Full-Year Revenue of $4.08 Billion, Record
Diluted Earnings Per Share of $17.19, and Strong Operating Cash
Flows of $573 Million
Valmont® Industries, Inc. (NYSE: VMI), a global leader that
provides products and solutions to support vital infrastructure and
advance agricultural productivity, today reported financial results
for the fourth quarter and fiscal year ended December 28, 2024.
President and Chief Executive Officer Avner M. Applbaum
commented, “The fourth quarter capped off an outstanding year for
Valmont as we continued executing our strategy. Both our
Infrastructure and Agriculture segments achieved sales growth, and
we expanded consolidated operating profit margins year-over-year
through strategic pricing, improved operational efficiencies, and
disciplined cost management. I want to thank the entire Valmont
team for their dedication and hard work in delivering these strong
results.”
“Looking ahead to 2025, demand for our Infrastructure products
and solutions will drive continued sales growth. In Agriculture,
international sales, particularly large-scale projects, will help
offset expected market softness in North America. Across both
segments, we remain focused on commercial and operational
excellence, leveraging our streamlined organization to deliver
exceptional value to our customers and shareholders.”
Fourth Quarter 2024 Highlights (all metrics compared to
Fourth Quarter 2023 unless otherwise noted)
- Net sales increased 2.1% to $1.04 billion, compared to $1.02
billion
- Operating income increased to $120.0 million or 11.6% of net
sales, compared to $63.5 million or 6.3% of net sales ($100.2
million or 9.9% adjusted1 in 2023)
- Diluted earnings per share (“EPS”) increased to $3.84, compared
to $1.38 ($3.18 adjusted1 in 2023)
- Operating cash flows increased 66.9% to $193.4 million,
compared to $115.9 million
- Cash and cash equivalents at the end of the fourth quarter were
$164.3 million
- Invested $25.6 million in capital expenditures and returned
$27.0 million to shareholders through share repurchases and
dividends
- Moody's Ratings upgraded the Company's credit rating to
Baa2
Full Year 2024 Highlights (all metrics compared to Full
Year 2023 unless otherwise noted)
- Net sales decreased 2.4% to $4.08 billion, compared to $4.17
billion
- Infrastructure sales of $3.0 billion were similar to prior
year, while Agriculture sales declined 8.3%
- Operating income increased to $524.6 million or 12.9% of net
sales, compared to $291.6 million or 7.0% of net sales ($473.2
million or 11.3% adjusted1 in 2023)
- Diluted EPS increased to $17.19, compared to $6.78 ($14.98
adjusted1 in 2023)
- Operating cash flows meaningfully increased 86.7% to $572.7
million, compared to $306.8 million, driven by strong net earnings
and effective working capital management
- Free cash flow1 increased 134.9% to $493.2 million, compared to
$210.0 million
- Invested $79.5 million in capital expenditures and returned
$118.4 million to shareholders through share repurchases and
dividends
- Deployed $393.0 million to fully repay the revolving credit
facility balance, achieving a net leverage ratio1 of 1.0
- Achieved return on invested capital1 of 16.4%
Key Financial Metrics
Fourth Quarter 2024
GAAP
Adjusted1
(In thousands, except per-share
amounts)
12/28/2024
12/30/2023
12/28/2024
12/30/2023
Q4 2024
Q4 2023
vs. Q4 2023
Q4 2024
Q4 2023
vs. Q4 2023
Net Sales
$
1,037,294
$
1,015,526
2.1%
$
1,037,294
$
1,015,526
2.1%
Gross Profit
313,021
282,941
10.6%
313,021
282,941
10.6%
Gross Profit as a % of Net Sales
30.2%
27.9%
30.2%
27.9%
Operating Income
119,988
63,548
88.8%
119,988
100,204
19.7%
Operating Income as a % of Net Sales
11.6%
6.3%
11.6%
9.9%
Net Earnings Attributable to VMI2
77,653
28,587
171.6%
77,653
66,034
17.6%
Diluted Earnings per Share
3.84
1.38
178.3%
3.84
3.18
20.8%
Weighted Average Shares Outstanding
20,197
20,764
20,197
20,764
Full Year 2024
GAAP
Adjusted1
(In thousands, except per-share
amounts)
12/28/2024
12/30/2023
12/28/2024
12/30/2023
FY 2024
FY 2023
vs. FY 2023
FY 2024
FY 2023
vs. FY 2023
Net Sales
$
4,075,034
$
4,174,598
(2.4)%
$
4,075,034
$
4,174,598
(2.4)%
Gross Profit
1,241,212
1,236,034
0.4%
1,241,212
1,236,034
0.4%
Gross Profit as a % of Net Sales
30.5%
29.6%
30.5%
29.6%
Operating Income
524,584
291,557
79.9%
524,584
473,237
10.9%
Operating Income as a % of Net Sales
12.9%
7.0%
12.9%
11.3%
Net Earnings Attributable to VMI2,3
348,259
143,475
142.7%
348,259
316,926
9.9%
Diluted Earnings per Share3
17.19
6.78
153.5%
17.19
14.98
14.8%
Weighted Average Shares Outstanding
20,261
21,159
20,261
21,159
Fourth Quarter 2024 Segment Review (all metrics compared
to Fourth Quarter 2023 unless otherwise noted)
Infrastructure (73.3% of Net
Sales)
Products and solutions to serve the infrastructure markets of
utility, solar, lighting and transportation, and
telecommunications, along with coatings services to protect metal
products
Sales increased 2.1% to $763.6 million, compared to $748.3
million.
Utility sales grew 5.9%, driven by pricing excellence and a
favorable product mix, with higher volumes of distribution and
substation products, which more than offset steel index deflation.
Telecommunications sales increased significantly, benefiting from a
higher level of carrier spending in a stabilizing North American
market. Solar sales declined significantly, primarily in North
America, following the Company’s strategic decision earlier in 2024
to exit certain low-margin projects.
Operating income increased to $122.0 million or 16.0% of net
sales, compared to $82.6 million or 11.1% of net sales ($98.7
million or 13.2% adjusted1 in 2023). This growth was driven by
pricing excellence, a reduction in the cost of goods sold and
higher volumes.
Agriculture (26.7% of Net
Sales)
Center pivot and linear irrigation equipment components for
agricultural markets, including aftermarket parts and tubular
products, and advanced technology solutions for precision
agriculture
Sales increased 2.3% to $278.0 million, compared to $271.6
million, despite a 2.3% unfavorable impact from foreign currency
translation.
In North America, irrigation equipment volumes were slightly
lower. Increased replacement sales, driven by severe weather events
earlier in 2024, were offset by continued agriculture market
softness due to lower grain prices. Internationally, sales were
higher year-over-year, led by strong growth in the Europe, Middle
East, and Africa (“EMEA”) region, and slightly higher sales in
Brazil amid a stabilizing market environment.
Operating income increased to $28.5 million or 10.3% of net
sales, compared to $13.9 million or 5.2% of net sales ($27.8
million or 10.3% adjusted1 in 2023), reflecting reduced SG&A
expenses.
Providing 2025 Full-Year Financial
Outlook and Key Assumptions
The Company is introducing its full-year 2025 financial outlook,
including projected net sales and diluted earnings per share, and
key assumptions for the year.
Metric
2025 Outlook
Net Sales
$4.0 to $4.2 billion
~(2%) to ~+3%
~(0.5%) to ~+4.5% Constant
Currency1
Infrastructure Net
Sales
$3.02 to $3.16 billion
Growth of ~+1% to ~+5.5%
~+2% to ~+6.5% Constant
Currency1
Agriculture Net Sales
$0.98 to $1.04 billion
Decline of ~(9.5%) to ~(3.5%)
~(7%) to ~(1%) Constant
Currency1
Diluted Earnings per
Share
$17.20 to $18.80
Capital Expenditures
$140 to $160 million
Effective Tax Rate
~26.0%
Key Assumptions
- Steel cost assumptions are aligned with futures markets as of
February 14, 2025.
- Based on the Company’s understanding of the recently announced
China tariffs, and the steel and aluminum import tariffs introduced
on February 10, 2025, these direct impacts have been factored into
the 2025 outlook.
- The potential timing and impact of additional U.S. import
tariffs, including a proposed 25% tariff on all imports from Mexico
and Canada, as well as retaliatory actions by other countries,
remains unclear and are not included in the 2025 outlook.
1Please see Reg G reconciliation to GAAP measures at end of
document 2Net earnings attributable to Valmont Industries, Inc.
including change in redemption value of redeemable noncontrolling
interests 3Q2 2024 included a tax benefit of approximately $3.0
million or $0.15 per share due to the reduction of a valuation
allowance on a tax loss carryforward in a foreign subsidiary
A live audio discussion with Avner M. Applbaum, President and
Chief Executive Officer, and Thomas Liguori, Executive Vice
President and Chief Financial Officer, will take place on Tuesday,
February 18, 2025 at 8:00 a.m. CT. The discussion can be accessed
by telephone at +1 877.407.6184 or +1 201.389.0877 (no Conference
ID needed) or via webcast at the following link: Valmont Industries
4Q and Full Year 2024 Earnings Conference Call. A slide
presentation will be available for download on the Investors page
of valmont.com during the webcast. A replay of the event will be
accessible three hours after the call at the above link or by
telephone at +1 877.660.6853 or +1 201.612.7415 using access code
13750342. The replay will be available until 10:59 p.m. CT on
February 25, 2025.
About Valmont Industries, Inc.
For nearly 80 years, Valmont has been a global leader that
provides products and solutions to support vital infrastructure and
advance agricultural productivity. We are committed to
customer-focused innovation that delivers lasting value. Learn more
about how we’re Conserving Resources. Improving Life.® at
valmont.com.
Concerning Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on assumptions made by management,
considering its experience in the industries where Valmont
operates, perceptions of historical trends, current conditions,
expected future developments, and other relevant factors. It is
important to note that these statements are not guarantees of
future performance or results. They involve risks, uncertainties
(some of which are beyond Valmont’s control), and assumptions.
While management believes these forward-looking statements are
based on reasonable assumptions, numerous factors could cause
actual results to differ materially from those anticipated. These
factors include, among other things, risks described in Valmont’s
reports to the Securities and Exchange Commission (“SEC”), the
Company’s actual cash flows and net income, future economic and
market circumstances, industry conditions, company performance and
financial results, operational efficiencies, availability and price
of raw materials, availability and market acceptance of new
products, product pricing, domestic and international competitive
environments, geopolitical risks, and actions and policy changes by
domestic and foreign governments. The Company cautions that any
forward-looking statements in this release are made as of its
publication date and does not undertake to update these statements,
except as required by law.
Website and Social Media Disclosure
The Company uses its website and social media channels, as
identified on its website, to distribute company information. Posts
on these channels may contain material information. Therefore,
investors should monitor these channels alongside the Company’s
press releases, SEC filings, and public conference calls and
webcasts. The contents of the Company’s website and social media
channels are not considered part of this press release.
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(Dollars and shares in thousands,
except per-share amounts)
(Unaudited)
Thirteen weeks ended
Fifty-two weeks ended
December 28,
December 30,
December 28,
December 30,
2024
2023
2024
2023
Net sales
$
1,037,294
$
1,015,526
$
4,075,034
$
4,174,598
Cost of sales
724,273
732,585
2,833,822
2,938,564
Gross profit
313,021
282,941
1,241,212
1,236,034
Selling, general, and administrative
expenses
193,033
188,363
716,628
768,423
Impairment of goodwill and other
intangible assets
—
—
—
140,844
Realignment charges
—
31,030
—
35,210
Operating income
119,988
63,548
524,584
291,557
Other income (expenses):
Interest expense
(12,342
)
(15,314
)
(58,722
)
(56,808
)
Interest income
1,825
1,651
7,183
6,230
Gain on deferred compensation
investments
518
1,773
3,634
3,564
Gain (loss) on divestitures
(4,474
)
—
(4,474
)
2,994
Other
138
(6,492
)
(3,524
)
(11,085
)
Total other income (expenses)
(14,335
)
(18,382
)
(55,903
)
(55,105
)
Earnings before income taxes and equity in
loss of nonconsolidated subsidiaries
105,653
45,166
468,681
236,452
Income tax expense
27,199
10,882
117,978
90,121
Equity in loss of nonconsolidated
subsidiaries
(19
)
(200
)
(79
)
(1,419
)
Net earnings
78,435
34,084
350,624
144,912
Loss (earnings) attributable to redeemable
noncontrolling interests
(782
)
1,877
(2,365
)
5,937
Net earnings attributable to Valmont
Industries, Inc.
77,653
35,961
348,259
150,849
Change in redemption value of redeemable
noncontrolling interests
—
(7,374
)
—
(7,374
)
Net earnings attributable to Valmont
Industries, Inc. including change in redemption value of redeemable
noncontrolling interests
$
77,653
$
28,587
$
348,259
$
143,475
Weighted average shares outstanding -
Basic
20,031
20,577
20,122
20,956
Earnings per share - Basic
$
3.88
$
1.39
$
17.31
$
6.85
Weighted average shares outstanding -
Diluted
20,197
20,764
20,261
21,159
Earnings per share - Diluted
$
3.84
$
1.38
$
17.19
$
6.78
Cash dividends per share
$
0.60
$
0.60
$
2.40
$
2.40
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
SUMMARY OPERATING
RESULTS
(Dollars in thousands)
(Unaudited)
Thirteen weeks ended
Fifty-two weeks ended
December 28,
December 30,
December 28,
December 30,
2024
2023
2024
2023
Infrastructure
Net sales
$
760,848
$
745,713
$
2,998,381
$
2,999,637
Gross profit
230,383
201,968
903,736
842,081
as a percentage of net sales
30.3
%
27.1
%
30.1
%
28.1
%
Selling, general, and administrative
expenses
108,345
103,227
406,596
424,997
as a percentage of net sales
14.2
%
13.8
%
13.6
%
14.2
%
Impairment of goodwill and other
intangible assets
—
—
—
3,571
Realignment charges
—
16,191
—
17,260
Operating income
122,038
82,550
497,140
396,253
as a percentage of net sales
16.0
%
11.1
%
16.6
%
13.2
%
Agriculture
Net sales
$
276,446
$
269,813
$
1,076,653
$
1,174,961
Gross profit
82,638
80,973
337,476
393,953
as a percentage of net sales
29.9
%
30.0
%
31.3
%
33.5
%
Selling, general, and administrative
expenses
54,139
58,833
199,140
230,729
as a percentage of net sales
19.6
%
21.8
%
18.5
%
19.6
%
Impairment of goodwill and other
intangible assets
—
—
—
137,273
Realignment charges
—
8,194
—
9,101
Operating income
28,499
13,946
138,336
16,850
as a percentage of net sales
10.3
%
5.2
%
12.8
%
1.4
%
Corporate
Selling, general, and administrative
expenses
$
30,549
$
26,303
$
110,892
$
112,697
Realignment charges
—
6,645
—
8,849
Operating loss
(30,549
)
(32,948
)
(110,892
)
(121,546
)
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
SUMMARY OPERATING
RESULTS
(Dollars in thousands)
(Unaudited)
In the fourth quarter of fiscal 2024, the
Company renamed its Transmission, Distribution, and Substation
product line to the Utility product line.
In fiscal 2024, the Company realigned
management's reporting structure for certain composite structure
sales and, accordingly, revised its presentation of sales across
product lines to reflect how the product is currently managed. The
reporting for the thirteen and fifty-two weeks ended December 30,
2023 was adjusted to conform to the fiscal 2024 presentation. As a
result, Utility product line sales increased and Lighting and
Transportation product line sales decreased by $14,598 and $47,902
for the thirteen and fifty-two weeks ended December 30, 2023,
respectively.
Thirteen weeks ended December
28, 2024
Infrastructure
Agriculture
Intersegment
Consolidated
Geographical Market:
North America
$
597,830
$
129,319
$
(4,209
)
$
722,940
International
165,811
148,665
(122
)
314,354
Total sales
$
763,641
$
277,984
$
(4,331
)
$
1,037,294
Product Line:
Utility
$
350,710
$
—
$
—
$
350,710
Lighting and Transportation
216,130
—
—
216,130
Coatings
87,029
—
(2,671
)
84,358
Telecommunications
74,121
—
—
74,121
Solar
35,651
—
(122
)
35,529
Irrigation Equipment and Parts
—
255,042
(1,538
)
253,504
Technology Products and Services
—
22,942
—
22,942
Total sales
$
763,641
$
277,984
$
(4,331
)
$
1,037,294
Thirteen weeks ended December
30, 2023
Infrastructure
Agriculture
Intersegment
Consolidated
Geographical Market:
North America
$
575,166
$
136,378
$
(4,240
)
$
707,304
International
173,124
135,266
(168
)
308,222
Total sales
$
748,290
$
271,644
$
(4,408
)
$
1,015,526
Product Line:
Utility
$
331,272
$
—
$
—
$
331,272
Lighting and Transportation
221,612
—
—
221,612
Coatings
84,129
—
(2,409
)
81,720
Telecommunications
56,660
—
—
56,660
Solar
54,617
—
(168
)
54,449
Irrigation Equipment and Parts
—
244,148
(1,831
)
242,317
Technology Products and Services
—
27,496
—
27,496
Total sales
$
748,290
$
271,644
$
(4,408
)
$
1,015,526
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
SUMMARY OPERATING
RESULTS
(Dollars in thousands)
(Unaudited)
Fifty-two weeks ended December
28, 2024
Infrastructure
Agriculture
Intersegment
Consolidated
Geographical Market:
North America
$
2,348,250
$
570,517
$
(17,045
)
$
2,901,722
International
660,326
513,191
(205
)
1,173,312
Total sales
$
3,008,576
$
1,083,708
$
(17,250
)
$
4,075,034
Product Line:
Utility
$
1,368,333
$
—
$
—
$
1,368,333
Lighting and Transportation
884,128
—
—
884,128
Coatings
353,739
—
(9,992
)
343,747
Telecommunications
250,770
—
—
250,770
Solar
151,606
—
(203
)
151,403
Irrigation Equipment and Parts
—
985,840
(7,055
)
978,785
Technology Products and Services
—
97,868
—
97,868
Total sales
$
3,008,576
$
1,083,708
$
(17,250
)
$
4,075,034
Fifty-two weeks ended December
30, 2023
Infrastructure
Agriculture
Intersegment
Consolidated
Geographical Market:
North America
$
2,318,801
$
587,056
$
(16,282
)
$
2,889,575
International
691,266
595,167
(1,410
)
1,285,023
Total sales
$
3,010,067
$
1,182,223
$
(17,692
)
$
4,174,598
Product Line:
Utility
$
1,291,670
$
—
$
—
$
1,291,670
Lighting and Transportation
916,170
—
—
916,170
Coatings
354,330
—
(9,020
)
345,310
Telecommunications
252,165
—
—
252,165
Solar
195,732
—
(1,410
)
194,322
Irrigation Equipment and Parts
—
1,069,425
(7,262
)
1,062,163
Technology Products and Services
—
112,798
—
112,798
Total sales
$
3,010,067
$
1,182,223
$
(17,692
)
$
4,174,598
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands)
(Unaudited)
December 28,
December 30,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
164,315
$
203,041
Receivables, net
654,360
657,960
Inventories
590,263
658,428
Contract assets
187,257
175,721
Prepaid expenses and other current
assets
87,197
92,479
Total current assets
1,683,392
1,787,629
Property, plant, and equipment, net
588,972
617,394
Goodwill and other non-current assets
1,057,608
1,072,425
Total assets
$
3,329,972
$
3,477,448
LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS, AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt
$
692
$
719
Notes payable to banks
1,669
3,205
Accounts payable
372,197
358,311
Accrued expenses
275,407
277,764
Contract liabilities
126,932
70,978
Income taxes payable
22,509
—
Dividends payable
12,019
12,125
Total current liabilities
811,425
723,102
Long-term debt, excluding current
installments
729,941
1,107,885
Operating lease liabilities
134,534
162,743
Other non-current liabilities
60,459
66,646
Total liabilities
1,736,359
2,060,376
Redeemable noncontrolling interests
51,519
62,792
Shareholders' equity
1,542,094
1,354,280
Total liabilities, redeemable
noncontrolling interests, and shareholders' equity
$
3,329,972
$
3,477,448
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Fifty-two weeks ended
December 28,
December 30,
2024
2023
Cash flows from operating activities:
Net earnings
$
350,624
$
144,912
Depreciation and amortization
95,395
98,708
Contribution to defined benefit pension
plan
(19,599
)
(17,345
)
Impairment of goodwill and other
intangible assets
—
140,844
Loss (gain) on divestitures
4,474
(2,994
)
Change in working capital
120,453
(66,342
)
Other
21,331
8,992
Net cash flows from operating
activities
572,678
306,775
Cash flows from investing activities:
Purchases of property, plant, and
equipment
(79,451
)
(96,771
)
Proceeds from divestiture, net of cash
divested
3,830
6,369
Proceeds from property damage insurance
claims
—
7,468
Acquisitions, net of cash acquired
—
(32,676
)
Other
(3,257
)
329
Net cash flows from investing
activities
(78,878
)
(115,281
)
Cash flows from financing activities:
Net repayments on short-term
borrowings
(1,485
)
(3,298
)
Proceeds from long-term borrowings
30,009
370,012
Principal repayments on long-term
borrowings
(408,080
)
(134,748
)
Dividends paid
(48,358
)
(49,515
)
Purchases of redeemable noncontrolling
interests
(17,745
)
—
Repurchases of common stock
(70,069
)
(345,279
)
Other
(6,832
)
(13,577
)
Net cash flows from financing
activities
(522,560
)
(176,405
)
Effect of exchange rates on cash and cash
equivalents
(9,966
)
2,546
Net change in cash and cash
equivalents
(38,726
)
17,635
Cash and cash equivalents—beginning of
period
203,041
185,406
Cash and cash equivalents—end of
period
$
164,315
$
203,041
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
FISCAL 2025 FULL-YEAR
FINANCIAL OUTLOOK BRIDGE
(Dollars in millions, except
per-share amounts)
(Unaudited)
The tables below outline the bridge from
fiscal 2024 net sales and diluted earnings per share to the
forecasted figures for fiscal 2025.
Net sales - fiscal 2024
$
4,075
Infrastructure volume
200
Net pricing (steel deflation)
(40
)
Agriculture storm volume
(50
)
Strategic deselection
(25
)
FX translation
(60
)
Net sales outlook midpoint - fiscal
2025
$
4,100
Diluted earnings per share - fiscal
2024
$
17.19
Operating profit
0.50
Interest expense
0.35
Share count
0.16
Tariff
(0.20)
Diluted earnings per share outlook
midpoint - fiscal 2025
$
18.00
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
USE OF NON-GAAP FINANCIAL MEASURES
Management utilizes non-GAAP financial measures to assess the
Company’s historical and prospective financial performance,
evaluate operational profitability on a consistent basis, factor
into executive compensation decisions, and enhance transparency for
the investment community. These non-GAAP measures are intended to
supplement, not replace, the Company’s reported financial results
prepared in accordance with GAAP. It is important to note that
other companies may calculate these measures differently, which can
limit their usefulness for comparison across organizations.
The following non-GAAP measures may be included in financial
releases and other financial communications:
- Adjusted Operating Income, Adjusted Operating Margin,
Adjusted Net Earnings, and Adjusted Diluted EPS: These metrics
provide meaningful supplemental insights into the Company’s
operating performance by excluding items that are not considered
part of core operating results. This approach enhances
comparability across reporting periods. Adjustments may include
costs or benefits associated with acquisitions, expenses related to
realignment or restructuring programs, goodwill or intangible asset
impairment, significant expenses or benefits from changes in tax
laws or rates, cumulative effects of changes in accounting
standards, refinancing-related expenses, loss or gain from a
partial or full settlement of the U.K. defined benefit pension plan
obligation, losses from natural disasters, and other non-recurring
items.
- Adjusted EBITDA: This metric is a key component of a
financial ratio included in the covenants of our major debt
agreements. It is calculated as net earnings before interest,
taxes, depreciation, amortization, stock-based compensation, and
other adjustments as outlined in the applicable debt agreements.
This metric offers investors and analysts valuable insights into
the Company’s core operating performance. Adjusted EBITDA margin is
also used to evaluate profitability.
- Leverage Ratio: This ratio is calculated by taking the
sum of interest-bearing debt, minus unrestricted cash in excess of
$50.0 million (but not exceeding $500.0 million), and dividing it
by Adjusted EBITDA. This is a key financial ratio included in the
covenants of our major debt agreements and is calculated on a
rolling four-fiscal-quarter basis.
- Free Cash Flow: Calculated as net cash provided by
operating activities minus capital expenditures, free cash flow
serves as an indicator of the Company’s financial strength.
However, this measure does not fully reflect the Company’s ability
to deploy cash freely, as it obligations such as debt repayments
and other fixed commitments.
- Backlog: This operating measure is used to evaluate
future potential sales revenue. An order is included in the backlog
upon receipt of a customer purchase order or the execution of a
sales order contract. Backlog is particularly relevant to the
Infrastructure segment due to the longer-term nature of its
projects. However, backlog is not a term defined under U.S. GAAP
and does not measure contract profitability. It should not be
viewed as the sole indicator of future revenue, as many projects
with short lead times book-and-bill within the same reporting
period and are not included in the backlog.
- Constant Currency: Defined as financial results adjusted
for foreign currency translation impacts by translating current
period and prior period activity using the same currency conversion
rate. This approach is used for countries whose functional currency
is not the U.S. dollar.
- ROIC: Return on invested capital (“ROIC”) and adjusted
ROIC are key operating ratios that enable investors to assess our
operating performance relative to the investment needed to generate
operating profit. ROIC is calculated as after-tax operating income
divided by the average of beginning and ending invested capital.
Adjusted ROIC is calculated as after-tax adjusted operating income
divided by the average of beginning and ending invested capital.
Invested capital represents total assets minus total liabilities
(excluding interest-bearing debt and redeemable noncontrolling
interests).
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
SUMMARY OF EFFECT OF
SIGNIFICANT NON-RECURRING ITEMS ON 2023 REPORTED RESULTS
REGULATION G
RECONCILIATION
(Dollars and shares in thousands,
except per-share amounts)
(Unaudited)
The non-GAAP table below discloses the
impacts on net earnings for fiscal 2023 from several items,
including the impairment of goodwill and other intangible assets,
realignment charges, and non-recurring charges associated with
major scope changes for two strategic projects initiated by
departed senior leadership. It also includes the effects of the
loss from Argentine peso hyperinflation and non-recurring tax
benefit items. Amounts may be impacted by rounding. The Company
believes that presenting non-GAAP adjusted net earnings, alongside
the corresponding reported GAAP measures, provides useful insights
for both management and investors when evaluating performance.
Thirteen
Fifty-two
weeks ended
Diluted
weeks ended
Diluted
December 30,
earnings per
December 30,
earnings per
2023
share1
2023
share1
Net earnings attributable to Valmont
Industries, Inc. including change in redemption value of redeemable
noncontrolling interests - as reported
$
28,587
$
1.38
$
143,475
$
6.78
Less: Change in redemption value of
redeemable noncontrolling interests
7,374
0.36
7,374
0.35
Net earnings attributable to Valmont
Industries, Inc.
35,961
1.73
150,849
7.13
Impairment of goodwill and other
intangible assets
—
—
140,844
6.66
Realignment charges
31,030
1.49
35,210
1.66
Other non-recurring charges
5,626
0.27
5,626
0.27
Total adjustments, pre-tax
36,656
1.77
181,680
8.59
Tax effect of adjustments2
(9,118
)
(0.44
)
(14,550
)
(0.69
)
Loss from Argentine peso hyperinflation,
net of tax, attributable to Valmont Industries, Inc.
2,535
0.12
2,535
0.12
Non-recurring tax benefit items
—
—
(3,588
)
(0.17
)
Net earnings attributable to Valmont
Industries, Inc. - adjusted
$
66,034
$
3.18
$
316,926
$
14.98
Average shares outstanding - diluted
20,764
21,159
The Company previously adjusted non-GAAP
financial measures to exclude Prospera intangible asset
amortization and stock-based compensation for Prospera employees,
providing investors with a clearer view of the Agriculture
segment’s performance related to traditional products. Following
the annual impairment testing of intangible asset values as of
September 2, 2023, the Company significantly reduced the value of
Prospera intangible assets. Additionally, realignment activities
approved by the Board of Directors in the third quarter of fiscal
2023 impacted future stock compensation for Prospera employees. As
a result, the Company no longer considers these historical
adjustments related to Prospera to be relevant for understanding
the Agriculture segment’s performance in the fourth quarter of
fiscal 2023, the second half of fiscal 2023, or in future periods.
Since these adjustments were included in net earnings for the first
half of fiscal 2023, the Company has removed their impact when
presenting the “further adjusted” net earnings for fiscal 2023
below.
Thirteen
Fifty-two
weeks ended
Diluted
weeks ended
Diluted
December 30,
earnings per
December 30,
earnings per
2023
share1
2023
share1
Net earnings attributable to Valmont
Industries, Inc. - adjusted
$
66,034
$
3.18
$
316,926
$
14.98
Prospera intangible asset amortization
—
—
3,290
0.16
Prospera stock-based compensation
—
—
4,278
0.20
Tax effect of adjustments2
—
—
(1,092
)
(0.05
)
Net earnings attributable to Valmont
Industries, Inc. - further adjusted
$
66,034
$
3.18
$
323,402
$
15.28
Average shares outstanding - diluted
20,764
21,159
1Diluted earnings per share includes
rounding.
2The tax effect of adjustments is
calculated based on the income tax rate in each applicable
jurisdiction.
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
SUMMARY OF EFFECT OF
SIGNIFICANT NON-RECURRING ITEMS ON 2023 REPORTED RESULTS
REGULATION G
RECONCILIATION
(Dollars in thousands)
(Unaudited)
The non-GAAP tables below disclose the
impacts on operating income (loss) for fiscal 2023 from several
items, including the impairment of goodwill and other intangible
assets, realignment charges, and other non-recurring charges
associated with major scope changes for two strategic projects
initiated by departed senior leadership. Amounts may be impacted by
rounding. The Company believes that presenting non-GAAP adjusted
operating income (loss), alongside the corresponding reported GAAP
measures, provides useful insights for both management and
investors when evaluating performance.
Thirteen weeks ended December
30, 2023
Operating Income (Loss)
Reconciliation
Infrastructure
Agriculture
Corporate
Consolidated
Operating income (loss) - as reported
$
82,550
$
13,946
$
(32,948
)
$
63,548
Realignment charges
16,191
8,194
6,645
31,030
Other non-recurring charges
—
5,626
—
5,626
Adjusted operating income (loss)
$
98,741
$
27,766
$
(26,303
)
$
100,204
Net sales - as reported
745,713
269,813
—
1,015,526
Operating income (loss) as a % of net
sales
11.1
%
5.2
%
NM
6.3
%
Adj. operating inc. (loss) as a % of net
sales
13.2
%
10.3
%
NM
9.9
%
Fifty-two weeks ended December
30, 2023
Operating Income (Loss)
Reconciliation
Infrastructure
Agriculture
Corporate
Consolidated
Operating income (loss) - as reported
$
396,253
$
16,850
$
(121,546
)
$
291,557
Impairment of goodwill and other
intangible assets
3,571
137,273
—
140,844
Realignment charges
17,260
9,101
8,849
35,210
Other non-recurring charges
—
5,626
—
5,626
Adjusted operating income (loss)
$
417,084
$
168,850
$
(112,697
)
$
473,237
Net sales - as reported
2,999,637
1,174,961
—
4,174,598
Operating income (loss) as a % of net
sales
13.2
%
1.4
%
NM
7.0
%
Adj. operating inc. (loss) as a % of net
sales
13.9
%
14.4
%
NM
11.3
%
The Company previously adjusted non-GAAP
financial measures to exclude Prospera intangible asset
amortization and stock-based compensation for Prospera employees,
providing investors with a clearer view of the Agriculture
segment’s performance related to traditional products. Following
the annual impairment testing of intangible asset values as of
September 2, 2023, the Company significantly reduced the value of
Prospera intangible assets. Additionally, realignment activities
approved by the Board of Directors in the third quarter of fiscal
2023 impacted future stock compensation for Prospera employees. As
a result, the Company no longer considers these historical
adjustments related to Prospera to be relevant for understanding
the Agriculture segment’s performance in the fourth quarter of
fiscal 2023, the second half of fiscal 2023, or in future periods.
Since these adjustments were included in operating income (loss)
for the first half of fiscal 2023, the Company has removed their
impact when presenting “further adjusted” operating income (loss)
for fiscal 2023 below.
Fifty-two weeks ended December
30, 2023
Operating Income (Loss)
Reconciliation
Infrastructure
Agriculture
Corporate
Consolidated
Adjusted operating income (loss)
$
417,084
$
168,850
$
(112,697
)
$
473,237
Prospera intangible asset amortization
—
3,290
—
3,290
Prospera stock-based compensation
—
4,278
—
4,278
Further adjusted operating income
(loss)
$
417,084
$
176,418
$
(112,697
)
$
480,805
Net sales - as reported
2,999,637
1,174,961
—
4,174,598
Adj. operating inc. (loss) as a % of net
sales
13.9
%
14.4
%
NM
11.3
%
Further adj. oper. inc. (loss) as a % of
net sales
13.9
%
15.0
%
NM
11.5
%
NM = not meaningful
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
REGULATION G RECONCILIATION OF
ADJUSTED EBITDA
(Dollars in thousands)
(Unaudited)
Thirteen weeks
ended
Fifty-two weeks
ended
December 28,
December 28,
2024
2024
Net cash flows from operating
activities
$
193,414
$
572,678
Interest expense
12,342
58,722
Income tax expense
27,199
117,978
Deferred income taxes
8,696
24,655
Redeemable noncontrolling interests
(782
)
(2,365
)
Net periodic pension cost
(158
)
(640
)
Contribution to defined benefit pension
plan
60
19,599
Changes in assets and liabilities
(78,881
)
(128,232
)
Other
(11,638
)
(12,172
)
Proforma divestitures adjustment
59
(2,346
)
Adjusted EBITDA
$
150,311
$
647,877
Net earnings attributable to Valmont
Industries, Inc.
$
77,653
$
348,259
Interest expense
12,342
58,722
Income tax expense
27,199
117,978
Depreciation and amortization
24,854
95,395
Stock-based compensation
8,204
29,869
Proforma divestitures adjustment
59
(2,346
)
Adjusted EBITDA
$
150,311
$
647,877
Net sales
$
1,037,294
$
4,075,034
Adjusted EBITDA
$
150,311
$
647,877
Adjusted EBITDA margin
14.5
%
15.9
%
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
REGULATION G RECONCILIATION OF
LEVERAGE RATIO
(Dollars in thousands)
(Unaudited)
December 28,
2024
Interest-bearing debt, excluding
origination fees and discounts of $25,613
$
757,915
Less: Cash and cash equivalents in excess
of $50,000
114,315
Net indebtedness
$
643,600
Adjusted EBITDA
647,877
Leverage ratio
0.99
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
REGULATION G RECONCILIATION OF
FREE CASH FLOW
(Dollars in thousands)
(Unaudited)
Fifty-two weeks ended
December 28,
December 30,
2024
2023
Net cash flows from operating
activities
$
572,678
$
306,775
Net cash flows from investing
activities
(78,878
)
(115,281
)
Net cash flows from financing
activities
(522,560
)
(176,405
)
Net cash flows from operating
activities
$
572,678
$
306,775
Purchases of property, plant, and
equipment
(79,451
)
(96,771
)
Free cash flow
$
493,227
$
210,004
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
BACKLOG
(Dollars in millions)
(Unaudited)
December 28,
December 30,
2024
2023
Infrastructure
$
1,273.3
$
1,299.6
Agriculture
163.4
165.9
Total backlog
$
1,436.7
$
1,465.5
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
REGULATION G RECONCILIATION OF
CONSTANT CURRENCY
(Dollars in thousands)
(Unaudited)
Fiscal 2025 Net Sales
Outlook
Low End
High End
Infrastructure
Agriculture
Consolidated
Infrastructure
Agriculture
Consolidated
Net sales
$
3,025,000
$
975,000
$
4,000,000
$
3,160,000
$
1,040,000
$
4,200,000
Impact of foreign exchange
35,000
25,000
60,000
35,000
25,000
60,000
Net sales - constant currency
$
3,060,000
$
1,000,000
$
4,060,000
$
3,195,000
$
1,065,000
$
4,260,000
Net sales - year-over-year change
0.9
%
(9.4
)%
(1.8
)%
5.4
%
(3.4
)%
3.1
%
Impact of foreign exchange
1.2
%
2.3
%
1.5
%
1.2
%
2.3
%
1.5
%
Net sales - constant currency
2.1
%
(7.1
)%
(0.4
)%
6.6
%
(1.1
)%
4.5
%
The foreign exchange impact assumes the
following currency exchange rates for the most significant
translation effects: BRL/USD: 5.90, AUD/USD: 1.58, and EUR/USD:
0.96
VALMONT INDUSTRIES, INC. AND
SUBSIDIARIES
REGULATION G RECONCILIATION OF
RETURN ON INVESTED CAPITAL
(Dollars in thousands)
(Unaudited)
Fifty-two
weeks ended
December 28,
2024
Operating income
$
524,584
Effective tax rate
25.2
%
Tax effect on operating income
(132,050
)
After-tax operating income
$
392,534
Average invested capital
$
2,396,436
Return on invested capital
16.4
%
Total assets
$
3,329,972
Less: Defined benefit pension asset
(46,520
)
Less: Accounts payable
(372,197
)
Less: Accrued expenses
(275,407
)
Less: Contract liabilities
(126,932
)
Less: Income taxes payable
(22,509
)
Less: Dividends payable
(12,019
)
Less: Deferred income taxes
(6,344
)
Less: Operating lease liabilities
(134,534
)
Less: Deferred compensation
(33,302
)
Less: Other non-current liabilities
(20,813
)
Total invested capital
$
2,279,395
Beginning invested capital
2,513,477
Average invested capital
$
2,396,436
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250218576019/en/
Renee Campbell renee.campbell@valmont.com
Valmont Industries (NYSE:VMI)
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