OMAHA, Neb., Oct. 23, 2019 /PRNewswire/ -- Valmont
Industries, Inc. (NYSE: VMI), a leading
global provider of engineered products and services for
infrastructure development and irrigation equipment and services
for agriculture, today reported financial results for the third
quarter ended September 28, 2019.
Third Quarter 2019 Highlights (metrics compared to
third quarter 2018 unless otherwise noted)
- Revenues grew 1.7% to $690.3
million, despite a challenging agricultural market
environment; sales were higher in three of four segments
- Operating income improved to $63.9
million or 9.3% of sales, compared to $38.4 million or 5.7% of sales ($63.2 million adjusted1 or 9.3% of
sales)
- Diluted Earnings per Share increased to $1.85 compared to $0.20 ($1.82
adjusted1); 2019 results include a ($0.24) after-tax impact from a non-recurring
loss associated with two large Access Systems sales projects in the
Engineered Support Structures segment
- Operating cash flows grew to $125.0
million, a substantial increase compared to 2018, and the
highest third quarter level since 2012
- Repurchased 126,700 shares of company stock for $16.8 million, at an average price of
$132.76 per share
- Revising 2019 diluted EPS guidance range to $7.05 - $7.45 from
$8.10 - $8.70, due to the impact of non-recurring
expenses recognized in the third quarter, insufficient capacity to
meet North American infrastructure market demand, lower anticipated
volumes in the Coatings segment, and continued lower Irrigation
segment sales
Key Financial Metrics
Third Quarter
2019
|
GAAP
|
|
Adjusted1
|
|
9/28/2019
3Q
2019
|
|
9/29/2018
3Q
2018
|
vs. 3Q
2019
|
|
9/28/2019 3Q 2019
|
|
9/29/2018
3Q
2018
|
vs. 3Q
2019
|
Net Sales
|
$690,340
|
|
|
$678,692
|
|
1.7%
|
|
$690,340
|
|
|
$678,692
|
|
1.7%
|
Operating
Income
|
63,863
|
|
|
$
|
38,360
|
|
66.5%
|
|
63,863
|
|
|
$
|
63,242
|
|
1.0%
|
Operating Income as
a % of Net Sales
|
9.3%
|
|
|
5.7%
|
|
|
|
9.3%
|
|
|
9.3%
|
|
|
Net
Earnings
|
40,144
|
|
|
4,448
|
|
802.5%
|
|
40,144
|
|
|
40,728
|
|
(1.4)%
|
Diluted Earnings Per
Share
|
$
|
1.85
|
|
|
$
|
0.20
|
|
825.0%
|
|
$
|
1.85
|
|
|
$
|
1.82
|
|
1.6%
|
Average Shares
Outstanding
|
21,684
|
|
|
22,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD
2019
|
GAAP
|
|
Adjusted1
|
|
09/28/2019
YTD
2019
|
|
09/29/2018
YTD
2018
|
vs. YTD
2019
|
|
09/28/2019
YTD
2019
|
|
09/29/2018
YTD
2018
|
vs. YTD
2019
|
Net Sales
|
$
|
2,083,350
|
|
|
$
|
2,059,781
|
|
1.1%
|
|
$
|
2,083,350
|
|
|
$
|
2,059,781
|
|
1.1%
|
Operating
Income
|
182,679
|
|
|
165,990
|
|
10.1%
|
|
182,679
|
|
|
203,272
|
|
(10.1)%
|
Operating Income as
a % of Net Sales
|
8.8%
|
|
|
8.1%
|
|
|
|
8.8%
|
|
|
9.9%
|
|
|
Net
Earnings
|
118,022
|
|
|
76,689
|
|
53.8%
|
|
118,022
|
|
|
129,024
|
|
(8.5)%
|
Diluted Earnings Per
Share
|
$
|
5.41
|
|
|
$
|
3.40
|
|
59.1%
|
|
$
|
5.41
|
|
|
$
|
5.72
|
|
(5.4)%
|
Average Shares
Outstanding
|
21,826
|
|
|
22,574
|
|
|
|
|
|
|
|
"We achieved year-over-year revenue and earnings growth despite
a challenging agricultural market environment and significant
project losses in our Engineered Support Structures segment," said
Stephen G. Kaniewski, President and
Chief Executive Officer. "Continued strong order flow from robust
market demand in our infrastructure businesses created capacity
constraints this quarter, leading to operational inefficiencies and
impacting our ability to effectively manage the additional volume.
Sales growth this quarter was led by strong demand from
transportation and wireless communication markets, particularly in
North America, revenue from
acquisitions, and favorable pricing across the portfolio. Order
flow in Engineered Support Structures continued to accelerate
during the quarter, increasing backlogs and causing industry lead
times to remain extended. Utility Support Structures revenue in the
third quarter was below our expectations, from less available
market capacity in China, and
factory capacity constraints in North American markets. Coatings
benefited from recent acquisitions and pricing discipline."
Kaniewski continued, "Despite the usual seasonal slowdown, North
America Irrigation sales grew in line with our expectations, but
volumes were lower in international markets as projects pushed into
2020. For the Company, gross profit margins were higher, due to
pricing discipline and the benefit of lower steel costs. We were
pleased to recognize another quarter of very strong operating cash
flows of $125 million, a result of
working capital improvements and the receipt of a project down
payment."
Third Quarter 2019 Segment Review
Infrastructure
Engineered Support Structures Segment (38.8% of
Sales)
Poles, towers and components for the global lighting, traffic
and wireless communication markets, engineered access systems,
integrated structure solutions for smart cities, and highway safety
products
Sales of $268.1 million increased
6.6% compared to last year, net of a 2.3% unfavorable currency
translation impact. Significantly higher volumes in North American
markets, revenue from recent acquisitions, and favorable pricing
drove sales growth.
Lighting and traffic sales were higher in North America, driven by strong market demand
from continued state and local government spending, and pricing. In
Europe, sales decreased from lower
volumes and unfavorable currency impacts. Sales of highway safety
products were also lower from a slowdown in government spending in
Australia and India, and lower project sales.
Wireless communication and components sales increased more than
30% globally compared to last year. As expected, strong demand in
North American markets was led by carriers' ongoing expansion of 4G
networks and 5G site preparation. Sales growth was driven by higher
volumes and revenues from recent acquisitions.
Sales of Access Systems products were lower compared to last
year, from lower volumes in the Asia
Pacific region due to strategically exiting certain markets
and product lines in 2018 and currency translation impacts.
Operating income was $21.8 million
or 8.1% of sales compared to $16.5
million, or 6.6% of sales ($22.8
million or 9.1% adjusted1) in 2018. Profitability
improvement from pricing discipline across the segment, a more
favorable product mix, and benefits from the 2018 operational
transformation, were more than offset by a one-time loss of
approximately $7.5 million associated
with two Access Systems projects that were completed in the third
quarter.
Utility Support Structures Segment (29.7% of
Sales)
Steel and concrete structures for global utility
transmission, distribution and generation applications, renewable
energy generation equipment, and substations
Revenues of $205.0 million
decreased 6.1% compared to last year. Favorable pricing was more
than offset by lower volumes from less available market capacity,
particularly in China, and a
North America plant closure in
early 2019. Profitability was also impacted by slightly lower
production levels in North American facilities.
Operating income was $20.4 million
or 9.9% of sales compared to $2.1
million, or 1.0% of sales ($20.0
million or 9.2% adjusted1) in 2018. Pricing
actions were offset by lower volumes and factory capacity
constraints, and lower profitability in the international
businesses.
Coatings Segment (13.5% of Sales)
Global galvanizing, painting and anodizing services to
preserve and protect metal products
Global sales of $93.0 million
increased 2.8% versus the prior year, led by sales from recent
acquisitions and continued pricing discipline, offset by slightly
lower volumes in external markets.
Operating income was $13.9 million
or 14.9% of sales, compared to $14.4
million or 15.9% of sales in 2018. Improved pricing was more
than offset by factory inefficiencies from lower external volumes
and non-recurring integration-related expenses.
Agriculture
Irrigation Segment (20.9% of Sales)
Agricultural irrigation equipment, parts, services and
tubular products, water management solutions, and technology for
precision agriculture
Global sales of $144.1 million
were 2.9% higher compared to last year.
North America sales of
$82.8 million were 6.0% higher
compared to last year, led by higher sales of systems, aftermarket
parts and technology solutions, offset by lower industrial tubing
sales.
International irrigation sales of $61.3
million decreased 1.0% compared to last year. Higher Middle East project sales and solid
demand from Brazil were offset by
significantly lower volumes in Australia and New
Zealand, where adverse weather has been muting demand.
Segment operating income was $18.2
million, or 12.6% of sales, compared to $21.3 million, or 15.2% of sales in 2018. Lower
volumes in international markets and industrial tubing and higher
R&D expense for technology growth investments, led to lower
profitability.
2019 Outlook
2019 Full Year
Financial Outlook
|
Previous
Outlook
|
Revised
Outlook
|
Diluted Earnings per
Share
|
$8.10 -
$8.70
|
$7.05 -
$7.45
|
Revenue
Growth2
|
6% - 7%
|
1% -
2%2
|
Operating Margin
Change
|
10 - 40 bps
increase
|
(60 - 90) bps
decrease
|
Global Effective Tax
Rate
|
~ 25%
|
No Change
|
Capital
Expenditures
|
$90 - $100
million
|
No Change
|
"While North American market demand in Engineered Support
Structures and Utility Support Structures remains very strong,
Irrigation segment sales are trending approximately 10% below our
previous expectations for the year," said Mr. Kaniewski.
"Additionally, the recent slowdown in U.S. industrial production is
expected to impact Coatings segment volumes in the fourth quarter.
Based on shipment schedules, fourth quarter wireless communication
sales are not expected to grow as fast, but we expect continued
growth in 2020. Accordingly, we have lowered our 2019 revenue
growth expectations for the Company. The non-recurring expenses
recognized in the third quarter, along with insufficient capacity
in our North American infrastructure facilities, are not expected
to be recovered this year. These impacts have collectively led to
downward revisions to full-year operating margin and earnings per
share."
Kaniewski continued, "We have already taken immediate steps to
carefully add capacity to only our existing infrastructure
factories in North America, and
are actively expanding our workforce and training programs. The
benefits from these actions are expected to be realized over the
next two quarters. In Engineered Support Structures, we expect
demand to remain strong from North American transportation and
wireless communication markets, causing industry lead times to
remain extended. Global backlogs of more than $600 million in Utility Support Structures are
being driven by receipt of the second purchase order of the large,
multi-year project in the southeastern United States, along with robust market demand
that has accelerated throughout this year, continuing into 2020. We
are monitoring changes to industrial production trends that may
impact our Coatings business, and are awaiting the outcome of fall
harvest in North American Irrigation markets, along with any
resulting impact to commodity prices that could affect demand. We
continue to focus on margin expansion given the current, favorable
raw material environment, and are making smart investments in
technology, new products and market growth. Additionally, our
balance sheet and cash flows remain very strong and we expect to
deliver free cash flow of more than 1.2x net earnings for
2019."
A live audio discussion with Stephen G.
Kaniewski, President and Chief Executive Officer, and
Mark C. Jaksich, Executive Vice
President and Chief Financial Officer, will be accessible by
telephone on Thursday, October 24,
2019 at 8:00 a.m. CDT by
dialing 1-877-407-6184 or 1-201-389-0877 (no Conference ID needed),
or via webcast by pointing browsers to this link: Valmont
Industries Third Quarter 2019 Earnings Call. A slide
presentation will simultaneously be available for download on
the Investors page at www.valmont.com. A replay of the event can be
accessed two hours after the call at the above link or by telephone
at 1-877-660-6853 or 1-201-612-7415. Please use conference
identification number 13684642. The replay will be available
through 10:59 p.m. CDT on
October 31, 2019.
About Valmont Industries, Inc.
Valmont is a global leader, designing and manufacturing
engineered products that support global infrastructure development
and agricultural productivity. Its products for infrastructure
serve highway, transportation, wireless communication, electric
transmission, and industrial construction and energy markets. Its
irrigation equipment and services for large-scale agriculture
improves farm productivity while conserving fresh water resources.
In addition, Valmont provides coatings services that protect
against corrosion and improve the service lives of steel and other
metal products.
Concerning Forward-Looking Statements
This release contains forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on assumptions that
management has made in light of experience in the industries in
which Valmont operates, as well as management's perceptions of
historical trends, current conditions, expected future developments
and other factors believed to be appropriate under the
circumstances. As you read and consider this release, you should
understand that these statements are not guarantees of performance
or results. They involve risks, uncertainties (some of which are
beyond Valmont's control) and assumptions. Although management
believes that these forward-looking statements are based on
reasonable assumptions, you should be aware that many factors could
affect Valmont's actual financial results and cause them to differ
materially from those anticipated in the forward-looking
statements. These factors include among other things, risk factors
described from time to time in Valmont's reports to the Securities
and Exchange Commission, as well as future economic and market
circumstances, industry conditions, company performance and
financial results, operating efficiencies, availability and price
of raw material, availability and market acceptance of new
products, product pricing, domestic and international competitive
environments, and actions and policy changes of domestic and
foreign governments. The Company cautions that any forward-looking
statement included in this press release is made as of the date of
this press release and the Company does not undertake to update any
forward-looking statement.
1
|
Please see Reg G
reconciliation of GAAP sales, operating income, net earnings and
EPS to Adjusted figures at end of document.
|
2
|
Led by approximately
10% lower Irrigation segment sales compared to 2018 and excludes
additional acquisitions in 2019.
|
VALMONT INDUSTRIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
(Dollars in
thousands, except per share amounts)
|
(unaudited)
|
|
|
Third
Quarter
|
|
Year-to-Date
|
|
13 Weeks
Ended
|
|
39 Weeks
Ended
|
|
|
|
|
|
|
|
|
|
28-Sep-19
|
|
29-Sep-18
|
|
28-Sep-19
|
|
29-Sep-18
|
Net sales
|
$
|
690,340
|
|
|
$
|
678,692
|
|
|
$
|
2,083,350
|
|
|
$
|
2,059,781
|
|
Cost of
sales
|
514,254
|
|
|
514,352
|
|
|
1,561,721
|
|
|
1,551,202
|
|
Gross
profit
|
176,086
|
|
|
164,340
|
|
|
521,629
|
|
|
508,579
|
|
Selling, general and
administrative expenses
|
112,223
|
|
|
125,980
|
|
|
338,950
|
|
|
342,589
|
|
Operating
income
|
63,863
|
|
|
38,360
|
|
|
182,679
|
|
|
165,990
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest
expense
|
(9,976)
|
|
|
(10,954)
|
|
|
(29,971)
|
|
|
(33,819)
|
|
Interest
income
|
969
|
|
|
1,000
|
|
|
2,815
|
|
|
3,713
|
|
Gain on investments
(unrealized)
|
402
|
|
|
1,068
|
|
|
4,754
|
|
|
1,146
|
|
Costs associated with
refinancing of debt
|
—
|
|
|
(14,820)
|
|
|
—
|
|
|
(14,820)
|
|
Loss from divestiture
of grinding media business (Donhad)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,084)
|
|
Other
|
768
|
|
|
1,428
|
|
|
1,938
|
|
|
2,053
|
|
|
(7,837)
|
|
|
(22,278)
|
|
|
(20,464)
|
|
|
(47,811)
|
|
Earnings before
income taxes
|
56,026
|
|
|
16,082
|
|
|
162,215
|
|
|
118,179
|
|
Income tax
expense
|
13,763
|
|
|
9,091
|
|
|
40,151
|
|
|
36,028
|
|
Net
earnings
|
42,263
|
|
|
6,991
|
|
|
122,064
|
|
|
82,151
|
|
Less: Earnings
attributable to non-controlling interests
|
(2,119)
|
|
|
(2,543)
|
|
|
(4,042)
|
|
|
(5,462)
|
|
Net earnings
attributable to Valmont Industries, Inc.
|
$
|
40,144
|
|
|
$
|
4,448
|
|
|
$
|
118,022
|
|
|
$
|
76,689
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding (000's) - Basic
|
21,556
|
|
|
22,215
|
|
|
21,725
|
|
|
22,421
|
|
Earnings per share -
Basic
|
$
|
1.86
|
|
|
$
|
0.20
|
|
|
$
|
5.43
|
|
|
$
|
3.42
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding (000's) - Diluted
|
21,684
|
|
|
22,352
|
|
|
21,826
|
|
|
22,574
|
|
Earnings per share -
Diluted
|
$
|
1.85
|
|
|
$
|
0.20
|
|
|
$
|
5.41
|
|
|
$
|
3.40
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
$
|
0.375
|
|
|
$
|
0.375
|
|
|
$
|
1.125
|
|
|
$
|
1.125
|
|
VALMONT INDUSTRIES,
INC. AND SUBSIDIARIES
|
SUMMARY OPERATING
RESULTS
|
(Dollars in
thousands)
|
(unaudited)
|
|
|
Third
Quarter
|
|
Year-to-Date
|
|
13 Weeks
Ended
|
|
39 Weeks
Ended
|
|
28-Sep-19
|
|
29-Sep-18
|
|
28-Sep-19
|
|
29-Sep-18
|
Net sales
|
|
|
|
|
|
|
|
Engineered Support
Structures
|
$
|
268,058
|
|
|
$
|
251,524
|
|
|
$
|
757,094
|
|
|
$
|
727,189
|
|
Utility Support
Structures
|
204,958
|
|
|
218,269
|
|
|
658,709
|
|
|
625,850
|
|
Coatings
|
92,957
|
|
|
90,433
|
|
|
278,142
|
|
|
266,952
|
|
Infrastructure
products
|
565,973
|
|
|
560,226
|
|
|
1,693,945
|
|
|
1,619,991
|
|
Irrigation
|
144,180
|
|
|
140,175
|
|
|
452,181
|
|
|
491,064
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
23,080
|
|
Less: Intersegment
sales
|
(19,813)
|
|
|
(21,709)
|
|
|
(62,776)
|
|
|
(74,354)
|
|
Total
|
$
|
690,340
|
|
|
$
|
678,692
|
|
|
$
|
2,083,350
|
|
|
$
|
2,059,781
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
|
|
|
Engineered Support
Structures
|
$
|
21,825
|
|
|
$
|
16,499
|
|
|
$
|
55,152
|
|
|
$
|
36,411
|
|
Utility Support
Structures
|
20,362
|
|
|
2,090
|
|
|
61,443
|
|
|
46,298
|
|
Coatings
|
13,865
|
|
|
14,373
|
|
|
39,037
|
|
|
41,108
|
|
Infrastructure
products
|
56,052
|
|
|
32,962
|
|
|
155,632
|
|
|
123,817
|
|
Irrigation
|
18,204
|
|
|
21,302
|
|
|
59,868
|
|
|
82,917
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(913)
|
|
Adjustment to LIFO
inventory valuation method
|
2,799
|
|
|
(2,780)
|
|
|
5,539
|
|
|
(5,512)
|
|
Corporate
|
(13,192)
|
|
|
(13,124)
|
|
|
(38,360)
|
|
|
(34,319)
|
|
Total
|
$
|
63,863
|
|
|
$
|
38,360
|
|
|
$
|
182,679
|
|
|
$
|
165,990
|
|
Valmont has aggregated its business segments into four global
reportable segments as follows.
Engineered Support Structures: This segment
consists of the manufacture of engineered metal and composite
poles, towers, and components for global lighting, traffic, and
wireless communication markets, engineered access systems,
integrated structure solutions for smart cities, and highway safety
products.
Utility Support Structures: This segment
consists of the manufacture of engineered steel and concrete
structures for the global utility transmission, distribution, and
generation applications, renewable energy generation equipment, and
substations.
Coatings: This segment consists of global
galvanizing, painting and anodizing services.
Irrigation: This segment consists of the global
manufacture of agricultural irrigation equipment, parts, services,
tubular products, water management solutions, and technology for
precision agriculture.
In addition to these four reportable segments, the Company
had other businesses and activities that individually are not more
than 10% of consolidated sales, operating income or assets. This
includes the manufacture of forged steel grinding media and is
reported in the "Other" category until its divestiture.
VALMONT INDUSTRIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Dollars in
thousands)
|
(unaudited)
|
|
|
28-Sep-19
|
|
29-Dec-18
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
327,200
|
|
|
$
|
313,210
|
|
Accounts receivable,
net
|
501,215
|
|
|
483,963
|
|
Inventories
|
377,300
|
|
|
383,566
|
|
Contract asset -
costs and profits in excess of billings
|
120,376
|
|
|
112,525
|
|
Prepaid
expenses
|
50,420
|
|
|
42,800
|
|
Refundable income
taxes
|
11,893
|
|
|
4,576
|
|
Total current
assets
|
1,388,404
|
|
|
1,340,640
|
|
Property, plant and
equipment, net
|
548,368
|
|
|
513,992
|
|
Goodwill and other
assets
|
789,745
|
|
|
675,642
|
|
|
$
|
2,726,517
|
|
|
$
|
2,530,274
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current installments
of long-term debt
|
$
|
745
|
|
|
$
|
779
|
|
Notes payable to
banks
|
19,324
|
|
|
10,678
|
|
Accounts
payable
|
197,535
|
|
|
218,115
|
|
Accrued
expenses
|
305,255
|
|
|
171,233
|
|
Dividend
payable
|
8,088
|
|
|
8,230
|
|
Total current
liabilities
|
530,947
|
|
|
409,035
|
|
Long-term debt,
excluding current installments
|
764,524
|
|
|
741,822
|
|
Other long-term
liabilities
|
299,875
|
|
|
243,894
|
|
Shareholders'
equity
|
1,131,171
|
|
|
1,135,523
|
|
|
$
|
2,726,517
|
|
|
$
|
2,530,274
|
|
VALMONT INDUSTRIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Dollars in
thousands)
|
(unaudited)
|
|
|
YTD
|
|
YTD
|
|
28-Sep-19
|
|
29-Sep-18
|
Cash flows from
operating activities
|
|
|
|
Net
Earnings
|
$
|
122,064
|
|
|
$
|
82,151
|
|
Depreciation and
amortization
|
60,424
|
|
|
62,018
|
|
Impairment of
long-lived assets
|
—
|
|
|
4,197
|
|
Impairment of
goodwill and intangibles
|
—
|
|
|
15,780
|
|
Loss from divestiture
of grinding media business
|
—
|
|
|
6,084
|
|
Contribution to
defined benefit pension plan
|
(17,426)
|
|
|
(1,555)
|
|
Change in working
capital
|
72,575
|
|
|
(96,912)
|
|
Other
|
1,593
|
|
|
(3,710)
|
|
Net cash flows from
operating activities
|
239,230
|
|
|
68,053
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchase of property,
plant, and equipment
|
(71,981)
|
|
|
(48,919)
|
|
Proceeds from sale of
assets
|
1,325
|
|
|
64,786
|
|
Acquisitions
|
(81,841)
|
|
|
(125,309)
|
|
Other
|
13,301
|
|
|
(3,992)
|
|
Net cash flows from
investing activities
|
(139,196)
|
|
|
(113,434)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
long-term borrowings
|
31,000
|
|
|
236,936
|
|
Proceeds from
short-term borrowings
|
9,284
|
|
|
3,217
|
|
Principal payments on
long-term borrowings
|
(10,578)
|
|
|
(252,952)
|
|
Purchase of treasury
shares
|
(55,172)
|
|
|
(86,919)
|
|
Purchase of
noncontrolling interest
|
(27,845)
|
|
|
(5,510)
|
|
Dividends
paid
|
(24,554)
|
|
|
(25,415)
|
|
Other
|
(4,794)
|
|
|
(6,064)
|
|
Net cash flows from
financing activities
|
(82,659)
|
|
|
(136,707)
|
|
Effect of exchange
rates on cash and cash equivalents
|
(3,385)
|
|
|
(15,095)
|
|
Net change in cash
and cash equivalents
|
13,990
|
|
|
(197,183)
|
|
Cash and cash
equivalents - beginning of year
|
313,210
|
|
|
492,805
|
|
Cash and cash
equivalents - end of period
|
$
|
327,200
|
|
|
$
|
295,622
|
|
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED
RESULTS
REGULATION G RECONCILIATION
(Dollars in
thousands, except per share amounts)
(unaudited)
The non-GAAP tables below disclose the impact on (a) diluted
earnings per share of (1) debt refinancing expenses (2) impairment
of goodwill and tradename (3) restructuring costs (4) acquisition
diligence expenses and (5) the loss from divestiture of Donhad, (b)
operating income from these expenses, and (c) segment operating
income for these items. Amounts may be impacted by rounding. We
believe it is useful when considering company performance for the
non-GAAP adjusted net earnings and operating income to be taken
into consideration by management and investors with the related
reported GAAP measures.
|
Thirteen
Weeks ended
September 29,
2018
|
|
Diluted
earnings
per
share
|
|
Thirty-nine
Weeks Ended
September 29,
2018
|
|
Diluted earnings per share
|
Net earnings
attributable to Valmont Industries, Inc. - as reported
|
$
|
4,448
|
|
|
$
|
0.20
|
|
|
$
|
76,689
|
|
|
$
|
3.40
|
|
Debt refinancing
expenses, pre-tax
|
14,820
|
|
|
0.66
|
|
|
14,820
|
|
|
0.66
|
|
Impairment of
goodwill and tradename, pre-tax
|
15,780
|
|
|
0.71
|
|
|
15,780
|
|
|
0.70
|
|
Restructuring and
related asset impairment costs - pre-tax
|
6,243
|
|
|
0.28
|
|
|
17,662
|
|
|
0.78
|
|
Acquisition diligence
costs, pre-tax
|
2,859
|
|
|
0.13
|
|
|
3,840
|
|
|
0.17
|
|
Loss from divestiture
of grinding media business, pre-tax
|
—
|
|
|
—
|
|
|
6,084
|
|
|
0.27
|
|
Total
Adjustments
|
39,702
|
|
|
1.78
|
|
|
58,186
|
|
|
2.58
|
|
Tax effect of
adjustments *
|
(3,422)
|
|
|
(0.15)
|
|
|
(5,851)
|
|
|
(0.26)
|
|
Net earnings
attributable to Valmont Industries, Inc. - Adjusted
|
$
|
40,728
|
|
|
$
|
1.82
|
|
|
$
|
129,024
|
|
|
$
|
5.72
|
|
Average shares
outstanding (000's) - Diluted
|
|
|
22,352
|
|
|
|
|
22,574
|
|
|
* The tax effect
of adjustments is calculated based on the income tax rate in each
applicable jurisdiction.
|
Operating Income
Reconciliation
|
|
Thirteen
Weeks ended
September
29, 2018
|
|
Thirty-nine
Weeks Ended
September
29, 2018
|
Operating income - as
reported
|
|
$
|
38,360
|
|
|
$
|
165,990
|
|
Impairment of
goodwill and tradename
|
|
15,780
|
|
|
15,780
|
|
Restructuring and
related asset impairment costs
|
|
6,243
|
|
|
17,662
|
|
Acquisition diligence
costs
|
|
2,859
|
|
|
3,840
|
|
Adjusted Operating
Income
|
|
$
|
63,242
|
|
|
$
|
203,272
|
|
Net Sales - as
reported
|
|
678,692
|
|
|
2,059,781
|
|
Operating Income as a
% of Sales
|
|
5.7
|
%
|
|
8.1
|
%
|
Adjusted Operating
Income as a % of Sales
|
|
9.3
|
%
|
|
9.9
|
%
|
VALMONT
INDUSTRIES, INC. AND SUBSIDIARIES
|
SUMMARY OF EFFECT
OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED
RESULTS
|
REGULATION G
RECONCILIATION (CONTINUED)
|
|
For the third
quarter ended September 29, 2018
|
Segment Operating
Income Reconciliation
|
Engineered Support Structures
|
|
Utility Support Structures
|
|
Coatings
|
|
Irrigation
|
|
Other/ Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income - as
reported
|
$
|
16,499
|
|
|
$
|
2,090
|
|
|
$
|
14,373
|
|
|
$
|
21,302
|
|
|
$
|
(15,904)
|
|
Impairment of
goodwill and tradename
|
—
|
|
|
15,780
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Restructuring and
related asset impairment costs
|
5,746
|
|
|
497
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition diligence
costs
|
553
|
|
|
1,672
|
|
|
—
|
|
|
—
|
|
|
634
|
|
Adjusted Operating
Income
|
$
|
22,798
|
|
|
$
|
20,039
|
|
|
$
|
14,373
|
|
|
$
|
21,302
|
|
|
$
|
(15,270)
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
251,524
|
|
|
218,269
|
|
|
90,433
|
|
|
140,175
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income as a
% of Sales
|
6.6
|
%
|
|
1.0
|
%
|
|
15.9
|
%
|
|
15.2
|
%
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income as a % of Sales
|
9.1
|
%
|
|
9.2
|
%
|
|
15.9
|
%
|
|
15.2
|
%
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Valmont Industries, Inc.