Business Wire | Jul 21, 2021 04:16PM EDT

Valmont Reports Second Quarter 2021 Results and Increases 2021 Full-Year Guidance

Jul. 21, 2021

OMAHA, Neb.--(BUSINESS WIRE)--Jul. 21, 2021--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 second quarter ended June 26, 2021.

Second Quarter 2021 Highlights(all metrics compared to Second Quarter 2020 unless otherwise noted)

* Record Net Sales of $894.6 million, an increase of 29.9% with growth in all segments, led by significantly higher sales in Irrigation and Utility Support Structures * Operating Income improved to $82.6 million, or 9.2% of sales ($90.9 million or 10.2% adjusted1) compared to $43.4 million or 6.3% of sales last year ($65.7 million or 9.5% adjusted1), despite continued inflationary pressures * Diluted Earnings per Share (EPS) improved to $2.89 ($3.06 adjusted1) compared to $1.06 ($2.00 adjusted1) * Record global backlog of more than $1.34 billion, an increase of 17.5% since the end of fiscal 2020, reflecting strong market demand * Received purchase orders and project awards totaling $72.0 million to supply Valmont Solar Solutions to the utility and agricultural markets * Generated operating cash flow of $37.0 million; cash and cash equivalents at end of second quarter were $199.3 million * Repurchased 42,150 shares of company stock for $10.5 million, at an average price of $248.47 per share * Recognized a favorable tax rate of 19.0% on a GAAP basis, primarily due to a non-recurring incremental tax benefit of $2.8 million attributed to a change in the United Kingdom tax rate; adjusted tax rate was 22.5%1 * Completed two acquisitions in the Irrigation segment; purchased 100% of the shares of Prospera Technologies, Ltd. and acquired 100% of the assets of PivoTrac * Commenced operations at a new greenfield Coatings facility in Pittsburgh, PA * Raising full-year Net Sales growth guidance from a range of 9% to 14%, to a range of 16% to 19% and increasing GAAP diluted EPS to $9.90 to $10.60 (Adjusted diluted EPS to $10.40 to $11.10)1.

Key Financial Metrics

Second GAAP Adjusted^1Quarter

(000's except per 06/26/2021 06/27/2020 06/26/2021 06/27/2020 vs. 2Qshare 2Q 2021 2Q 2020 vs. 2Q 2Q 2021 2Q 2020 2021amounts) 2021

Net Sales $ 894,629 $ 688,808 29.9 % $ 894,629 $ 688,808 29.9 %

Operating 82,625 43,440 90.2 % 90,850 65,657 38.4 %Income

OperatingIncome as a 9.2 % 6.3 % 10.2 % 9.5 % % of NetSales

Net Earnings 62,110 22,607 174.7 % 65,762 42,847 53.5 %

DilutedEarnings Per $ 2.89 $ 1.06 172.6 % $ 3.06 $ 2.00 53.0 %Share

AverageShares 21,469 21,393 Outstanding



Year-To-Date GAAP Adjusted^1

06/26/2021 06/27/2020 vs. YTD 06/26/2021 06/27/2020 vs. YTD 2021 YTD 2020 2021 YTD 2021 YTD 2020 YTD 2021

Net Sales $ 1,669,515 $ 1,363,008 22.5 % $ 1,669,515 $ 1,363,008 22.5 %

Operating 159,836 110,335 44.9 % 168,061 132,552 26.8 %Income

OperatingIncome as a 9.6 % 8.1 % 10.1 % 9.7 % % of NetSales

Net Earnings 117,124 65,536 78.7 % 120,776 85,776 40.8 %

DilutedEarnings Per $ 5.46 $ 3.05 79.0 % $ 5.63 $ 3.99 41.1 %Share

AverageShares 21,449 21,471 Outstanding

"We achieved record second-quarter sales, grew adjusted operating income nearly 40 percent year-over-year, despite persistent inflationary pressures that meaningfully impacted our Utility business, and delivered adjusted earnings per share growth of more than 50 percent," said Stephen G. Kaniewski, President and Chief Executive Officer. "These solid results reflect the strength of our businesses, our continued focus on pricing actions to help offset inflation and the outstanding execution by our teams around the world. Sales growth was led by significantly higher sales in the Irrigation segment, as strong global agricultural market fundamentals continue to drive positive farmer sentiment, and deliveries of the large Egypt project continued. Higher volumes in Utility Support Structures were driven by continued strong underlying market demand for improving grid resiliency and increasing usage of renewable energy. Record second quarter sales in Engineered Support Structures and a focus on pricing, cost optimization, and the benefits of previous restructuring actions helped improve operating profit margins to nearly 12 percent. Coatings segment sales grew more than 22 percent, led by higher volumes as general economic trends are improving globally. We generated positive free cash flow despite significant increases in working capital to support robust sales growth."

Added Kaniewski, "We completed the acquisition of Prospera Technologies during the quarter, advancing our strategy to accelerate growth and innovation through investments in recurring revenue services. Utilizing their award-winning technology and building on our successful partnership over the past two and a half years, together we have created the most global and vertically-integrated AI company in agriculture, focused on in-season crop performance. As discussed during our virtual Investor Day in May, this acquisition is a testament to our commitment to make the farm more efficient, increase productivity and dramatically improve sustainability. Together, we are expanding beyond our traditional markets, finding new ways to use less inputs in order to achieve higher crop yields. I am excited to welcome the entire Prospera team to Valmont."

Second Quarter 2021 Segment Review

Infrastructure

Utility Support Structures Segment (29.9% of Sales)

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

Sales of $267.9 million grew 15.8% year-over-year, led by higher volumes due to increasing demand for renewable energy generation and utilities' continued investments in grid resiliency, and increased pricing.

Operating Income was $15.0 million or 5.6% of sales ($21.2 million or 7.9% adjusted1) compared to $21.7 million or 9.4% of sales ($25.3 million or 10.9% adjusted1) in 2020. Higher volumes and operational efficiencies were more than offset by the impact of rapid raw material cost inflation of approximately $8.0 million that could not be fully recovered through pricing mechanisms during the quarter, and a higher mix of global generation products. GAAP operating income includes a $5.5 million receivable write-off following arbitration from a 2014 commercial transaction attributed to the offshore wind product line.

Engineered Support Structures Segment(30.1% of Sales)

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

Record sales of $269.4 million increased 6.3% year-over-year, as favorable pricing, higher sales of wireless communication products and components, and $11.5 million of favorable currency impacts primarily from the Australian dollar, more than offset lower volumes in transportation markets.

Lighting and transportation sales of $187.0 million increased 3.3% year-over-year. Favorable pricing in all regions, higher international volumes, mainly in Europe and Australia, and higher commercial lighting sales more than offset lower volumes in North American transportation markets, primarily due to delays in approving the 2020 FAST Act extension.

Wireless communication products and components sales of $54.6 million increased 7.2% year-over-year. Increasing capital investments from wireless carriers and favorable pricing led to the sales growth.

Access Systems sales of $27.9 million increased 29.8% year-over-year, primarily due to favorable currency impacts.

Operating Income improved to a record $31.9 million or 11.9% of sales compared to $4.8 million or 1.9% of sales ($22.9 million or 9.0% adjusted1) in 2020. Profitability improvement was driven by favorable pricing, operational efficiencies, and lower SG&A expense including the benefit of previous restructuring actions.

Coatings Segment(11.0% of Sales)

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

Sales of $98.2 million increased 22.7% year-over-year, due to higher volumes driven by an improving macro-environment compared to last year, favorable pricing and $3.8 million of favorable currency impacts, primarily from the Australian dollar.

Operating Income improved to $14.7 million or 14.9% of sales compared to $10.1 million or 12.7% of sales ($10.4 million or 13.0% adjusted1) in 2020. Profitability improvement was led by higher volumes, favorable pricing and operational efficiencies.

Agriculture

Irrigation Segment(31.5% of Sales)

Center pivots and linear irrigation equipment for agricultural markets, including, parts, services, and tubular products, and advanced technology solutions for water management and precision agriculture

Global sales of $282.0 million increased 87.2% year-over-year, due to higher volumes across all markets, particularly in North America, the Middle East and Brazil, favorable pricing, and higher technology sales.

North American sales of $156.1 million increased 57.6% compared to 2020. Sales growth was led by higher volumes and higher average selling prices due to continued strength in agricultural markets, and higher industrial tubing sales.

International sales of $125.9 million grew 144.0% year-over-year. Sales growth was led by ongoing deliveries of the large project for Egypt, strong demand in Brazil and higher sales in Europe.

Operating Income improved to $42.0 million, or 14.9% of sales ($42.9 million or 15.2% adjusted1) compared to $22.4 million, or 14.8% of sales in 2020. Profitability growth was driven by higher volumes, favorable pricing and improved operational efficiencies, partially offset by higher R&D expense of approximately $3.1 million for technology growth investments and intangible asset amortization.

During the quarter, Valmont completed two acquisitions to advance its technology-enabled growth strategy to accelerate addressable market expansion. The Company purchased 100% of the shares of Prospera Technologies, Ltd., a global leader in artificial intelligence, machine learning and computer vision. The Company also acquired 100% of the assets of PivoTrac, a subscription-based provider of control technology and remote monitoring solutions for the southwest U.S. market.

Global Supply Chain and Continuation of COVID-19 Safety Protocols

Since the start of the pandemic, the Company has been taking measured and deliberate steps to strengthen its global supply chain. Through its strong relationships with many strategic suppliers, Valmont has experienced no significant supply disruptions, and has been able to continue procuring raw materials and components critical to its operations, including steel, aluminum and zinc. Other supply constraints have been largely mitigated by effectively utilizing the Company's global footprint.

Valmont monitors health advisories on a continuous basis, particularly in areas reporting recent increases in infection including the more recent COVID-19 Delta variant. Valmont also continues to follow CDC, WHO and local guidelines to protect the safety, health and well-being of employees, customers, suppliers and communities.

Balance Sheet, Liquidity and Capital Allocation

The Company continues to generate positive operating cash flows through strong earnings and managing working capital to mitigate supply chain disruptions and support sales growth. At the end of second quarter, cash and cash equivalents were $199.3 million. The Company completed the acquisition of Prospera Technologies, Ltd. for $300 million, funded by a combination of cash and short-term borrowings on its revolving credit facility. Valmont purchased $10.5 million of company stock in the second quarter, and $126.4 million remains on the current authorization with no expiration. Subsequent to the Prospera acquisition, Moody's completed a periodic ratings review resulting in no change to the Company's Baa3 credit rating. The Company remains committed to maintaining its Investment Grade rating.

Updating 2021 Financial Outlook and Key Assumptions

The Company is updating its full-year outlook and providing key assumptions for the remainder of 2021. Valmont now expects full-year Net Sales to increase 16% to 19%, and Irrigation segment sales to increase 45% to 50%. GAAP diluted EPS is expected to be $9.90 to $10.60 and adjusted diluted EPS is expected to be $10.40 to $11.101. The increased guidance reflects the Company's strong year-to-date results, strength in global agricultural markets, continued favorable end-market demand across all businesses and expected recovery of cost inflation.

2021 Full Year Financial Outlook Previous Outlook Revised Outlook

Net Sales Growth (vs. PY) 9% to 14% 16% to 19%

Irrigation Segment Sales Growth (vs. PY) 27% to 30% 45% to 50%

GAAP Diluted EPS^1 $9.30 to $10.00 $9.90 to $10.60

Adjusted Diluted EPS^1 NA $10.40 to $11.10

* Favorable foreign currency translation impact of approximately 2.0% of Net Sales * Second half 2021 tax rate of approximately 25.0% as benefits from favorable tax planning strategies will not continue in second half 2021; assumes no tax law changes * Capital expenditures to be in the range of $110 - $120 million to support strategic growth and Industry 4.0 advanced manufacturing initiatives * No closures of large manufacturing facilities, workforce disruptions, or significant supply chain interruptions

Kaniewski added, "The strong market drivers we are seeing across our businesses, and our team's proven ability to manage through this unprecedented inflationary environment gives us confidence about the remainder of this year and provides good tailwinds for us into 2022. On that basis, we are raising both our revenue and earnings guidance for 2021. We entered the third quarter with a robust backlog of more than $1.3 billion, improving planning and supply chain management. In the Utility Support Structures segment, we expect meaningful sequential margin improvement in the second half of 2021 as pricing becomes more aligned with steel cost inflation. Our backlog of more than $675.0 million in this segment is indicative of long-term market drivers of grid resiliency and the increasing use of renewable energy. In Engineered Support Structures, current and future stimulus will continue to benefit global markets and the long-term need for critical infrastructure investment globally gives us confidence in future growth. We are benefiting from increasing demand in wireless communications markets as 5G build-outs continue to ramp. Our Coatings business is trending in-line with improving economic conditions. In Irrigation, the large project for Egypt, a solid international project pipeline and favorable market trends globally are providing strong momentum well into 2022. Across the portfolio, we continue to quickly execute pricing strategies to recover the impact of inflation and leverage the strength of our global supply chain. Additionally, our balance sheet remains strong, giving us flexibility to execute our long-term strategic plan. I'm also proud of our team's continued efforts to elevate ESG across the company, as demonstrated by recent external score improvements and additional highlights we've shared on our Valmont Sustainability site. ESG is an important priority for us and we are encouraged by this recognition as we remain focused on this key initiative."

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, July 22, 2021 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 2Q 2021 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 13713722. The replay will be available through 10:59 p.m. CDT on July 29, 2021.

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, netearnings and EPS to Adjusted figures at end of document

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(unaudited)

Second Quarter

Year-to-Date

13 Weeks Ended

26 Weeks Ended

26-Jun-21

27-Jun-20

26-Jun-21

27-Jun-20

Net sales

$

894,629

$

688,808

$

1,669,515

$

1,363,008

Cost of sales

664,982

504,871

1,235,314

992,822

Gross profit

229,647

183,937

434,201

370,186

Selling, general and administrative expenses

147,022

123,859

274,365

243,213

Impairment of goodwill and intangible assets

-

16,638

-

16,638

Operating income

82,625

43,440

159,836

110,335

Other income (expense)

Interest expense

(10,436

)

(10,098

)

(20,435

)

(20,112

)

Interest income

186

458

497

1,501

Gain on investments (unrealized)

1,177

2,510

1,068

202

Other

4,204

(694

)

7,653

1,116

Other income (expense), net

(4,869

)

(7,824

)

(11,217

)

(17,293

)

Earnings before income taxes

77,756

35,616

148,619

93,042

Income tax expense

14,740

12,602

30,242

27,088

Equity in (loss) of nonconsolidated subsidiaries

(359

)

(260

)

(719

)

(479

)

Net earnings

62,657

22,754

117,658

65,475

Less: Loss (earnings) attributable to non-controlling interests

(547

)

(147

)

(534

)

61

Net earnings attributable to Valmont Industries, Inc.

$

62,110

$

22,607

$

117,124

$

65,536

Average shares outstanding (000's) - Basic

21,193

21,312

21,186

21,383

Earnings per share - Basic

$

2.93

$

1.06

$

5.53

$

3.06

Average shares outstanding (000's) - Diluted

21,469

21,393

21,449

21,471

Earnings per share - Diluted

$

2.89

$

1.06

$

5.46

$

3.05

Cash dividends per share

$

0.500

$

0.450

$

1.000

$

0.900





VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(unaudited)

Second Quarter Year-to-Date

13 Weeks Ended 26 Weeks Ended



26-Jun-21 27-Jun-20 26-Jun-21 27-Jun-20

Net sales $ 894,629 $ 688,808 $ 1,669,515 $ 1,363,008

Cost of sales 664,982 504,871 1,235,314 992,822

Gross profit 229,647 183,937 434,201 370,186

Selling, general andadministrative 147,022 123,859 274,365 243,213 expenses

Impairment ofgoodwill and - 16,638 - 16,638 intangible assets

Operating income 82,625 43,440 159,836 110,335

Other income (expense)

Interest expense (10,436 ) (10,098 ) (20,435 ) (20,112 )

Interest income 186 458 497 1,501

Gain on investments 1,177 2,510 1,068 202 (unrealized)

Other 4,204 (694 ) 7,653 1,116

Other income (4,869 ) (7,824 ) (11,217 ) (17,293 )(expense), net

Earnings before 77,756 35,616 148,619 93,042 income taxes

Income tax expense 14,740 12,602 30,242 27,088

Equity in (loss) ofnonconsolidated (359 ) (260 ) (719 ) (479 )subsidiaries

Net earnings 62,657 22,754 117,658 65,475

Less: Loss(earnings)attributable to (547 ) (147 ) (534 ) 61 non-controllinginterests

Net earningsattributable to $ 62,110 $ 22,607 $ 117,124 $ 65,536 Valmont Industries,Inc.



Average sharesoutstanding (000's) 21,193 21,312 21,186 21,383 - Basic

Earnings per share - $ 2.93 $ 1.06 $ 5.53 $ 3.06 Basic



Average sharesoutstanding (000's) 21,469 21,393 21,449 21,471 - Diluted

Earnings per share - $ 2.89 $ 1.06 $ 5.46 $ 3.05 Diluted



Cash dividends per $ 0.500 $ 0.450 $ 1.000 $ 0.900 share

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(unaudited)

Second Quarter

Year-to-Date

13 Weeks Ended

26 Weeks Ended

26-Jun-21

27-Jun-20

26-Jun-21

27-Jun-20

Net sales

Utility Support Structures

$

267,863

$

231,324

$

520,996

$

456,785

Engineered Support Structures

269,389

253,385

491,716

484,127

Coatings

98,158

80,005

191,446

168,090

Infrastructure products

635,410

564,714

1,204,158

1,109,002

Irrigation

281,965

150,639

511,629

307,359

Less: Intersegment sales

(22,746

)

(26,545

)

(46,272

)

(53,353

)

Total

$

894,629

$

688,808

$

1,669,515

$

1,363,008

Operating Income

Utility Support Structures

$

14,955

$

21,650

$

36,607

$

49,374

Engineered Support Structures

31,927

4,818

51,852

20,749

Coatings

14,668

10,148

27,540

21,202

Infrastructure products

61,550

36,616

115,999

91,325

Irrigation

41,984

22,351

80,732

46,014

Corporate

(20,909

)

(15,527

)

(36,895

)

(27,004

)

Total

$

82,625

$

43,440

$

159,836

$

110,335

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

Utility Support Structures:This segment consists of the manufacture of steel, concrete and composite structures for utility markets, including transmission, distribution, substations, renewable energy generation equipment and drone inspection services..

Engineered Support Structures:This segment consists of the manufacture and distribution of poles, towers and components for the lighting, transportation 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 center pivots and linear irrigation equipment for agricultural markets, including, parts, services, and tubular products, and advanced technology solutions for water management and precision agriculture





VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(unaudited)

Second Quarter Year-to-Date

13 Weeks Ended 26 Weeks Ended

26-Jun-21 27-Jun-20 26-Jun-21 27-Jun-20

Net sales

Utility Support $ 267,863 $ 231,324 $ 520,996 $ 456,785 Structures

Engineered Support 269,389 253,385 491,716 484,127 Structures

Coatings 98,158 80,005 191,446 168,090

Infrastructure products 635,410 564,714 1,204,158 1,109,002

Irrigation 281,965 150,639 511,629 307,359

Less: Intersegment sales (22,746 ) (26,545 ) (46,272 ) (53,353 )

Total $ 894,629 $ 688,808 $ 1,669,515 $ 1,363,008



Operating Income

Utility Support $ 14,955 $ 21,650 $ 36,607 $ 49,374 Structures

Engineered Support 31,927 4,818 51,852 20,749 Structures

Coatings 14,668 10,148 27,540 21,202

Infrastructure products 61,550 36,616 115,999 91,325

Irrigation 41,984 22,351 80,732 46,014

Corporate (20,909 ) (15,527 ) (36,895 ) (27,004 )

Total $ 82,625 $ 43,440 $ 159,836 $ 110,335

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

Utility Support Structures:This segment consists of the manufacture of steel, concrete and composite structures for utility markets, including transmission, distribution, substations, renewable energy generation equipment and drone inspection services..

Engineered Support Structures:This segment consists of the manufacture and distribution of poles, towers and components for the lighting, transportation 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 center pivots and linear irrigation equipment for agricultural markets, including, parts, services, and tubular products, and advanced technology solutions for water management and precision agriculture





VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

26-Jun-21 26-Dec-20

ASSETS

Current assets:

Cash and cash equivalents $ 199,285 $ 400,726

Accounts receivable, net 559,323 511,714

Inventories 593,498 448,941

Contract asset - costs and profits in excess of 140,146 123,495 billings

Prepaid expenses and other assets 103,022 59,804

Refundable income taxes - 9,945

Total current assets 1,595,274 1,554,625

Property, plant and equipment, net 609,867 597,727

Goodwill and other assets 1,198,995 800,808

$ 3,404,136 $ 2,953,160



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current installments of long-term debt $ 5,628 $ 2,748

Notes payable to banks 29,449 35,147

Accounts payable 324,946 268,099

Accrued expenses 208,191 227,735

Contract liability - billings in excess of costs 156,481 130,018 and earnings

Income taxes payable 11,920 -

Dividend payable 10,607 9,556

Total current liabilities 747,222 673,303

Long-term debt, excluding current installments 860,878 728,431

Other long-term liabilities 474,552 343,590

Shareholders' equity 1,321,484 1,207,836

$ 3,404,136 $ 2,953,160

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

Second Quarter

26 Weeks Ended

26-Jun-21

27-Jun-20

Cash flows from operating activities

Net Earnings

$

117,658

$

65,475

Depreciation and amortization

44,063

40,584

Impairment of long-lived assets

-

18,896

Contribution to defined benefit pension plan

(970

)

(17,138

)

Change in working capital

(84,455

)

42,280

Other

(6,111

)

647

Net cash flows from operating activities

70,185

150,744

Cash flows from investing activities

Purchase of property, plant, and equipment

(48,824

)

(48,165

)

Acquisitions

(312,500

)

(15,862

)

Other

(74

)

11,015

Net cash flows from investing activities

(361,398

)

(53,012

)

Cash flows from financing activities

Proceeds from long-term borrowings

149,342

88,872

Payments on short-term borrowings

(5,049

)

(6,255

)

Principal payments on long-term borrowings

(15,421

)

(75,568

)

Purchase of treasury shares

(21,600

)

(20,481

)

Purchase of noncontrolling interest

-

(55,916

)

Dividends paid

(20,181

)

(17,704

)

Other

2,969

(4,923

)

Net cash flows from financing activities

90,060

(91,975

)

Effect of exchange rates on cash and cash equivalents

(288

)

(5,951

)

Net change in cash and cash equivalents

(201,441

)

(194

)

Cash and cash equivalents - beginning of year

400,726

353,542

Cash and cash equivalents - end of period

$

199,285

$

353,348

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 of a write off a receivable from a commercial transaction from 2014, acquisition diligence and restructuring expenses on segment operating income and net earnings as well as the impact of the U.K. tax rate change on net earnings (adjusts GAAP tax rate from 19.0% to 22.5%). 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.





VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

Second Quarter

26 Weeks Ended

26-Jun-21 27-Jun-20

Cash flows from operating activities

Net Earnings $ 117,658 $ 65,475

Depreciation and amortization 44,063 40,584

Impairment of long-lived assets - 18,896

Contribution to defined benefit pension plan (970 ) (17,138 )

Change in working capital (84,455 ) 42,280

Other (6,111 ) 647

Net cash flows from operating activities 70,185 150,744



Cash flows from investing activities

Purchase of property, plant, and equipment (48,824 ) (48,165 )

Acquisitions (312,500 ) (15,862 )

Other (74 ) 11,015

Net cash flows from investing activities (361,398 ) (53,012 )



Cash flows from financing activities

Proceeds from long-term borrowings 149,342 88,872

Payments on short-term borrowings (5,049 ) (6,255 )

Principal payments on long-term borrowings (15,421 ) (75,568 )

Purchase of treasury shares (21,600 ) (20,481 )

Purchase of noncontrolling interest - (55,916 )

Dividends paid (20,181 ) (17,704 )

Other 2,969 (4,923 )

Net cash flows from financing activities 90,060 (91,975 )

Effect of exchange rates on cash and cash (288 ) (5,951 )equivalents

Net change in cash and cash equivalents (201,441 ) (194 )

Cash and cash equivalents - beginning of year 400,726 353,542

Cash and cash equivalents - end of period $ 199,285 $ 353,348

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 of a write off a receivable from a commercial transaction from 2014, acquisition diligence and restructuring expenses on segment operating income and net earnings as well as the impact of the U.K. tax rate change on net earnings (adjusts GAAP tax rate from 19.0% to 22.5%). 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 Diluted Twenty-six Diluted

weeks earnings weeks ended earnings ended per per

June 26, share June 26, share 2021 2021

Net earnings attributable toValmont Industries, Inc. - as $ 62,110 $ 2.89 $ 117,124 $ 5.46 reported

Write-off of a receivable, 5,545 0.26 5,545 0.26 pre-tax

Acquisition diligence expense, 1,120 0.05 1,120 0.05 pre-tax

Restructuring expense, pre-tax 1,560 0.07 1,560 0.07

Total Adjustments 8,225 0.38 8,225 0.38

Change in U.K. statutory tax (2,819 ) (0.13 ) (2,819 ) (0.13 )rate

Tax effect of adjustments * (1,754 ) (0.08 ) (1,754 ) (0.08 )

Net earnings attributable toValmont Industries, Inc. - $ 65,762 $ 3.06 $ 120,776 $ 5.63 Adjusted

Average shares outstanding 21,469 21,449 (000's) - Diluted

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

Thirteen weeks ended June 26, 2021

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

31,927

$

14,955

$

14,668

$

41,984

$

(20,909

)

$

82,625

Write-off a receivable, pre-tax

-

5,545

-

-

-

5,545

Acquisition diligence expense, pre-tax

-

-

-

-

1,120

1,120

Restructuring expense, pre-tax

-

650

-

910

-

1,560

Adjusted Operating Income

$

31,927

$

21,150

$

14,668

$

42,894

$

(19,789

)

$

90,850

Net Sales - as reported

269,389

267,863

98,158

281,965

NM

894,629

Operating Income as a % of Sales

11.9

%

5.6

%

14.9

%

14.9

%

NM

9.2

%

Adjusted Operating Income as a % of Sales

11.9

%

7.9

%

14.9

%

15.2

%

NM

10.2

%





Thirteen weeks ended June 26, 2021



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 31,927 $ 14,955 $ 14,668 $ 41,984 $ (20,909 ) $ 82,625 reported

Write-off areceivable, - 5,545 - - - 5,545 pre-tax

Acquisitiondiligence - - - - 1,120 1,120 expense,pre-tax

Restructuringexpense, - 650 - 910 - 1,560 pre-tax

AdjustedOperating $ 31,927 $ 21,150 $ 14,668 $ 42,894 $ (19,789 ) $ 90,850 Income

Net Sales - as 269,389 267,863 98,158 281,965 NM 894,629 reported



OperatingIncome as a % 11.9 % 5.6 % 14.9 % 14.9 % NM 9.2 %of Sales

AdjustedOperating 11.9 % 7.9 % 14.9 % 15.2 % NM 10.2 %Income as a %of Sales

Twenty-six weeks ended June 26, 2021

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

51,852

$

36,607

$

27,540

$

80,732

$

(36,895

)

$

159,836

Write off a receivable, pre-tax

-

5,545

-

-

-

5,545

Acquisition diligence expense, pre-tax

-

-

-

-

1,120

1,120

Restructuring expense, pre-tax

-

650

-

910

-

1,560

Adjusted Operating Income

$

51,852

$

42,802

$

27,540

$

81,642

$

(35,775

)

$

168,061

Net Sales - as reported

491,716

520,996

191,446

511,629

NM

1,669,515

Operating Income as a % of Sales

10.5

%

7.0

%

14.4

%

15.8

%

NM

9.6

%

Adjusted Operating Income as a % of Sales

10.5

%

8.2

%

14.4

%

16.0

%

NM

10.1

%

The non-GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, tradenames, and a facility and (2) restructuring costs (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 for the second quarter and first half of fiscal 2020.





Twenty-six weeks ended June 26, 2021



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 51,852 $ 36,607 $ 27,540 $ 80,732 $ (36,895 ) $ 159,836 reported

Write off areceivable, - 5,545 - - - 5,545 pre-tax

Acquisitiondiligence - - - - 1,120 1,120 expense,pre-tax

Restructuringexpense, - 650 - 910 - 1,560 pre-tax

AdjustedOperating $ 51,852 $ 42,802 $ 27,540 $ 81,642 $ (35,775 ) $ 168,061 Income

Net Sales - as 491,716 520,996 191,446 511,629 NM 1,669,515 reported



OperatingIncome as a % 10.5 % 7.0 % 14.4 % 15.8 % NM 9.6 %of Sales

AdjustedOperating 10.5 % 8.2 % 14.4 % 16.0 % NM 10.1 %Income as a %of Sales

The non-GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, tradenames, and a facility and (2) restructuring costs (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 for the second quarter and first half of fiscal 2020.



Thirteen Diluted Twenty-six Diluted

weeks earnings weeks earnings ended per ended per

June 27, share June 27, share 2020 2020

Net earnings attributable toValmont Industries, Inc. - as $ 22,607 $ 1.06 $ 65,536 $ 3.05 reported

Impairment of goodwill and 16,638 0.78 16,638 0.77 tradename, pre-tax

Restructuring and relatedasset impairment costs - 5,579 0.26 5,579 0.26 pre-tax

Total Adjustments 22,217 1.04 22,217 1.03

Tax effect of adjustments * (1,977 ) (0.09 ) (1,977 ) (0.09 )

Net earnings attributable toValmont Industries, Inc. - $ 42,847 $ 2.00 $ 85,776 $ 3.99 Adjusted

Average shares outstanding 21,393 21,471 (000's) - Diluted

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

Thirteen weeks ended June 27, 2020

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

4,818

$

21,650

$

10,148

$

22,351

$

(15,527

)

$

43,440

Impairment of goodwill and tradename

16,638

-

-

-

-

16,638

Restructuring and related asset impairment costs

1,462

3,674

222

-

221

5,579

Adjusted Operating Income

$

22,918

$

25,324

$

10,370

$

22,351

$

(15,306

)

$

65,657

Net Sales - as reported

253,385

231,324

80,005

150,639

NM

688,808

Operating Income as a % of Sales

1.9

%

9.4

%

12.7

%

14.8

%

NM

6.3

%

Adjusted Operating Income as a % of Sales

9.0

%

10.9

%

13.0

%

14.8

%

NM

9.5

%





Thirteen weeks ended June 27, 2020



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 4,818 $ 21,650 $ 10,148 $ 22,351 $ (15,527 ) $ 43,440 reported

Impairment ofgoodwill and 16,638 - - - - 16,638 tradename

Restructuringand relatedasset 1,462 3,674 222 - 221 5,579 impairmentcosts

AdjustedOperating $ 22,918 $ 25,324 $ 10,370 $ 22,351 $ (15,306 ) $ 65,657 Income

Net Sales - as 253,385 231,324 80,005 150,639 NM 688,808 reported



OperatingIncome as a % 1.9 % 9.4 % 12.7 % 14.8 % NM 6.3 %of Sales

AdjustedOperating 9.0 % 10.9 % 13.0 % 14.8 % NM 9.5 %Income as a %of Sales

Twenty-six weeks ended June 27, 2020

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

20,749

$

49,374

$

21,202

$

46,014

$

(27,004

)

$

110,335

Impairment of goodwill and tradename

16,638

-

-

-

-

16,638

Restructuring and related asset impairment costs

1,462

3,674

222

-

221

5,579

Adjusted Operating Income

$

38,849

$

53,048

$

21,424

$

46,014

$

(26,783

)

$

132,552

Net Sales - as reported

484,127

456,785

168,090

307,359

NM

1,363,008

Operating Income as a % of Sales

4.3

%

10.8

%

12.6

%

15.0

%

NM

8.1

%

Adjusted Operating Income as a % of Sales

8.0

%

11.6

%

12.7

%

15.0

%

NM

9.7

%

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

REGULATION G RECONCILIATION OF FORECASTED GAAP AND ADJUSTED EARNINGS

(Dollars in thousands, except per share amounts)

The non-GAAP tables below disclose the impact on the range of estimated diluted earnings per share of the (1) write off a receivable from a commercial transaction from 2014 (2) restructuring costs, (3) acquisition diligence costs and (4) six months of (a) amortization of the technology intangible asset (Prospera Technologies) and (b) share-based compensation for Prospera employees. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings to be taken into consideration by management and investors with the related reported GAAP measures for fiscal 2021.





Twenty-six weeks ended June 27, 2020



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 20,749 $ 49,374 $ 21,202 $ 46,014 $ (27,004 ) $ 110,335 reported

Impairment ofgoodwill and 16,638 - - - - 16,638 tradename

Restructuringand relatedasset 1,462 3,674 222 - 221 5,579 impairmentcosts

AdjustedOperating $ 38,849 $ 53,048 $ 21,424 $ 46,014 $ (26,783 ) $ 132,552 Income

Net Sales - as 484,127 456,785 168,090 307,359 NM 1,363,008 reported



OperatingIncome as a % 4.3 % 10.8 % 12.6 % 15.0 % NM 8.1 %of Sales

AdjustedOperating 8.0 % 11.6 % 12.7 % 15.0 % NM 9.7 %Income as a %of Sales





VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

REGULATION G RECONCILIATION OF FORECASTED GAAP AND ADJUSTED EARNINGS

(Dollars in thousands, except per share amounts)

The non-GAAP tables below disclose the impact on the range of estimated diluted earnings per share of the (1) write off a receivable from a commercial transaction from 2014 (2) restructuring costs, (3) acquisition diligence costs and (4) six months of (a) amortization of the technology intangible asset (Prospera Technologies) and (b) share-based compensation for Prospera employees. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings to be taken into consideration by management and investors with the related reported GAAP measures for fiscal 2021.



Reconciliation of Range of Net Low End High End AdjustmentsEarnings - Full Year 2021

Estimated net earnings - GAAP $ 213,000 $ 228,000

Write-off of a receivable, pre-tax 5,545

Acquisition diligence expense, pre-tax 1,120

Estimated restructuring expense, 1,560 pre-tax

Prospera intangible asset (proprietary 3,750 technology) amortization, pre-tax

Share-based compensation - Prospera 5,544 (ML & AI subsidiary), pre-tax

Total pre-tax adjustments 17,519

Estimated tax benefit from above (3,700 )expenses*

Change in U.K. statutory tax rate (2,819 )

Total Adjustments, after-tax $ 11,000

Estimated net earnings - Adjusted $ 224,000 $ 239,000

Diluted Earnings Per Share Range - $ 9.90 $ 10.60 GAAP

Diluted Earnings Per Share Range - $ 10.40 $ 11.10 Adjusted

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20210721005899/en/

CONTACT: Renee Campbell +1 402.963.1057