Business Wire | Oct 20, 2021 04:16PM EDT

Valmont Reports Third Quarter 2021 Results

Oct. 20, 2021

OMAHA, Neb.--(BUSINESS WIRE)--Oct. 20, 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 third quarter ended September 25, 2021.

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

* Record Third-Quarter Net Sales of $868.8 million, an increase of 18.4%, with growth in all segments led by significantly higher Irrigation sales * Operating Income improved to $76.2 million, or 8.8% of sales ($80.4 million or 9.3% adjusted1) compared to $61.5 million or 8.4% of sales last year ($67.1 million or 9.1% adjusted1), despite ongoing inflationary pressures and supply chain disruptions * Diluted Earnings per Share (EPS) improved to $2.40 ($2.57 adjusted1) compared to $1.84 ($1.99 adjusted1) * Record global backlog of more than $1.5 billion, an increase of 35.0% since the end of fiscal 2020, reflecting improved pricing and continued strong market demand * Raising the bottom end of full-year GAAP diluted EPS guidance to a new range of $10.10 to $10.60 (Adjusted diluted EPS to $10.60 to $11.10)1.

Key Financial Metrics

Third GAAP Adjusted^1Quarter

(000's except per 09/25/2021 09/26/2020 09/25/2021 09/26/2020 vs.share 3Q 2021 3Q 2020 vs. 3Q 2021 3Q 2020 3Qamounts) 3Q 2020 2020

Net Sales $ 868,782 $ 733,970 18.4% $ 868,782 $ 733,970 18.4%

Operating 76,195 61,479 23.9% 80,433 67,111 19.9%Income

OperatingIncome as a 8.8 % 8.4 % 9.3 % 9.1 % % of NetSales

Net Earnings 51,650 39,342 31.3% 55,284 42,670 29.6%

DilutedEarnings Per $ 2.40 $ 1.84 30.4% $ 2.57 $ 1.99 29.1%Share

AverageShares 21,552 21,416 21,552 21,416 Outstanding



Year-To-Date GAAP Adjusted^1

09/25/2021 09/26/2020 vs. 09/25/2021 09/26/2020 vs. YTD 2021 YTD 2020 YTD YTD 2021 YTD 2020 YTD 2020 2020

Net Sales $ 2,538,297 $ 2,096,978 21.0% $ 2,538,297 $ 2,096,978 21.0%

Operating 236,031 171,814 37.4% 248,494 199,663 24.5%Income

OperatingIncome as a 9.3 % 8.2 % 9.8 % 9.5 % % of NetSales

Net Earnings 168,774 104,878 60.9% 176,060 128,446 37.1%

DilutedEarnings Per $ 7.86 $ 4.89 60.7% $ 8.20 $ 5.99 36.9%Share

AverageShares 21,483 21,453 21,483 21,453 Outstanding

"We have continued building positive momentum in 2021 with another quarter of strong sales and operating performance," said Stephen G. Kaniewski, President and Chief Executive Officer. "Our results reflect the benefits of focused pricing actions and our growth strategies, combined with the strength of our businesses and execution by our global teams. Through these actions, we achieved record third-quarter sales, grew adjusted operating income 20 percent year-over-year and delivered adjusted diluted earnings per share growth of 30 percent, despite ongoing inflationary pressures of higher raw materials, freight and labor. Sales growth this quarter was once again led by significantly higher sales in Irrigation, as strong global agricultural market fundamentals are driving positive farmer sentiment, and deliveries of the large Egypt project continued. Robust market demand for improving grid resiliency and renewable energy usage, and increased pricing are driving continued sales growth in Utility Support Structures. Higher sales in Engineered Support Structures were led by a focus on pricing and growth of wireless communication products and components, and solid execution globally helped drive this segment's third-quarter operating profit margins above 12 percent for the first time. Sales growth in Coatings was led by pricing and improved industrial production levels compared to last year."

Kaniewski continued, "Year-to-date, we have delivered strong results driven by the engagement and focus of our employees and successful execution of our strategies, in spite of a challenging macro environment. I am incredibly proud of the way our team continues to perform and would like to thank our employees for their hard work in delivering these results and continuing to provide exceptional service to our customers."

Third Quarter 2021 Segment Review

Infrastructure

Utility Support Structures Segment (31.8% of Sales)

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

Sales of $276.5 million grew slightly year-over-year. Significantly higher pricing and higher volumes in North American markets due to utilities' ongoing investments in grid resiliency were mostly offset by lower global generation sales primarily related to large projects in 2020 that did not repeat this year.

Operating Income was $24.6 million or 8.9% of sales compared to $25.9 million or 9.4% of sales ($29.2 million or 10.6% adjusted1) in 2020. Higher average selling prices were more than offset by the impact of continued raw material cost inflation that was not fully recovered through pricing mechanisms during the quarter, and lower global generation product sales.

Engineered Support Structures Segment(32.4% 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

Sales of $281.1 million increased 10.0% year-over-year, due to favorable pricing in all regions and higher sales of wireless communication products and components.

Lighting and transportation sales of $188.6 million increased 3.9% year-over-year, as favorable pricing and higher commercial lighting sales more than offset lower transportation volumes in most regions.

Wireless communication products and components sales of $63.4 million increased 25.2% year-over-year. Capital investments from wireless carriers supporting 5G buildouts, and favorable pricing led to sales growth.

Access systems sales of $29.1 million increased 24.3% year-over-year, primarily due to improved end markets in Australia.

Operating Income improved to $34.4 million or 12.2% of sales compared to $25.4 million or 9.9% of sales ($26.4 million or 10.3% adjusted1) in 2020. Profitability improvement was driven by favorable pricing and improved fixed cost leverage.

Coatings Segment(11.1% of Sales)

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

Sales of $96.7 million increased 10.0% year-over-year, due to higher average selling prices and sales from the new greenfield facility in Pittsburgh, PA that commenced operations earlier this year.

Operating Income was $12.5 million or 12.9% of sales compared to $12.4 million or 14.1% of sales ($13.7 million or 15.6% adjusted1) in 2020. Lower profitability was driven by higher cost inflation that was not yet fully recovered by price, and startup costs related to the new Pittsburgh facility.

Agriculture

Irrigation Segment(27.7% 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 $240.3 million increased 72.6% year-over-year, due to higher volumes in all markets, particularly Egypt, North America and Brazil, favorable pricing, and higher technology sales.

North American sales of $116.3 million grew 53.4% compared to 2020. Sales growth was led by favorable pricing, higher volumes due to continued strength in agricultural markets and higher industrial tubing sales.

International sales of $124.0 million nearly doubled year-over-year. Sales growth was led by continued strong demand, including deliveries of the large Egypt project and higher sales in Brazil, Africa and Europe.

Global backlog increased 26.0% year-over-year to $388.0 million, demonstrating the underlying strength in agricultural markets globally.

Operating Income improved to $27.7 million, or 11.5% of sales ($32.0 million or 13.3% adjusted1) compared to $14.7 million, or 10.6% of sales in 2020. Profitability growth was driven by higher volumes, favorable pricing and improved operational efficiencies, partially offset by SG&A expense from the recent Prospera acquisition.

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 and will continue 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

Year-to-date cash flows from operations are $61.8 million, primarily reflecting higher levels of net working capital to proactively manage supply chain disruptions and support strong sales growth. At the end of third quarter, cash and cash equivalents were $170.0 million. Valmont purchased $2.5 million of company stock in the third quarter, and $123.9 million remains on the current authorization with no expiration. The Company remains committed to maintaining its Investment Grade credit rating.

2021 Financial Outlook and Key Assumptions

The Company is raising the bottom end of its full-year diluted EPS guidance range and reaffirming key assumptions for the remainder of 2021. GAAP diluted EPS is now expected to be $10.10 to $10.60 and adjusted diluted EPS is now expected to be $10.60 to $11.101. Full-year Net Sales growth is expected to be 17% to 18%, and Irrigation segment sales growth is expected to be 50% to 53%. The revised guidance reflects the Company's 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) 16% to 19% 17% to 18%

Irrigation Segment Sales Growth (vs. PY) 45% to 50% 50% to 53%

GAAP Diluted EPS^1 $9.90 to $10.60 $10.10 to $10.60

Adjusted Diluted EPS^1 $10.40 to $11.10 $10.60 to $11.10

2021 Key Assumptions

* Favorable foreign currency translation impact of approximately 1.0% of Net Sales * Fourth quarter tax rate of approximately 24.0% * Capital expenditures to be in the range of $110 - $120 million to support strategic growth and Industry 4.0 advanced manufacturing initiatives * No pandemic-driven closures of large manufacturing facilities, workforce disruptions, or significant supply chain interruptions

"The strong market drivers we are seeing across our businesses, and our team's proven ability to manage through this unprecedented macro environment give us confidence about the remainder of this year," Kaniewski added. "We entered the fourth quarter with a record backlog of more than $1.5 billion reflecting strong market demand. In the Utility Support Structures segment, despite continued steel cost increases, we expect sequential margin improvement as pricing becomes more aligned with inflation. Our backlog of more than $760.0 million in this segment is indicative of the long-term market drivers of grid resiliency and the increasing use of renewable energy. In Engineered Support Structures, the long-term need for critical infrastructure investment globally, including current and future stimulus programs, gives us confidence in future growth. We are benefiting from increasing demand in wireless communications markets as 5G build-outs are accelerating. Our Coatings business has been trending in-line with industrial production levels. In Irrigation, a solid international project pipeline and favorable market trends globally are providing strong momentum well into next year. 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."

Kaniewski continued, "Strong market demand, the strength of our operations, and our continued pricing actions across the portfolio give us confidence as we look ahead to next year. In 2022 we expect sales growth of 7% to 12% and earnings per share growth of 13% to 15%, in line with the 3- to-5 year growth targets we communicated at our May 2021 Investor Day. We are in a position of strength with a diverse and talented team who are driven by our core values to deliver results for our customers and our stakeholders."

A live audio discussion with Stephen G. Kaniewski, President and Chief Executive Officer, and Avner M. Applbaum, Executive Vice President and Chief Financial Officer, will be accessible by telephone on Thursday, October 21, 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 3Q 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 13713723. The replay will be available through 10:59 p.m. CDT on October 28, 2021.

About Valmont Industries, Inc.

For over 75 years, Valmont(r) has been a global leader in creating vital infrastructure and advancing agricultural productivity. Today, we remain committed to doing more with less by innovating through technology. Learn more about how we're Conserving Resources. Improving Life.(r) 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 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 to GAAP measures at end of document

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(unaudited)

Third Quarter

Year-to-Date

13 Weeks Ended

39 Weeks Ended

25-Sep-21

26-Sep-20

25-Sep-21

26-Sep-20

Net sales

$

868,782

$

733,970

$

2,538,297

$

2,096,978

Cost of sales

641,378

543,223

1,876,692

1,536,045

Gross profit

227,404

190,747

661,605

560,933

Selling, general and administrative expenses

151,209

129,268

425,574

372,481

Impairment of goodwill and intangible assets

-

-

-

16,638

Operating income

76,195

61,479

236,031

171,814

Other income (expense)

Interest expense

(11,031

)

(10,454

)

(31,466

)

(30,566

)

Interest income

397

430

894

1,931

Gain on investments (unrealized)

488

900

1,556

1,102

Other

2,644

233

10,297

1,349

Other income (expense), net

(7,502

)

(8,891

)

(18,719

)

(26,184

)

Earnings before income taxes

68,693

52,588

217,312

145,630

Income tax expense

16,080

12,084

46,322

39,172

Equity in (loss) of nonconsolidated subsidiaries

(360

)

(276

)

(1,079

)

(755

)

Net earnings

52,253

40,228

169,911

105,703

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

(603

)

(886

)

(1,137

)

(825

)

Net earnings attributable to Valmont Industries, Inc.

$

51,650

$

39,342

$

168,774

$

104,878

Average shares outstanding (000's) - Basic

21,175

21,309

21,182

21,358

Earnings per share - Basic

$

2.44

$

1.85

$

7.97

$

4.91

Average shares outstanding (000's) - Diluted

21,552

21,416

21,483

21,453

Earnings per share - Diluted

$

2.40

$

1.84

$

7.86

$

4.89

Cash dividends per share

$

0.500

$

0.450

$

1.500

$

1.350





VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(unaudited)

Third Quarter Year-to-Date

13 Weeks Ended 39 Weeks Ended



25-Sep-21 26-Sep-20 25-Sep-21 26-Sep-20

Net sales $ 868,782 $ 733,970 $ 2,538,297 $ 2,096,978

Cost of sales 641,378 543,223 1,876,692 1,536,045

Gross profit 227,404 190,747 661,605 560,933

Selling, general andadministrative 151,209 129,268 425,574 372,481 expenses

Impairment ofgoodwill and - - - 16,638 intangible assets

Operating income 76,195 61,479 236,031 171,814

Other income (expense)

Interest expense (11,031 ) (10,454 ) (31,466 ) (30,566 )

Interest income 397 430 894 1,931

Gain on investments 488 900 1,556 1,102 (unrealized)

Other 2,644 233 10,297 1,349

Other income (7,502 ) (8,891 ) (18,719 ) (26,184 )(expense), net

Earnings before 68,693 52,588 217,312 145,630 income taxes

Income tax expense 16,080 12,084 46,322 39,172

Equity in (loss) ofnonconsolidated (360 ) (276 ) (1,079 ) (755 )subsidiaries

Net earnings 52,253 40,228 169,911 105,703

Less: Loss(earnings)attributable to (603 ) (886 ) (1,137 ) (825 )non-controllinginterests

Net earningsattributable to $ 51,650 $ 39,342 $ 168,774 $ 104,878 Valmont Industries,Inc.



Average sharesoutstanding (000's) 21,175 21,309 21,182 21,358 - Basic

Earnings per share - $ 2.44 $ 1.85 $ 7.97 $ 4.91 Basic



Average sharesoutstanding (000's) 21,552 21,416 21,483 21,453 - Diluted

Earnings per share - $ 2.40 $ 1.84 $ 7.86 $ 4.89 Diluted



Cash dividends per $ 0.500 $ 0.450 $ 1.500 $ 1.350 share

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(unaudited)

Third Quarter

Year-to-Date

13 Weeks Ended

39 Weeks Ended

25-Sep-21

26-Sep-20

25-Sep-21

26-Sep-20

Net sales

Utility Support Structures

$

276,502

$

274,393

$

797,498

$

731,178

Engineered Support Structures

281,097

255,656

772,813

739,783

Coatings

96,685

87,886

288,131

255,976

Infrastructure products

654,284

617,935

1,858,442

1,726,937

Irrigation

240,331

139,209

751,960

446,568

Less: Intersegment sales

(25,833

)

(23,174

)

(72,105

)

(76,527

)

Total

$

868,782

$

733,970

$

2,538,297

$

2,096,978

Operating Income

Utility Support Structures

$

24,561

$

25,881

$

61,168

$

75,255

Engineered Support Structures

34,383

25,434

86,235

46,183

Coatings

12,478

12,416

40,018

33,618

Infrastructure products

71,422

63,731

187,421

155,056

Irrigation

27,735

14,687

108,467

60,701

Corporate

(22,962

)

(16,939

)

(59,857

)

(43,943

)

Total

$

76,195

$

61,479

$

236,031

$

171,814

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)

Third Quarter Year-to-Date

13 Weeks Ended 39 Weeks Ended

25-Sep-21 26-Sep-20 25-Sep-21 26-Sep-20

Net sales

Utility Support $ 276,502 $ 274,393 $ 797,498 $ 731,178 Structures

Engineered Support 281,097 255,656 772,813 739,783 Structures

Coatings 96,685 87,886 288,131 255,976

Infrastructure products 654,284 617,935 1,858,442 1,726,937

Irrigation 240,331 139,209 751,960 446,568

Less: Intersegment sales (25,833 ) (23,174 ) (72,105 ) (76,527 )

Total $ 868,782 $ 733,970 $ 2,538,297 $ 2,096,978



Operating Income

Utility Support $ 24,561 $ 25,881 $ 61,168 $ 75,255 Structures

Engineered Support 34,383 25,434 86,235 46,183 Structures

Coatings 12,478 12,416 40,018 33,618

Infrastructure products 71,422 63,731 187,421 155,056

Irrigation 27,735 14,687 108,467 60,701

Corporate (22,962 ) (16,939 ) (59,857 ) (43,943 )

Total $ 76,195 $ 61,479 $ 236,031 $ 171,814

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)

25-Sep-21 26-Dec-20

ASSETS

Current assets:

Cash and cash equivalents $ 169,795 $ 400,726

Accounts receivable, net 537,693 511,714

Inventories 655,903 448,941

Contract asset - costs and profits in excess of 155,417 123,495 billings

Prepaid expenses and other assets 95,965 59,804

Refundable income taxes - 9,945

Total current assets 1,614,773 1,554,625

Property, plant and equipment, net 617,313 597,727

Goodwill and other assets 1,179,178 800,808

$ 3,411,264 $ 2,953,160



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current installments of long-term debt $ 4,803 $ 2,748

Notes payable to banks 13,765 35,147

Accounts payable 338,723 268,099

Accrued expenses 241,058 227,735

Contract liability - billings in excess of costs 138,286 130,018 and earnings

Income taxes payable 3,734 -

Dividend payable 10,610 9,556

Total current liabilities 750,979 673,303

Long-term debt, excluding current installments 897,488 728,431

Operating lease liabilities 148,031 80,202

Other long-term liabilities 270,034 263,388

Shareholders' equity 1,344,732 1,207,836

$ 3,411,264 $ 2,953,160

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

Third Quarter

39 Weeks Ended

25-Sep-21

26-Sep-20

Cash flows from operating activities

Net Earnings

$

169,911

$

105,703

Depreciation and amortization

67,764

61,523

Impairment of long-lived assets

-

19,449

Contribution to defined benefit pension plan

(970

)

(17,398

)

Change in working capital

(157,473

)

119,617

Other

(17,403

)

(15,848

)

Net cash flows from operating activities

61,829

273,046

Cash flows from investing activities

Purchase of property, plant, and equipment

(80,509

)

(70,960

)

Acquisitions

(312,500

)

(15,862

)

Other

3,546

15,437

Net cash flows from investing activities

(389,463

)

(71,385

)

Cash flows from financing activities

Proceeds from long-term borrowings

236,710

88,872

Principal payments on long-term borrowings

(66,128

)

(76,417

)

Payments on short-term borrowings

(20,463

)

(6,462

)

Purchase of treasury shares

(24,101

)

(28,006

)

Purchase of noncontrolling interest

-

(55,916

)

Dividends paid

(30,794

)

(27,316

)

Other

5,792

(4,739

)

Net cash flows from financing activities

101,016

(109,984

)

Effect of exchange rates on cash and cash equivalents

(4,313

)

(2,164

)

Net change in cash and cash equivalents

(230,931

)

89,513

Cash and cash equivalents - beginning of year

400,726

353,542

Cash and cash equivalents - end of period

$

169,795

$

443,055





VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

Third Quarter

39 Weeks Ended

25-Sep-21 26-Sep-20

Cash flows from operating activities

Net Earnings $ 169,911 $ 105,703

Depreciation and amortization 67,764 61,523

Impairment of long-lived assets - 19,449

Contribution to defined benefit pension plan (970 ) (17,398 )

Change in working capital (157,473 ) 119,617

Other (17,403 ) (15,848 )

Net cash flows from operating activities 61,829 273,046



Cash flows from investing activities

Purchase of property, plant, and equipment (80,509 ) (70,960 )

Acquisitions (312,500 ) (15,862 )

Other 3,546 15,437

Net cash flows from investing activities (389,463 ) (71,385 )



Cash flows from financing activities

Proceeds from long-term borrowings 236,710 88,872

Principal payments on long-term borrowings (66,128 ) (76,417 )

Payments on short-term borrowings (20,463 ) (6,462 )

Purchase of treasury shares (24,101 ) (28,006 )

Purchase of noncontrolling interest - (55,916 )

Dividends paid (30,794 ) (27,316 )

Other 5,792 (4,739 )

Net cash flows from financing activities 101,016 (109,984 )

Effect of exchange rates on cash and cash (4,313 ) (2,164 )equivalents

Net change in cash and cash equivalents (230,931 ) 89,513

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

Cash and cash equivalents - end of period $ 169,795 $ 443,055

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 1) the intangible asset amortization and stock-based compensation recognized on the Prospera subsidiary, 2) a write off a receivable following arbitration of a commercial transaction from 2014, 3) acquisition diligence, 4) restructuring expenses on segment operating income and net earnings and 6) the impact of the U.K. tax rate change on net earnings (adjusts statutory tax rate from 19% to 25%). Amounts may be impacted by rounding. We believe the adjustments for Prospera allow for a better comparison of future Irrigation segment performance as compared to historical results. 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

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 1) the intangible assetamortization and stock-based compensation recognized on the Prosperasubsidiary, 2) a write off a receivable following arbitration of a commercialtransaction from 2014, 3) acquisition diligence, 4) restructuring expenses onsegment operating income and net earnings and 6) the impact of the U.K. taxrate change on net earnings (adjusts statutory tax rate from 19% to 25%).Amounts may be impacted by rounding. We believe the adjustments for Prosperaallow for a better comparison of future Irrigation segment performance ascompared to historical results. We believe it is useful when consideringcompany performance for the non-GAAP adjusted net earnings and operating incometo be taken into consideration by management and investors with the relatedreported GAAP measures.

Thirteen

Diluted

Thirty-nine

Diluted

weeks ended September 25,

earnings per

weeks ended September 25,

earnings per

2021

share

2021

share

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

$

51,650

$

2.40

$

168,774

$

7.86

Prospera intangible asset amortization

1,926

0.09

1,926

0.09

Stock-based compensation - Prospera subsidiary

2,312

0.11

2,312

0.11

Write-off of a receivable, pre-tax

-

-

5,545

0.26

Acquisition diligence expense, pre-tax

-

-

1,120

0.05

Restructuring expense, pre-tax

-

-

1,560

0.07

Total Adjustments

4,238

0.20

12,463

0.58

Change in U.K. statutory tax rate

-

-

(2,819

)

(0.13

)

Tax effect of adjustments *

(604

)

(0.03

)

(2,358

)

(0.11

)

Net earnings attributable to Valmont Industries, Inc. - Adjusted

$

55,284

$

2.57

$

176,060

$

8.20

Average shares outstanding (000's) - Diluted

21,552

21,483

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

Thirteen Diluted Thirty-nine Diluted

weeks weeks ended ended earnings September earnings September per 25, per 25,

2021 share 2021 share

Net earnings attributableto Valmont Industries, Inc. $ 51,650 $ 2.40 $ 168,774 $ 7.86 - as reported

Prospera intangible asset 1,926 0.09 1,926 0.09 amortization

Stock-based compensation - 2,312 0.11 2,312 0.11 Prospera subsidiary

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

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

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

Total Adjustments 4,238 0.20 12,463 0.58

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

Tax effect of adjustments * (604 ) (0.03 ) (2,358 ) (0.11 )

Net earnings attributableto Valmont Industries, Inc. $ 55,284 $ 2.57 $ 176,060 $ 8.20 - Adjusted

Average shares outstanding 21,552 21,483 (000's) - Diluted

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

Thirteen weeks ended September 25, 2021

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

34,383

$

24,561

$

12,478

$

27,735

$

(22,962

)

$

76,195

Prospera intangible asset amortization

-

-

-

1,926

-

1,926

Stock-based compensation - Prospera subsidiary

-

-

-

2,312

-

2,312

Adjusted Operating Income

$

34,383

$

24,561

$

12,478

$

31,973

$

(22,962

)

$

80,433

Net Sales - as reported

281,097

276,502

96,685

240,331

NM

868,782

Operating Income as a % of Sales

12.2

%

8.9

%

12.9

%

11.5

%

NM

8.8

%

Adjusted Operating Income as a % of Sales

12.2

%

8.9

%

12.9

%

13.3

%

NM

9.3

%



Thirteen weeks ended September 25, 2021



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 34,383 $ 24,561 $ 12,478 $ 27,735 $ (22,962 ) $ 76,195 reported

Prosperaintangible - - - 1,926 - 1,926 assetamortization

Stock-basedcompensation - - - - 2,312 - 2,312 Prosperasubsidiary

AdjustedOperating $ 34,383 $ 24,561 $ 12,478 $ 31,973 $ (22,962 ) $ 80,433 Income

Net Sales - as 281,097 276,502 96,685 240,331 NM 868,782 reported



OperatingIncome as a % 12.2 % 8.9 % 12.9 % 11.5 % NM 8.8 %of Sales

AdjustedOperating 12.2 % 8.9 % 12.9 % 13.3 % NM 9.3 %Income as a %of Sales

Thirty-nine weeks ended September 25, 2021

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

86,235

$

61,168

$

40,018

$

108,467

$

(59,857

)

$

236,031

Prospera intangible asset amortization

-

-

-

1,926

-

1,926

Stock-based compensation - Prospera subsidiary

-

-

-

2,312

-

2,312

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

$

86,235

$

67,363

$

40,018

$

113,615

$

(58,737

)

$

248,494

Net Sales - as reported

772,813

797,498

288,131

751,960

NM

2,538,297

Operating Income as a % of Sales

11.2

%

7.7

%

13.9

%

14.4

%

NM

9.3

%

Adjusted Operating Income as a % of Sales

11.2

%

8.4

%

13.9

%

15.1

%

NM

9.8

%

The non-GAAP tables below disclose the impact of impairment of goodwill, tradenames, and a facility, restructuring costs on segment operating income and net earnings as well as the impact of the U.K. tax rate change on net earnings (adjusts statutory tax rate from 17% to 19%). 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.



Thirty-nine weeks ended September 25, 2021



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 86,235 $ 61,168 $ 40,018 $ 108,467 $ (59,857 ) $ 236,031 reported

Prosperaintangible - - - 1,926 - 1,926 assetamortization

Stock-basedcompensation - - - - 2,312 - 2,312 Prosperasubsidiary

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 $ 86,235 $ 67,363 $ 40,018 $ 113,615 $ (58,737 ) $ 248,494 Income

Net Sales - as 772,813 797,498 288,131 751,960 NM 2,538,297 reported



OperatingIncome as a % 11.2 % 7.7 % 13.9 % 14.4 % NM 9.3 %of Sales

AdjustedOperating 11.2 % 8.4 % 13.9 % 15.1 % NM 9.8 %Income as a %of Sales

The non-GAAP tables below disclose the impact of impairment of goodwill, tradenames, and a facility, restructuring costs on segment operating income and net earnings as well as the impact of the U.K. tax rate change on net earnings (adjusts statutory tax rate from 17% to 19%). 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 Thirty-nine Diluted

weeks weeks ended ended earnings September earnings September per 26, per 26,

2020 share 2020 share

Net earnings attributableto Valmont Industries, Inc. $ 39,342 $ 1.84 $ 104,878 $ 4.89 - as reported

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

Restructuring and relatedasset impairment costs - 5,632 0.26 11,211 0.52 pre-tax

Total Adjustments 5,632 0.26 27,849 1.30

Tax effect of adjustments * (776 ) (0.04 ) (2,753 ) (0.13 )

UK tax rate change (1,528 ) (0.07 ) (1,528 ) (0.07 )

Net earnings attributableto Valmont Industries, Inc. $ 42,670 $ 1.99 $ 128,446 $ 5.99 - Adjusted

Average shares outstanding 21,416 21,453 (000's) - Diluted

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

Thirteen weeks ended September 26, 2020

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

25,434

$

25,881

$

12,416

$

14,687

$

(16,939

)

$

61,479

Impairment of goodwill and tradename

-

-

-

-

-

Restructuring and related asset impairment costs

902

3,301

1,284

-

145

5,632

Adjusted Operating Income

$

26,336

$

29,182

$

13,700

$

14,687

$

(16,794

)

$

67,111

Net Sales - as reported

255,656

274,393

87,886

139,209

NM

733,970

Operating Income as a % of Sales

9.9

%

9.4

%

14.1

%

10.6

%

NM

8.4

%

Adjusted Operating Income as a % of Sales

10.3

%

10.6

%

15.6

%

10.6

%

NM

9.1

%



Thirteen weeks ended September 26, 2020



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 25,434 $ 25,881 $ 12,416 $ 14,687 $ (16,939 ) $ 61,479 reported

Impairment ofgoodwill and - - - - - tradename

Restructuringand relatedasset 902 3,301 1,284 - 145 5,632 impairmentcosts

AdjustedOperating $ 26,336 $ 29,182 $ 13,700 $ 14,687 $ (16,794 ) $ 67,111 Income

Net Sales - as 255,656 274,393 87,886 139,209 NM 733,970 reported



OperatingIncome as a % 9.9 % 9.4 % 14.1 % 10.6 % NM 8.4 %of Sales

AdjustedOperating 10.3 % 10.6 % 15.6 % 10.6 % NM 9.1 %Income as a %of Sales

Thirty-nine weeks ended September 26, 2020

Operating Income Reconciliation

Engineered Support Structures

Utility Support Structures

Coatings

Irrigation

Corporate

Valmont

Operating income - as reported

$

46,183

$

75,255

$

33,618

$

60,701

$

(43,943

)

$

171,814

Impairment of goodwill and tradename

16,638

-

-

-

-

16,638

Restructuring and related asset impairment costs

2,364

6,975

1,506

-

366

11,211

Adjusted Operating Income

$

65,185

$

82,230

$

35,124

$

60,701

$

(43,577

)

$

199,663

Net Sales - as reported

739,783

731,178

255,976

446,568

NM

2,096,978

Operating Income as a % of Sales

6.2

%

10.3

%

13.1

%

13.6

%

NM

8.2

%

Adjusted Operating Income as a % of Sales

8.8

%

11.2

%

13.7

%

13.6

%

NM

9.5

%



Thirty-nine weeks ended September 26, 2020



Operating Engineered UtilityIncome Support Support Coatings Irrigation Corporate ValmontReconciliation Structures Structures

Operatingincome - as $ 46,183 $ 75,255 $ 33,618 $ 60,701 $ (43,943 ) $ 171,814 reported

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

Restructuringand relatedasset 2,364 6,975 1,506 - 366 11,211 impairmentcosts

AdjustedOperating $ 65,185 $ 82,230 $ 35,124 $ 60,701 $ (43,577 ) $ 199,663 Income

Net Sales - as 739,783 731,178 255,976 446,568 NM 2,096,978 reported



OperatingIncome as a % 6.2 % 10.3 % 13.1 % 13.6 % NM 8.2 %of Sales

AdjustedOperating 8.8 % 11.2 % 13.7 % 13.6 % NM 9.5 %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 following arbitration 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 and 5) the increase in the U.K. statutory tax rate. We believe the adjustments for Prospera allow for a better comparison of future Irrigation segment performance as compared to historical results. 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.





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 dilutedearnings per share of the 1) write off a receivable following arbitration 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 and 5) the increase in the U.K.statutory tax rate. We believe the adjustments for Prospera allow for a bettercomparison of future Irrigation segment performance as compared to historicalresults. We believe it is useful when considering company performance for thenon-GAAP adjusted net earnings to be taken into consideration by management andinvestors with the related reported GAAP measures for fiscal 2021.

Reconciliation of Range of Net Earnings - Full Year 2021

Low End

High End

Adjustments

Estimated net earnings - GAAP

$

217,000

$

228,000

Write-off of a receivable, pre-tax

5,545

Acquisition diligence expense, pre-tax

1,120

Estimated restructuring expense, pre-tax

1,560

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

3,750

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

4,950

Total pre-tax adjustments

16,925

Estimated tax benefit from above expenses*

(3,106

)

Change in U.K. statutory tax rate

(2,819

)

Total Adjustments, after-tax

$

11,000

Estimated net earnings - Adjusted

$

228,000

$

239,000

Diluted Earnings Per Share Range - GAAP

$

10.10

$

10.60

Diluted Earnings Per Share Range - Adjusted

$

10.60

$

11.10

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20211020006036/en/

CONTACT: Renee Campbell +1 402.963.1057