VALMONT INDUSTRIES INC [VMI] Filings

10-Q 1 vmi-20220924x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 24, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to

Commission file number 1-31429

Valmont Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-0351813
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
15000 Valmont Plaza,
Omaha, Nebraska	68154
(Address of Principal Executive Offices)	(Zip Code)

(402) 963-1000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock $1.00 par value		VMI		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐	Non‑accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

21,333,058

Outstanding shares of common stock as of October 27, 2022

Table of Contents

VALMONT INDUSTRIES, INC

INDEX TO FORM 10-Q

		Page No.
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Statements of Earnings for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021	3
	Condensed Consolidated Statements of Comprehensive Income for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021	4
	Condensed Consolidated Balance Sheets as of September 24, 2022 and December 25, 2021	5
	Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended September 24, 2022 and September 25, 2021	6
	Condensed Consolidated Statements of Shareholders’ Equity for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

	PART II. OTHER INFORMATION
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	39
Signatures		40

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(Unaudited)


	Thirteen weeks ended				Thirty-nine weeks ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Product sales	$	999,131	$	782,694	$	2,926,290	$	2,283,460
Services sales		98,251		86,088		287,444		254,837
Net sales		1,097,382		868,782		3,213,734		2,538,297
Product cost of sales		739,353		585,986		2,193,846		1,712,721
Services cost of sales		72,551		55,392		192,623		163,971
Total cost of sales		811,904		641,378		2,386,469		1,876,692
Gross profit		285,478		227,404		827,265		661,605
Selling, general and administrative expenses		175,506		151,209		503,732		425,574
Operating income		109,972		76,195		323,533		236,031
Other income (expenses):
Interest expense		(11,629)		(11,031)		(34,278)		(31,466)
Interest income		507		397		1,019		894
Gain (loss) on investments - unrealized		(901)		488		(4,306)		1,556
Other		2,822		2,644		8,537		10,297
		(9,201)		(7,502)		(29,028)		(18,719)
Earnings before income taxes		100,771		68,693		294,505		217,312
Income tax expense:
Current		33,278		21,109		83,311		55,069
Deferred		(5,455)		(5,029)		(2,780)		(8,747)
		27,823		16,080		80,531		46,322
Earnings before equity in earnings of nonconsolidated subsidiaries		72,948		52,613		213,974		170,990
Equity in loss of nonconsolidated subsidiaries		(18)		(360)		(931)		(1,079)
Net earnings		72,930		52,253		213,043		169,911
Less: earnings attributable to noncontrolling interests		(818)		(603)		(2,512)		(1,137)
Net earnings attributable to Valmont Industries, Inc.	$	72,112	$	51,650	$	210,531	$	168,774
Earnings per share:
Basic	$	3.38	$	2.44	$	9.88	$	7.97
Diluted	$	3.34	$	2.40	$	9.77	$	7.86

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


	Thirteen Weeks Ended				Thirty-nine weeks ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Net earnings	$	72,930	$	52,253	$	213,043	$	169,911
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
Unrealized translation loss		(46,000)		(15,018)		(78,050)		(16,961)
Gain (loss) on hedging activities:
Cash flow hedges		—		307		—		16
Amortization cost included in interest expense		(16)		(16)		(48)		(48)
Commodity hedges		(2,233)		(5,754)		(1,185)		20,500
Realized (gain) loss on commodity hedges recorded in earnings		1,546		(9,870)		1,048		(10,140)
Cross currency swaps		5,592		2,530		10,873		4,041
Defined Benefit Pension Plan:
Actuarial loss		115		163		371		1,838
Other comprehensive loss		(40,996)		(27,658)		(66,991)		(754)
Comprehensive income		31,934		24,595		146,052		169,157
Comprehensive (income) loss attributable to noncontrolling interests		242		268		(514)		(819)
Comprehensive income attributable to Valmont Industries, Inc.	$	32,176	$	24,863	$	145,538	$	168,338

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)


	September 24,		December 25,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	166,221	$	177,232
Receivables, net		614,411		571,593
Inventories		746,282		728,834
Contract assets		215,684		142,643
Prepaid expenses and other assets		107,476		83,646
Refundable income taxes		—		8,815
Total current assets		1,850,074		1,712,763
Property, plant and equipment, at cost		1,426,883		1,422,101
Less accumulated depreciation and amortization		830,033		823,496
Net property, plant and equipment		596,850		598,605
Goodwill		728,587		708,566
Other intangible assets, net		182,796		175,364
Other assets		263,422		251,951
Total assets	$	3,621,729	$	3,447,249

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	2,106	$	4,884
Notes payable to banks		4,935		13,439
Accounts payable		376,508		347,841
Accrued employee compensation and benefits		125,565		144,559
Contract liabilities		200,341		135,746
Other accrued expenses		136,335		108,771
Income taxes payable		10,668		—
Dividends payable		11,733		10,616
Total current liabilities		868,191		765,856
Deferred income taxes		48,542		47,849
Long-term debt, excluding current installments		935,129		947,072
Defined benefit pension liability		—		536
Operating lease liabilities		156,860		147,759
Deferred compensation		28,754		35,373
Other noncurrent liabilities		11,502		89,207
Shareholders’ equity:
Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued		27,900		27,900
Additional paid in capital		13,251		1,479
Retained earnings		2,569,641		2,394,307
Accumulated other comprehensive loss		(328,120)		(263,127)
Treasury stock		(769,941)		(773,712)
Total Valmont Industries, Inc. shareholders’ equity		1,512,731		1,386,847
Noncontrolling interest in consolidated subsidiaries		60,020		26,750
Total shareholders’ equity		1,572,751		1,413,597
Total liabilities and shareholders’ equity	$	3,621,729	$	3,447,249

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Thirty-nine weeks ended
	September 24,		September 25,
	2022		2021
Cash flows from operating activities:
Net earnings	$	213,043	$	169,911
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization		72,803		67,764
Stock-based compensation		29,998		17,895
Defined benefit pension plan benefit		(7,597)		(11,051)
Contribution to defined benefit pension plan		(17,155)		(970)
Loss (gain) on sale of property, plant and equipment		790		(1,250)
Equity in loss in nonconsolidated subsidiaries		931		1,079
Deferred income taxes		(2,780)		(8,747)
Changes in assets and liabilities:
Receivables		(60,450)		(30,709)
Inventories		(31,143)		(211,273)
Prepaid expenses and other assets (current and non-current)		6,738		(21,589)
Contract assets		(76,887)		(33,199)
Accounts payable		37,787		76,916
Accrued expenses		10,904		15,523
Contract liabilities		(10,051)		6,768
Other noncurrent liabilities		(9,312)		10,228
Income taxes payable/refundable		26,107		14,533
Net cash flows from operating activities		183,726		61,829
Cash flows from investing activities:
Purchase of property, plant and equipment		(67,122)		(80,509)
Proceeds from sale of assets		71		1,655
Acquisitions, net of cash acquired		(39,287)		(312,500)
Other, net		(108)		1,891
Net cash flows from investing activities		(106,446)		(389,463)
Cash flows from financing activities:
Proceeds from short-term borrowings		4,137		3,191
Payments on short-term borrowings		(12,366)		(23,654)
Proceeds from long-term borrowings		235,470		236,710
Principal payments on long-term borrowings		(251,155)		(66,128)
Settlement of financial derivatives		2,243		—
Dividends paid		(34,080)		(30,794)
Purchase of noncontrolling interests		(7,338)		—
Purchase of treasury shares		(20,491)		(24,101)
Proceeds from exercises under stock plans		8,778		22,747
Purchase of common treasury shares—stock plan exercises		(4,341)		(16,955)
Net cash flows from financing activities		(79,143)		101,016
Effect of exchange rate changes on cash and cash equivalents		(9,148)		(4,313)
Net change in cash and cash equivalents		(11,011)		(230,931)
Cash and cash equivalents—beginning of year		177,232		400,726
Cash and cash equivalents—end of period	$	166,221	$	169,795

See accompanying notes to condensed consolidated financial statements

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)


							Accumulated				Noncontrolling
			Additional				other				interest in		Total
	Common		paid-in		Retained		comprehensive		Treasury		consolidated		shareholders’
	stock		capital		earnings		loss		stock		subsidiaries		equity
Balance at June 26, 2021	$	27,900	$	—	$	2,337,015	$	(283,435)	$	(786,857)	$	26,861	$	1,321,484
Net earnings		—		—		51,650		—		—		603		52,253
Other comprehensive loss		—		—		—		(26,787)		—		(871)		(27,658)
Cash dividends declared ($0.50 per share)		—		—		(10,617)		—		—		—		(10,617)
Purchase of treasury shares; 10,759 shares acquired		—		—		—		—		(2,500)		—		(2,500)
Stock plan exercises; 144 shares acquired		—		—		—		—		(33)		—		(33)
Stock options exercised; 20,749 shares issued		—		(2,194)		27		—		5,023		—		2,856
Stock option expense		—		618		—		—		—		—		618
Stock awards; 494 shares issued		—		8,244		—		—		85		—		8,329
Balance at September 25, 2021	$	27,900	$	6,668	$	2,378,075	$	(310,222)	$	(784,282)	$	26,593	$	1,344,732
Balance at June 25, 2022	$	27,900	$	4,321	$	2,509,262	$	(288,184)	$	(764,917)	$	64,768		1,553,150
Net earnings		—		—		72,112		—		—		818		72,930
Other comprehensive loss		—		—		—		(39,936)		—		(1,060)		(40,996)
Cash dividends declared ($0.55 per share)		—		—		(11,733)		—		—		—		(11,733)
Purchase of noncontrolling interest		—		1,410		—		—		—		(4,456)		(3,046)
Addition of noncontrolling interest due to acquisition		—		—		—		—		—		(50)		(50)
Purchase of treasury shares; 38,606 shares acquired		—		—		—		—		(10,715)		—		(10,715)
Stock plan exercises; 507 shares acquired		—		—		—		—		(136)		—		(136)
Stock options exercised; 20,448 shares issued		—		(2,859)		—		—		5,791		—		2,932
Stock option expense		—		749		—		—		—		—		749
Stock awards; 270 shares issued		—		9,630		—		—		36		—		9,666
Balance at September 24, 2022	$	27,900	$	13,251	$	2,569,641	$	(328,120)	$	(769,941)	$	60,020	$	1,572,751

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)


							Accumulated				Noncontrolling
			Additional				other				interest in		Total
	Common		paid-in		Retained		comprehensive		Treasury		consolidated		shareholders’
	stock		capital		earnings		loss		stock		subsidiaries		equity
Balance at December 26, 2020	$	27,900	$	335	$	2,245,035	$	(309,786)	$	(781,422)	$	25,774	$	1,207,836
Net earnings		—		—		168,774		—		—		1,137		169,911
Other comprehensive loss		—		—		—		(436)		—		(318)		(754)
Cash dividends declared ($1.50 per share)		—		—		(31,848)		—		—		—		(31,848)
Purchase of treasury shares; 103,056 shares acquired		—		—		—		—		(24,100)		—		(24,100)
Stock plan exercises; 71,412 shares acquired		—		—		—		—		(16,955)		—		(16,955)
Stock options exercised; 164,872 shares issued		—		(10,294)		(3,886)		—		36,927		—		22,747
Stock option expense		—		1,885		—		—		—		—		1,885
Stock awards; 9,554 shares issued		—		14,742		—		—		1,268		—		16,010
Balance at September 25, 2021	$	27,900	$	6,668	$	2,378,075	$	(310,222)	$	(784,282)	$	26,593	$	1,344,732
Balance at December 25, 2021	$	27,900	$	1,479	$	2,394,307	$	(263,127)	$	(773,712)	$	26,750

VALMONT INDUSTRIES INC [VMI] Filings
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10-Q	[2022-04-27]
10-K	[2022-02-23]
10-Q	[2021-10-28]
10-Q	[2021-07-29]
10-Q	[2021-04-29]
10-K	[2021-02-24]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-29]
10-K	[2020-02-26]
10-Q	[2019-10-31]
10-Q	[2019-07-31]
10-Q	[2019-05-02]
10-K	[2019-02-27]
10-Q	[2018-11-01]
10-Q	[2018-08-01]
10-Q	[2018-04-27]
10-K	[2018-02-28]
10-Q	[2017-11-02]
10-Q	[2017-07-27]
10-Q	[2017-04-28]
10-K	[2017-03-01]
10-Q	[2016-10-27]
10-Q	[2016-07-28]
10-Q	[2016-04-28]
10-K	[2016-02-24]
10-Q	[2015-10-30]
10-Q	[2015-07-29]
10-Q	[2015-04-30]
10-K	[2015-02-25]
10-Q	[2014-10-30]
10-Q	[2014-07-30]
10-Q	[2014-04-30]
10-K	[2014-02-25]
10-Q	[2013-10-24]
10-Q	[2013-07-25]
10-Q	[2013-05-02]
10-K	[2013-02-26]
10-Q	[2012-10-29]
10-Q	[2012-07-27]
10-Q	[2012-04-30]
10-K	[2012-02-28]