VMI Valmont Industries

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 26, 2020.

Third Quarter 2020 Highlights (all metrics compared to Third Quarter 2019 unless otherwise noted)

• Net Sales of $734.0 million increased 6.3% led primarily by significantly higher Utility Support Structures segment sales and improved international market demand

• Operating Income of $61.5 million, or 8.4% of sales ($67.1 million or 9.1% of sales adjusted1) compared to $61.1 million or 8.8% of sales last year

• Diluted Earnings per Share improved to $1.84 ($1.99 adjusted1) compared to $1.75

• Generated strong operating cash flow of $122.3 million, driven by higher operating income and strategic working capital management; cash and cash equivalents were $443.1 million at end of third quarter

• Lifted the temporary suspension of the Company’s share repurchase program on September 10, 2020; repurchased 60,600 shares of company stock in the third quarter for $7.5 million, at an average price of $124.08 per share

• Announced a $240.0 million multi-year order for irrigation products and services to provide modern irrigation and technology solutions for a ~500,000-acre agricultural development project in Egypt

• Providing key assumptions and indications for the fourth quarter 2020

Key Financial Metrics

Third Quarter 2020

GAAP

 

Adjusted1

 

 

09/26/2020 3Q 2020

 

09/28/2019 3Q 2019

vs. 3Q 2019

 

09/26/2020 3Q 2020

 

09/28/2019 3Q 2019

vs. 3Q 2019

Net Sales

$

733,970

 

 

$

690,340

 

6.3%

 

$

733,970

 

 

$

690,340

 

6.3%

Operating Income

61,479

 

 

61,064

 

0.7%

 

67,111

 

 

61,064

 

9.9%

Operating Income as a % of Net Sales

8.4

%

 

8.8

%

 

 

9.1

%

 

8.8

%

 

Net Earnings

39,342

 

 

38,045

 

3.4%

 

42,670

 

 

38,045

 

12.2%

Diluted Earnings Per Share

$

1.84

 

 

$

1.75

 

5.1%

 

$

1.99

 

 

$

1.75

 

13.7%

Average Shares Outstanding

21,416

 

 

21,684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD 2020

GAAP

 

Adjusted1

 

 

09/26/2020 3Q 2020

 

09/28/2019 3Q 2019

vs. 3Q 2019

 

09/26/2020 3Q 2020

 

09/28/2019 3Q 2019

vs. 3Q 2019

Net Sales

$

2,096,978

 

 

$

2,083,350

 

0.7%

 

$

2,096,978

 

 

$

2,083,350

 

0.7%

Operating Income

171,814

 

 

177,140

 

(3.0)%

 

199,663

 

 

177,140

 

12.7%

Operating Income as a % of Net Sales

8.2

%

 

8.5

%

 

 

9.5

%

 

8.5

%

 

Net Earnings

104,878

 

 

113,868

 

(7.9)%

 

128,446

 

 

113,868

 

12.8%

Diluted Earnings Per Share

$

4.89

 

 

$

5.22

 

(6.3)%

 

$

5.99

 

 

$

5.22

 

14.8%

Average Shares Outstanding

21,453

 

 

21,826

 

 

 

 

 

 

 

"We achieved higher revenue year-over-year from operational excellence and increased volumes, and delivered earnings growth through our focus on pricing and market leadership, despite an extraordinary macro environment,” said Stephen G. Kaniewski, President and Chief Executive Officer. “Sales and profitability were better than anticipated, as we remained highly focused on execution and pricing across the portfolio. Sales growth was driven by strong demand in the Utility Support Structures segment, including significantly higher sales of renewable energy products. I am pleased with the solid operating performance in the Engineered Support Structures and Coatings segments, and the Irrigation segment delivered solid performance despite end-market instability, benefiting from continued strength in international markets and recent acquisitions. We recognized another quarter of very strong operating cash flows, driven by our strategic priorities for working capital management.”

Kaniewski continued, “Year-to-date, we have delivered solid sales, operating profit, and earnings, as well as significant cash flow, driven by the engagement and focus of our employees and successful execution of our strategies, in spite of a difficult macro environment. We have seen unprecedented challenges this year in our business, and I am incredibly proud of the way our team continues to perform. The safety and well-being of our employees remains our top priority. I want to thank the entire Valmont team for their hard work and resiliency to produce products and provide services that support critical infrastructure sectors and food security around the world.”

Third Quarter 2020 Segment Review

Infrastructure

Utility Support Structures Segment (37.4% of Sales)

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

Sales of $274.4 million grew 33.9% year-over-year, led by higher sales in the international businesses, including significantly higher solar tracker project sales. In North American markets, sales growth was led by continued robust market demand, strategic capacity additions in existing North American operations and favorable pricing, partially offset by deflation due to lower steel costs.

Operating income was $25.9 million or 9.4% of sales ($29.2 million adjusted1 or 10.6% of sales) compared to $20.4 million, or 9.9% of sales in 2019. Profitability growth was led by higher volumes, improved operations performance, and favorable pricing.

Engineered Support Structures Segment (34.8% of Sales)

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

Sales of $255.7 million decreased 4.6% year-over-year. Higher sales of wireless communication products were more than offset by lower volumes of lighting and traffic products and lower Access Systems sales.

Lighting and traffic sales of $181.6 million decreased 5.1% year-over-year. In North America, lower volumes in transportation and commercial lighting markets led to lower sales. In international markets, sales were lower due to economic disruptions from COVID-19 impacts, which impacted end-market demand.

Wireless communication structures and components increased 4.8% to $50.7 million compared to last year. Higher volumes in Europe, favorable pricing, and wireless carriers’ continued capital spending in North American markets led to higher sales.

Access Systems sales of $23.4 million decreased 17.6% year-over-year due to lower volumes from strategically exiting product lines.

Operating income was $25.4 million or 9.9% of sales ($26.3 million adjusted1 or 10.3% of sales), compared to $21.8 million or 8.1% of sales in 2019. Profitability improvement was driven by favorable pricing, improved operations performance and the non-recurrence of one-time losses in the Access Systems business in third quarter 2019.

Coatings Segment (12.0% of Sales)

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

Sales of $87.9 million decreased 5.5% year-over-year. Higher internal volumes and favorable pricing were more than offset by lower external volumes in North American markets due to economic impacts from COVID-19 on end customers.

Operating income was $12.4 million or 14.1% of sales ($13.7 million adjusted1 or 15.6% of sales), compared to $13.9 million or 14.9% of sales in 2019. Operating margin improvement on an adjusted basis was due to improved operational efficiencies and favorable pricing, partially offset by lower volumes.

Agriculture

Irrigation Segment (19.0% of Sales)

Irrigation equipment for agricultural markets, including center pivots, parts, services and tubular products, water management solutions, and technology for precision agriculture

Global sales of $139.2 million decreased 3.4% year-over-year, primarily due to $6.3 million of unfavorable currency impacts mostly from the depreciation of the Brazilian Real, otherwise sales were similar to last year.

North American sales of $75.8 million decreased 8.5% compared to 2019. Higher irrigation system volumes were more than offset by lower volumes of other products including industrial tubing sales.

International sales of $63.4 million increased 3.3% year-over-year and increased 13.7% in local currencies. Sales growth was led by higher sales in South American markets including continued strong demand in Brazil, higher sales in Europe and Australia, and sales from recent acquisitions.

Segment operating income was $14.7 million, or 10.6% of sales, compared to $18.2 million, or 12.6% of sales in 2019. Lower profitability was due to lower sales volumes, partially offset by pricing. Higher SG&A expense included $1.2 million of incremental R&D expense for technology growth investments.

During the quarter, the Company announced it had entered into a $240.0 million, multi-year supply agreement to bring modern irrigation and technology solutions to Egypt. Once completed, the project will be the largest "Connected Farm of Engaged Acres" in the world, demonstrating the growing global demand for more efficient and reliable food production, and increasing national investments in agriculture to feed growing populations and address food security issues. Project deliveries will begin in fourth quarter 2020.

Continuation of Enhanced COVID-19 Safety Protocols

To protect the safety, health and well-being of employees, customers, suppliers and communities, Valmont continues to follow CDC, WHO and local guidelines in all its facilities. The Company monitors health advisories on a continuous basis, particularly in areas reporting recent increases in infection, and continues to take deliberate steps to protect all stakeholders and minimize the operational and financial impacts on the business during the pandemic. During the third quarter, Valmont did not experience any significant disruptions in its operations or supply chain.

Balance Sheet, Liquidity and Capital Allocation

The Company continues to generate strong cash flows through a focus on working capital management, including strategic customer payment initiatives and inventory improvements. During third quarter, Standard & Poor's reaffirmed the Company’s BBB+/Stable credit rating. Cash and cash equivalents were $443.1 million at end of third quarter, including receipt of a significant customer down payment. During the quarter, Valmont resumed its previously-suspended share repurchase program, purchasing $7.5 million of company stock, and $176.0 million remains on the current authorization with no expiration. 2020 capital expenditures are expected to be in the range of $85.0 to $95.0 million to support strategic growth initiatives. Valmont remains committed to maintaining its investment grade credit rating.

Voluntary One-Time Early Retirement Benefit Program

Valmont remains committed to the well-being of its employees in alignment with its core values, and driving growth while building a strong foundation for the future. In the third quarter 2020, Valmont initiated a one-time, voluntary Early Retirement Program that gives recognition to tenured U.S. administrative employees who have contributed to the Company’s success. As a result, in fourth quarter 2020 the Company expects to record estimated pre-tax charges of approximately $10.0 million ($7.5 million after-tax), with an estimated EPS impact of ($0.34), with an expected payback of 24 months. These charges will be excluded from fourth quarter adjusted earnings results.

Fourth-Quarter 2020 Financial Outlook and Key Assumptions

While the pandemic's impacts on global economic factors and pace of economic recovery remain uncertain, the Company is currently providing a greater level of transparency, including key assumptions and indications for fourth quarter 2020, to help the financial community understand short-term impacts and expectations.

Financial Outlook

Metrics

Estimates

Net Sales

$715.0 to $735.0M

GAAP Operating Profit Margin

6.5% to 7.5%

Adjusted Operating Profit Margin2

8.0% to 9.0%

Segment Sales: Irrigation

~12%-15% Increase (vs. prior year)

Key Assumptions

• Irrigation sales estimate driven by expected timing of international project deliveries
• Tax rate of ~ 25.0%
• Positive operating cash flows
• Stable raw material costs and no significant supply chain interruptions
• No closures of large manufacturing facilities or workforce disruptions

Kaniewski added, "We continue to prioritize employee safety and well-being while focusing on growth and performance, providing our customers with the essential products and solutions they need. The strong global backlog of approximately $600.0 million in our Utility Support Structures segment is providing a good line of sight well into 2021. In the Engineered Support Structures segment, we expect demand to remain strong in wireless communications markets as 5G build-outs continue to ramp. Our Coatings business is trending in line with industrial production levels and will improve over time as the general economy improves. The large, multi-year international irrigation project and favorable international market trends are providing increased momentum leading into 2021 and we are optimistic that recent increases in commodity prices may improve grower sentiment in North American irrigation markets. 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 2020. Our strategies remain focused on long-term growth with a strong emphasis on Return on Invested Capital, ESG principles, operational excellence and strengthening our organization for the future."

A live audio discussion with Stephen G. Kaniewski, President and Chief Executive Officer, and Avner M. Applbaum, Executive Vice President and Chief Financial Officer, will be accessible by telephone on Thursday, October 22, 2020 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 3Q 2020 Earnings Conference Call. A slide presentation will simultaneously be available for download on the Investors page at valmont.com. A replay of the event can be accessed two hours after the call at the above link or by telephone at 1-877-660-6853 or 1-201-612-7415. Please use conference identification number 13698673. The replay will be available through 10:59 p.m. CDT on October 29, 2020.

About Valmont Industries, Inc.

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

Concerning Forward-Looking Statements

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

1 Please see Reg G reconciliation of GAAP sales, operating income, net earnings and EPS to Adjusted figures at end of document 2 Excludes primarily the expected pre-tax impact of the voluntary one-time Early Retirement Program

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

 

 

 

 

 

 

 

 

 

26-Sep-20

 

28-Sep-19

 

26-Sep-20

 

28-Sep-19

Net sales

$

733,970

 

 

$

690,340

 

 

$

2,096,978

 

 

$

2,083,350

 

Cost of sales

543,223

 

 

517,053

 

 

1,536,045

 

 

1,567,260

 

Gross profit

190,747

 

 

173,287

 

 

560,933

 

 

516,090

 

Selling, general and administrative expenses

129,268

 

 

112,223

 

 

372,481

 

 

338,950

 

Impairment of goodwill and intangible assets

—

 

 

—

 

 

16,638

 

 

—

 

Operating income

61,479

 

 

61,064

 

 

171,814

 

 

177,140

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

(10,454)

 

 

(9,976)

 

 

(30,566)

 

 

(29,971)

 

Interest income

430

 

 

969

 

 

1,931

 

 

2,815

 

Gain on investments (unrealized)

900

 

 

402

 

 

1,102

 

 

4,754

 

Other

233

 

 

768

 

 

1,349

 

 

1,938

 

Other income (expense), net

(8,891)

 

 

(7,837)

 

 

(26,184)

 

 

(20,464)

 

Earnings before income taxes

52,588

 

 

53,227

 

 

145,630

 

 

156,676

 

Income tax expense

12,084

 

 

13,063

 

 

39,172

 

 

38,766

 

Equity in (loss) of nonconsolidated subsidiaries

(276)

 

 

—

 

 

(755)

 

 

—

 

Net earnings

40,228

 

 

40,164

 

 

105,703

 

 

117,910

 

Less: (Earnings) attributable to non-controlling interests

(886)

 

 

(2,119)

 

 

(825)

 

 

(4,042)

 

Net earnings attributable to Valmont Industries, Inc.

$

39,342

 

 

$

38,045

 

 

$

104,878

 

 

$

113,868

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Basic

21,309

 

 

21,556

 

 

21,358

 

 

21,725

 

Earnings per share - Basic

$

1.85

 

 

$

1.76

 

 

$

4.91

 

 

$

5.24

 

 

 

 

 

 

 

 

 

Average shares outstanding (000's) - Diluted

21,416

 

 

21,684

 

 

21,453

 

 

21,826

 

Earnings per share - Diluted

$

1.84

 

 

$

1.75

 

 

$

4.89

 

 

$

5.22

 

 

 

 

 

 

 

 

 

Cash dividends per share

$

0.450

 

 

$

0.375

 

 

$

1.350

 

 

$

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

 

26-Sep-20

 

28-Sep-19

 

26-Sep-20

 

28-Sep-19

Net sales

 

 

 

 

 

 

 

Utility Support Structures

$

274,393

 

 

$

204,958

 

 

$

731,178

 

 

$

658,709

 

Engineered Support Structures

255,656

 

 

268,058

 

 

739,783

 

 

757,094

 

Coatings

87,886

 

 

92,957

 

 

255,976

 

 

278,142

 

Infrastructure products

617,935

 

 

565,973

 

 

1,726,937

 

 

1,693,945

 

Irrigation

139,209

 

 

144,180

 

 

446,568

 

 

452,181

 

Less: Intersegment sales

(23,174)

 

 

(19,813)

 

 

(76,527)

 

 

(62,776)

 

Total

$

733,970

 

 

$

690,340

 

 

$

2,096,978

 

 

$

2,083,350

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

Utility Support Structures

$

25,881

 

 

$

20,362

 

 

$

75,255

 

 

$

61,443

 

Engineered Support Structures

25,434

 

 

21,825

 

 

46,183

 

 

55,152

 

Coatings

12,416

 

 

13,865

 

 

33,618

 

 

39,037

 

Infrastructure products

63,731

 

 

56,052

 

 

155,056

 

 

155,632

 

Irrigation

14,687

 

 

18,204

 

 

60,701

 

 

59,868

 

Corporate

(16,939)

 

 

(13,192)

 

 

(43,943)

 

 

(38,360)

 

Total

$

61,479

 

 

$

61,064

 

 

$

171,814

 

 

$

177,140

 

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

Utility Support Structures: This segment consists of the manufacture of engineered steel and concrete structures for utility transmission, distribution, substations, and renewable energy generation equipment.

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

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

Irrigation: This segment consists of the global manufacture of agricultural irrigation equipment, parts, services, tubular products, water management solutions, and technology for precision agriculture.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

 

26-Sep-20

 

28-Dec-19

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

443,055

 

 

$

353,542

 

Accounts receivable, net

502,004

 

 

480,000

 

Inventories

448,088

 

 

418,370

 

Contract asset - costs and profits in excess of billings

113,254

 

 

141,322

 

Prepaid expenses and other assets

51,745

 

 

32,043

 

Refundable income taxes

—

 

 

6,947

 

Total current assets

1,558,146

 

 

1,432,224

 

Property, plant and equipment, net

573,353

 

 

558,129

 

Goodwill and other assets

792,411

 

 

816,863

 

 

$

2,923,910

 

 

$

2,807,216

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Current installments of long-term debt

$

1,922

 

 

$

760

 

Notes payable to banks

14,227

 

 

21,774

 

Accounts payable

295,852

 

 

197,957

 

Accrued expenses

219,200

 

 

167,264

 

Contract liability - billings in excess of costs and earnings

119,529

 

 

117,945

 

Income taxes payable

724

 

 

—

 

Dividend payable

9,614

 

 

8,079

 

Total current liabilities

661,068

 

 

513,779

 

Long-term debt, excluding current installments

779,788

 

 

764,944

 

Other long-term liabilities

293,390

 

 

338,748

 

Shareholders' equity

1,189,664

 

 

1,189,745

 

 

$

2,923,910

 

 

$

2,807,216

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

 

YTD

 

YTD

 

26-Sep-20

 

28-Sep-19

Cash flows from operating activities

 

 

 

Net Earnings

$

105,703

 

 

$

117,910

 

Depreciation and amortization

61,523

 

 

60,424

 

Impairment of long-lived assets

19,449

 

 

—

 

Contribution to defined benefit pension plan

(17,398)

 

 

(17,426)

 

Change in working capital

109,468

 

 

67,793

 

Other

(5,699)

 

 

10,529

 

Net cash flows from operating activities

273,046

 

 

239,230

 

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of property, plant, and equipment

(70,960)

 

 

(71,981)

 

Acquisitions

(15,862)

 

 

(81,841)

 

Other

15,437

 

 

14,626

 

Net cash flows from investing activities

(71,385)

 

 

(139,196)

 

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from long-term borrowings

88,872

 

 

31,000

 

Proceeds (payments) from short-term borrowings

(6,462)

 

 

9,284

 

Principal payments on long-term borrowings

(76,417)

 

 

(10,578)

 

Purchase of treasury shares

(28,006)

 

 

(55,172)

 

Purchase of noncontrolling interest

(55,916)

 

 

(27,845)

 

Dividends paid

(27,316)

 

 

(24,554)

 

Other

(4,739)

 

 

(4,794)

 

Net cash flows from financing activities

(109,984)

 

 

(82,659)

 

Effect of exchange rates on cash and cash equivalents

(2,164)

 

 

(3,385)

 

Net change in cash and cash equivalents

89,513

 

 

13,990

 

Cash and cash equivalents - beginning of year

353,542

 

 

313,210

 

Cash and cash equivalents - end of period

$

443,055

 

 

$

327,200

 

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) impairment of goodwill, and tradenames, (2) restructuring costs and non-recurring asset impairments (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 26, 2020

 

Diluted

 

Thirty-nine weeks ended September 26, 2020

 

Diluted

 

 

earnings per

 

 

earnings per

 

 

share

 

 

share

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

$

39,342

 

 

$

1.84

 

 

$

104,878

 

 

$

4.89

 

Impairment of goodwill and intangible assets, pre-tax

—

 

 

—

 

 

16,638

 

 

0.78

 

Restructuring and asset impairment costs - pre-tax

5,632

 

 

0.26

 

 

11,211

 

 

0.52

 

Total Adjustments

5,632

 

 

0.26

 

 

27,849

 

 

1.30

 

Tax effect of adjustments *

(776)

 

 

(0.04)

 

 

(2,753)

 

 

(0.13)

 

UK tax rate change

(1,528)

 

 

(0.07)

 

 

(1,528)

 

 

(0.07)

 

Net earnings attributable to Valmont Industries, Inc. - Adjusted

$

42,670

 

 

$

1.99

 

 

$

128,446

 

 

$

5.99

 

Average shares outstanding (000’s) - Diluted

 

 

21,416

 

 

 

 

21,453

 

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

 

 

Thirteen weeks ended September 26, 2020

 

Thirty-nine weeks ended September 26, 2020

 

 

 

Operating Income Reconciliation

 

 

Operating income - as reported

 

$

61,479

 

 

$

171,814

 

Impairment of goodwill and tradename

 

—

 

 

16,638

 

Restructuring and related asset impairment costs

 

5,632

 

 

11,211

 

Adjusted Operating Income

 

$

67,111

 

 

$

199,663

 

Net Sales - as reported

 

733,970

 

 

2,096,978

 

Operating Income as a % of Sales

 

8.4

%

 

8.2

%

Adjusted Operating Income as a % of Sales

 

9.1

%

 

9.5

%

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 26, 2020

 

Engineered

 

Utility

 

 

 

 

 

 

 

Support

 

Support

 

 

 

 

 

 

Segment Operating Income Reconciliation

Structures

 

Structures

 

Coatings

 

Irrigation

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income - as reported

$

25,434

 

 

$

25,881

 

 

$

12,416

 

 

$

14,687

 

 

$

(16,939)

 

Restructuring and related asset impairment costs

902

 

 

3,301

 

 

1,284

 

 

—

 

 

145

 

Adjusted Operating Income

$

26,336

 

 

$

29,182

 

 

$

13,700

 

 

$

14,687

 

 

$

(16,794)

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

255,656

 

 

$

274,393

 

 

$

87,886

 

 

$

139,209

 

 

—

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

9.9

%

 

9.4

%

 

14.1

%

 

10.6

%

 

NM

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income as a % of Sales

10.3

%

 

10.6

%

 

15.6

%

 

10.6

%

 

NM

 

 

 

 

 

 

 

 

 

 

Financial Outlook Adjusted Operating Profit Margin Reconciliation for Fourth Quarter 2020

 

 

 

 

 

in thousands

Low End

 

High End

 

Net Sales

$715,000

to

$735,000

 

Operating Profit

47,000

to

55,750

 

GAAP Operating Profit Margin

6.5%

to

7.5%

 

Expected pre-tax impact on operating profit of voluntary one-time Early Retirement Program Expense

10,000

 

10,000

 

Adjusted Operating Profit

57,000

to

65,750

 

Adjusted Operating Margin

8.0%

to

9.0%

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20201021005939/en/

Renee Campbell +1 402.963.1057