment (30.1% of Sales)

Poles, towers and components for the lighting, transportation and wireless communication markets, engineered access systems, integrated structure solutions for smart cities, and highway safety products

Record sales of $269.4 million increased 6.3% year-over-year, as favorable pricing, higher sales of wireless communication products and components, and $11.5 million of favorable currency impacts primarily from the Australian dollar, more than offset lower volumes in transportation markets.

Lighting and transportation sales of $187.0 million increased 3.3% year-over-year. Favorable pricing in all regions, higher international volumes, mainly in Europe and Australia, and higher commercial lighting sales more than offset lower volumes in North American transportation markets, primarily due to delays in approving the 2020 FAST Act extension.

Wireless communication products and components sales of $54.6 million increased 7.2% year-over-year. Increasing capital investments from wireless carriers and favorable pricing led to the sales growth.

Access Systems sales of $27.9 million increased 29.8% year-over-year, primarily due to favorable currency impacts.

Operating Income improved to a record $31.9 million or 11.9% of sales compared to $4.8 million or 1.9% of sales ($22.9 million or 9.0% adjusted 1 ) in 2020. Profitability improvement was driven by favorable pricing, operational efficiencies, and lower SG&A expense including the benefit of previous restructuring actions.

Coatings Segment (11.0% of Sales)

Galvanizing, painting and anodizing services to preserve and protect metal products

Sales of $98.2 million increased 22.7% year-over-year, due to higher volumes driven by an improving macro-environment compared to last year, favorable pricing and $3.8 million of favorable currency impacts, primarily from the Australian dollar.

Operating Income improved to $14.7 million or 14.9% of sales compared to $10.1 million or 12.7% of sales ($10.4 million or 13.0% adjusted 1 ) in 2020. Profitability improvement was led by higher volumes, favorable pricing and operational efficiencies.

Agriculture

Irrigation Segment (31.5% of Sales)

Center pivots and linear irrigation equipment for agricultural markets, including, parts, services, and tubular products, and advanced technology solutions for water management and precision agriculture

Global sales of $282.0 million increased 87.2% year-over-year, due to higher volumes across all markets, particularly in North America, the Middle East and Brazil, favorable pricing, and higher technology sales.

North American sales of $156.1 million increased 57.6% compared to 2020. Sales growth was led by higher volumes and higher average selling prices due to continued strength in agricultural markets, and higher industrial tubing sales.

International sales of $125.9 million grew 144.0% year-over-year. Sales growth was led by ongoing deliveries of the large project for Egypt, strong demand in Brazil and higher sales in Europe.

Operating Income improved to $42.0 million, or 14.9% of sales ($42.9 million or 15.2% adjusted 1 ) compared to $22.4 million, or 14.8% of sales in 2020. Profitability growth was driven by higher volumes, favorable pricing and improved operational efficiencies, partially offset by higher R&D expense of approximately $3.1 million for technology growth investments and intangible asset amortization.

During the quarter, Valmont completed two acquisitions to advance its technology-enabled growth strategy to accelerate addressable market expansion. The Company purchased 100% of the shares of Prospera Technologies, Ltd., a global leader in artificial intelligence, machine learning and computer vision. The Company also acquired 100% of the assets of PivoTrac, a subscription-based provider of control technology and remote monitoring solutions for the southwest U.S. market.

Global Supply Chain and Continuation of COVID-19 Safety Protocols

Since the start of the pandemic, the Company has been taking measured and deliberate steps to strengthen its global supply chain. Through its strong relationships with many strategic suppliers, Valmont has experienced no significant supply disruptions, and has been able to continue procuring raw materials and components critical to its operations, including steel, aluminum and zinc. Other supply constraints have been largely mitigated by effectively utilizing the Company’s global footprint.

Valmont monitors health advisories on a continuous basis, particularly in areas reporting recent increases in infection including the more recent COVID-19 Delta variant. Valmont also continues to follow CDC, WHO and local guidelines to protect the safety, health and well-being of employees, customers, suppliers and communities.

Balance Sheet, Liquidity and Capital Allocation

The Company continues to generate positive operating cash flows through strong earnings and managing working capital to mitigate supply chain disruptions and support sales growth. At the end of second quarter, cash and cash equivalents were $199.3 million. The Company completed the acquisition of Prospera Technologies, Ltd. for $300 million, funded by a combination of cash and short-term borrowings on its revolving credit facility. Valmont purchased $10.5 million of company stock in the second quarter, and $126.4 million remains on the current authorization with no expiration. Subsequent to the Prospera acquisition, Moody’s completed a periodic ratings review resulting in no change to the Company’s Baa3 credit rating. The Company remains committed to maintaining its Investment Grade rating.

Updating 2021 Financial Outlook and Key Assumptions

The Company is updating its full-year outlook and providing key assumptions for the remainder of 2021. Valmont now expects full-year Net Sales to increase 16% to 19%, and Irrigation segment sales to increase 45% to 50%. GAAP diluted EPS is expected to be $9.90 to $10.60 and adjusted diluted EPS is expected to be $10.40 to $11.10 1. The increased guidance reflects the Company’s strong year-to-date results, strength in global agricultural markets, continued favorable end-market demand across all businesses and expected recovery of cost inflation.

2021 Full Year Financial Outlook

Previous Outlook

Revised Outlook

Net Sales Growth (vs. PY)

9% to 14%

16% to 19%

Irrigation Segment Sales Growth (vs. PY)

27% to 30%

45% to 50%

GAAP Diluted EPS 1

$9.30 to $10.00

$9.90 to $10.60

Adjusted Diluted EPS 1

NA

$10.40 to $11.10

  • Favorable foreign currency translation impact of approximately 2.0% of Net Sales
  • Second half 2021 tax rate of approximately 25.0% as benefits from favorable tax planning strategies will not continue in second half 2021; assumes no tax law changes
  • Capital expenditures to be in the range of $110 - $120 million to support strategic growth and Industry 4.0 advanced manufacturing initiatives
  • No closures of large manufacturing facilities, workforce disruptions, or significant supply chain interruptions

Kaniewski added, “The strong market drivers we are seeing across our businesses, and our team’s proven ability to manage through this unprecedented inflationary environment gives us confidence about the remainder of this year and provides good tailwinds for us into 2022. On that basis, we are raising both our revenue and earnings guidance for 2021. We entered the third quarter with a robust backlog of more than $1.3 billion, improving planning and supply chain management. In the Utility Support Structures segment, we expect meaningful sequential margin improvement in the second half of 2021 as pricing becomes more aligned with steel cost inflation. Our backlog of more than $675.0 million in this segment is indicative of long-term market drivers of grid resiliency and the increasing use of renewable energy. In Engineered Support Structures, current and future stimulus will continue to benefit global markets and the long-term need for critical infrastructure investment globally gives us confidence in future growth. We are benefiting from increasing demand in wireless communications markets as 5G build-outs continue to ramp. Our Coatings business is trending in-line with improving economic conditions. In Irrigation, the large project for Egypt, a solid international project pipeline and favorable market trends globally are providing strong momentum well into 2022. Across the portfolio, we continue to quickly execute pricing strategies to recover the impact of inflation and leverage the strength of our global supply chain. Additionally, our balance sheet remains strong, giving us flexibility to execute our long-term strategic plan. I’m also proud of our team’s continued efforts to elevate ESG across the company, as demonstrated by recent external score improvements and additional highlights we’ve shared on our Valmont Sustainability site. ESG is an important priority for us and we are encouraged by this recognition as we remain focused on this key initiative.”

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 22, 2021 at 8:00 a.m. CDT 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 2Q 2021 Earnings Conference Call. A slide presentation will simultaneously be available for download on the Investors page at valmont.com. A replay of the event can be accessed two hours after the call at the above link or by telephone at 1-877-660-6853 or 1-201-612-7415. Please use conference identification number 13713722. The replay will be available through 10:59 p.m. CDT on July 29, 2021.

About Valmont Industries, Inc.

Valmont is a global leader, designing and manufacturing engineered products and services that support global infrastructure development and agricultural productivity. Its products for infrastructure serve highway, transportation, wireless communication, electric transmission, and industrial construction and energy markets. Its irrigation equipment and services for large-scale agriculture improve farm productivity while conserving fresh water resources. In addition, Valmont provides coatings services that protect against corrosion and improve the service life of steel and other metal products. For more information, visit 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, 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 of GAAP sales, operating income, net earnings and EPS to Adjusted figures 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

 

 

 

 

 

 

 

 

 

26-Jun-21

 

27-Jun-20

 

26-Jun-21

 

27-Jun-20

Net sales

$

894,629

 

 

$

688,808

 

 

$

1,669,515

 

 

$

1,363,008

 

Cost of sales

664,982

 

 

504,871

 

 

1,235,314

 

 

992,822

 

Gross profit

229,647

 

 

183,937

 

 

434,201

 

 

370,186

 

Selling, general and administrative expenses

147,022

 

 

123,859

 

 

274,365

 

 

243,213

 

Impairment of goodwill and intangible assets

 

 

16,638

 

 

 

 

16,638

 

Operating income

82,625

 

 

43,440

 

 

159,836

 

 

110,335

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

(10,436

)

 

(10,098

)

 

(20,435

)

 

(20,112

)

Interest income

186

 

 

458

 

 

497

 

 

1,501

 

Gain on investments (unrealized)

1,177

 

 

2,510

 

 

1,068

 

 

202

 

Other

4,204

 

 

(694

)

 

7,653

 

 

1,116

 

Other income (expense), net

(4,869

)

 

(7,824

)

 

(11,217

)

 

(17,293

)

Earnings before income taxes

77,756

 

 

35,616

 

 

148,619

 

 

93,042

 

Income tax expense

14,740

 

 

12,602

 

 

30,242

 

 

27,088

 

Equity in (loss) of nonconsolidated subsidiaries

(359

)

 

(260

)

 

(719

)

 

(479

)

Net earnings

62,657

 

 

22,754

 

 

117,658

 

 

65,475

 

Less: Loss (earnings) attributable to non-controlling interests

(547

)

 

(147

)

 

(534

)

 

61

 

Net earnings attributable to Valmont Industries, Inc.

$

62,110

 

 

$

22,607

 

 

$

117,124

 

 

$

65,536

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Basic

21,193

 

 

21,312

 

 

21,186

 

 

21,383

 

Earnings per share - Basic

$

2.93

 

 

$

1.06

 

 

$

5.53

 

 

$

3.06

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Diluted

21,469

 

 

21,393

 

 

21,449

 

 

21,471

 

Earnings per share - Diluted

$

2.89

 

 

$

1.06

 

 

$

5.46

 

 

$

3.05

 

 

 

 

 

 

 

 

 

Cash dividends per share

$

0.500

 

 

$

0.450

 

 

$

1.000

 

 

$

0.900

 

 

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(unaudited)

 

 

Second Quarter

 

Year-to-Date

 

13 Weeks Ended

 

26 Weeks Ended

 

26-Jun-21

 

27-Jun-20

 

26-Jun-21

 

27-Jun-20

Net sales

 

 

 

 

 

 

 

Utility Support Structures

$

267,863

 

 

$

231,324

 

 

$

520,996

 

 

$

456,785

 

Engineered Support Structures

269,389

 

 

253,385

 

 

491,716

 

 

484,127

 

Coatings

98,158

 

 

80,005

 

 

191,446

 

 

168,090

 

Infrastructure products

635,410

 

 

564,714

 

 

1,204,158

 

 

1,109,002

 

Irrigation

281,965

 

 

150,639

 

 

511,629

 

 

307,359

 

Less: Intersegment sales

(22,746

)

 

(26,545

)

 

(46,272

)

 

(53,353

)

Total

$

894,629

 

 

$

688,808

 

 

$

1,669,515

 

 

$

1,363,008

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

Utility Support Structures

$

14,955

 

 

$

21,650

 

 

$

36,607

 

 

$

49,374

 

Engineered Support Structures

31,927

 

 

4,818

 

 

51,852

 

 

20,749

 

Coatings

14,668

 

 

10,148

 

 

27,540

 

 

21,202

 

Infrastructure products

61,550

 

 

36,616

 

 

115,999

 

 

91,325

 

Irrigation

41,984

 

 

22,351

 

 

80,732

 

 

46,014

 

Corporate

(20,909

)

 

(15,527

)

 

(36,895

)

 

(27,004

)

Total

$

82,625

 

 

$

43,440

 

 

$

159,836

 

 

$

110,335

 

 

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

Utility Support Structures: This segment consists of the manufacture of steel, concrete and composite structures for utility markets, including transmission, distribution, substations, renewable energy generation equipment and drone inspection services..

Engineered Support Structures: This segment consists of the manufacture and distribution of poles, towers and components for the lighting, transportation and wireless communication markets, engineered access systems, integrated structure solutions for smart cities, and highway safety products.

Coatings: This segment consists of global galvanizing, painting and anodizing services to preserve and protect metal products.

Irrigation: This segment consists of the global manufacture of center pivots and linear irrigation equipment for agricultural markets, including, parts, services, and tubular products, and advanced technology solutions for water management and precision agriculture

 

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

 

 

26-Jun-21

 

26-Dec-20

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

199,285

 

 

$

400,726

 

Accounts receivable, net

559,323

 

 

511,714

 

Inventories

593,498

 

 

448,941

 

Contract asset - costs and profits in excess of billings

140,146

 

 

123,495

 

Prepaid expenses and other assets

103,022

 

 

59,804

 

Refundable income taxes

 

 

9,945

 

Total current assets

1,595,274

 

 

1,554,625

 

Property, plant and equipment, net

609,867

 

 

597,727

 

Goodwill and other assets

1,198,995

 

 

800,808

 

 

$

3,404,136

 

 

$

2,953,160

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Current installments of long-term debt

$

5,628

 

 

$

2,748

 

Notes payable to banks

29,449

 

 

35,147

 

Accounts payable

324,946

 

 

268,099

 

Accrued expenses

208,191

 

 

227,735

 

Contract liability - billings in excess of costs and earnings

156,481

 

 

130,018

 

Income taxes payable

11,920

 

 

 

Dividend payable

10,607

 

 

9,556

 

Total current liabilities

747,222

 

 

673,303

 

Long-term debt, excluding current installments

860,878

 

 

728,431

 

Other long-term liabilities

474,552

 

 

343,590

 

Shareholders' equity

1,321,484

 

 

1,207,836

 

 

$

3,404,136

 

 

$

2,953,160

 

 

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

 

 

Second Quarter

 

26 Weeks Ended

 

26-Jun-21

 

27-Jun-20

Cash flows from operating activities

 

 

 

Net Earnings

$

117,658

 

 

$

65,475

 

Depreciation and amortization

44,063

 

 

40,584

 

Impairment of long-lived assets

 

 

18,896

 

Contribution to defined benefit pension plan

(970

)

 

(17,138

)

Change in working capital

(84,455

)

 

42,280

 

Other

(6,111

)

 

647

 

Net cash flows from operating activities

70,185

 

 

150,744

 

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of property, plant, and equipment

(48,824

)

 

(48,165

)

Acquisitions

(312,500

)

 

(15,862

)

Other

(74

)

 

11,015

 

Net cash flows from investing activities

(361,398

)

 

(53,012

)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from long-term borrowings

149,342

 

 

88,872

 

Payments on short-term borrowings

(5,049

)

 

(6,255

)

Principal payments on long-term borrowings

(15,421

)

 

(75,568

)

Purchase of treasury shares

(21,600

)

 

(20,481

)

Purchase of noncontrolling interest

 

 

(55,916

)

Dividends paid

(20,181

)

 

(17,704

)

Other

2,969

 

 

(4,923

)

Net cash flows from financing activities

90,060

 

 

(91,975

)

Effect of exchange rates on cash and cash equivalents

(288

)

 

(5,951

)

Net change in cash and cash equivalents

(201,441

)

 

(194

)

Cash and cash equivalents - beginning of year

400,726

 

 

353,542

 

Cash and cash equivalents - end of period

$

199,285

 

 

$

353,348

 

 

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 a write off a receivable from 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%). 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

 

Diluted

 

Twenty-six

 

Diluted

 

weeks ended

 

earnings per

 

weeks ended

 

earnings per

 

June 26, 2021

 

share

 

June 26, 2021

 

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

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 adjustments *

(1,754

)

 

(0.08

)

 

(1,754

)

 

(0.08

)

Net earnings attributable to Valmont Industries, Inc. - Adjusted

$

65,762

 

 

$

3.06

 

 

$

120,776

 

 

$

5.63

 

Average shares outstanding (000’s) - Diluted

 

 

21,469

 

 

 

 

21,449

 

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

 

 

 

 

Thirteen weeks ended June 26, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Reconciliation

 

Engineered
Support
Structures

 

Utility
Support
Structures

 

Coatings

 

Irrigation

 

Corporate

 

Valmont

Operating income - as reported

 

$

31,927

 

 

$

14,955

 

 

$

14,668

 

 

$

41,984

 

 

$

(20,909

)

 

$

82,625

 

Write-off 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

 

$

31,927

 

 

$

21,150

 

 

$

14,668

 

 

$

42,894

 

 

$

(19,789

)

 

$

90,850

 

Net Sales - as reported

 

269,389

 

 

267,863

 

 

98,158

 

 

281,965

 

 

NM

 

 

894,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

 

11.9

%

 

5.6

%

 

14.9

%

 

14.9

%

 

NM

 

 

9.2

%

Adjusted Operating Income as a % of Sales

 

11.9

%

 

7.9

%

 

14.9

%

 

15.2

%

 

NM

 

 

10.2

%

 

 

 

 

Twenty-six weeks ended June 26, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Reconciliation

 

Engineered
Support
Structures

 

Utility
Support
Structures

 

Coatings

 

Irrigation

 

Corporate

 

Valmont

Operating income - as reported

 

$

51,852

 

 

$

36,607

 

 

$

27,540

 

 

$

80,732

 

 

$

(36,895

)

 

$

159,836

 

Write off 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

 

$

51,852

 

 

$

42,802

 

 

$

27,540

 

 

$

81,642

 

 

$

(35,775

)

 

$

168,061

 

Net Sales - as reported

 

491,716

 

 

520,996

 

 

191,446

 

 

511,629

 

 

NM

 

 

1,669,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

 

10.5

%

 

7.0

%

 

14.4

%

 

15.8

%

 

NM

 

 

9.6

%

Adjusted Operating Income as a % of Sales

 

10.5

%

 

8.2

%

 

14.4

%

 

16.0

%

 

NM

 

 

10.1

%

 

The non-GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, tradenames, and a facility and (2) restructuring costs (b) operating income from these expenses, and (c) segment operating income for these items. 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 for the second quarter and first half of fiscal 2020.

 

 

Thirteen

 

Diluted

 

Twenty-six

 

Diluted

 

weeks ended

 

earnings per

 

weeks ended

 

earnings per

 

June 27, 2020

 

share

 

June 27, 2020

 

share

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

$

22,607

 

 

$

1.06

 

 

 

$

65,536

 

 

$

3.05

 

Impairment of goodwill and tradename, pre-tax

16,638

 

 

0.78

 

 

 

16,638

 

 

0.77

 

Restructuring and related asset impairment costs - pre-tax

5,579

 

 

0.26

 

 

 

5,579

 

 

0.26

 

Total Adjustments

22,217

 

 

1.04

 

 

 

22,217

 

 

1.03

 

Tax effect of adjustments *

(1,977

)

 

(0.09

)

 

 

(1,977

)

 

(0.09

)

Net earnings attributable to Valmont Industries, Inc. - Adjusted

$

42,847

 

 

$

2.00

 

 

 

$

85,776

 

 

$

3.99

 

Average shares outstanding (000’s) - Diluted

 

 

21,393

 

 

 

 

 

21,471

 

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

 

 

 

 

Thirteen weeks ended June 27, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Reconciliation

 

Engineered
Support
Structures

 

Utility
Support
Structures

 

Coatings

 

Irrigation

 

Corporate

 

Valmont

Operating income - as reported

 

$

4,818

 

 

$

21,650

 

 

$

10,148

 

 

$

22,351

 

 

$

(15,527

)

 

$

43,440

 

Impairment of goodwill and tradename

 

16,638

 

 

 

 

 

 

 

 

 

 

16,638

 

Restructuring and related asset impairment costs

 

1,462

 

 

3,674

 

 

222

 

 

 

 

221

 

 

5,579

 

Adjusted Operating Income

 

$

22,918

 

 

$

25,324

 

 

$

10,370

 

 

$

22,351

 

 

$

(15,306

)

 

$

65,657

 

Net Sales - as reported

 

253,385

 

 

231,324

 

 

80,005

 

 

150,639

 

 

NM

 

 

688,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

 

1.9

%

 

9.4

%

 

12.7

%

 

14.8

%

 

NM

 

 

6.3

%

Adjusted Operating Income as a % of Sales

 

9.0

%

 

10.9

%

 

13.0

%

 

14.8

%

 

NM

 

 

9.5

%

 

 

 

 

Twenty-six weeks ended June 27, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Reconciliation

 

Engineered
Support
Structures

 

Utility
Support
Structures

 

Coatings

 

Irrigation

 

Corporate

 

Valmont

Operating income - as reported

 

$

20,749

 

 

$

49,374

 

 

$

21,202

 

 

$

46,014

 

 

$

(27,004

)

 

$

110,335

 

Impairment of goodwill and tradename

 

16,638

 

 

 

 

 

 

 

 

 

 

16,638

 

Restructuring and related asset impairment costs

 

1,462

 

 

3,674

 

 

222

 

 

 

 

221

 

 

5,579

 

Adjusted Operating Income

 

$

38,849

 

 

$

53,048

 

 

$

21,424

 

 

$

46,014

 

 

$

(26,783

)

 

$

132,552

 

Net Sales - as reported

 

484,127

 

 

456,785

 

 

168,090

 

 

307,359

 

 

NM

 

 

1,363,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

 

4.3

%

 

10.8

%

 

12.6

%

 

15.0

%

 

NM

 

 

8.1

%

Adjusted Operating Income as a % of Sales

 

8.0

%

 

11.6

%

 

12.7

%

 

15.0

%

 

NM

 

 

9.7

%

 

 

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) write off a receivable from a commercial transaction from 2014 (2) restructuring costs, (3) acquisition diligence costs and (4) six months of (a) amortization of the technology intangible asset (Prospera Technologies) and (b) share-based compensation for Prospera employees. 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 for fiscal 2021.

 

 

 

 

 

 

Reconciliation of Range of Net Earnings - Full Year 2021

Low End

 

High End

 

Adjustments

Estimated net earnings - GAAP

$

213,000

 

 

$

228,000

 

 

 

Write-off of a receivable, pre-tax

 

 

 

 

5,545

 

Acquisition diligence expense, pre-tax

 

 

 

 

1,120

 

Estimated restructuring expense, pre-tax

 

 

 

 

1,560

 

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

 

 

 

 

3,750

 

Share-based compensation - Prospera (ML & AI subsidiary), pre-tax

 

 

 

 

5,544

 

Total pre-tax adjustments

 

 

 

 

17,519

 

Estimated tax benefit from above expenses*

 

 

 

 

(3,700

)

Change in U.K. statutory tax rate

 

 

 

 

(2,819

)

Total Adjustments, after-tax

 

 

 

 

$

11,000

 

Estimated net earnings - Adjusted

$

224,000

 

 

$

239,000

 

 

 

Diluted Earnings Per Share Range - GAAP

$

9.90

 

 

$

10.60

 

 

 

Diluted Earnings Per Share Range - Adjusted

$

10.40

 

 

$

11.10

 

 

 

____________________

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

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20210721005899/en/

CONTACT: Renee Campbell

+1 402.963.1057

KEYWORD: UNITED STATES NORTH AMERICA NEBRASKA

INDUSTRY KEYWORD: OTHER MANUFACTURING CONSTRUCTION & PROPERTY STEEL ENGINEERING MANUFACTURING BUILDING SYSTEMS AGRICULTURE OTHER CONSTRUCTION & PROPERTY NATURAL RESOURCES

SOURCE: Valmont Industries, Inc.

Copyright Business Wire 2021.

PUB: 07/21/2021 04:16 PM/DISC: 07/21/2021 04:17 PM

http://www.businesswire.com/news/home/20210721005899/en