OMAHA, Neb.--(BUSINESS WIRE)--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 Quarter |
GAAP |
|
Adjusted1 |
|||||||||||||||||||
(000's except per share amounts) |
06/26/2021
|
|
06/27/2020
|
|
vs. 2Q 2021 |
|
06/26/2021
|
|
06/27/2020
|
|
vs. 2Q 2021 |
|||||||||||
Net Sales |
$ |
894,629 |
|
|
$ |
688,808 |
|
29.9 |
% |
|
$ |
894,629 |
|
|
$ |
688,808 |
|
29.9 |
% |
|||
Operating Income |
82,625 |
|
|
43,440 |
|
90.2 |
% |
|
90,850 |
|
|
65,657 |
|
38.4 |
% |
|||||||
Operating Income as a % of Net Sales |
9.2 |
% |
|
6.3 |
% |
|
|
10.2 |
% |
|
9.5 |
% |
|
|||||||||
Net Earnings |
62,110 |
|
|
22,607 |
|
174.7 |
% |
|
65,762 |
|
|
42,847 |
|
53.5 |
% |
|||||||
Diluted Earnings Per Share |
$ |
2.89 |
|
|
$ |
1.06 |
|
172.6 |
% |
|
$ |
3.06 |
|
|
$ |
2.00 |
|
53.0 |
% |
|||
Average Shares Outstanding |
21,469 |
|
|
21,393 |
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Year-To-Date |
GAAP |
|
Adjusted1 |
|||||||||||||||||||
|
06/26/2021
|
|
06/27/2020
|
|
vs. YTD 2021 |
|
06/26/2021
|
|
06/27/2020
|
|
vs. YTD 2021 |
|||||||||||
Net Sales |
$ |
1,669,515 |
|
|
$ |
1,363,008 |
|
22.5 |
% |
|
$ |
1,669,515 |
|
|
$ |
1,363,008 |
|
22.5 |
% |
|||
Operating Income |
159,836 |
|
|
110,335 |
|
44.9 |
% |
|
168,061 |
|
|
132,552 |
|
26.8 |
% |
|||||||
Operating Income as a % of Net Sales |
9.6 |
% |
|
8.1 |
% |
|
|
10.1 |
% |
|
9.7 |
% |
|
|||||||||
Net Earnings |
117,124 |
|
|
65,536 |
|
78.7 |
% |
|
120,776 |
|
|
85,776 |
|
40.8 |
% |
|||||||
Diluted Earnings Per Share |
$ |
5.46 |
|
|
$ |
3.05 |
|
79.0 |
% |
|
$ |
5.63 |
|
|
$ |
3.99 |
|
41.1 |
% |
|||
Average Shares Outstanding |
21,449 |
|
|
21,471 |
|
|
|
|
|
|
|
|||||||||||
"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 EPS1 |
$9.30 to $10.00 |
$9.90 to $10.60 |
Adjusted Diluted EPS1 |
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, net earnings 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 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 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 billings |
140,146 |
|
|
123,495 |
|
|||
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 and earnings |
156,481 |
|
|
130,018 |
|
|||
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.
|
Thirteen |
|
Diluted |
|
Twenty-six |
|
Diluted |
|||||||||
|
weeks ended |
|
earnings per |
|
weeks ended |
|
earnings per |
|||||||||
|
June 26, 2021 |
|
share |
|
June 26, 2021 |
|
share |
|||||||||
Net earnings attributable to Valmont Industries, Inc. - as reported |
$ |
62,110 |
|
|
$ |
2.89 |
|
|
$ |
117,124 |
|
|
$ |
5.46 |
|
|
Write-off of a receivable, pre-tax |
5,545 |
|
|
0.26 |
|
|
5,545 |
|
|
0.26 |
|
|||||
Acquisition diligence expense, pre-tax |
1,120 |
|
|
0.05 |
|
|
1,120 |
|
|
0.05 |
|
|||||
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 rate |
(2,819 |
) |
|
(0.13 |
) |
|
(2,819 |
) |
|
(0.13 |
) |
|||||
Tax effect of adjustments * |
(1,754 |
) |
|
(0.08 |
) |
|
(1,754 |
) |
|
(0.08 |
) |
|||||
Net earnings attributable to Valmont Industries, Inc. - Adjusted |
$ |
65,762 |
|
|
$ |
3.06 |
|
|
$ |
120,776 |
|
|
$ |
5.63 |
|
|
Average shares outstanding (000’s) - Diluted |
|
|
21,469 |
|
|
|
|
21,449 |
|
|||||||
* The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction. |
||||||||||||||||
|
||||||||||||||||||||||||
|
|
Thirteen weeks ended June 26, 2021 |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Income Reconciliation |
|
Engineered
|
|
Utility
|
|
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 |
% |
||||||
|
||||||||||||||||||||||||
|
|
Twenty-six weeks ended June 26, 2021 |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Income Reconciliation |
|
Engineered
|
|
Utility
|
|
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.
|
|||||||||||||||||
|
Thirteen |
|
Diluted |
|
Twenty-six |
|
Diluted |
||||||||||
|
weeks ended |
|
earnings per |
|
weeks ended |
|
earnings per |
||||||||||
|
June 27, 2020 |
|
share |
|
June 27, 2020 |
|
share |
||||||||||
Net earnings attributable to Valmont Industries, Inc. - as reported |
$ |
22,607 |
|
|
$ |
1.06 |
|
|
|
$ |
65,536 |
|
|
$ |
3.05 |
|
|
Impairment of goodwill and tradename, pre-tax |
16,638 |
|
|
0.78 |
|
|
|
16,638 |
|
|
0.77 |
|
|||||
Restructuring and related asset impairment costs - pre-tax |
5,579 |
|
|
0.26 |
|
|
|
5,579 |
|
|
0.26 |
|
|||||
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 to Valmont Industries, Inc. - Adjusted |
$ |
42,847 |
|
|
$ |
2.00 |
|
|
|
$ |
85,776 |
|
|
$ |
3.99 |
|
|
Average shares outstanding (000’s) - Diluted |
|
|
21,393 |
|
|
|
|
|
21,471 |
|
|||||||
* The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction. |
|||||||||||||||||
|
||||||||||||||||||||||||
|
|
Thirteen weeks ended June 27, 2020 |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Income Reconciliation |
|
Engineered
|
|
Utility
|
|
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 |
% |
||||||
|
||||||||||||||||||||||||
|
|
Twenty-six weeks ended June 27, 2020 |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Income Reconciliation |
|
Engineered
|
|
Utility
|
|
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.
|
|
|
|
|
|
|||||||
Reconciliation of Range of Net Earnings - Full Year 2021 |
Low End |
|
High End |
|
Adjustments |
|||||||
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, pre-tax |
|
|
|
|
1,560 |
|
||||||
Prospera intangible asset (proprietary technology) amortization, pre-tax |
|
|
|
|
3,750 |
|
||||||
Share-based compensation - Prospera (ML & AI subsidiary), pre-tax |
|
|
|
|
5,544 |
|
||||||
Total pre-tax adjustments |
|
|
|
|
17,519 |
|
||||||
Estimated tax benefit from above expenses* |
|
|
|
|
(3,700 |
) |
||||||
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 - GAAP |
$ |
9.90 |
|
|
$ |
10.60 |
|
|
|
|||
Diluted Earnings Per Share Range - Adjusted |
$ |
10.40 |
|
|
$ |
11.10 |
|
|
|
|||
| ____________________ | ||||||||||||
* The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction. |
||||||||||||
