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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 June 25, 2022
or
    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)

(402963-1000
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock $1.00 par valueVMINew 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 x No o
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 x No o
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 filerNon‑accelerated filerSmaller 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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
No x
21,350,725
Outstanding shares of common stock as of July 21, 2022

1


VALMONT INDUSTRIES, INC

INDEX TO FORM 10-Q
Page No.
PART I. FINANCIAL INFORMATION
Item 1.
weeks ended June 25, 2022 and June 26, 2021
and twenty-six weeks ended June 25, 2022 and June 26, 2021
Condensed Consolidated Balance Sheets as of June 25, 2022 and
December 25, 2021
Condensed Consolidated Statements of Cash Flows for the twenty-six weeks
ended June 25, 2022 and June 26, 2021
Condensed Consolidated Statements of Shareholders' Equity for the thirteen
and twenty-six weeks ended June 25, 2022 and June 26, 2021
Notes to Condensed Consolidated Financial Statements
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 5.
Other Information
Item 6.
Exhibits
Signatures
2




VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen weeks endedTwenty-six weeks ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Product sales$1,036,289 $805,801 $1,927,159 $1,500,766 
Services sales99,243 88,828 189,193 168,749 
Net sales1,135,532 894,629 2,116,352 1,669,515 
Product cost of sales781,323 608,101 1,454,493 1,126,735 
Services cost of sales61,608 56,881 120,072 108,579 
Total cost of sales842,931 664,982 1,574,565 1,235,314 
Gross profit292,601 229,647 541,787 434,201 
Selling, general and administrative expenses173,882 147,022 328,226 274,365 
Operating income118,719 82,625 213,561 159,836 
Other income (expenses):
Interest expense(11,386)(10,436)(22,649)(20,435)
Interest income285 186 512 497 
Gain (loss) on investments - unrealized(2,342)1,177 (3,405)1,068 
Other2,073 4,204 5,715 7,653 
(11,370)(4,869)(19,827)(11,217)
Earnings before income taxes107,349 77,756 193,734 148,619 
Income tax expense:
Current27,620 25,413 50,033 33,960 
Deferred1,967 (10,673)2,675 (3,718)
29,587 14,740 52,708 30,242 
Earnings before equity in earnings of nonconsolidated subsidiaries77,762 63,016 141,026 118,377 
Equity in loss of nonconsolidated subsidiaries(555)(359)(913)(719)
Net earnings77,207 62,657 140,113 117,658 
Less: earnings attributable to noncontrolling interests(1,099)(547)(1,694)(534)
Net earnings attributable to Valmont Industries, Inc.$76,108 $62,110 $138,419 $117,124 
Earnings per share:
Basic$3.57 $2.93 $6.50 $5.53 
Diluted$3.53 $2.89 $6.43 $5.46 

See accompanying notes to condensed consolidated financial statements.
3


VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
Thirteen Weeks EndedTwenty-six weeks ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Net earnings
$77,207 $62,657 $140,113 $117,658 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
  Unrealized translation gain (loss)(43,666)10,690 (32,050)(1,943)
         Gain (loss) on hedging activities:
   Cash flow hedges (313) (291)
Amortization cost included in interest expense(16)(16)(32)(32)
     Commodity hedges(19,512)16,308 1,048 26,254 
     Realized (gain) loss on commodity hedges recorded in earnings1,545 (270)(498)(270)
     Cross currency swaps3,470 (2,095)5,281 1,511 
         Defined Benefit Pension Plan:
Actuarial gain on defined benefit pension plan124 843 256 1,675 
Other comprehensive income (loss)(58,055)25,147 (25,995)26,904 
Comprehensive income
19,152 87,804 114,118 144,562 
Comprehensive (income) loss attributable to noncontrolling interests932 (1,573)(756)(1,087)
Comprehensive income attributable to Valmont Industries, Inc.
$20,084 $86,231 $113,362 $143,475 











See accompanying notes to condensed consolidated financial statements.
4


VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
June 25,
2022
December 25,
2021
ASSETS
Current assets:
Cash and cash equivalents$154,579 $177,232 
 Receivables, net627,876 571,593 
Inventories786,600 728,834 
   Contract assets200,522 142,643 
Prepaid expenses and other assets87,070 83,646 
     Refundable income taxes 8,815 
        Total current assets1,856,647 1,712,763 
Property, plant and equipment, at cost1,452,413 1,422,101 
Less accumulated depreciation and amortization844,850 823,496 
Net property, plant and equipment607,563 598,605 
Goodwill741,743 708,566 
Other intangible assets, net192,333 175,364 
Other assets276,466 251,951 
Total assets$3,674,752 $3,447,249 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt$3,018 $4,884 
Notes payable to banks4,428 13,439 
Accounts payable388,498 347,841 
Accrued employee compensation and benefits107,108 144,559 
   Contract liabilities 175,814 135,746 
Other accrued expenses130,114 108,771 
Income taxes payable10,036  
         Dividends payable11,743 10,616 
Total current liabilities830,759 765,856 
Deferred income taxes55,641 47,849 
Long-term debt, excluding current installments995,647 947,072 
Defined benefit pension liability 536 
Operating lease liabilities154,799 147,759 
Deferred compensation33,778 35,373 
Other noncurrent liabilities50,978 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 capital4,321 1,479 
Retained earnings2,509,262 2,394,307 
Accumulated other comprehensive loss(288,184)(263,127)
Treasury stock(764,917)(773,712)
     Total Valmont Industries, Inc. shareholders’ equity1,488,382 1,386,847 
Noncontrolling interest in consolidated subsidiaries64,768 26,750 
Total shareholders’ equity1,553,150 1,413,597 
Total liabilities and shareholders’ equity$3,674,752 $3,447,249 
See accompanying notes to condensed consolidated financial statements.
5


VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Twenty-six weeks ended
June 25,
2022
June 26,
2021
Cash flows from operating activities:
Net earnings$140,113 $117,658 
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization48,012 44,063 
Stock-based compensation19,583 8,948 
Defined benefit pension plan benefit(5,242)(7,400)
Contribution to defined benefit pension plan(17,155)(970)
           Loss (gain) on sale of property, plant and equipment737 (1,330)
Equity in loss in nonconsolidated subsidiaries913 719 
Deferred income taxes2,675 (3,718)
Changes in assets and liabilities:
Receivables(53,809)(45,398)
Inventories(56,625)(142,218)
  Prepaid expenses and other assets (current and non-current)5,369 (19,680)
  Contract assets(59,536)(17,165)
Accounts payable39,875 55,445 
Accrued expenses(16,034)(18,119)
  Contract liabilities4,798 24,963 
Other noncurrent liabilities(6,447)52,229 
   Income taxes payable/refundable20,792 22,158 
Net cash flows from operating activities68,019 70,185 
Cash flows from investing activities:
Purchase of property, plant and equipment(49,676)(48,824)
Proceeds from sale of assets45 1,595 
Acquisitions, net of cash acquired(39,297)(312,500)
Other, net1,117 (1,669)
Net cash flows from investing activities(87,811)(361,398)
Cash flows from financing activities:
Proceeds from short-term borrowings 11,972 
Payments on short-term borrowings(9,155)(17,021)
Proceeds from long-term borrowings201,462 149,342 
Principal payments on long-term borrowings(156,973)(15,421)
Dividends paid(22,337)(20,181)
Purchase of noncontrolling interest(4,292) 
Purchase of treasury shares(9,776)(21,600)
Proceeds from exercises under stock plans5,846 19,891 
Purchase of common treasury shares—stock plan exercises(4,205)(16,922)
Net cash flows from financing activities570 90,060 
Effect of exchange rate changes on cash and cash equivalents(3,431)(288)
Net change in cash and cash equivalents(22,653)(201,441)
Cash and cash equivalents—beginning of year177,232 400,726 
Cash and cash equivalents—end of period$154,579 $199,285 
See accompanying notes to condensed consolidated financial statements
6


VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Dollars in thousands)
(Unaudited)

Common
stock
Additional
paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Treasury
stock
Noncontrolling
interest in
consolidated
subsidiaries
Total
shareholders’
equity
Balance at March 27, 2021$27,900 $ $2,282,355 $(307,556)$(777,885)$25,288 $1,250,102 
Net earnings— — 62,110 — — 547 62,657 
Other comprehensive income (loss)— — — 24,121 — 1,026 25,147 
Cash dividends declared ($0.5 per share)
— — (10,606)— — — (10,606)
Purchase of treasury shares; 42,150 shares acquired
— — — — (10,469)— (10,469)
Stock plan exercises; 63,783 shares acquired
— — — — (197)— (197)
Stock options exercised; 1,245 shares issued
— (3,500)3,156 — 917 — 573 
Stock option expense— 619 — — — — 619 
Stock awards; 6,351 shares issued
— 2,881 — — 777 — 3,658 
Balance at June 26, 2021$27,900 $ $2,337,015 $(283,435)$(786,857)$26,861 $1,321,484 
Balance at March 26, 2022$27,900 $5,251 $2,444,897 $(232,160)$(769,835)$28,438 1,504,491 
Net earnings— — 76,108 — — 1,099 77,207 
Other comprehensive income (loss)— — — (56,024)— (2,031)(58,055)
Cash dividends declared ($0.55 per share)
— — (11,743)— — — (11,743)
Purchase of noncontrolling interest— 189  — — (4,481)(4,292)
Addition of noncontrolling interest due to acquisition— — — — — 41,743 41,743 
Purchase of treasury shares; 38,804 shares acquired
— — — — (9,776)— (9,776)
Stock plan exercises; 7,080 shares acquired
— — — — (1,678)— (1,678)
Stock options exercised; 42,961 shares issued
— (1,551) — 6,684 — 5,133 
Stock option expense— 836 — — — — 836 
Stock awards; 42,145 shares issued
— (404)— — 9,688 — 9,284 
Balance at June 25, 2022$27,900 $4,321 $2,509,262 $(288,184)$(764,917)$64,768 $1,553,150 












See accompanying notes to the condensed consolidated financial statements.






Common
stock
Additional
paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Treasury
stock
Noncontrolling
interest in
consolidated
subsidiaries
Total
shareholders’
equity
Balance at December 26, 2020$27,900 $335 $2,245,035 $(309,786)$(781,422)$25,774 $1,207,836 
Net earnings— — 117,124 — — 534 117,658 
Other comprehensive income (loss)— — — 26,351 — 553 26,904 
Cash dividends declared ($1.00 per share)
— — (21,231)— — — (21,231)
Purchase of treasury shares; 92,297 shares acquired
— — — — (21,600)— (21,600)
Stock plan exercises; 71,268 shares acquired
— — — — (16,922)— (16,922)
Stock options exercised; 144,123 shares issued
— (8,100)(3,913)— 31,904 — 19,891 
Stock option expense— 1,267 — — — — 1,267 
Stock awards; 9,060 shares issued
— 6,498 — — 1,183 — 7,681 
Balance at June 26, 2021$27,900 $ $2,337,015 $(283,435)$(786,857)$26,861 $1,321,484 
Balance at December 25, 2021$27,900 $1,479 $2,394,307 $(263,127)$(773,712)$26,750 $1,413,597 
Net earnings— — 138,419 — — 1,694 140,113 
Other comprehensive income (loss)— — — (25,057)— (938)(25,995)
Cash dividends declared ($1.10 per share)
— — (23,464)— — — (23,464)
Purchase of noncontrolling interest— 189  — — (4,481)(4,292)
Addition of noncontrolling interest due to acquisition— — — — — 41,743 41,743 
Purchase of treasury shares; 38,804 shares acquired
— — — — (9,776)— (9,776)
Stock plan exercises; 18,775 shares acquired
— — — — (4,205)— (4,205)
Stock options exercised; 48,577 shares issued
— (2,087)— — 7,933 — 5,846 
Stock option expense— 1,552 — — — — 1,552 
Stock awards; 79,893 shares issued
— 3,188 — — 14,843 — 18,031 
Balance at June 25, 2022$27,900 $4,321 $2,509,262 $(288,184)$(764,917)$64,768 $1,553,150 








See accompanying notes to the condensed consolidated financial statements.
7


VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Condensed Consolidated Financial Statements
The Condensed Consolidated Balance Sheet as of June 25, 2022, the Condensed Consolidated Statements of Earnings, Comprehensive Income, and Shareholders' Equity for the thirteen and twenty-six weeks ended June 25, 2022 and June 26, 2021, and the Condensed Consolidated Statement of Cash Flows for the twenty-six weeks then ended have been prepared by Valmont Industries Inc. (the Company), without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of June 25, 2022 and for all periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2021. The results of operations for the period ended June 25, 2022 are not necessarily indicative of the operating results for the full year.
Change in Reportable Segments    
During the first quarter of 2022, the Company's Chief Executive Officer, as the chief operating decision maker ("CODM"), made changes to the Company’s management structure and began to manage the business, allocate resources, and evaluate performance under the new structure. As a result, the Company has realigned its reportable segment structure. All prior period segment information has been recast to reflect this change in reportable segments. Refer to Note 7 for additional information.

Inventories
Inventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods.
Inventories consisted of the following:
June 25,
2022
December 25,
2021
Raw materials and purchased parts
$309,372 $278,107 
Work-in-process
72,632 63,628 
Finished goods and manufactured goods
404,596 387,099 
Total Inventory$786,600 $728,834 
Income Taxes
Earnings before income taxes for the thirteen and twenty-six weeks ended June 25, 2022 and June 26, 2021, were as follows:    
Thirteen weeks endedTwenty-six weeks ended
2022202120222021
United States$62,214 $57,090 $123,031 $108,245 
Foreign45,135 20,666 70,703 40,374 
$107,349 $77,756 $193,734 $148,619 
8


VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

Pension Benefits
The Company incurs expenses in connection with the Delta Pension Plan ("DPP"). The DPP was acquired as part of the Delta plc acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the related benefit obligation, various assumptions are made including discount rates used to value the obligation, expected return on plan assets used to fund these expenses and estimated future inflation rates. These assumptions are based on historical experience as well as current facts and circumstances. An actuarial analysis is used to measure the expense and liability associated with pension benefits.

The components of the net periodic pension (benefit) expense for the thirteen and twenty-six weeks ended June 25, 2022 and June 26, 2021 were as follows:
Thirteen weeks endedTwenty-six weeks ended
Net periodic (benefit) expense:2022202120222021
Interest cost
$3,157 $2,530 $6,522 $5,027 
Expected return on plan assets
(5,818)(7,097)(12,020)(14,102)
Amortization of actuarial loss
124 843 256 1,675 
Net periodic benefit$(2,537)$(3,724)$(5,242)$(7,400)
    Stock Plans
The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. At June 25, 2022, 1,892,141 shares of common stock remained available for issuance under the plans.
    Under the plans, the exercise price of each option equals the closing market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three years or on the grant's fifth anniversary. Expiration of grants is seven years to ten years from the date of grant. Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant.
The Company's compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options and restricted stock for the thirteen and twenty-six weeks ended June 25, 2022 and June 26, 2021, respectively, were as follows:
Thirteen weeks endedTwenty-six weeks ended
2022202120222021
Compensation expense
$10,120 $4,277 $19,583 $8,948 
Income tax benefits
2,530 1,069 4,896 2,237 
Fair Value
The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
9


VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
    Level 1: Quoted market prices in active markets for identical assets or liabilities.
    Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
    Level 3: Unobservable inputs that are not corroborated by market data.
The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.
Trading Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan at June 25, 2022 of $28,383 ($29,982 at December 25, 2021) represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification ("ASC") 320, Accounting for Certain Investments in Debt and Equity Securities, considering the employee's ability to change investment allocation of their deferred compensation at any time. The Company's ownership of shares in Delta EMD Pty. Ltd. (JSE:DTA) is also classified as trading securities. The shares are valued at $93 and $94 as of June 25, 2022 and December 25, 2021, respectively, which is the estimated fair value. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.
Derivative Financial Instruments: The fair value of foreign currency and commodity forward contracts, and cross currency contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate.
Fair Value Measurement Using:
Carrying Value June 25, 2022Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Trading Securities
$28,476 $28,476 $ $ 
Derivative financial instruments, net
3,432  3,432  
Fair Value Measurement Using:
Carrying Value December 25, 2021Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets (Liabilities):
Trading Securities
$30,076 $30,076 $ $ 
Derivative financial instruments, net
(4,007)