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TABLE OF CONTENTS
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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(Mark One) |
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ý |
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 27, 2015 |
or |
o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period
from to
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Commission file number 1-31429 |
Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization) |
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47-0351813
(I.R.S. Employer
Identification No.) |
One Valmont Plaza, |
|
|
Omaha, Nebraska |
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68154-5215 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
(402) 963-1000
(Registrant's telephone number, including area code) |
(Former name, former address and former fiscal year, if changed since last report) |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ý |
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Accelerated filer o |
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Non-accelerated filer o (Do not check if a
smaller reporting company) |
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Smaller reporting company o |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No ý
23,248,776
Outstanding shares of common stock as of July 22, 2015
Table of Contents
VALMONT INDUSTRIES, INC.
INDEX TO FORM 10-Q
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Page No. |
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PART I. FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements: |
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Condensed Consolidated Statements of Earnings for the thirteen and twenty-six weeks ended June 27, 2015 and June 28,
2014 |
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3 |
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Condensed Consolidated Statements of Comprehensive Income for the thirteen and twenty-six weeks ended June 27, 2015 and
June 28, 2014 |
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4 |
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Condensed Consolidated Balance Sheets as of June 27, 2015 and December 27, 2014 |
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5 |
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Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended June 27, 2015 and June 28,
2014 |
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6 |
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Condensed Consolidated Statements of Shareholders' Equity for the twenty-six weeks ended June 27, 2015 and June 28,
2014 |
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7 |
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Notes to Condensed Consolidated Financial Statements |
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8 |
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Item 2. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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35 |
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Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
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45 |
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Item 4. |
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Controls and Procedures |
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45 |
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PART II. OTHER INFORMATION |
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Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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47 |
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Item 6. |
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Exhibits |
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47 |
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Signatures |
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48 |
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2
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
(Unaudited)
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Thirteen Weeks Ended |
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Twenty-six Weeks Ended |
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June 27,
2015 |
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June 28,
2014 |
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June 27,
2015 |
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June 28,
2014 |
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Product sales |
|
$ |
611,782 |
|
$ |
766,844 |
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$ |
1,215,676 |
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$ |
1,447,887 |
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Services sales |
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70,341 |
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75,755 |
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136,845 |
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146,452 |
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Net sales |
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682,123 |
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842,599 |
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1,352,521 |
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1,594,339 |
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Product cost of sales |
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461,173 |
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573,067 |
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920,714 |
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1,070,910 |
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Services cost of sales |
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51,402 |
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49,055 |
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96,805 |
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95,970 |
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Total cost of sales |
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512,575 |
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622,122 |
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1,017,519 |
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1,166,880 |
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Gross profit |
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169,548 |
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220,477 |
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335,002 |
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427,459 |
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Selling, general and administrative expenses |
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115,548 |
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115,701 |
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223,319 |
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223,835 |
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Operating income |
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54,000 |
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104,776 |
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111,683 |
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203,624 |
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Other income (expenses): |
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Interest expense |
|
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(11,232 |
) |
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(8,304 |
) |
|
(22,360 |
) |
|
(16,501 |
) |
Interest income |
|
|
616 |
|
|
1,577 |
|
|
1,490 |
|
|
3,316 |
|
Other |
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(28 |
) |
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1,903 |
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|
988 |
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(3,909 |
) |
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|
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|
|
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(10,644 |
) |
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(4,824 |
) |
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(19,882 |
) |
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(17,094 |
) |
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Earnings before income taxes |
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43,356 |
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99,952 |
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91,801 |
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186,530 |
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Income tax expense (benefit): |
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Current |
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19,136 |
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26,117 |
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30,910 |
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59,055 |
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Deferred |
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(5,219 |
) |
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7,953 |
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(55 |
) |
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5,030 |
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|
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|
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13,917 |
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34,070 |
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30,855 |
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64,085 |
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Earnings before equity in earnings of nonconsolidated subsidiaries |
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29,439 |
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65,882 |
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60,946 |
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122,445 |
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Equity in earnings of nonconsolidated subsidiaries |
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(30 |
) |
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(30 |
) |
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Net earnings |
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29,439 |
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65,852 |
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60,946 |
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122,415 |
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Less: Earnings attributable to noncontrolling interests |
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(1,566 |
) |
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(1,876 |
) |
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(2,334 |
) |
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(2,459 |
) |
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Net earnings attributable to Valmont Industries, Inc. |
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$ |
27,873 |
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$ |
63,976 |
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$ |
58,612 |
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$ |
119,956 |
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Earnings per share: |
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Basic |
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$ |
1.19 |
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$ |
2.40 |
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$ |
2.48 |
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$ |
4.50 |
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Diluted |
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$ |
1.19 |
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$ |
2.38 |
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$ |
2.47 |
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$ |
4.46 |
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Cash dividends declared per share |
|
$ |
0.375 |
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$ |
0.375 |
|
$ |
0.750 |
|
$ |
0.625 |
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Weighted average number of shares of common stock outstandingBasic (000 omitted) |
|
|
23,336 |
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|
26,623 |
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23,602 |
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|
26,669 |
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Weighted average number of shares of common stock outstandingDiluted (000 omitted) |
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23,450 |
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26,856 |
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23,716 |
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26,903 |
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See accompanying notes to condensed consolidated financial statements.
3
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
|
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|
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|
|
|
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Thirteen Weeks
Ended |
|
Twenty-six Weeks Ended |
|
|
|
June 27,
2015 |
|
June 28,
2014 |
|
June 27,
2015 |
|
June 28,
2014 |
|
Net earnings |
|
$ |
29,439 |
|
$ |
65,852 |
|
$ |
60,946 |
|
$ |
122,415 |
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Other comprehensive income (loss), net of tax: |
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Foreign currency translation adjustments: |
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|
|
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|
Unrealized translation gain (loss)
|
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18,328 |
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13,869 |
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(39,850 |
) |
|
25,506 |
|
Unrealized gain/(loss) on cash flow hedge: |
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Amortization cost included in interest expense |
|
|
19 |
|
|
(33 |
) |
|
37 |
|
|
67 |
|
Gain on cash flow hedges |
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|
751 |
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|
|
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|
1,045 |
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Actuarial gain (loss) in defined benefit pension plan |
|
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|
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|
(614 |
) |
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|
|
|
(847 |
) |
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|
|
|
|
|
|
|
|
|
|
|
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Other comprehensive income (loss) |
|
|
19,098 |
|
|
13,222 |
|
|
(38,768 |
) |
|
24,726 |
|
|
|
|
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|
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Comprehensive income (loss) |
|
|
48,537 |
|
|
79,074 |
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|
22,178 |
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|
147,141 |
|
Comprehensive loss (income) attributable to noncontrolling interests |
|
|
(1,968 |
) |
|
(1,792 |
) |
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(641 |
) |
|
(1,704 |
) |
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|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to Valmont Industries, Inc. |
|
$ |
46,569 |
|
$ |
77,282 |
|
$ |
21,537 |
|
$ |
145,437 |
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See accompanying notes to condensed consolidated financial statements.
4
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except shares and per share amounts)
(Unaudited)
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June 27,
2015 |
|
December 27,
2014 |
|
ASSETS |
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Current assets: |
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Cash and cash equivalents |
|
$ |
317,523 |
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$ |
371,579 |
|
Receivables, net |
|
|
491,706 |
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|
536,918 |
|
Inventories |
|
|
379,897 |
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|
359,522 |
|
Prepaid expenses |
|
|
56,653 |
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|
56,912 |
|
Refundable and deferred income taxes |
|
|
44,072 |
|
|
68,010 |
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|
|
|
|
|
|
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|
Total current assets |
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|
1,289,851 |
|
|
1,392,941 |
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|
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Property, plant and equipment, at cost |
|
|
1,123,885 |
|
|
1,139,569 |
|
Less accumulated depreciation and amortization |
|
|
552,908 |
|
|
533,116 |
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|
|
|
|
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|
Net property, plant and equipment |
|
|
570,977 |
|
|
606,453 |
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|
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|
|
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|
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Goodwill |
|
|
380,086 |
|
|
385,111 |
|
Other intangible assets, net |
|
|
189,892 |
|
|
202,004 |
|
Other assets |
|
|
136,586 |
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|
143,159 |
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|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,567,392 |
|
$ |
2,729,668 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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|
|
|
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|
Current installments of long-term debt |
|
$ |
1,096 |
|
$ |
1,181 |
|
Notes payable to banks |
|
|
7,914 |
|
|
13,952 |
|
Accounts payable |
|
|
186,421 |
|
|
196,565 |
|
Accrued employee compensation and benefits |
|
|
75,155 |
|
|
87,950 |
|
Accrued expenses |
|
|
89,983 |
|
|
88,480 |
|
Dividends payable |
|
|
8,733 |
|
|
9,086 |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
369,302 |
|
|
397,214 |
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
62,959 |
|
|
71,797 |
|
Long-term debt, excluding current installments |
|
|
765,272 |
|
|
766,654 |
|
Defined benefit pension liability |
|
|
135,068 |
|
|
150,124 |
|
Deferred compensation |
|
|
51,056 |
|
|
47,932 |
|
Other noncurrent liabilities |
|
|
43,142 |
|
|
45,542 |
|
Shareholders' equity: |
|
|
|
|
|
|
|
Preferred stock of $1 par value |
|
|
|
|
|
|
|
Authorized 500,000 shares; none issued |
|
|
|
|
|
|
|
Common stock of $1 par value |
|
|
|
|
|
|
|
Authorized 75,000,000 shares; 27,900,000 issued |
|
|
27,900 |
|
|
27,900 |
|
Retained earnings |
|
|
1,762,534 |
|
|
1,718,662 |
|
Accumulated other comprehensive income (loss) |
|
|
(171,508 |
) |
|
(134,433 |
) |
Treasury stock |
|
|
(525,877 |
) |
|
(410,296 |
) |
|
|
|
|
|
|
|
|
Total Valmont Industries, Inc. shareholders' equity |
|
|
1,093,049 |
|
|
1,201,833 |
|
|
|
|
|
|
|
|
|
Noncontrolling interest in consolidated subsidiaries |
|
|
47,544 |
|
|
48,572 |
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
1,140,593 |
|
|
1,250,405 |
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,567,392 |
|
$ |
2,729,668 |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
5
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Twenty-six Weeks Ended |
|
|
|
June 27,
2015 |
|
June 28,
2014 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net earnings |
|
$ |
60,946 |
|
$ |
122,415 |
|
Adjustments to reconcile net earnings to net cash flows from operations: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
47,761 |
|
|
43,368 |
|
Noncash loss on trading securities |
|
|
4,582 |
|
|
3,501 |
|
Impairment of assets |
|
|
9,292 |
|
|
|
|
Stock-based compensation |
|
|
3,513 |
|
|
3,686 |
|
Defined benefit pension plan expense |
|
|
(305 |
) |
|
1,334 |
|
Contribution to defined benefit pension plan |
|
|
(15,735 |
) |
|
(17,484 |
) |
Gain on sale of property, plant and equipment |
|
|
542 |
|
|
(102 |
) |
Equity in earnings in nonconsolidated subsidiaries |
|
|
|
|
|
30 |
|
Deferred income taxes |
|
|
(55 |
) |
|
5,030 |
|
Changes in assets and liabilities (net of acquisitions): |
|
|
|
|
|
|
|
Receivables |
|
|
32,511 |
|
|
21,083 |
|
Inventories |
|
|
(27,746 |
) |
|
6,624 |
|
Prepaid expenses |
|
|
(3,087 |
) |
|
(18,289 |
) |
Accounts payable |
|
|
(5,021 |
) |
|
(28,633 |
) |
Accrued expenses |
|
|
(6,431 |
) |
|
(30,415 |
) |
Other noncurrent liabilities |
|
|
1,761 |
|
|
1,766 |
|
Income taxes refundable |
|
|
15,817 |
|
|
(22,063 |
) |
|
|
|
|
|
|
|
|
Net cash flows from operating activities |
|
|
118,345 |
|
|
91,851 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(24,758 |
) |
|
(46,991 |
) |
Proceeds from sale of assets |
|
|
1,101 |
|
|
1,151 |
|
Acquisitions, net of cash acquired |
|
|
|
|
|
(120,483 |
) |
Other, net |
|
|
5,896 |
|
|
(2,940 |
) |
|
|
|
|
|
|
|
|
Net cash flows from investing activities |
|
|
(17,761 |
) |
|
(169,263 |
) |
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
Net borrowings under short-term agreements |
|
|
(5,890 |
) |
|
(1,861 |
) |
Proceeds from long-term borrowings |
|
|
33,000 |
|
|
|
|
Principal payments on long-term borrowings |
|
|
(33,657 |
) |
|
(259 |
) |
Dividends paid |
|
|
(17,956 |
) |
|
(13,427 |
) |
Dividends to noncontrolling interest |
|
|
(1,669 |
) |
|
(1,340 |
) |
Purchase of treasury shares |
|
|
(121,020 |
) |
|
(77,084 |
) |
Proceeds from exercises under stock plans |
|
|
9,454 |
|
|
11,996 |
|
Excess tax benefits from stock option exercises |
|
|
1,394 |
|
|
3,576 |
|
Purchase of common treasury sharesstock plan exercises |
|
|
(10,490 |
) |
|
(11,984 |
) |
|
|
|
|
|
|
|
|
Net cash flows from financing activities |
|
|
(146,834 |
) |
|
(90,383 |
) |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(7,806 |
) |
|
10,016 |
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
(54,056 |
) |
|
(157,779 |
) |
Cash and cash equivalentsbeginning of year |
|
|
371,579 |
|
|
613,706 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalentsend of period |
|
$ |
317,523 |
|
$ |
455,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
6
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock |
|
Additional
paid-in
capital |
|
Retained
earnings |
|
Accumulated
other
comprehensive
income (loss) |
|
Treasury
stock |
|
Noncontrolling
interest in
consolidated
subsidiaries |
|
Total
shareholders'
equity |
|
Balance at December 28, 2013 |
|
$ |
27,900 |
|
$ |
|
|
$ |
1,562,670 |
|
$ |
(47,685 |
) |
$ |
(20,860 |
) |
$ |
22,821 |
|
$ |
1,544,846 |
|
Net earnings |
|
|
|
|
|
|
|
|
119,956 |
|
|
|
|
|
|
|
|
2,459 |
|
|
122,415 |
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
25,481 |
|
|
|
|
|
(755 |
) |
|
24,726 |
|
Cash dividends declared |
|
|
|
|
|
|
|
|
(16,651 |
) |
|
|
|
|
|
|
|
|
|
|
(16,651 |
) |
Dividends to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,340 |
) |
|
(1,340 |
) |
Acquisition of DS SM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,232 |
|
|
9,232 |
|
Addition of noncontrolling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
404 |
|
|
404 |
|
Purchase of treasury shares; 490,172 shares acquired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(77,084 |
) |
|
|
|
|
(77,084 |
) |
Stock plan exercises; 78,217 shares acquired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,984 |
) |
|
|
|
|
(11,984 |
) |
Stock options exercised; 158,317 shares issued |
|
|
|
|
|
(7,262 |
) |
|
6,312 |
|
|
|
|
|
12,946 |
|
|
|
|
|
11,996 |
|
Tax benefit from stock option exercises |
|
|
|
|
|
3,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,576 |
|
Stock option expense |
|
|
|
|
|
2,525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,525 |
|
Stock awards; 8,822 shares issued |
|
|
|
|
|
1,161 |
|
|
|
|
|
|
|
|
1,268 |
|
|
|
|
|
2,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 28, 2014 |
|
$ |
27,900 |
|
$ |
|
|
$ |
1,672,287 |
|
$ |
(22,204 |
) |
$ |
(95,714 |
) |
$ |
32,821 |
|
$ |
1,615,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 27, 2014 |
|
$ |
27,900 |
|
$ |
|
|
$ |
1,718,662 |
|
$ |
(134,433 |
) |
$ |
(410,296 |
) |
$ |
48,572 |
|
$ |
1,250,405 |
|
Net earnings |
|
|
|
|
|
|
|
|
58,612 |
|
|
|
|
|
|
|
|
2,334 |
|
|
60,946 |
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
(37,075 |
) |
|
|
|
|
(1,693 |
) |
|
(38,768 |
) |
Cash dividends declared |
|
|
|
|
|
|
|
|
(17,603 |
) |
|
|
|
|
|
|
|
|
|
|
(17,603 |
) |
Dividends to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,669 |
) |
|
(1,669 |
) |
Purchase of treasury shares; 989,821 shares acquired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(121,020 |
) |
|
|
|
|
(121,020 |
) |
Stock plan exercises; 82,989 shares acquired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,490 |
) |
|
|
|
|
(10,490 |
) |
Stock options exercised; 119,687 shares issued |
|
|
|
|
|
(8,860 |
) |
|
2,863 |
|
|
|
|
|
15,451 |
|
|
|
|
|
9,454 |
|
Tax benefit from stock option exercises |
|
|
|
|
|
1,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,394 |
|
Stock option expense |
|
|
|
|
|
2,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,653 |
|
Stock awards; 4,846 shares issued |
|
|
|
|
|
4,813 |
|
|
|
|
|
|
|
|
478 |
|
|
|
|
|
5,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 27, 2015 |
|
$ |
27,900 |
|
$ |
|
|
$ |
1,762,534 |
|
$ |
(171,508 |
) |
$ |
(525,877 |
) |
$ |
47,544 |
|
$ |
1,140,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
7
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Condensed Consolidated Balance Sheet as of June 27, 2015, the Condensed Consolidated Statements of Earnings and
Comprehensive Income for the thirteen and twenty-six weeks ended June 27, 2015 and June 28, 2014, and the Condensed Consolidated Statements of Cash Flows and Shareholders' Equity for the
twenty-six week period then ended have been prepared by the Company, without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made
to present fairly the financial statements as of June 27, 2015 and for all periods presented.
Certain
information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 27, 2014. The accounting policies and methods of computation followed in these interim financial statements are the same as those
followed in the financial statements for the year ended December 27, 2014. The results of operations for the period ended June 27, 2015 are not necessarily indicative of the operating
results for the full year.
Approximately 36% and 44% of inventory is valued at the lower of cost, determined on the last-in, first-out (LIFO) method, or market as
of June 27, 2015 and December 27, 2014, respectively. All other inventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods
and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods. The
excess of replacement cost of inventories over the LIFO value is approximately $39,093 and $47,178 at June 27, 2015 and December 27, 2014, respectively.
Inventories
consisted of the following:
|
|
|
|
|
|
|
|
|
|
June 27,
2015 |
|
December 27,
2014 |
|
Raw materials and purchased parts |
|
$ |
182,927 |
|
$ |
179,093 |
|
Work-in-process |
|
|
26,286 |
|
|
27,835 |
|
Finished goods and manufactured goods |
|
|
209,777 |
|
|
199,772 |
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
418,990 |
|
|
406,700 |
|
Less: LIFO reserve |
|
|
39,093 |
|
|
47,178 |
|
|
|
|
|
|
|
|
|
|
|
$ |
379,897 |
|
$ |
359,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries for the thirteen and twenty-six weeks ended
June 27, 2015 and June 28, 2014, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended |
|
Twenty-six Weeks
Ended |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
United States |
|
$ |
33,641 |
|
$ |
65,096 |
|
$ |
66,282 |
|
$ |
136,790 |
|
Foreign |
|
|
9,715 |
|
|
34,856 |
|
|
25,519 |
|
|
49,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
43,356 |
|
$ |
99,952 |
|
$ |
91,801 |
|
$ |
186,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company incurs expenses in connection with the Delta Pension Plan ("DPP"). The DPP was acquired as part of the Delta plc
acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the related benefit obligation, various assumptions are made including discount rates used to
value the obligation, expected return on plan assets used to fund these expenses and estimated future inflation rates. These assumptions are based on historical experience as well as current facts and
circumstances. An actuarial analysis is used to measure the expense and liability associated with pension benefits.
The
components of the net periodic pension (benefit) expense for the thirteen and twenty-six weeks ended June 27, 2015 and June 28, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended |
|
Twenty-six Weeks
Ended |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Net periodic (benefit) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost |
|
$ |
6,189 |
|
$ |
7,312 |
|
$ |
12,300 |
|
$ |
14,509 |
|
Expected return on plan assets |
|
|
(6,344 |
) |
|
(6,640 |
) |
|
(12,605 |
) |
|
(13,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic (benefit) expense |
|
$ |
(155 |
) |
$ |
672 |
|
$ |
(305 |
) |
$ |
1,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of
the Board of Directors may grant
incentive stock options, nonqualified stock options, stock appreciation rights, non-vested stock awards and bonuses of common stock. At June 27, 2015, 1,176,222 shares of common stock remained
available for issuance under the plans. Shares and options issued and available are subject to changes in capitalization.
Under
the plans, the exercise price of each option equals the closing market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts
over three to six years or on the fifth anniversary of the grant.
9
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Expiration
of grants is from six to ten years from the date of grant. The Company's compensation expense (included in selling, general and administrative expenses) and associated income
tax benefits related to stock options for the thirteen and twenty-six weeks ended June 27, 2015 and June 28, 2014, respectively, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended |
|
Twenty-six Weeks
Ended |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Compensation expense |
|
$ |
1,303 |
|
$ |
1,262 |
|
$ |
2,653 |
|
$ |
2,525 |
|
Income tax benefits |
|
|
501 |
|
|
486 |
|
|
1,021 |
|
|
972 |
|
The Company has equity method investments in non-consolidated subsidiaries, which are recorded within "Other assets" on the Condensed
Consolidated Balance Sheet.
The Company applies the provisions of Accounting Standards Codification 820, Fair Value
Measurements ("ASC 820") which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of
ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date.
ASC
820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs
refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be
classified and disclosed in one of the following three categories:
Level 1:
Quoted market prices in active markets for identical assets or liabilities.
Level 2:
Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3:
Unobservable inputs that are not corroborated by market data.
The
categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Following
is a description of the valuation methodologies used for assets and liabilities measured at fair value.
Trading
Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan of $39,789 ($36,439 at December 27, 2014) represent
mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting
10
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Standards
Codification 320, Accounting for Certain Investments in Debt and Equity Securities, considering the employee's ability to change investment
allocation of their deferred compensation at any time.
The
Company's ownership of shares in Delta EMD Pty. Ltd. (JSE:DTA) is also classified as trading securities. During first quarter of 2015, the Company received a special dividend
of $5,010 from Delta EMD Pty. Ltd and the market price of the shares were proportionately decreased accordingly. The shares are valued at $4,966 and $9,034 as of June 27, 2015 and
December 27, 2014, respectively, which is the estimated fair value. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1
input.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement Using: |
|
|
|
Carrying Value
June 27,
2015 |
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1) |
|
Significant Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading Securities |
|
$ |
44,755 |
|
$ |
44,755 |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement Using: |
|
|
|
Carrying Value
December 27,
2014 |
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1) |
|
Significant Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading Securities |
|
$ |
45,473 |
|
$ |
45,473 |
|
$ |
|
|
$ |
|
|
Comprehensive income includes net earnings, currency translation adjustments, certain derivative-related activity and changes in net
actuarial gains/losses from a pension plan. Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at
the exchange rates in effect on the balance
sheet dates. Accumulated other comprehensive income (loss) consisted of the following at June 27, 2015 and December 27, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Currency
Translation
Adjustments |
|
Unrealized
Gain on Cash
Flow Hedge |
|
Defined
Benefit
Pension Plan |
|
Accumulated
Other
Comprehensive
Income |
|
Balance at December 27, 2014 |
|
$ |
(99,618 |
) |
$ |
3,879 |
|
$ |
(38,694 |
) |
$ |
(134,433 |
) |
Current-period comprehensive income (loss) |
|
|
(38,157 |
) |
|
1,082 |
|
|
|
|
|
(37,075 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 27, 2015 |
|
$ |
(137,775 |
) |
$ |
4,961 |
|
$ |
(38,694 |
) |
$ |
(171,508 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with
Customers (Topic 606), which supersedes the
11
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
revenue
recognition requirements in Accounting Standards Codification ("ASC") 605, Revenue Recognition. The new revenue recognition standard requires
entities to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 is effective for interim and annual reporting
periods beginning after December 15, 2017 and is to be applied retrospectively. The Company is currently evaluating the effect that adopting this new accounting guidance will have on its
consolidated results of operations and financial position.
In
July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory." Under this ASU, inventory will be measured at the "lower of cost and net realizable value" and
options that currently exist for "market value" will be eliminated. The ASU defines net realizable value as the "estimated selling prices in the ordinary course of business, less reasonably
predictable costs of completion, disposal, and transportation." No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods
beginning after December 15, 2016. Early application is permitted and should be applied prospectively. Management is evaluating the provisions of this statement, including which period to
adopt, and has not determined what impact the adoption of ASU 2015-11 will have on the Company's financial position or results of operations.
(2) ACQUISITIONS
On March 3, 2014, the Company purchased 90% of the outstanding shares of DS SM A/S, which was renamed Valmont SM. Valmont SM is a manufacturer of heavy complex steel structures
for a diverse range of industries including wind energy, offshore oil and gas, and electricity transmission. Valmont SM's operations are reported in the Engineered Infrastructure Products Segment.
Valmont SM's annual sales are approximately $190,000 and it operates two manufacturing locations in Denmark. The purchase price paid for the business at closing (net of $56 cash acquired) was
$120,483, including the payoff of an intercompany note payable by Valmont SM to its prior affiliates. The purchase is subject to an earn-out clause that is contingent on meeting future operational
metrics for which no liability has been established based on expectations. The acquisition, which was funded by cash held by the Company, was completed to participate in markets for wind energy, oil
and gas exploration, power transmission and other related infrastructure projects and to increase the Company's geographic footprint in Europe. The Company also funded a portion of the acquisition
with an intercompany note payable. The excess purchase price over the fair value of assets resulted in goodwill, which is not deductible for tax purposes.
12
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(2) ACQUISITIONS (Continued)
The following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of acquisition, which was finalized in the fourth quarter of 2014.
|
|
|
|
|
|
|
At March 3,
2014 |
|
Current assets |
|
$ |
73,421 |
|
Property, plant and equipment |
|
|
85,638 |
|
Intangible assets |
|
|
30,340 |
|
Goodwill |
|
|
16,803 |
|
|
|
|
|
|
Total fair value of assets acquired |
|
$ |
206,202 |
|
|
|
|
|
|
Current liabilities |
|
|
47,754 |
|
Deferred income taxes |
|
|
19,715 |
|
Intercompany note payable |
|
|
37,448 |
|
Long-term debt |
|
|
8,941 |
|
|
|
|
|
|
Total fair value of liabilities assumed |
|
|
113,858 |
|
Non-controlling interests |
|
|
9,309 |
|
|
|
|
|
|
Net assets acquired |
|
$ |
83,035 |
|
|
|
|
|
|
Based
on the fair value assessments, the Company allocated $30,340 of the purchase price to acquired intangible assets. The following table summarizes the major classes of Valmont SM's
acquired intangible assets and the respective weighted average amortization periods:
|
|
|
|
|
|
|
|
|
|
Amount |
|
Weighted
Average
Amortization
Period
(Years) |
|
Trade Names |
|
$ |
11,470 |
|
|
Indefinite |
|
Backlog |
|
|
3,145 |
|
|
1.5 |
|
Customer Relationships |
|
|
15,725 |
|
|
12.0 |
|
|
|
|
|
|
|
|
|
Total Intangible Assets |
|
$ |
30,340 |
|
|
|
|
|
|
|
|
|
|
|
|
On
October 6, 2014, the Company acquired Shakespeare Composite Structures (Shakespeare) for $48,272 in cash, plus assumed liabilities. Shakespeare is a manufacturer of fiberglass
reinforced composite structures and products with two manufacturing facilities in South Carolina. Shakespeare's annual sales are approximately $55,000 and its operations are included in the Engineered
Infrastructure Products segment. The acquisition of Shakespeare was completed to expand our product offering of composite structure solutions.
The
preliminary fair value measurement disclosed below is subject to management reviews and completion of the fair value measurements of the assets acquired and liabilities assumed. The
Company expects the fair value measurement process and purchase price allocation for Shakespeare to be completed in the third quarter of 2015.
13
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(2) ACQUISITIONS (Continued)
The
following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the date of the Shakespeare acquisition (goodwill is not deductible for
tax purposes):
|
|
|
|
|
|
|
At October 6,
2014 |
|
Current assets |
|
$ |
12,532 |
|
Property, plant and equipment |
|
|
10,694 |
|
Intangible assets |
|
|
13,500 |
|
Goodwill |
|
|
15,416 |
|
|
|
|
|
|
Total fair value of assets acquired |
|
$ |
52,142 |
|
|
|
|
|
|
Current liabilities |
|
|
3,870 |
|
|
|
|
|
|
Net assets acquired |
|
$ |
48,272 |
|
|
|
|
|
|
Based
on the preliminary fair value assessments, the Company allocated $13,500 of the purchase price to acquired intangible assets. The following table summarizes the major classes of
Shakespeare acquired intangible assets and the respective weighted-average amortization periods:
|
|
|
|
|
|
|
|
|
|
Amount |
|
Weighted
Average
Amortization
Period
(Years) |
|
Trade Names |
|
$ |
4,000 |
|
|
Indefinite |
|
Customer Relationships |
|
|
9,500 |
|
|
12.0 |
|
|
|
|
|
|
|
|
|
Total Intangible Assets |
|
$ |
13,500 |
|
|
|
|
|
|
|
|
|
|
|
|
On
August 25, 2014, the Company acquired 51% of AgSense, LLC (AgSense) for $17 million in cash. AgSense operates in South Dakota and is the creator of global WagNet
network which provides
growers with a more complete view of their entire farming operation by tying irrigation decision making to field, crop and weather conditions. In the measurement of fair values of assets acquired and
liabilities assumed, goodwill of $17,193 and $16,083 of customer relationships, trade name and other intangible assets were recorded. A portion of the goodwill is deductible for tax purposes. AgSense
is included in the Irrigation Segment.
The
Company's Condensed Consolidated Statement of Earnings for the thirteen and twenty-six weeks ended June 27, 2015 included net sales of $44,271 and $86,195 and net earnings of
$2,935 and $4,933 resulting from the Valmont SM, AgSense, and Shakespeare acquisitions. The pro forma effect of
14
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(2) ACQUISITIONS (Continued)
these
acquisitions on the second quarter and first half of the 2014 Statement of Earnings was as follows:
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
June 28, 2014 |
|
Twenty-six Weeks Ended
June 28, 2014 |
|
Net sales |
|
$ |
858,068 |
|
$ |
1,658,333 |
|
Net earnings |
|
$ |
64,525 |
|
$ |
123,441 |
|
Earnings per sharediluted |
|
$ |
2.40 |
|
$ |
4.59 |
|
(3) RESTRUCTURING ACTIVITIES
In April 2015, the Company's Board of Directors authorized a broad restructuring plan (the "Plan") of up to $60 million to respond to the market environment in certain businesses.
We anticipate the Company will recognize the following pre-tax expenses in conjunction with the initial restructuring activities from the Plan announced in 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP |
|
Utility |
|
Coatings |
|
Irrigation |
|
Other/
Corporate |
|
TOTAL |
|
Severance |
|
$ |
4,000 |
|
$ |
1,445 |
|
$ |
460 |
|
$ |
425 |
|
$ |
75 |
|
$ |
6,405 |
|
Other cash restructuring expenses |
|
|
725 |
|
|
1,810 |
|
|
225 |
|
|
|
|
|
|
|
|
2,760 |
|
Asset impairments/net loss on disposals |
|
|
3,850 |
|
|
625 |
|
|
4,150 |
|
|
250 |
|
|
|
|
|
8,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales |
|
|
8,575 |
|
|
3,880 |
|
|
4,835 |
|
|
675 |
|
|
75 |
|
|
18,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
3,900 |
|
|
450 |
|
|
|
|
|
575 |
|
|
1,025 |
|
|
5,950 |
|
Other cash restructuring expenses |
|
|
750 |
|
|
270 |
|
|
275 |
|
|
100 |
|
|
650 |
|
|
2,045 |
|
Asset impairments/net loss on disposals |
|
|
2,375 |
|
|
|
|
|
|
|
|
150 |
|
|
1,890 |
|
|
4,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative expenses |
|
|
7,025 |
|
|
720 |
|
|
275 |
|
|
825 |
|
|
3,565 |
|
|
12,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total |
|
$ |
15,600 |
|
$ |
4,600 |
|
$ |
5,110 |
|
$ |
1,500 |
|
$ |
3,640 |
|
$ |
30,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain
of these initial restructuring actions are within the APAC Coatings reporting unit which has approximately $16 million of goodwill as of June 27, 2015. The Company
expects these activities to improve the profitability of this reporting unit. Should operating income not improve within this reporting unit after these restructuring activities are implemented, we
may have to write off all or a portion of our goodwill for this reporting unit during our annual impairment testing during the third quarter. Inclusive of this goodwill, the Company is currently
evaluating additional potential restructuring activities estimated up to $25 million of asset impairments and $5 million of cash expenses.
15
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(3) RESTRUCTURING ACTIVITIES (Continued)
The
following is a summary of the segments affected by these additional potential restructuring activities under current evaluation and the estimated pre-tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP |
|
Coatings |
|
Other/
Corporate |
|
TOTAL |
|
Severance |
|
$ |
2,000 |
|
$ |
|
|
$ |
250 |
|
$ |
2,250 |
|
Other cash restructuring expenses |
|
|
700 |
|
|
|
|
|
250 |
|
|
950 |
|
Asset impairments/net loss on disposals |
|
|
3,800 |
|
|
|
|
|
500 |
|
|
4,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales |
|
|
6,500 |
|
|
|
|
|
1,000 |
|
|
7,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
500 |
|
|
|
|
|
1,150 |
|
|
1,650 |
|
Asset impairments/net loss on disposals |
|
|
600 |
|
|
16,000 |
|
|
3,500 |
|
|
20,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative expenses |
|
|
1,100 |
|
|
16,000 |
|
|
4,650 |
|
|
21,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total |
|
$ |
7,600 |
|
$ |
16,000 |
|
$ |
5,650 |
|
$ |
29,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the first quarter of fiscal 2015, the Company's EIP segment recognized approximately $800 of pre-tax expense for severance and other cash restructuring expenses. During the second
quarter of fiscal 2015, the Company recognized the following pre-tax restructuring expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP |
|
Utility |
|
Coatings |
|
Irrigation |
|
Other/
Corporate |
|
TOTAL |
|
Severance |
|
$ |
535 |
|
$ |
1,380 |
|
$ |
310 |
|
$ |
|
|
$ |
73 |
|
$ |
2,298 |
|
Other cash restructuring expenses |
|
|
45 |
|
|
375 |
|
|
40 |
|
|
|
|
|
|
|
|
460 |
|
Asset impairments/net loss on disposals |
|
|
797 |
|
|
295 |
|
|
4,150 |
|
|
|
|
|
|
|
|
5,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales |
|
|
1,377 |
|
|
2,050 |
|
|
4,500 |
|
|
|
|
|
73 |
|
|
8,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
965 |
|
|
405 |
|
|
|
|
|
219 |
|
|
240 |
|
|
1,829 |
|
Other cash restructuring expenses |
|
|
125 |
|
|
|
|
|
269 |
|
|
|
|
|
|
|
|
394 |
|
Asset impairments/net loss on disposals |
|
|
2,030 |
|
|
|
|
|
|
|
|
130 |
|
|
1,890 |
|
|
4,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative expenses |
|
|
3,120 |
|
|
405 |
|
|
269 |
|
|
349 |
|
|
2,130 |
|
|
6,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total |
|
$ |
4,497 |
|
$ |
2,455 |
|
$ |
4,769 |
|
$ |
349 |
|
$ |
2,203 |
|
$ |
14,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(3) RESTRUCTURING ACTIVITIES (Continued)
Liabilities
recorded for the restructuring Plan and changes therein for the first half of fiscal 2015 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 27,
2014 |
|
Recognized
Restructuring
Expense |
|
Costs Paid or
Otherwise
Settled |
|
Balance at
June 27,
2015 |
|
Severance |
|
$ |
|
|
$ |
4,927 |
|
$ |
(2,294 |
) |
$ |
2,633 |
|
Other cash restructuring expenses |
|
|
|
|
|
885 |
|
|
(645 |
) |
|
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales |
|
$ |
|
|
$ |
5,812 |
|
$ |
(2,939 |
) |
$ |
2,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) GOODWILL AND INTANGIBLE ASSETS
The components of amortized intangible assets at June 27, 2015 and December 27, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
June 27, 2015 |
|
|
Gross
Carrying
Amount |
|
Accumulated
Amortization |
|
Weighted
Average
Life |
Customer Relationships |
|
$ |
206,053 |
|
$ |
96,178 |
|
13 years |
Proprietary Software & Database |
|
|
3,676 |
|
|
2,985 |
|
8 years |
Patents & Proprietary Technology |
|
|
13,029 |
|
|
9,290 |
|
8 years |
Other |
|
|
3,858 |
|
|
3,486 |
|
3 years |
|
|
|
|
|
|
|
|
|
|
|
$ |
226,616 |
|
$ |
111,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 27, 2014 |
|
|
Gross
Carrying
Amount |
|
Accumulated
Amortization |
|
Weighted
Average
Life |
Customer Relationships |
|
$ |
207,509 |
|
$ |
88,538 |
|
13 years |
Proprietary Software & Database |
|
|
3,769 |
|
|
2,977 |
|
8 years |
Patents & Proprietary Technology |
|
|
12,394 |
|
|
8,537 |
|
8 years |
Other |
|
|
4,355 |
|
|
2,998 |
|
3 years |
|
|
|
|
|
|
|
|
|
|
|
$ |
228,027 |
|
$ |
103,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(4) GOODWILL AND INTANGIBLE ASSETS (Continued)
Amortization expense for intangible assets for the thirteen and twenty-six weeks ended June 27, 2015 and June 28, 2014, respectively was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended |
|
Twenty-six Weeks
Ended |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
$ |
4,737 |
|
$ |
4,634 |
|
$ |
9,650 |
|
$ |
8,737 |
|
Estimated
annual amortization expense related to finite-lived intangible assets is as follows:
|
|
|
|
|
|
|
Estimated
Amortization
Expense |
|
2015 |
|
$ |
18,124 |
|
2016 |
|
|
16,322 |
|
2017 |
|
|
16,276 |
|
2018 |
|
|
14,622 |
|
2019 |
|
|
13,795 |
|
The
useful lives assigned to finite-lived intangible assets included consideration of factors such as the Company's past and expected experience related to customer retention rates, the
remaining legal or contractual life of the underlying arrangement that resulted in the recognition of the intangible asset and the Company's expected use of the intangible asset.
Intangible assets with indefinite lives are not amortized. The carrying values of trade names at June 27, 2015 and
December 27, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
June 27,
2015 |
|
December 27,
2014 |
|
Year
Acquired |
|
Webforge |
|
$ |
16,997 |
|
$ |
16,801 |
|
|
2010 |
|
Valmont SM |
|
|
9,294 |
|
|
10,818 |
|
|
2014 |
|
Newmark |
|
|
11,111 |
|
|
11,111 |
|
|
2004 |
|
Ingal EPS/Ingal Civil Products |
|
|
8,971 |
|
|
8,867 |
|
|
2010 |
|
Donhad |
|
|
6,767 |
|
|
6,689 |
|
|
2010 |
|
Shakespeare |
|
|
4,000 |
|
|
4,000 |
|
|
2014 |
|
Industrial Galvanizers |
|
|
3,935 |
|
|
3,889 |
|
|
2010 |
|
Other |
|
|
14,140 |
|
|
14,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
75,215 |
|
$ |
77,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
its determination of these intangible assets as indefinite-lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory,
technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to
18
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(4) GOODWILL AND INTANGIBLE ASSETS (Continued)
maintain
the value of the intangible asset. The Company expects that these intangible assets will maintain their value indefinitely. Accordingly, these assets are not amortized.
The
Company's trade names were tested for impairment in the third quarter of 2014. The values of the trade names were determined using the relief-from-royalty method. Based on this
evaluation, the Company determined that its trade names were not impaired.
The carrying amount of goodwill by segment as of June 27, 2015 and December 27, 2014 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered
Infrastructure
Products
Segment |
|
Utility
Support
Structures
Segment |
|
Coatings
Segment |
|
Irrigation
Segment |
|
Other |
|
Total |
|
Balance at December 27, 2014 |
|
$ |
197,074 |
|
$ |
75,404 |
|
$ |
74,862 |
|
$ |
19,536 |
|
$ |
18,235 |
|
$ |
385,111 |
|
Impairment |
|
|
(1,737 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,737 |
) |
Foreign currency translation |
|
|
(2,789 |
) |
|
|
|
|
(634 |
) |
|
(78 |
) |
|
213 |
|
|
(3,288 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 27, 2015 |
|
$ |
192,548 |
|
$ |
75,404 |
|
$ |
74,228 |
|
$ |
19,458 |
|
$ |
18,448 |
|
$ |
380,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the second quarter of 2015, the Company implemented a plan to divest of a small business in its EIP segment. The goodwill allocated to that business was $1,737 and based on its
current estimation of value, the goodwill was determined to be impaired and was recorded in Selling, General and Administrative Expenses in the Condensed Consolidated Statements of Earnings. The
Company's annual impairment test of goodwill was last performed during the third quarter of 2014. As a result of that testing, the Company determined that its goodwill was not impaired, as the
valuation of the reporting units exceeded their respective carrying values. The Company continues to monitor changes in the global economy that could impact future operating results of its reporting
units. If such conditions arise, the Company will test a given reporting unit for impairment prior to the annual test.
(5) CASH FLOW SUPPLEMENTARY INFORMATION
The Company considers all highly liquid temporary cash investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash
payments for interest and income taxes (net of refunds) for the twenty-six weeks ended June 27, 2015 and June 28, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
2015 |
|
2014 |
|
Interest |
|
$ |
22,898 |
|
$ |
16,564 |
|
Income taxes |
|
|
14,280 |
|
|
77,691 |
|
On
May 13, 2014, the Company announced a new capital allocation philosophy which increased the dividend by 50% and covered a share repurchase program of up to $500 million
of the Company's outstanding common stock to be acquired from time to time over twelve months at prevailing market
19
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(5) CASH FLOW SUPPLEMENTARY INFORMATION (Continued)
prices,
through open market or privately-negotiated transactions. On February 24, 2015, the Board of Directors authorized an additional purchase of up to $250 million of the Company's
outstanding common stock with no stated expiration date. As of June 27, 2015, the Company has acquired 3,700,970 shares for approximately $516.1 million under the share repurchase
programs.
(6) EARNINGS PER SHARE
The following table provides a reconciliation between Basic and Diluted earnings per share (EPS):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
EPS |
|
Dilutive
Effect of
Stock Options |
|
Diluted
EPS |
|
Thirteen weeks ended June 27, 2015: |
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc. |
|
$ |
27,873 |
|
$ |
|
|
$ |
27,873 |
|
Shares outstanding |
|
|
23,336 |
|
|
114 |
|
|
23,450 |
|
Per share amount |
|
$ |
1.19 |
|
$ |
|
|
$ |
1.19 |
|
Thirteen weeks ended June 28, 2014: |
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc. |
|
$ |
63,976 |
|
$ |
|
|
$ |
63,976 |
|
Shares outstanding |
|
|
26,623 |
|
|
233 |
|
|
26,856 |
|
Per share amount |
|
$ |
2.40 |
|
$ |
(0.02 |
) |
$ |
2.38 |
|
Twenty-six weeks ended June 27, 2015: |
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc. |
|
$ |
58,612 |
|
$ |
|
|
$ |
58,612 |
|
Shares outstanding |
|
|
23,602 |
|
|
114 |
|
|
23,716 |
|
Per share amount |
|
$ |
2.48 |
|
$ |
(0.01 |
) |
$ |
2.47 |
|
Twenty-six weeks ended June 28, 2014: |
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc. |
|
$ |
119,956 |
|
$ |
|
|
$ |
119,956 |
|
Shares outstanding |
|
|
26,669 |
|
|
234 |
|
|
26,903 |
|
Per share amount |
|
$ |
4.50 |
|
$ |
(0.04 |
) |
$ |
4.46 |
|
Earnings
per share are computed independently for each of the quarters. Therefore, the sum of the quarterly earnings per share may not equal the total for the year primarily due to the
share buyback program that began in the second quarter of 2014.
At
June 27, 2015, there were 452,459 outstanding stock options with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted
earnings per share.
20
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(7) BUSINESS SEGMENTS
The Company has four reportable segments based on its management structure. Each segment is global in nature with a manager responsible for segment operational performance and the
allocation of capital within the segment. Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts and sales
dollars.
Reportable
segments are as follows:
ENGINEERED INFRASTRUCTURE PRODUCTS: This segment consists of the manufacture of engineered metal structures and components for the
global lighting
and traffic, wireless communication, wind energy, offshore oil and gas, roadway safety and access systems applications;
UTILITY SUPPORT STRUCTURES: This segment consists of the manufacture of engineered steel and concrete structures for the global utility
industry;
COATINGS: This segment consists of galvanizing, anodizing and powder coating services on a global basis; and
IRRIGATION: This segment consists of the manufacture of agricultural irrigation equipment and related parts and services for the global
agricultural
industry.
In
addition to these four reportable segments, the Company has other businesses and activities that individually are not more than 10% of consolidated sales. These include the
manufacture of forged steel grinding media for the mining industry, tubular products for industrial customers, and the distribution of industrial fasteners and are reported in the "Other" category.
The
accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance of its business segments based upon operating
income and invested capital. The Company does not allocate interest expense, non-operating income and deductions, or income taxes to its business segments.
21
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(7) BUSINESS SEGMENTS (Continued)
Summary by Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-six Weeks Ended |
|
|
|
June 27,
2015 |
|
June 28,
2014 |
|
June 27,
2015 |
|
June 28,
2014 |
|
SALES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Infrastructure Products segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lighting, Traffic, and Roadway Products |
|
$ |
154,688 |
|
$ |
164,753 |
|
$ |
299,955 |
|
$ |
303,730 |
|
Communication Products |
|
|
45,935 |
|
|
43,618 |
|
|
78,491 |
|
|
73,504 |
|
Offshore Structures |
|
|
23,135 |
|
|
47,217 |
|
|
47,983 |
|
|
64,521 |
|
Access Systems |
|
|
37,311 |
|
|
48,764 |
|
|
73,033 |
|
|
91,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Infrastructure Products segment |
|
|
261,069 |
|
|
304,352 |
|
|
499,462 |
|
|
532,814 |
|
Utility Support Structures segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel |
|
|
139,425 |
|
|
179,574 |
|
|
297,698 |
|
|
371,011 |
|
Concrete |
|
|
23,504 |
|
|
33,456 |
|
|
41,572 |
|
|
56,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility Support Structures segment |
|
|
162,929 |
|
|
213,030 |
|
|
339,270 |
|
|
427,757 |
|
Coatings segment |
|
|
76,094 |
|
|
85,157 |
|
|
150,454 |
|
|
167,328 |
|
Irrigation segment |
|
|
153,821 |
|
|
219,917 |
|
|
308,297 |
|
|
432,650 |
|
Other |
|
|
50,404 |
|
|
61,786 |
|
|
104,262 |
|
|
120,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
704,317 |
|
|
884,242 |
|
|
1,401,745 |
|
|
1,680,937 |
|
INTERSEGMENT SALES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Infrastructure Products segment |
|
|
4,052 |
|
|
18,166 |
|
|
11,126 |
|
|
37,731 |
|
Utility Support Structures segment |
|
|
273 |
|
|
1,025 |
|
|
562 |
|
|
1,520 |
|
Coatings segment |
|
|
12,178 |
|
|
14,770 |
|
|
24,725 |
|
|
29,723 |
|
Irrigation segment |
|
|
3 |
|
|
4 |
|
|
12 |
|
|
13 |
|
Other |
|
|
5,688 |
|
|
7,678 |
|
|
12,799 |
|
|
17,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
22,194 |
|
|
41,643 |
|
|
49,224 |
|
|
86,598 |
|
NET SALES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Infrastructure Products segment |
|
|
257,017 |
|
|
286,186 |
|
|
488,336 |
|
|
495,083 |
|
Utility Support Structures segment |
|
|
162,656 |
|
|
212,005 |
|
|
338,708 |
|
|
426,237 |
|
Coatings segment |
|
|
63,916 |
|
|
70,387 |
|
|
125,729 |
|
|
137,605 |
|
Irrigation segment |
|
|
153,818 |
|
|
219,913 |
|
|
308,285 |
|
|
432,637 |
|
Other |
|
|
44,716 |
|
|
54,108 |
|
|
91,463 |
|
|
102,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
682,123 |
|
$ |
842,599 |
|
$ |
1,352,521 |
|
$ |
1,594,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Infrastructure Products segment |
|
$ |
17,424 |
|
$ |
28,625 |
|
$ |
29,406 |
|
$ |
42,334 |
|
Utility Support Structures segment |
|
|
10,399 |
|
|
26,375 |
|
|
25,756 |
|
|
59,132 |
|
Coatings segment |
|
|
7,862 |
|
|
15,820 |
|
|
18,861 |
|
|
29,706 |
|
Irrigation segment |
|
|
25,814 |
|
|
41,473 |
|
|
50,116 |
|
|
84,619 |
|
Other |
|
|
6,273 |
|
|
8,343 |
|
|
12,871 |
|
|
16,893 |
|
Corporate |
|
|
(13,772 |
) |
|
(15,860 |
) |
|
(25,327 |
) |
|
(29,060 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
54,000 |
|
$ |
104,776 |
|
$ |
111,683 |
|
$ |
203,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION
The Company has three tranches of senior unsecured notes. All of the senior notes are guaranteed, jointly, severally, fully and unconditionally by certain of the Company's current and
future direct and indirect domestic and foreign subsidiaries (collectively the "Guarantors"), excluding its other current domestic and foreign subsidiaries which do not guarantee the debt
(collectively referred to as the "Non-Guarantors"). All Guarantors are 100% owned by the parent company.
In
the fourth quarter of 2014, a subsidiary of the Company was removed as a guarantor of our revolving credit facility, and consequently was removed as a guarantor of the notes. All
prior year consolidated financial information has been recast to reflect the current guarantor structure. Consolidated financial information for the Company ("Parent"), the Guarantor subsidiaries and
the Non-Guarantor subsidiaries is as follows:
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Thirteen weeks ended June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net sales |
|
$ |
311,156 |
|
$ |
102,090 |
|
$ |
322,555 |
|
$ |
(53,678 |
) |
$ |
682,123 |
|
Cost of sales |
|
|
232,779 |
|
|
78,149 |
|
|
254,666 |
|
|
(53,019 |
) |
|
512,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
78,377 |
|
|
23,941 |
|
|
67,889 |
|
|
(659 |
) |
|
169,548 |
|
Selling, general and administrative expenses |
|
|
50,913 |
|
|
11,091 |
|
|
53,544 |
|
|
|
|
|
115,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
27,464 |
|
|
12,850 |
|
|
14,345 |
|
|
(659 |
) |
|
54,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(10,894 |
) |
|
|
|
|
(338 |
) |
|
|
|
|
(11,232 |
) |
Interest income |
|
|
4 |
|
|
2 |
|
|
610 |
|
|
|
|
|
616 |
|
Other |
|
|
(248 |
) |
|
24 |
|
|
196 |
|
|
|
|
|
(28 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,138 |
) |
|
26 |
|
|
468 |
|
|
|
|
|
(10,644 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries |
|
|
16,326 |
|
|
12,876 |
|
|
14,813 |
|
|
(659 |
) |
|
43,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
7,545 |
|
|
5,223 |
|
|
6,547 |
|
|
(179 |
) |
|
19,136 |
|
Deferred |
|
|
(1,650 |
) |
|
(51 |
) |
|
(3,518 |
) |
|
|
|
|
(5,219 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,895 |
|
|
5,172 |
|
|
3,029 |
|
|
(179 |
) |
|
13,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before equity in earnings of nonconsolidated subsidiaries |
|
|
10,431 |
|
|
7,704 |
|
|
11,784 |
|
|
(480 |
) |
|
29,439 |
|
Equity in earnings of nonconsolidated subsidiaries |
|
|
17,442 |
|
|
876 |
|
|
|
|
|
(18,318 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
27,873 |
|
|
8,580 |
|
|
11,784 |
|
|
(18,798 |
) |
|
29,439 |
|
Less: Earnings attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(1,566 |
) |
|
|
|
|
(1,566 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc |
|
$ |
27,873 |
|
$ |
8,580 |
|
$ |
10,218 |
|
$ |
(18,798 |
) |
$ |
27,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Twenty-six weeks ended June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net sales |
|
$ |
640,287 |
|
$ |
198,038 |
|
$ |
624,791 |
|
$ |
(110,595 |
) |
$ |
1,352,521 |
|
Cost of sales |
|
|
482,646 |
|
|
153,045 |
|
|
491,651 |
|
|
(109,823 |
) |
|
1,017,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
157,641 |
|
|
44,993 |
|
|
133,140 |
|
|
(772 |
) |
|
335,002 |
|
Selling, general and administrative expenses |
|
|
98,955 |
|
|
22,388 |
|
|
101,976 |
|
|
|
|
|
223,319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
58,686 |
|
|
22,605 |
|
|
31,164 |
|
|
(772 |
) |
|
111,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(21,726 |
) |
|
|
|
|
(634 |
) |
|
|
|
|
(22,360 |
) |
Interest income |
|
|
13 |
|
|
4 |
|
|
1,473 |
|
|
|
|
|
1,490 |
|
Other |
|
|
(897 |
) |
|
|
|
|
1,885 |
|
|
|
|
|
988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22,610 |
) |
|
4 |
|
|
2,724 |
|
|
|
|
|
(19,882 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries |
|
|
36,076 |
|
|
22,609 |
|
|
33,888 |
|
|
(772 |
) |
|
91,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
8,937 |
|
|
9,850 |
|
|
12,344 |
|
|
(221 |
) |
|
30,910 |
|
Deferred |
|
|
3,819 |
|
|
(584 |
) |
|
(3,290 |
) |
|
|
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,756 |
|
|
9,266 |
|
|
9,054 |
|
|
(221 |
) |
|
30,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before equity in earnings of nonconsolidated subsidiaries |
|
|
23,320 |
|
|
13,343 |
|
|
24,834 |
|
|
(551 |
) |
|
60,946 |
|
Equity in earnings of nonconsolidated subsidiaries |
|
|
35,292 |
|
|
5,181 |
|
|
|
|
|
(40,473 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
58,612 |
|
|
18,524 |
|
|
24,834 |
|
|
(41,024 |
) |
|
60,946 |
|
Less: Earnings attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(2,334 |
) |
|
|
|
|
(2,334 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc |
|
$ |
58,612 |
|
$ |
18,524 |
|
$ |
22,500 |
|
$ |
(41,024 |
) |
$ |
58,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Thirteen weeks ended June 28, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net sales |
|
$ |
378,642 |
|
$ |
124,414 |
|
$ |
387,715 |
|
$ |
(48,172 |
) |
$ |
842,599 |
|
Cost of sales |
|
|
280,054 |
|
|
91,536 |
|
|
298,764 |
|
|
(48,232 |
) |
|
622,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
98,588 |
|
|
32,878 |
|
|
88,951 |
|
|
60 |
|
|
220,477 |
|
Selling, general and administrative expenses |
|
|
50,164 |
|
|
12,670 |
|
|
52,867 |
|
|
|
|
|
115,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
48,424 |
|
|
20,208 |
|
|
36,084 |
|
|
60 |
|
|
104,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(7,691 |
) |
|
|
|
|
(613 |
) |
|
|
|
|
(8,304 |
) |
Interest income |
|
|
6 |
|
|
113 |
|
|
1,458 |
|
|
|
|
|
1,577 |
|
Other |
|
|
1,754 |
|
|
140 |
|
|
9 |
|
|
|
|
|
1,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,931 |
) |
|
253 |
|
|
854 |
|
|
|
|
|
(4,824 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries |
|
|
42,493 |
|
|
20,461 |
|
|
36,938 |
|
|
60 |
|
|
99,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
9,315 |
|
|
5,458 |
|
|
11,316 |
|
|
28 |
|
|
26,117 |
|
Deferred |
|
|
7,672 |
|
|
2,079 |
|
|
(1,798 |
) |
|
|
|
|
7,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,987 |
|
|
7,537 |
|
|
9,518 |
|
|
28 |
|
|
34,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before equity in earnings of nonconsolidated subsidiaries |
|
|
25,506 |
|
|
12,924 |
|
|
27,420 |
|
|
32 |
|
|
65,882 |
|
Equity in earnings of nonconsolidated subsidiaries |
|
|
38,470 |
|
|
8,478 |
|
|
|
|
|
(46,978 |
) |
|
(30 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
63,976 |
|
|
21,402 |
|
|
27,420 |
|
|
(46,946 |
) |
|
65,852 |
|
Less: Earnings attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(1,876 |
) |
|
|
|
|
(1,876 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc |
|
$ |
63,976 |
|
$ |
21,402 |
|
$ |
25,544 |
|
$ |
(46,946 |
) |
$ |
63,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Twenty-six weeks ended June 28, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net sales |
|
$ |
755,284 |
|
$ |
260,311 |
|
$ |
687,996 |
|
$ |
(109,252 |
) |
$ |
1,594,339 |
|
Cost of sales |
|
|
551,813 |
|
|
191,352 |
|
|
533,398 |
|
|
(109,683 |
) |
|
1,166,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
203,471 |
|
|
68,959 |
|
|
154,598 |
|
|
431 |
|
|
427,459 |
|
Selling, general and administrative expenses |
|
|
97,954 |
|
|
25,661 |
|
|
100,220 |
|
|
|
|
|
223,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
105,517 |
|
|
43,298 |
|
|
54,378 |
|
|
431 |
|
|
203,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(15,366 |
) |
|
|
|
|
(1,135 |
) |
|
|
|
|
(16,501 |
) |
Interest income |
|
|
26 |
|
|
296 |
|
|
2,994 |
|
|
|
|
|
3,316 |
|
Other |
|
|
1,821 |
|
|
(352 |
) |
|
(5,378 |
) |
|
|
|
|
(3,909 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,519 |
) |
|
(56 |
) |
|
(3,519 |
) |
|
|
|
|
(17,094 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries |
|
|
91,998 |
|
|
43,242 |
|
|
50,859 |
|
|
431 |
|
|
186,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
29,193 |
|
|
13,512 |
|
|
16,218 |
|
|
132 |
|
|
59,055 |
|
Deferred |
|
|
5,829 |
|
|
1,667 |
|
|
(2,466 |
) |
|
|
|
|
5,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,022 |
|
|
15,179 |
|
|
13,752 |
|
|
132 |
|
|
64,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before equity in earnings of nonconsolidated subsidiaries |
|
|
56,976 |
|
|
28,063 |
|
|
37,107 |
|
|
299 |
|
|
122,445 |
|
Equity in earnings of nonconsolidated subsidiaries |
|
|
62,980 |
|
|
9,023 |
|
|
|
|
|
(72,033 |
) |
|
(30 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
119,956 |
|
|
37,086 |
|
|
37,107 |
|
|
(71,734 |
) |
|
122,415 |
|
Less: Earnings attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(2,459 |
) |
|
|
|
|
(2,459 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc |
|
$ |
119,956 |
|
$ |
37,086 |
|
$ |
34,648 |
|
$ |
(71,734 |
) |
$ |
119,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Thirteen weeks ended June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net earnings |
|
$ |
27,873 |
|
$ |
8,580 |
|
$ |
11,784 |
|
$ |
(18,798 |
) |
$ |
29,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) arising during the period |
|
|
|
|
|
76 |
|
|
18,252 |
|
|
|
|
|
18,328 |
|
Unrealized loss on cash flow hedge: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization cost included in interest expense |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
19 |
|
Gain on cash flow hedges |
|
|
(301 |
) |
|
|
|
|
1,052 |
|
|
|
|
|
751 |
|
Equity in other comprehensive income |
|
|
18,978 |
|
|
|
|
|
|
|
|
(18,978 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
18,696 |
|
|
76 |
|
|
19,304 |
|
|
(18,978 |
) |
|
19,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
46,569 |
|
|
8,656 |
|
|
31,088 |
|
|
(37,776 |
) |
|
48,537 |
|
Comprehensive income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(1,968 |
) |
|
|
|
|
(1,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Valmont Industries, Inc. |
|
$ |
46,569 |
|
$ |
8,656 |
|
$ |
29,120 |
|
$ |
(37,776 |
) |
$ |
46,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Twenty-six weeks ended June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net earnings |
|
$ |
58,612 |
|
$ |
18,524 |
|
$ |
24,834 |
|
$ |
(41,024 |
) |
$ |
60,946 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) arising during the period |
|
|
|
|
|
(8,812 |
) |
|
(31,038 |
) |
|
|
|
|
(39,850 |
) |
Unrealized loss on cash flow hedge: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization cost included in interest expense |
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
37 |
|
Gain on cash flow hedges |
|
|
(209 |
) |
|
|
|
|
1,254 |
|
|
|
|
|
1,045 |
|
Equity in other comprehensive income |
|
|
(36,903 |
) |
|
|
|
|
|
|
|
36,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
(37,075 |
) |
|
(8,812 |
) |
|
(29,784 |
) |
|
36,903 |
|
|
(38,768 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
21,537 |
|
|
9,712 |
|
|
(4,950 |
) |
|
(4,121 |
) |
|
22,178 |
|
Comprehensive income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(641 |
) |
|
|
|
|
(641 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Valmont Industries, Inc. |
|
$ |
21,537 |
|
$ |
9,712 |
|
$ |
(5,591 |
) |
$ |
(4,121 |
) |
$ |
21,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Thirteen weeks ended June 28, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net earnings |
|
$ |
63,976 |
|
$ |
21,402 |
|
$ |
27,420 |
|
$ |
(46,946 |
) |
$ |
65,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) arising during the period |
|
|
|
|
|
(126 |
) |
|
13,995 |
|
|
|
|
|
13,869 |
|
Unrealized loss on cash flow hedge: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization cost included in interest expense |
|
|
100 |
|
|
|
|
|
(133 |
) |
|
|
|
|
(33 |
) |
Actuarial gain (loss) in defined benefit pension plan liability |
|
|
|
|
|
|
|
|
(614 |
) |
|
|
|
|
(614 |
) |
Equity in other comprehensive income |
|
|
13,206 |
|
|
|
|
|
|
|
|
(13,206 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
13,306 |
|
|
(126 |
) |
|
13,248 |
|
|
(13,206 |
) |
|
13,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
77,282 |
|
|
21,276 |
|
|
40,668 |
|
|
(60,152 |
) |
|
79,074 |
|
Comprehensive income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(1,792 |
) |
|
|
|
|
(1,792 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Valmont Industries, Inc. |
|
$ |
77,282 |
|
$ |
21,276 |
|
$ |
38,876 |
|
$ |
(60,152 |
) |
$ |
77,282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Twenty-six weeks ended June 28, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-
Guarantors |
|
Eliminations |
|
Total |
|
Net earnings |
|
$ |
119,956 |
|
$ |
37,086 |
|
$ |
37,107 |
|
$ |
(71,734 |
) |
$ |
122,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) arising during the period |
|
|
|
|
|
1,063 |
|
|
24,443 |
|
|
|
|
|
25,506 |
|
Unrealized loss on cash flow hedge: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization cost included in interest expense |
|
|
200 |
|
|
|
|
|
(133 |
) |
|
|
|
|
67 |
|
Actuarial gain (loss) in defined benefit pension plan liability |
|
|
|
|
|
|
|
|
(847 |
) |
|
|
|
|
(847 |
) |
Equity in other comprehensive income |
|
|
25,281 |
|
|
|
|
|
|
|
|
(25,281 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
25,481 |
|
|
1,063 |
|
|
23,463 |
|
|
(25,281 |
) |
|
24,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
145,437 |
|
|
38,149 |
|
|
60,570 |
|
|
(97,015 |
) |
|
147,141 |
|
Comprehensive income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(1,704 |
) |
|
|
|
|
(1,704 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Valmont Industries, Inc. |
|
$ |
145,437 |
|
$ |
38,149 |
|
$ |
58,866 |
|
$ |
(97,015 |
) |
$ |
145,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS
June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
Total |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
12,453 |
|
$ |
1,800 |
|
$ |
303,270 |
|
$ |
|
|
$ |
317,523 |
|
Receivables, net |
|
|
146,163 |
|
|
54,606 |
|
|
290,937 |
|
|
|
|
|
491,706 |
|
Inventories |
|
|
133,029 |
|
|
51,821 |
|
|
198,598 |
|
|
(3,551 |
) |
|
379,897 |
|
Prepaid expenses |
|
|
6,782 |
|
|
662 |
|
|
49,209 |
|
|
|
|
|
56,653 |
|
Refundable and deferred income taxes |
|
|
29,974 |
|
|
6,089 |
|
|
8,009 |
|
|
|
|
|
44,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
328,401 |
|
|
114,978 |
|
|
850,023 |
|
|
(3,551 |
) |
|
1,289,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, at cost |
|
|
561,190 |
|
|
125,366 |
|
|
437,329 |
|
|
|
|
|
1,123,885 |
|
Less accumulated depreciation and amortization |
|
|
334,149 |
|
|
67,516 |
|
|
151,243 |
|
|
|
|
|
552,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net property, plant and equipment |
|
|
227,041 |
|
|
57,850 |
|
|
286,086 |
|
|
|
|
|
570,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
20,108 |
|
|
107,542 |
|
|
252,436 |
|
|
|
|
|
380,086 |
|
Other intangible assets |
|
|
265 |
|
|
41,235 |
|
|
148,392 |
|
|
|
|
|
189,892 |
|
Investment in subsidiaries and intercompany accounts |
|
|
1,405,594 |
|
|
854,867 |
|
|
899,268 |
|
|
(3,159,729 |
) |
|
|
|
Other assets |
|
|
49,438 |
|
|
|
|
|
87,148 |
|
|
|
|
|
136,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,030,847 |
|
$ |
1,176,472 |
|
$ |
2,523,353 |
|
$ |
(3,163,280 |
) |
$ |
2,567,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current installments of long-term debt |
|
$ |
215 |
|
$ |
|
|
$ |
881 |
|
$ |
|
|
$ |
1,096 |
|
Notes payable to banks |
|
|
|
|
|
|
|
|
7,914 |
|
|
|
|
|
7,914 |
|
Accounts payable |
|
|
51,355 |
|
|
15,355 |
|
|
119,711 |
|
|
|
|
|
186,421 |
|
Accrued employee compensation and benefits |
|
|
33,728 |
|
|
5,209 |
|
|
36,218 |
|
|
|
|
|
75,155 |
|
Accrued expenses |
|
|
32,928 |
|
|
6,182 |
|
|
50,873 |
|
|
|
|
|
89,983 |
|
Dividends payable |
|
|
8,733 |
|
|
|
|
|
|
|
|
|
|
|
8,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
126,959 |
|
|
26,746 |
|
|
215,597 |
|
|
|
|
|
369,302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
1,085 |
|
|
28,299 |
|
|
33,575 |
|
|
|
|
|
62,959 |
|
Long-term debt, excluding current installments |
|
|
759,251 |
|
|
|
|
|
6,021 |
|
|
|
|
|
765,272 |
|
Defined benefit pension liability |
|
|
|
|
|
|
|
|
135,068 |
|
|
|
|
|
135,068 |
|
Deferred compensation |
|
|
45,231 |
|
|
|
|
|
5,825 |
|
|
|
|
|
51,056 |
|
Other noncurrent liabilities |
|
|
5,272 |
|
|
|
|
|
37,870 |
|
|
|
|
|
43,142 |
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock of $1 par value |
|
|
27,900 |
|
|
457,950 |
|
|
648,682 |
|
|
(1,106,632 |
) |
|
27,900 |
|
Additional paid-in capital |
|
|
|
|
|
150,286 |
|
|
1,098,408 |
|
|
(1,248,694 |
) |
|
|
|
Retained earnings |
|
|
1,762,534 |
|
|
571,199 |
|
|
420,383 |
|
|
(991,582 |
) |
|
1,762,534 |
|
Accumulated other comprehensive income (loss) |
|
|
(171,508 |
) |
|
(58,008 |
) |
|
(125,620 |
) |
|
183,628 |
|
|
(171,508 |
) |
Treasury stock |
|
|
(525,877 |
) |
|
|
|
|
|
|
|
|
|
|
(525,877 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Valmont Industries, Inc. shareholders' equity |
|
|
1,093,049 |
|
|
1,121,427 |
|
|
2,041,853 |
|
|
(3,163,280 |
) |
|
1,093,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest in consolidated subsidiaries |
|
|
|
|
|
|
|
|
47,544 |
|
|
|
|
|
47,544 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
1,093,049 |
|
|
1,121,427 |
|
|
2,089,397 |
|
|
(3,163,280 |
) |
|
1,140,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,030,847 |
|
$ |
1,176,472 |
|
$ |
2,523,353 |
|
$ |
(3,163,280 |
) |
$ |
2,567,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS
December 27, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
Total |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
69,869 |
|
$ |
2,157 |
|
$ |
299,553 |
|
$ |
|
|
$ |
371,579 |
|
Receivables, net |
|
|
158,316 |
|
|
68,414 |
|
|
310,188 |
|
|
|
|
|
536,918 |
|
Inventories |
|
|
127,859 |
|
|
54,914 |
|
|
177,512 |
|
|
(763 |
) |
|
359,522 |
|
Prepaid expenses |
|
|
7,087 |
|
|
502 |
|
|
49,323 |
|
|
|
|
|
56,912 |
|
Refundable and deferred income taxes |
|
|
53,307 |
|
|
6,194 |
|
|
8,509 |
|
|
|
|
|
68,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
416,438 |
|
|
132,181 |
|
|
845,085 |
|
|
(763 |
) |
|
1,392,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, at cost |
|
|
556,658 |
|
|
124,182 |
|
|
458,729 |
|
|
|
|
|
1,139,569 |
|
Less accumulated depreciation and amortization |
|
|
319,899 |
|
|
65,493 |
|
|
147,724 |
|
|
|
|
|
533,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net property, plant and equipment |
|
|
236,759 |
|
|
58,689 |
|
|
311,005 |
|
|
|
|
|
606,453 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
20,108 |
|
|
107,542 |
|
|
257,461 |
|
|
|
|
|
385,111 |
|
Other intangible assets |
|
|
292 |
|
|
43,644 |
|
|
158,068 |
|
|
|
|
|
202,004 |
|
Investment in subsidiaries and intercompany accounts |
|
|
1,446,989 |
|
|
825,236 |
|
|
887,055 |
|
|
(3,159,280 |
) |
|
|
|
Other assets |
|
|
46,587 |
|
|
|
|
|
96,572 |
|
|
|
|
|
143,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,167,173 |
|
$ |
1,167,292 |
|
$ |
2,555,246 |
|
$ |
(3,160,043 |
) |
$ |
2,729,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current installments of long-term debt |
|
$ |
213 |
|
$ |
|
|
$ |
968 |
|
$ |
|
|
$ |
1,181 |
|
Notes payable to banks |
|
|
|
|
|
|
|
|
13,952 |
|
|
|
|
|
13,952 |
|
Accounts payable |
|
|
59,893 |
|
|
15,151 |
|
|
121,521 |
|
|
|
|
|
196,565 |
|
Accrued employee compensation and benefits |
|
|
48,169 |
|
|
5,385 |
|
|
34,396 |
|
|
|
|
|
87,950 |
|
Accrued expenses |
|
|
32,616 |
|
|
6,052 |
|
|
49,812 |
|
|
|
|
|
88,480 |
|
Dividends payable |
|
|
9,086 |
|
|
|
|
|
|
|
|
|
|
|
9,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
149,977 |
|
|
26,588 |
|
|
220,649 |
|
|
|
|
|
397,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
5,584 |
|
|
28,988 |
|
|
37,225 |
|
|
|
|
|
71,797 |
|
Long-term debt, excluding current installments |
|
|
759,895 |
|
|
|
|
|
6,759 |
|
|
|
|
|
766,654 |
|
Defined benefit pension liability |
|
|
|
|
|
|
|
|
150,124 |
|
|
|
|
|
150,124 |
|
Deferred compensation |
|
|
41,803 |
|
|
|
|
|
6,129 |
|
|
|
|
|
47,932 |
|
Other noncurrent liabilities |
|
|
8,081 |
|
|
|
|
|
37,461 |
|
|
|
|
|
45,542 |
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock of $1 par value |
|
|
27,900 |
|
|
457,950 |
|
|
648,682 |
|
|
(1,106,632 |
) |
|
27,900 |
|
Additional paid-in capital |
|
|
|
|
|
150,286 |
|
|
1,098,408 |
|
|
(1,248,694 |
) |
|
|
|
Retained earnings |
|
|
1,718,662 |
|
|
552,676 |
|
|
397,302 |
|
|
(949,978 |
) |
|
1,718,662 |
|
Accumulated other comprehensive income |
|
|
(134,433 |
) |
|
(49,196 |
) |
|
(96,065 |
) |
|
145,261 |
|
|
(134,433 |
) |
Treasury stock |
|
|
(410,296 |
) |
|
|
|
|
|
|
|
|
|
|
(410,296 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Valmont Industries, Inc. shareholders' equity |
|
|
1,201,833 |
|
|
1,111,716 |
|
|
2,048,327 |
|
|
(3,160,043 |
) |
|
1,201,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest in consolidated subsidiaries |
|
|
|
|
|
|
|
|
48,572 |
|
|
|
|
|
48,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
1,201,833 |
|
|
1,111,716 |
|
|
2,096,899 |
|
|
(3,160,043 |
) |
|
1,250,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,167,173 |
|
$ |
1,167,292 |
|
$ |
2,555,246 |
|
$ |
(3,160,043 |
) |
$ |
2,729,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twenty-six Weeks Ended June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
Total |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
58,612 |
|
$ |
18,524 |
|
$ |
24,834 |
|
$ |
(41,024 |
) |
$ |
60,946 |
|
Adjustments to reconcile net earnings to net cash flows from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
14,983 |
|
|
6,278 |
|
|
26,500 |
|
|
|
|
|
47,761 |
|
Noncash loss on trading securities |
|
|
|
|
|
|
|
|
4,582 |
|
|
|
|
|
4,582 |
|
Impairment of assets |
|
|
1,890 |
|
|
215 |
|
|
7,187 |
|
|
|
|
|
9,292 |
|
Stock-based compensation |
|
|
7,466 |
|
|
|
|
|
(3,953 |
) |
|
|
|
|
3,513 |
|
Defined benefit pension plan expense |
|
|
|
|
|
|
|
|
(305 |
) |
|
|
|
|
(305 |
) |
Contribution to defined benefit pension plan |
|
|
|
|
|
|
|
|
(15,735 |
) |
|
|
|
|
(15,735 |
) |
Gain on sale of property, plant and equipment |
|
|
(8 |
) |
|
97 |
|
|
453 |
|
|
|
|
|
542 |
|
Equity in earnings in nonconsolidated subsidiaries |
|
|
(35,292 |
) |
|
(5,181 |
) |
|
|
|
|
40,473 |
|
|
|
|
Deferred income taxes |
|
|
3,819 |
|
|
(584 |
) |
|
(3,290 |
) |
|
|
|
|
(55 |
) |
Changes in assets and liabilities (net of acquisitions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables |
|
|
12,153 |
|
|
13,807 |
|
|
6,551 |
|
|
|
|
|
32,511 |
|
Inventories |
|
|
10,161 |
|
|
3,093 |
|
|
(41,000 |
) |
|
|
|
|
(27,746 |
) |
Prepaid expenses |
|
|
305 |
|
|
(160 |
) |
|
(3,232 |
) |
|
|
|
|
(3,087 |
) |
Accounts payable |
|
|
(8,538 |
) |
|
204 |
|
|
3,313 |
|
|
|
|
|
(5,021 |
) |
Accrued expenses |
|
|
(13,652 |
) |
|
(46 |
) |
|
7,267 |
|
|
|
|
|
(6,431 |
) |
Other noncurrent liabilities |
|
|
(2,729 |
) |
|
|
|
|
4,490 |
|
|
|
|
|
1,761 |
|
Income taxes payable (refundable) |
|
|
15,016 |
|
|
(5 |
) |
|
806 |
|
|
|
|
|
15,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating activities |
|
|
64,186 |
|
|
36,242 |
|
|
18,468 |
|
|
(551 |
) |
|
118,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(7,065 |
) |
|
(3,147 |
) |
|
(14,546 |
) |
|
|
|
|
(24,758 |
) |
Proceeds from sale of assets |
|
|
25 |
|
|
19 |
|
|
1,057 |
|
|
|
|
|
1,101 |
|
Other, net |
|
|
24,268 |
|
|
(33,440 |
) |
|
14,517 |
|
|
551 |
|
|
5,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from investing
activities |
|
|
17,228 |
|
|
(36,568 |
) |
|
1,028 |
|
|
551 |
|
|
(17,761 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings under short-term agreements |
|
|
|
|
|
|
|
|
(5,890 |
) |
|
|
|
|
(5,890 |
) |
Proceeds from long-term borrowings |
|
|
33,000 |
|
|
|
|
|
|
|
|
|
|
|
33,000 |
|
Principal payments on long-term borrowings |
|
|
(33,212 |
) |
|
|
|
|
(445 |
) |
|
|
|
|
(33,657 |
) |
Dividends paid |
|
|
(17,956 |
) |
|
|
|
|
|
|
|
|
|
|
(17,956 |
) |
Dividends to noncontrolling interest |
|
|
|
|
|
|
|
|
(1,669 |
) |
|
|
|
|
(1,669 |
) |
Proceeds from exercises under stock plans |
|
|
9,454 |
|
|
|
|
|
|
|
|
|
|
|
9,454 |
|
Excess tax benefits from stock option exercises |
|
|
1,394 |
|
|
|
|
|
|
|
|
|
|
|
1,394 |
|
Purchase of treasury shares |
|
|
(121,020 |
) |
|
|
|
|
|
|
|
|
|
|
(121,020 |
) |
Purchase of common treasury sharesstock plan exercises |
|
|
(10,490 |
) |
|
|
|
|
|
|
|
|
|
|
(10,490 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from financing
activities |
|
|
(138,830 |
) |
|
|
|
|
(8,004 |
) |
|
|
|
|
(146,834 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
|
|
(31 |
) |
|
(7,775 |
) |
|
|
|
|
(7,806 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
(57,416 |
) |
|
(357 |
) |
|
3,717 |
|
|
|
|
|
(54,056 |
) |
Cash and cash equivalentsbeginning of year |
|
|
69,869 |
|
|
2,157 |
|
|
299,553 |
|
|
|
|
|
371,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalentsend of period |
|
$ |
12,453 |
|
$ |
1,800 |
|
$ |
303,270 |
|
$ |
|
|
$ |
317,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
Table of Contents
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twenty-six Weeks Ended June 28, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent |
|
Guarantors |
|
Non-Guarantors |
|
Eliminations |
|
Total |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
119,956 |
|
$ |
37,086 |
|
$ |
37,107 |
|
$ |
(71,734 |
) |
$ |
122,415 |
|
Adjustments to reconcile net earnings to net cash flows from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
12,539 |
|
|
6,584 |
|
|
24,245 |
|
|
|
|
|
43,368 |
|
Noncash loss on trading securities |
|
|
|
|
|
|
|
|
3,501 |
|
|
|
|
|
3,501 |
|
Stock-based compensation |
|
|
3,686 |
|
|
|
|
|
|
|
|
|
|
|
3,686 |
|
Defined benefit pension plan expense |
|
|
|
|
|
|
|
|
1,334 |
|
|
|
|
|
1,334 |
|
Contribution to defined benefit pension plan |
|
|
|
|
|
|
|
|
(17,484 |
) |
|
|
|
|
(17,484 |
) |
Gain on sale of property, plant and equipment |
|
|
7 |
|
|
(74 |
) |
|
(35 |
) |
|
|
|
|
(102 |
) |
Equity in earnings in nonconsolidated subsidiaries |
|
|
(62,980 |
) |
|
(9,023 |
) |
|
|
|
|
72,033 |
|
|
30 |
|
Deferred income taxes |
|
|
5,829 |
|
|
1,667 |
|
|
(2,466 |
) |
|
|
|
|
5,030 |
|
Changes in assets and liabilities (net of acquisitions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables |
|
|
(9,471 |
) |
|
34,803 |
|
|
(4,249 |
) |
|
|
|
|
21,083 |
|
Inventories |
|
|
9,584 |
|
|
10,651 |
|
|
(13,611 |
) |
|
|
|
|
6,624 |
|
Prepaid expenses |
|
|
(1,870 |
) |
|
241 |
|
|
(16,660 |
) |
|
|
|
|
(18,289 |
) |
Accounts payable |
|
|
1,352 |
|
|
(3,892 |
) |
|
(26,093 |
) |
|
|
|
|
(28,633 |
) |
Accrued expenses |
|
|
(23,205 |
) |
|
(8,411 |
) |
|
1,201 |
|
|
|
|
|
(30,415 |
) |
Other noncurrent liabilities |
|
|
1,941 |
|
|
|
|
|
(175 |
) |
|
|
|
|
1,766 |
|
Income taxes payable (refundable) |
|
|
(22,572 |
) |
|
1,071 |
|
|
(562 |
) |
|
|
|
|
(22,063 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating activities |
|
|
34,796 |
|
|
70,703 |
|
|
(13,947 |
) |
|
299 |
|
|
91,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(27,046 |
) |
|
(1,486 |
) |
|
(18,459 |
) |
|
|
|
|
(46,991 |
) |
Proceeds from sale of assets |
|
|
21 |
|
|
88 |
|
|
1,042 |
|
|
|
|
|
1,151 |
|
Acquisitions, net of cash acquired |
|
|
|
|
|
|
|
|
(120,483 |
) |
|
|
|
|
(120,483 |
) |
Other, net |
|
|
49,004 |
|
|
(74,035 |
) |
|
22,390 |
|
|
(299 |
) |
|
(2,940 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from investing activities |
|
|
21,979 |
|
|
(75,433 |
) |
|
(115,510 |
) |
|
(299 |
) |
|
(169,263 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings under short-term agreements |
|
|
|
|
|
|
|
|
(1,861 |
) |
|
|
|
|
(1,861 |
) |
Principal payments on long-term borrowings |
|
|
(196 |
) |
|
|
|
|
(63 |
) |
|
|
|
|
(259 |
) |
Dividends paid |
|
|
(13,427 |
) |
|
|
|
|
|
|
|
|
|
|
(13,427 |
) |
Intercompany dividends |
|
|
20,895 |
|
|
|
|
|
(20,895 |
) |
|
|
|
|
|
|
Dividends to noncontrolling interest |
|
|
|
|
|
|
|
|
(1,340 |
) |
|
|
|
|
(1,340 |
) |
Intercompany capital contribution |
|
|
(143,000 |
) |
|
|
|
|
143,000 |
|
|
|
|
|
|
|
Proceeds from exercises under stock plans |
|
|
11,996 |
|
|
|
|
|
|
|
|
|
|
|
11,996 |
|
Excess tax benefits from stock option exercises |
|
|
3,576 |
|
|
|
|
|
|
|
|
|
|
|
3,576 |
|
Purchase of treasury shares |
|
|
(77,084 |
) |
|
|
|
|
|
|
|
|
|
|
(77,084 |
) |
Purchase of common treasury sharesstock plan exercises |
|
|
(11,984 |
) |
|
|
|
|
|
|
|
|
|
|
(11,984 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from financing activities |
|
|
(209,224 |
) |
|
|
|
|
118,841 |
|
|
|
|
|
(90,383 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
|
|
2,691 |
|
|
7,325 |
|
|
|
|
|
10,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
(152,449 |
) |
|
(2,039 |
) |
|
(3,291 |
) |
|
|
|
|
(157,779 |
) |
Cash and cash equivalentsbeginning of year |
|
|
215,576 |
|
|
29,797 |
|
|
368,333 |
|
|
|
|
|
613,706 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalentsend of period |
|
$ |
63,127 |
|
$ |
27,758 |
|
$ |
365,042 |
|
$ |
|
|
$ |
455,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
Table of Contents
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's discussion and analysis 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 the Company 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. These statements are not guarantees of
performance or results. They involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Management believes that these forward-looking statements are based on
reasonable assumptions. Many factors could affect the Company's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors
include, among other things, risk factors described from time to time in the Company'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 materials, availability and market acceptance of new products, product pricing, domestic
and international competitive environments, and actions and policy changes of domestic and foreign governments.
This
discussion should be read in conjunction with the financial statements and notes thereto, and the management's discussion and analysis included in the Company's Annual Report on
Form 10-K for the fiscal year ended December 27, 2014. Segment sales in the table below are presented net of intersegment sales.
35
Table of Contents
Results of Operations
Dollars in millions, except per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-six Weeks Ended |
|
|
|
June 27,
2015 |
|
June 28,
2014 |
|
% Incr.
(Decr.) |
|
June 27,
2015 |
|
June 28,
2014 |
|
% Incr.
(Decr.) |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
682.1 |
|
$ |
842.6 |
|
|
(19.0 |
)% |
$ |
1,352.5 |
|
$ |
1,594.3 |
|
|
(15.2 |
)% |
Gross profit |
|
|
169.5 |
|
|
220.5 |
|
|
(23.1 |
)% |
|
335.0 |
|
|
427.5 |
|
|
(21.6 |
)% |
as a percent of sales |
|
|
24.8 |
% |
|
26.2 |
% |
|
|
|
|
24.8 |
% |
|
26.8 |
% |
|
|
|
SG&A expense |
|
|
115.5 |
|
|
115.7 |
|
|
(0.2 |
)% |
|
223.3 |
|
|
223.8 |
|
|
(0.2 |
)% |
as a percent of sales |
|
|
16.9 |
% |
|
13.7 |
% |
|
|
|
|
16.5 |
% |
|
14.0 |
% |
|
|
|
Operating income |
|
|
54.0 |
|
|
104.8 |
|
|
(48.5 |
)% |
|
111.7 |
|
|
203.6 |
|
|
(45.1 |
)% |
as a percent of sales |
|
|
7.9 |
% |
|
12.4 |
% |
|
|
|
|
8.3 |
% |
|
12.8 |
% |
|
|
|
Net interest expense |
|
|
10.6 |
|
|
6.7 |
|
|
58.2 |
% |
|
20.9 |
|
|
13.2 |
|
|
58.3 |
% |
Effective tax rate |
|
|
32.1 |
% |
|
34.1 |
% |
|
|
|
|
33.6 |
% |
|
34.4 |
% |
|
|
|
Net earnings |
|
$ |
27.9 |
|
$ |
64.0 |
|
|
(56.4 |
)% |
$ |
58.6 |
|
$ |
120.0 |
|
|
(51.2 |
)% |
Diluted earnings per share |
|
$ |
1.19 |
|
$ |
2.38 |
|
|
(50.0 |
)% |
$ |
2.47 |
|
$ |
4.46 |
|
|
(44.6 |
)% |
Engineered Infrastructure Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
257.0 |
|
|
286.2 |
|
|
(10.2 |
)% |
|
488.3 |
|
|
495.1 |
|
|
(1.4 |
)% |
Gross profit |
|
|
63.5 |
|
|
73.9 |
|
|
(14.1 |
)% |
|
118.5 |
|
|
128.4 |
|
|
(7.7 |
)% |
SG&A expense |
|
|
46.1 |
|
|
45.3 |
|
|
1.8 |
% |
|
89.1 |
|
|
86.1 |
|
|
3.5 |
% |
Operating income |
|
|
17.4 |
|
|
28.6 |
|
|
(39.2 |
)% |
|
29.4 |
|
|
42.3 |
|
|
(30.5 |
)% |
Utility Support Structures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
162.6 |
|
$ |
212.0 |
|
|
(23.3 |
)% |
$ |
338.7 |
|
$ |
426.2 |
|
|
(20.5 |
)% |
Gross profit |
|
|
30.6 |
|
|
45.9 |
|
|
(33.3 |
)% |
|
65.2 |
|
|
98.0 |
|
|
(33.5 |
)% |
SG&A expense |
|
|
20.3 |
|
|
19.6 |
|
|
3.6 |
% |
|
39.5 |
|
|
38.9 |
|
|
1.5 |
% |
Operating income |
|
|
10.3 |
|
|
26.3 |
|
|
(60.8 |
)% |
|
25.7 |
|
|
59.1 |
|
|
(56.5 |
)% |
Coatings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
63.9 |
|
$ |
70.4 |
|
|
(9.2 |
)% |
$ |
125.7 |
|
$ |
137.6 |
|
|
(8.6 |
)% |
Gross profit |
|
|
17.0 |
|
|
25.3 |
|
|
(32.8 |
)% |
|
36.8 |
|
|
48.6 |
|
|
(24.3 |
)% |
SG&A expense |
|
|
9.1 |
|
|
9.5 |
|
|
(4.2 |
)% |
|
17.9 |
|
|
18.9 |
|
|
(5.3 |
)% |
Operating income |
|
|
7.9 |
|
|
15.8 |
|
|
(50.0 |
)% |
|
18.9 |
|
|
29.7 |
|
|
(36.4 |
)% |
Irrigation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
153.8 |
|
$ |
219.9 |
|
|
(30.1 |
)% |
$ |
308.3 |
|
$ |
432.6 |
|
|
(28.7 |
)% |
Gross profit |
|
|
47.7 |
|
|
62.9 |
|
|
(24.2 |
)% |
|
93.0 |
|
|
127.6 |
|
|
(27.1 |
)% |
SG&A expense |
|
|
21.9 |
|
|
21.3 |
|
|
2.8 |
% |
|
42.9 |
|
|
42.9 |
|
|
|
% |
Operating income |
|
|
25.8 |
|
|
41.6 |
|
|
(38.0 |
)% |
|
50.1 |
|
|
84.7 |
|
|
(40.9 |
)% |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
44.8 |
|
$ |
54.1 |
|
|
(17.2 |
)% |
$ |
91.5 |
|
$ |
102.8 |
|
|
(11.0 |
)% |
Gross profit |
|
|
10.5 |
|
|
12.4 |
|
|
(15.3 |
)% |
|
21.4 |
|
|
24.7 |
|
|
(13.4 |
)% |
SG&A expense |
|
|
4.2 |
|
|
4.1 |
|
|
2.4 |
% |
|
8.5 |
|
|
7.8 |
|
|
9.0 |
% |
Operating income |
|
|
6.3 |
|
|
8.3 |
|
|
(24.1 |
)% |
|
12.9 |
|
|
16.9 |
|
|
(23.7 |
)% |
Net corporate expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
0.2 |
|
$ |
0.1 |
|
|
(100.0 |
)% |
$ |
0.1 |
|
$ |
0.2 |
|
|
50.0 |
% |
SG&A expense |
|
|
13.9 |
|
|
16.0 |
|
|
(13.1 |
)% |
|
25.4 |
|
|
29.3 |
|
|
(13.3 |
)% |
Operating loss |
|
|
(13.7 |
) |
|
(15.9 |
) |
|
13.8 |
% |
|
(25.3 |
) |
|
(29.1 |
) |
|
13.1 |
% |
36
Table of Contents
Overview
On a consolidated basis, the decrease in net sales in the second quarter and first half of fiscal 2015, as compared with 2014,
reflected lower sales in all reportable segments. The changes in net sales in the second quarter and first half of fiscal 2015, as compared with fiscal 2014, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second quarter |
|
|
|
Total |
|
EIP |
|
Utility |
|
Coatings |
|
Irrigation |
|
Other |
|
Sales2014 |
|
$ |
842.6 |
|
$ |
286.2 |
|
$ |
212.0 |
|
$ |
70.4 |
|
$ |
219.9 |
|
$ |
54.1 |
|
Volume |
|
|
(101.2 |
) |
|
(12.5 |
) |
|
(24.4 |
) |
|
(5.0 |
) |
|
(57.6 |
) |
|
(1.7 |
) |
Pricing/mix |
|
|
(25.5 |
) |
|
(3.1 |
) |
|
(21.7 |
) |
|
2.9 |
|
|
(1.3 |
) |
|
(2.3 |
) |
Acquisitions |
|
|
21.1 |
|
|
15.7 |
|
|
|
|
|
|
|
|
5.4 |
|
|
|
|
Currency translation |
|
|
(54.9 |
) |
|
(29.3 |
) |
|
(3.3 |
) |
|
(4.4 |
) |
|
(12.6 |
) |
|
(5.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales2015 |
|
$ |
682.1 |
|
$ |
257.0 |
|
$ |
162.6 |
|
$ |
63.9 |
|
$ |
153.8 |
|
$ |
44.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date |
|
|
|
Total |
|
EIP |
|
Utility |
|
Coatings |
|
Irrigation |
|
Other |
|
Sales2014 |
|
$ |
1,594.3 |
|
$ |
495.1 |
|
$ |
426.2 |
|
$ |
137.6 |
|
$ |
432.6 |
|
$ |
102.8 |
|
Volume |
|
|
(165.0 |
) |
|
(2.9 |
) |
|
(38.9 |
) |
|
(12.7 |
) |
|
(110.7 |
) |
|
0.2 |
|
Pricing/mix |
|
|
(44.3 |
) |
|
(3.2 |
) |
|
(42.9 |
) |
|
8.4 |
|
|
(3.3 |
) |
|
(3.3 |
) |
Acquisitions |
|
|
53.7 |
|
|
45.0 |
|
|
|
|
|
|
|
|
8.7 |
|
|
|
|
Currency translation |
|
|
(86.2 |
) |
|
(45.7 |
) |
|
(5.7 |
) |
|
(7.6 |
) |
|
(19.0 |
) |
|
(8.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales2015 |
|
$ |
1,352.5 |
|
$ |
488.3 |
|
$ |
338.7 |
|
$ |
125.7 |
|
$ |
308.3 |
|
$ |
91.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
effects are estimated based on a physical production or sales measure. Since products we sell are not uniform in nature, pricing and mix relate to a combination of changes in
sales prices and the attributes of the product sold. Accordingly, pricing and mix changes do not necessarily directly result in operating income changes.
Acquisitions
included DS SM A/S (renamed Valmont SM), AgSense LLC, and Shakespeare. We acquired Valmont SM in March 2014, AgSense in August 2014, and Shakespeare in October 2014.
Shakespeare and Valmont SM are reported in the Engineered Infrastructure Products segment, and AgSense is reported in the Irrigation segment. Average steel index prices for both hot rolled coil and
plate decreased substantially in North America over the three and six month periods ended June 27,
2015 compared to June 28, 2014. Decreases in sales pricing and volumes offset the increase in gross profit realized from the lower steel prices.
Restructuring Plan
In April 2015, our Board of Directors authorized a broad restructuring plan (the "Plan") of up to $60 million to respond to the
market environment in certain of our businesses. We expect to incur pre-tax cash expenses of $17 million and asset impairments of approximately $13 million. These charges are expected to
be incurred over the remainder of 2015. Approximately $14.3 million of restructuring expense was recorded during the second quarter of 2015; $8.0 million in cost of goods sold and
$6.3 million in selling, general, and administrative expense. The decrease in second quarter 2015 gross profit due to restructuring expense by segment is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
Total |
|
EIP |
|
Utility |
|
Coatings |
|
Irrigation |
|
Other |
|
Corporate |
|
Second quarter |
|
$ |
(8.0 |
) |
$ |
(1.4 |
) |
$ |
(2.0 |
) |
$ |
(4.5 |
) |
$ |
|
|
$ |
(0.1 |
) |
$ |
|
|
37
Table of Contents
The
decrease in second quarter 2015 operating income due to restructuring expense by segment is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
EIP |
|
Utility |
|
Coatings |
|
Irrigation |
|
Other |
|
Corporate |
|
Second quarter |
|
$ |
(14.3 |
) |
$ |
(4.5 |
) |
$ |
(2.5 |
) |
$ |
(4.8 |
) |
$ |
(0.3 |
) |
$ |
(0.1 |
) |
$ |
(2.1 |
) |
Certain
of these restructuring actions are within the APAC Coatings reporting unit which has approximately $16 million of goodwill as of June 27, 2015. We expect these
activities to improve the profitability of this reporting unit. Should operating income not improve within this reporting unit after these restructuring activities are implemented, we may have to
write off all or a portion of our goodwill for this reporting unit during our annual impairment testing during the third quarter. In addition to this goodwill, we are also evaluating other potential
restructuring activities authorized under the Plan. In total, these restructuring items could result in asset impairments of up to $25 million and cash charges of $5 million.
In
the second quarter and first half of fiscal 2015, we realized a decrease in operating profit, as compared with fiscal 2014, due to currency translation effects. On average, the U.S.
dollar strengthened in particular against the Australian dollar, Brazilian Real, Euro, and South Africa Rand, resulting in less operating profit in U.S. dollar terms. The breakdown of this effect by
segment was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
EIP |
|
Utility |
|
Coatings |
|
Irrigation |
|
Other |
|
Corporate |
|
Second quarter |
|
$ |
(5.4 |
) |
$ |
(2.4 |
) |
$ |
|
|
$ |
(0.3 |
) |
$ |
(2.5 |
) |
$ |
(0.4 |
) |
$ |
0.2 |
|
Year-to-date |
|
$ |
(7.7 |
) |
$ |
(3.2 |
) |
$ |
(0.1 |
) |
$ |
(0.6 |
) |
$ |
(3.5 |
) |
$ |
(0.6 |
) |
$ |
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
decrease in gross margin (gross profit as a percent of sales) in fiscal 2015, as compared with 2014, was due to a combination of lower sales prices, unfavorable sales mix,
restructuring charges, and reduced sales volumes in 2015, as compared with 2014.
Selling,
general and administrative (SG&A) spending in the second quarter and first half of fiscal 2015, as compared with the same periods in 2014, decreased slightly due to the
following factors:
-
- currency translation effects of $6.4 million and $8.9 million, respectively, due to the strengthening of the U.S. dollar
primarily against the Australian dollar, Brazilian Real, Euro, and South Africa Rand; and
-
- decreased employee incentive accruals of $4.4 million and $6.7 million, due to lower operating results.
The
above reductions in SG&A were partially offset by the following:
-
- the acquisition of Valmont SM, AgSense, and Shakespeare with expenses of $3.4 million and $8.9 million, respectively;
and
-
- expenses incurred related to the restructuring plan during the second quarter of $6.3 million.
The
decrease in operating income on a reportable segment basis in 2015, as compared to 2014, was due to reduced operating performance in all segments. The decrease in operating income is
primarily attributable to lower volumes and sales prices, restructuring expenses, and currency translation effects.
Net
interest expense increased in the second quarter and first half of fiscal 2015, as compared with 2014, primarily due to additional long-term debt borrowed in the third quarter of
2014. In addition, interest income decreased due to less cash on hand due to the share buyback program.
The
increase in other expense in the second quarter of 2015, as compared with 2014, was due to a smaller gain on deferred compensation assets of $1.1 million and less favorable
foreign currency
38
Table of Contents
transaction
gains/losses due to currency exchange rate changes. The decrease in other expense in the first half of fiscal 2015, as compared with 2014, was primarily attributable to the difference in
the investment income from the Company's shares of Delta EMD. In 2014, we recorded a non-cash mark to market loss of $3.5 million and in 2015, we received a $5.0 million special dividend
offset by a noncash mark to market loss of approximately $4.6 million. The remaining decrease in other expense relates to a smaller gain on deferred compensation assets of $0.7 million
and more favorable currency transactional gains/losses.
Our
effective income tax rate in the second quarter and first half of fiscal 2015 was lower when compared with the same period in fiscal 2014. The reduction relates to a tax benefit
recorded in 2015 for certain withholding taxes paid in foreign jurisdictions.
Earnings
attributable to noncontrolling interest was relatively flat in the second quarter and first half of fiscal 2015, as compared with the same periods in 2014.
Our
cash flows provided by operations were approximately $118.3 million in the first half of fiscal 2015, as compared with $91.9 million provided by operations in 2014. The
increase in operating cash flow in the first half of fiscal 2015 was the result of improved net working capital, partially offset by lower net earnings, compared with 2014.
The decrease in net sales in the second quarter and first half of fiscal 2015 as compared with 2014 was primarily due to unfavorable
foreign currency translation effects of $29.3 million and $45.7 million, respectively, and lower sales volumes. These reductions were partially offset by the acquisitions of Valmont SM
in March 2014 and Shakespeare in October 2014, which added sales in the second quarter and first half of fiscal 2015 of $15.7 million and $45.0 million, respectively.
Global
lighting, traffic, and roadway product sales in the second quarter and first half of 2015 were lower compared to the same periods in fiscal 2014. In the second quarter and first
half of fiscal 2015, sales volumes in the U.S. were higher in the commercial steel and aluminum markets and slightly lower in the transportation markets. The transportation market continues to be
challenging, due in part to the lack of long-term U.S. federal highway funding legislation. Sales volumes in Canada decreased in the second quarter and first half of 2015 as compared to 2014, due to
lower volumes and unfavorable currency impacts. Sales in Europe were lower in the second quarter and first half of fiscal 2015 compared to the same periods in fiscal 2014, due to unfavorable currency
translation effects that were offset to an extent by higher volumes relating to a large project in the Middle East that ended in the second quarter. The domestic markets in general remain subdued in
Europe. In the Asia Pacific region, sales were slightly lower in the second quarter and first half of fiscal 2015, as compared to 2014, due to lower investment activity in both China and Australia.
Highway safety product sales decreased slightly in the second quarter and first half of 2015 compared to 2014, due to unfavorable foreign currency translation that was partially offset by increased
volume due to improvement in highway project activity in Australia and New Zealand.
Communication
product line sales were slightly higher in the second quarter and first half of fiscal 2015, as compared with the same periods in fiscal 2014. North America communication
structure sales decreased, primarily due to one customer who significantly reduced its 4G wireless network build out in 2015 compared with 2014. Communication component sales were flat year over year.
In China, sales of wireless communication structures in the second quarter and first half of fiscal 2015 increased over the same period in 2014 as the investment levels by the major wireless carriers
have remained strong and we have increased our market share through better sales coverage.
Access
systems product line sales decreased in the second quarter and first half of 2015, as compared with 2014, primarily due to the negative impact of currency translation effects and
lower
39
Table of Contents
volumes.
The volume decrease was primarily related to the slowdown in mining sector investment in Australia, weaker market conditions in China, and fewer oil and gas related construction projects.
Offshore
structures sales were down $24.1 million and $16.5 million in the second quarter and first half of 2015, as compared to the same periods in 2014. These decreases
are impacted by unfavorable currency translation effects of $9.1 million and $12.3 million in the second quarter and first half of 2015, respectively, as well as reduced volumes
partially offset by two additional months of sales in 2015. A delay in wind energy product introduction by our customers has resulted in some projects being postponed. An additional factor
contributing to the sales decrease was the postponement of oil and gas orders due to lower oil prices.
Operating
income for the segment in the second quarter and first half of fiscal 2015 was lower, as compared with the same period of fiscal 2014, due to restructuring charges recorded in
the second quarter and first half of 2015 and unfavorable currency translation effects of $2.4 million and $3.2 million, respectively. The remainder of the decrease can be attributed to
lower volumes and sales mix. The slight increase in SG&A spending in the second quarter and first half of 2015 was due to the Shakespeare and Valmont SM acquisitions totaling $2.3 million and
$6.7 million, respectively, and restructuring charges incurred in 2015. These increases were partially offset by currency translation effects.
In the Utility segment, sales decreased in the second quarter and first half of 2015, as compared with 2014, due to lower sales volume,
a decrease in average selling prices, most notably for our steel products, and an unfavorable sales mix. Our mix of revenue from very large transmission projects in second quarter and first half of
2015 was unfavorable to same periods of 2014. A backlog including some very large transmission projects at year-end 2013 provided for the more favorable mix of large transmission projects revenue in
first quarter of 2014. Declining steel prices during the first half of 2015 and a competitive pricing environment also contributed to lower average selling prices in the second quarter of 2015
compared to 2014.
In
North America, sales volumes in tons for steel and concrete utility structures were down in the first half of 2015, as compared with 2014. Our large utility customers delayed capital
investment in transmission and we believe this trend will continue for the remainder of 2015. The pricing environment in North America continues to be very competitive. In the second quarter and first
half of 2015, as compared to 2014, international utility structures sales decreased due to unfavorable currency translation effects and lower volumes in the Asia-Pacific region.
SG&A
expense was slightly lower in the second quarter and first half of 2015, as compared with 2014, primarily due to lower employee compensation and sales commissions, offset to an
extent by restructuring costs. Operating income in the second quarter and first half of 2015, as compared with 2014, decreased due to lower volumes, sales margins, and reduced leverage of fixed costs.
While we initiated a number of actions to improve our cost structure in this segment, including certain restructuring activities, the full effect will be recognized upon a rebound in our sales
volumes.
Coatings segment sales in North America decreased in the second quarter and first half of 2015, as compared with 2014, due to lower
sales volumes and currency translation effects related to the strengthening of the U.S. dollar against the Canadian dollar. Intercompany sales volumes in North America were down as well. Those
decreases were partially offset by price increases to recover higher costs for zinc in 2015 as compared to 2014. Coatings sales in Asia Pacific decreased primarily due to currency translation effects
related to the strengthening of the U.S. dollar against the Australian dollar. Continued weak demand in Australia led to the lower volumes that were partially offset by price increases to recover
higher costs of zinc. Sales in Asia were relatively flat in the second quarter and first half of 2015.
40
Table of Contents
SG&A expense decreased in the second quarter and first half of 2015, as compared to the same periods in 2014, by $0.3 million and $1.0 primarily due to
currency translation effects. Operating income was lower in the second quarter and first half of 2015, as compared with 2014, due to $4.8 million of restructuring costs in Australia, the lower
sales volumes, unfavorable currency impacts, and reduced leverage of fixed costs in both Australia and North America.
The decrease in Irrigation segment net sales in the second quarter and first half of fiscal 2015, as compared with 2014, was mainly due
to sales volume decreases in both North American and International markets. In fiscal 2015, net farm income in the United States is expected to decrease 32% from the levels of 2014, due in part to
lower market prices for corn and soybeans. We believe this reduction contributed to lower demand for irrigation machines in North America in the second quarter and first half of 2015, as compared with
2014. In international markets, sales decreased in the second quarter and first half of 2015, as compared with 2014, primarily due to reduced volumes in Brazil, Eastern Europe, and the Middle East and
unfavorable currency translation effects in Brazil and South Africa.
SG&A
was relatively flat in the second quarter and first half of fiscal 2015, as compared with 2014; SG&A increased due to AgSense (acquired in August 2014) of $1.1 million and
$2.1 million, respectively, offset by currency translation reductions of $0.9 million and $1.4 million, respectively. Operating income for the segment declined in the second
quarter and first half of fiscal 2015 over 2014, due to sales volume decreases and associated operating deleverage of fixed operating costs, unfavorable currency impacts, and slightly lower pricing.
These reductions were partially offset by the operating income of AgSense that was acquired in August 2014, lower average steel purchase prices, and reduced factory spending to adjust to the lower
sales volumes.
This unit includes the grinding media, industrial tubing, and industrial fasteners operations. The decrease in sales in the second
quarter and first half of fiscal 2015, as compared with 2014, was due in part to unfavorable currency translation of $5.3 million and $8.2 million, respectively. Grinding media volumes
were slightly lower in the second quarter but higher in the first half of 2015. Tubing sales in 2015 were lower due to a decline in steel prices and lower volumes. Industrial fasteners sales were down
due to lower volumes in 2015. Operating income in the second quarter and first half of fiscal 2015 was lower than the same periods in 2014, due primarily to lower tubing and industrial fasteners sales
volumes and unfavorable currency translation.
Net corporate expense in the second quarter and first half of fiscal 2015 decreased over the same period in fiscal 2014. These
decreases were mainly due to lower employee incentives of $4.4 million and $6.0 million associated with reduced net earnings, respectively, offset partially by restructuring expenses in
the second quarter of $2.1 million.
Liquidity and Capital Resources
Working Capital and Operating Cash FlowsNet working capital was
$920.5 million at June 27, 2015, as compared with $995.7 million at December 27, 2014. The decrease in net working capital in 2015 mainly resulted from decreased cash which
was used in the share repurchase program and lower accounts receivable due to improved collections. Cash flow provided by operations was $118.3 million in the first half of 2015, as compared
with $91.9 million in first half of 2014. The increase in operating
41
Table of Contents
cash
flow in 2015 was primarily the result of working capital improvements over 2014, offset to an extent by reduced net earnings.
Investing Cash FlowsCapital spending in the first half of fiscal 2015 was $24.8 million, as compared with
$47.0 million for the same period in 2014. Significant capital spending projects in 2015 and 2014 include certain investments in machinery and equipment across all businesses. We expect our
capital spending for the 2015 fiscal year to be approximately $60 million. The biggest contributor to lower investing cash outflows in 2015 as compared to 2014, was no acquisitions in the first
half of 2015 and $120.5 million in the first half of 2014 for the acquisition of Valmont SM.
Financing Cash FlowsOur total interest-bearing debt decreased slightly to $774.3 million at June 27, 2015 from
$781.8 million at December 27, 2014. Financing cash flows changed from a use of approximately $90.4 million in the first half of fiscal 2014 to a use of approximately
$146.9 million in the first half of fiscal 2015. The primary change was due to the Company purchasing $44.0 million more treasury shares in 2015 over 2014 related to the share repurchase
program.
On May 13, 2014, we announced a new capital allocation philosophy which covered a share repurchase program. The Board of
Directors authorized the purchase of up to $500 million of the Company's outstanding common stock from time to time over twelve months at
prevailing market prices, through open market or privately-negotiated transactions. In February 2015, the Board of Directors authorized an additional $250 million of share purchase, without an
expiration date. The share purchases will be funded from available working capital and short-term borrowings and will be made subject to market and economic conditions. We are not obligated to make
any share repurchases under the share repurchase program and we may discontinue the share repurchase program at any time.
As
of June 27, 2015, we have acquired approximately 3.7 million shares for approximately $516.1 million under these share repurchase programs. As of July 22,
2015, the date as of which we report on the cover of this form 10-Q the number of outstanding shares of our common stock, we have acquired a total of 3.74 million shares for approximately
$521.0 million under these share repurchase programs.
Our
capital allocation philosophy announcement included our intention to manage our capital structure to maintain our investment grade debt rating. Our most recent rating were Baa2 by
Moody's Investors Services, Inc. and BBB+ rating by Standard and Poor's Rating Services. We would be willing to allow our debt rating to fall to Baa3 or BBB to finance a
special acquisition or other opportunity. Otherwise, we expect to maintain a ratio of debt to invested capital which will support our current investment grade debt rating.
Our
debt financing at June 27, 2015 is primarily long-term debt consisting of:
-
- $250.2 million face value ($255.2 million carrying value) of senior unsecured notes that bear interest at 6.625% per
annum and are due in April 2020.
-
- $250 million face value ($248.9 million carrying value) of senior unsecured notes that bear interest at 5.00% per annum
and are due in October 2044.
-
- $250 million face value ($246.7 million carrying value) of unsecured notes that bear interest at 5.25% per annum and are
due in October 2054.
-
- We are allowed to repurchase the notes at specified prepayment premiums. All three tranches of these notes are guaranteed by certain
of our subsidiaries.
42
Table of Contents
At
June 27, 2015 and December 27, 2014, we had no outstanding borrowings under our revolving credit agreement. The revolving credit agreement contains certain financial
covenants that may limit our additional borrowing capability under the agreement. At June 27, 2015, we had the ability to borrow $581.4 million under this facility, after consideration
of standby letters of credit of $18.6 million associated with certain insurance obligations and international sales commitments. We also maintain certain short-term bank lines of credit
totaling $105.9 million, $98.8 million of which was unused at June 27, 2015.
Our
senior unsecured notes and revolving credit agreement each contain cross-default provisions which permit the acceleration of our indebtedness to them if we default on other
indebtedness that results in, or permits, the acceleration of such other indebtedness.
The
debt agreements contain covenants that require us to maintain certain coverage ratios and may limit us with respect to certain business activities, including capital expenditures.
The debt agreements allow us to add estimated EBITDA from acquired businesses for periods we did not own the acquired business. As such, our calculations below are on an Adjusted EBITDA basis. Our key
debt covenants are as follows:
-
- Interest-bearing debt is not to exceed 3.5X Adjusted EBITDA of the prior four quarters; and
-
- Adjusted EBITDA over the prior four quarters must be at least 2.5X our interest expense over the same period.
At
June 27, 2015, we were in compliance with all covenants related to the debt agreements. The key covenant calculations at June 27, 2015 were as follows:
|
|
|
|
|
Interest-bearing debt |
|
$ |
774,282 |
|
Adjusted EBITDAlast four quarters |
|
|
324,373 |
|
Leverage ratio |
|
|
2.39 |
|
Adjusted EBITDAlast four quarters |
|
$ |
324,373 |
|
Interest expenselast four quarters |
|
|
45,127 |
|
Interest earned ratio |
|
|
7.19 |
|
43
Table of Contents
The
calculation of Adjusted EBITDA-last four quarters (June 28, 2014 through June 27, 2015) is as follows:
|
|
|
|
|
Net cash flows from operations |
|
$ |
200,590 |
|
Interest expense |
|
|
45,127 |
|
Income tax expense |
|
|
61,663 |
|
Impairment of assets |
|
|
(9,292 |
) |
Loss on investment |
|
|
(4,876 |
) |
Non-cash debt refinancing expense |
|
|
2,478 |
|
Acquisition earn-out release |
|
|
4,300 |
|
Deferred income tax benefit |
|
|
(166 |
) |
Noncontrolling interest |
|
|
(5,217 |
) |
Equity in earnings of nonconsolidated subsidiaries |
|
|
60 |
|
Stock-based compensation |
|
|
(6,557 |
) |
Pension plan expense |
|
|
(999 |
) |
Contribution to pension plan |
|
|
16,424 |
|
Changes in assets and liabilities |
|
|
20,644 |
|
Other |
|
|
(1,036 |
) |
|
|
|
|
|
EBITDA |
|
|
323,143 |
|
Shakespeare EBITDAJune 29, 2014Oct. 5, 2014 |
|
|
1,230 |
|
Adjusted EBITDA |
|
$ |
324,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Valmont Industries, Inc. |
|
$ |
122,632 |
|
Interest expense |
|
|
45,127 |
|
Income tax expense |
|
|
61,663 |
|
Depreciation and amortization expense |
|
|
93,721 |
|
|
|
|
|
|
EBITDA |
|
|
323,143 |
|
Shakespeare EBITDAJun 29, 2014Oct. 5, 2014 |
|
|
1,230 |
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
324,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the third quarter of 2014, we incurred $38,705 of costs associated with refinancing of debt. This category of expense is not in the definition of EBITDA for debt covenant
calculation purposes per our debt agreements. As such, it has not been added back in the Adjusted EBITDA reconciliation to cash flows from operation or net earnings for the four quarters between
June 28, 2014 and June 27, 2015.
Our
businesses are cyclical, but we have diversity in our markets, from a product, customer and a geographical standpoint. We have demonstrated the ability to effectively manage through
business cycles and maintain liquidity. We have consistently generated operating cash flows in excess of our capital expenditures. Based on our available credit facilities, recent issuance of senior
unsecured notes and our history of positive operational cash flows, we believe that we have adequate liquidity to meet our needs.
We
have not made any provision for U.S. income taxes in our financial statements on approximately $683.7 million of undistributed earnings of our foreign subsidiaries, as we
intend to reinvest those earnings. Of our cash balances at June 27, 2015, approximately $299.1 million is held in entities outside the United States with $108.9 million
specifically held within consolidated Delta Ltd., a wholly-owned subsidiary of the Company. Delta Ltd. sponsors a defined benefit pension plan and therefore, the Company is allowed to
dividend out Delta Ltd.'s available cash only as long as that dividend does not negatively impact Delta Ltd.'s ability to meet its annual contribution requirements of the pension plan.
We believe that the cash payments Delta Ltd. receives from its intercompany notes will provide sufficient funds to meet the pension funding requirements but additional analysis on
44
Table of Contents
pension
funding requirements would have to be performed prior to the repatriation of the $108.9 million of Delta Ltd.'s cash balances.
If
we need to repatriate foreign cash balances to the United States to meet our cash needs, income taxes would be paid to the extent that those cash repatriations were undistributed
earnings of our foreign subsidiaries. The income taxes that we would pay if cash were repatriated depends on the amounts to be repatriated and from which country. If all of our cash outside the United
States were to be repatriated to the United States, we estimate that we would pay approximately $21.9 million in income taxes to repatriate that cash.
Financial Obligations and Financial Commitments
There have been no material changes to our financial obligations and financial commitments as described on page 40 in our
Form 10-K for the fiscal year ended December 27, 2014.
Off Balance Sheet Arrangements
There have been no changes in our off balance sheet arrangements as described on page 40 in our Form 10-K for the fiscal
year ended December 27, 2014.
Critical Accounting Policies
There have been no changes in our critical accounting policies as described on pages 42-45 in our Form 10-K for the
fiscal year ended December 27, 2014 during the quarter ended June 27, 2015.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Steel is a key material we use and over the last several years, prices for this commodity have been volatile. Our main strategy in
managing this risk is a combination of fixed price purchase contracts with our vendors to reduce the volatility and sales price increases where possible. This commodity is most significant for our
utility support structures segment where the cost of steel has been approximately 50% of the net sales on average. Assuming a similar sales mix, a hypothetical 20% change in the price of steel would
have affected our net sales from our utility support structures by approximately $30 million on a year-to-date basis ended June 27, 2015.
There
were no other material changes in the company's market risk during the quarter ended June 27, 2015. For additional information, refer to the section "Risk Management" in our
Form 10-K for the fiscal year ended December 27, 2014.
Item 4. Controls and Procedures
The Company carried out an evaluation under the supervision and with the participation of the Company's management, including the
Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Securities Exchange Act
Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company's disclosure
controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange
Act of 1934 is (1) accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required
disclosures and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.
45
Table of Contents
No
changes in the Company's internal control over financial reporting occurred during the quarter covered by this report that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting.
46
Table of Contents
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Total Number
of Shares
Purchased |
|
Average Price
paid per share |
|
Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs |
|
Approximate Dollar
Value of Maximum
Number of Shares
that may yet be
Purchased under
the Program(1) |
|
March 29, 2015 to April 25, 2015 |
|
|
129,301 |
|
$ |
120.14 |
|
|
129,301 |
|
$ |
266,520,000 |
|
April 26, 2015 to May 30, 2015 |
|
|
164,413 |
|
|
125.12 |
|
|
164,413 |
|
|
245,948,000 |
|
May 31, 2015 to June 27, 2015 |
|
|
97,880 |
|
|
122.73 |
|
|
97,880 |
|
|
233,935,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
391,594 |
|
$ |
122.88 |
|
|
391,594 |
|
$ |
233,935,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- On
May 13, 2014, we announced a new capital allocation philosophy which covered both the quarterly dividend rate as well as a share repurchase
program. Specifically, the Board of Directors authorized the purchase of up to $500 million of the Company's outstanding common stock from time to time over twelve months at prevailing market
prices, through open market or privately-negotiated transactions. On February 24, 2015, the Board of Directors authorized an additional purchase of up to $250 million of the Company's
outstanding common stock with no stated expiration date. As of June 27, 2015, we have acquired 3,700,970 shares for approximately $516.1 million under this share repurchase program.
Item 6. Exhibits
- (a)
- Exhibits
|
|
|
|
|
|
|
|
Exhibit No. |
|
Description |
|
|
|
31.1 |
|
Section 302 Certificate of Chief Executive Officer |
|
|
|
31.2 |
|
Section 302 Certificate of Chief Financial Officer |
|
|
|
32.1 |
|
Section 906 Certifications of Chief Executive Officer and Chief Financial Officer |
|
|
|
101 |
|
The following financial information from Valmont's Quarterly Report on Form 10-Q for the quarter ended June 27, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed
Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed
Consolidated Statements of Shareholders' Equity, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information. |
47
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf and by the undersigned hereunto duly authorized.
|
|
|
|
|
VALMONT INDUSTRIES, INC.
(Registrant) |
|
|
/s/ MARK C. JAKSICH
Mark C. Jaksich Executive Vice President and Chief Financial Officer |
Dated
this 29th day of July, 2015.
48
Table of Contents
Index of Exhibits
|
|
|
|
|
|
|
|
Exhibit No. |
|
Description |
|
|
|
31.1 |
|
Section 302 Certificate of Chief Executive Officer |
|
|
|
31.2 |
|
Section 302 Certificate of Chief Financial Officer |
|
|
|
32.1 |
|
Section 906 Certifications of Chief Executive Officer and Chief Financial Officer |
|
|
|
101 |
|
The following financial information from Valmont's Quarterly Report on Form 10-Q for the quarter ended June 27, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed
Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed
Consolidated Statements of Shareholders' Equity, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information. |
49
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Exhibit 31.1
CERTIFICATIONS
I,
Mogens C. Bay, certify that:
- 1.
- I
have reviewed this quarterly report on Form 10-Q for the quarter ended June 27, 2015 of Valmont Industries, Inc.;
- 2.
- Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3.
- Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4.
- The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
- a)
- Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
- b)
- Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
- c)
- Evaluated
the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
- d)
- Disclosed
in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal
quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and
- 5.
- The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
- a)
- All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and
- b)
- Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.
|
|
|
|
|
/s/ MOGENS C. BAY
Mogens C. Bay Chairman and Chief Executive Officer |
Date:
July 29, 2015
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Exhibit 31.2
I,
Mark C. Jaksich, certify that:
- 1.
- I
have reviewed this quarterly report on Form 10-Q for the quarter ended June 27, 2015 of Valmont Industries, Inc.;
- 2.
- Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3.
- Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4.
- The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
- a)
- Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
- b)
- Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
- c)
- Evaluated
the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
- d)
- Disclosed
in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal
quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and
- 5.
- The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
- a)
- All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and
- b)
- Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.
|
|
|
|
|
/s/ MARK C. JAKSICH
Mark C. Jaksich Executive Vice President and Chief Financial Officer |
Date:
July 29, 2015
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Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
The
undersigned, Mogens C. Bay, Chairman and Chief Executive Officer of Valmont Industries, Inc. (the "Company"), has executed this certification in connection with the filing
with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the quarter ended June 27, 2015 (the "Report").
The
undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to his knowledge
that:
- 1.
- The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
- 2.
- The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
IN
WITNESS WHEREOF, the undersigned has executed this certification as of the 29th day of July, 2015.
|
|
|
|
|
/s/ MOGENS C. BAY
Mogens C. Bay Chairman and Chief Executive Officer |
CERTIFICATION OF CHIEF FINANCIAL OFFICER
Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
The
undersigned, Mark C. Jaksich, Executive Vice President and Chief Financial Officer of Valmont Industries, Inc. (the "Company"), has executed this certification in connection
with the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the quarter ended June 27, 2015 (the "Report").
The
undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to his knowledge
that:
- 1.
- The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
- 2.
- The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
IN
WITNESS WHEREOF, the undersigned has executed this certification as of the 29th day of July, 2015.
|
|
|
|
|
/s/ MARK C. JAKSICH
Mark C. Jaksich Executive Vice President and Chief Financial Officer |
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CERTIFICATION OF CHIEF EXECUTIVE OFFICER
CERTIFICATION OF CHIEF FINANCIAL OFFICER
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