OMAHA, Neb.--(BUSINESS WIRE)--Valmont Industries, Inc. (NYSE: VMI), a global leader that provides vital infrastructure and advances agricultural productivity while driving innovation through technology, today reported financial results for the fourth quarter and fiscal year ended December 30, 2023.
President and Chief Executive Officer Avner M. Applbaum commented, “The Valmont team delivered fourth-quarter results in line with our expectations. Despite lower sales volumes, we expanded gross profit margins year-over-year through successful pricing strategies and improved operational efficiencies in our facilities. In Infrastructure, our solid results reflect continued strong utility market demand, and we achieved another quarter of adjusted operating margin improvement year-over-year despite lower Telecommunications volumes. In Agriculture, as expected, North America sales were lower as backlog levels were more normalized this year compared to fourth quarter 2022. International sales growth was driven by Middle East project shipments and sales from our recent acquisition of HR Products, offset by lower sales in Brazil due to slowing market demand amid lower grain prices. Reflecting on the full year, our global teams performed extremely well in 2023, despite industry-wide demand challenges in North America agriculture and telecommunications markets that pressured the top line. I’m very pleased with our progress in reducing inventory, which helped deliver strong operating cash flows.”
Applbaum added, “Turning to 2024, we remain focused on what we can control. We are sustaining higher gross profit margins through ongoing improvement in operational efficiencies and commitment to our pricing strategies. We are reducing SG&A expense through the realignment program we announced last quarter. We expect these efforts to help mitigate the bottom-line impact of softer demand in agriculture and telecommunications markets, and to position our business for incremental profit when those markets normalize. Turning to the segments, in Infrastructure, demand for our products remains strong and we are making strategic capacity investments to meet the needs of our customers and take advantage of the visible opportunities ahead of us. In Agriculture, we expect lower sales this year amid more challenging global market conditions due to lower grain prices and farm income projections. Across both segments, we will continue to deliver operational efficiencies and benefit from our realigned organization. Our market leadership, combined with a relentless focus on strong cash flow generation, return on invested capital and a disciplined capital allocation framework gives us confidence in our actions to enhance shareholder value for years to come.”
Fourth Quarter 2023 Highlights (all metrics compared to Fourth Quarter 2022 unless otherwise noted)
- Net Sales decreased 10.3% to $1.0 billion. Accounting for the 2022 divestiture of the offshore wind energy structures business, reported in the “Other” segment, Net Sales decreased 7.5%1
- Operating Income decreased 42.1% to $63.5 million or 6.3% of net sales (decreased 11.9% to $100.2 million or 9.9% adjusted1) compared to $109.7 million or 9.7% of net sales ($113.7 million or 10.4% adjusted1)
- Diluted Earnings per Share (“EPS”) of $1.38 ($3.18 adjusted1) compared to $1.86 ($3.57 adjusted1)
- Generated strong operating cash flows of $115.9 million; cash and cash equivalents at the end of the fourth quarter were $203.0 million
Full Year 2023 Highlights (all metrics compared to Full Year 2022 unless otherwise noted)
- Net Sales decreased 3.9% to $4.2 billion. Accounting for the 2022 divestiture of the offshore wind energy structures business, reported in the “Other” segment, Net Sales decreased 1.7%1
- Operating Income decreased 32.7% to $291.6 million or 7.0% of net sales (increased 5.2% to $473.2 million or 11.3% adjusted1) compared to $433.2 million or 10.0% of net sales ($449.7 million or 10.6% adjusted1)
- Diluted EPS of $6.78 ($14.98 adjusted1) compared to $11.62 ($13.82 adjusted1)
- Generated strong operating cash flows of $306.8 million and free cash flow of $210.0 million1, driven by net earnings and working capital management
-
Deployed $524.2 million of capital, including $129.4 million for capital expenditures and acquisitions, and $394.8 million was returned to shareholders through dividends and share repurchases
- Share repurchases include a $120.0 million Accelerated Share Repurchase program announced in the fourth quarter
- Achieved Return on Invested Capital of 7.2% (14.0% adjusted1)
Key Financial Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Fourth Quarter 2023 |
|
GAAP |
Adjusted1 |
|||||||||||||||
(000s except per share amounts) |
|
13 weeks |
|
14 weeks |
|
|
|
13 weeks |
|
14 weeks |
|
|
||||||
|
|
12/30/2023 |
|
12/31/2022 |
|
|
|
12/30/2023 |
|
12/31/2022 |
|
|
||||||
|
|
Q4 2023 |
|
Q4 2022 |
|
vs. Q4 2022 |
|
Q4 2023 |
|
Q4 2022 |
|
vs. Q4 2022 |
||||||
Net Sales |
|
$ |
1,015,526 |
|
$ |
1,131,516 |
|
(10.3 |
)% |
|
$ |
1,015,526 |
|
$ |
1,098,244 |
|
(7.5 |
)% |
Gross Profit |
|
|
282,941 |
|
|
298,959 |
|
(5.4 |
)% |
|
|
282,941 |
|
|
298,959 |
|
(5.4 |
)% |
Gross Profit as a % of Net Sales |
|
|
27.9 |
% |
|
26.4 |
% |
|
|
|
27.9 |
% |
|
27.2 |
% |
|
||
Operating Income |
|
|
63,548 |
|
|
109,716 |
|
(42.1 |
)% |
|
|
100,204 |
|
|
113,734 |
|
(11.9 |
)% |
Operating Income as a % of Net Sales |
|
|
6.3 |
% |
|
9.7 |
% |
|
|
|
9.9 |
% |
|
10.4 |
% |
|
||
Net Earnings1 |
|
|
28,587 |
|
|
40,332 |
|
(29.1 |
)% |
|
|
66,034 |
|
|
77,256 |
|
(14.5 |
)% |
Diluted Earnings per Share |
|
|
1.38 |
|
|
1.86 |
|
(25.8 |
)% |
|
|
3.18 |
|
|
3.57 |
|
(10.9 |
)% |
Average Shares Outstanding |
|
|
20,764 |
|
|
21,656 |
|
|
|
|
20,764 |
|
|
21,656 |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Full Year 2023 |
|
GAAP |
Adjusted1 |
|||||||||||||||
(000s except per share amounts) |
|
52 weeks |
|
53 weeks |
|
|
|
52 weeks |
|
53 weeks |
|
|
||||||
|
|
12/30/2023 |
|
12/31/2022 |
|
|
|
12/30/2023 |
|
12/31/2022 |
|
|
||||||
|
|
FY 2023 |
|
FY 2022 |
|
vs. FY 2022 |
|
FY 2023 |
|
FY 2022 |
|
vs. FY 2022 |
||||||
Net Sales |
|
$ |
4,174,598 |
|
$ |
4,345,250 |
|
(3.9 |
)% |
|
$ |
4,174,598 |
|
$ |
4,245,031 |
|
(1.7 |
)% |
Gross Profit |
|
|
1,236,034 |
|
|
1,126,224 |
|
9.8 |
% |
|
|
1,236,034 |
|
|
1,126,224 |
|
9.8 |
% |
Gross Profit as a % of Net Sales |
|
|
29.6 |
% |
|
25.9 |
% |
|
|
|
29.6 |
% |
|
26.5 |
% |
|
||
Operating Income |
|
|
291,557 |
|
|
433,249 |
|
(32.7 |
)% |
|
|
473,237 |
|
|
449,725 |
|
5.2 |
% |
Operating Income as a % of Net Sales |
|
|
7.0 |
% |
|
10.0 |
% |
|
|
|
11.3 |
% |
|
10.6 |
% |
|
||
Net Earnings1 |
|
|
143,475 |
|
|
250,863 |
|
(42.8 |
)% |
|
|
316,926 |
|
|
298,139 |
|
6.3 |
% |
Diluted Earnings per Share |
|
|
6.78 |
|
|
11.62 |
|
(41.7 |
)% |
|
|
14.98 |
|
|
13.82 |
|
8.4 |
% |
Average Shares Outstanding |
|
|
21,159 |
|
|
21,580 |
|
|
|
|
21,159 |
|
|
21,580 |
|
|
||
Fourth Quarter 2023 Segment Review
Infrastructure (73.4% of Net Sales)
Products and solutions to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to protect metal products
Sales of $748.3 million decreased 3.0% year-over-year. Higher volumes in the Transmission, Distribution and Substation (TD&S) and Solar product lines were driven by continued strong market demand led by ongoing investments in the global energy transition. These volume increases, and favorable pricing across the portfolio, were more than offset by lower Telecommunications and Coatings volumes.
Operating Income decreased to $82.6 million or 11.1% of net sales ($98.7 million or 13.2% adjusted1) compared to $99.6 million or 13.0% of net sales in 2022. Favorable pricing and deliberate actions to improve overall cost of goods sold were more than offset by lower volumes.
Agriculture (26.6% of Net Sales)
Center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products; advanced technology solutions for precision agriculture
Sales of $271.6 million decreased 18.9% year-over-year. In North America, irrigation equipment volumes were lower as the fourth quarter of 2022 benefited from the ongoing delivery of elevated backlog. Average irrigation selling prices were comparable to last year.
International sales growth was driven by higher project sales and sales from the HR Products acquisition, offset by lower sales in Brazil, due to lower grain prices and the return of backlog to a more normalized level as compared to fourth quarter 2022.
Operating Income decreased to $13.9 million, or 5.2% of net sales ($27.8 million or 10.3% adjusted1) compared to $40.5 million or 12.2% of net sales ($44.5 million or 13.4% adjusted1) in 2022 driven by lower volumes and higher SG&A.
Other
Offshore wind energy structures business
As previously announced, the divestiture of the offshore wind energy structures business was completed in December 2022. In the fourth quarter of 2022, the subsequently divested business generated sales of $33.3 million and operating income was $1.4 million.
Balance Sheet, Liquidity, and Capital Allocation
The Company generated full-year 2023 free cash flow1 of $210.0 million through earnings and effectively managing working capital. At the end of 2023, cash and cash equivalents were $203.0 million.
$178.6 million of Company stock was purchased in the fourth quarter, inclusive of the $120.0 million Accelerated Share Repurchase program executed during the quarter. $136.1 million remains on the authorized share repurchase program.
Organizational Realignment Program
As announced in October 2023, the Company initiated an organizational realignment program to better align the Company’s administrative support structure to its long-term growth strategy. The program affected both reportable segments and corporate, and was completed in 2023. Actions taken resulted in pre-tax cash expenses of $35.2 million in fiscal 2023, including $31.0 million in the fourth quarter, and are expected to be recovered through lower SG&A within 12 months.
Introducing 2024 Full Year Financial Outlook and Key Assumptions
The Company is introducing its 2024 full-year net sales and diluted earnings per share outlook and key assumptions for the year.
-
Net Sales Change (vs. prior year) of (3.0%) to flat
- Infrastructure sales growth expected to approach mid-single digits
- Agriculture sales expected to decrease 15-20%
- Diluted Earnings per Share of $14.25 to $15.50
- Effective tax rate of approximately 26%
- Minimal expected foreign currency translation impact to net sales
- Capital expenditures expected to be in the range of $125 to $140 million to support strategic growth initiatives
Providing New Long-Term Financial Targets
The Company is taking the opportunity to provide new long-term financial targets beyond 2024.
Metric |
Target |
Organic Net Sales Growth |
Above Mid-Single Digits |
Operating Margin |
Approaching Mid-Teens |
Return on Invested Capital (ROIC) |
High-Teens |
Free Cash Flow Conversion |
100% of Net Earnings |
Applbaum continued, “I’m excited to share our long-term financial targets for Valmont beyond 2024. We are focusing on strategic initiatives that drive sustainable growth and profitability over the long term with an ongoing commitment to value creation. We are executing a focused and disciplined plan to leverage our diversified portfolio and deliver operating margin and ROIC improvements. As evidenced by these goals, we are demonstrating higher levels of through-cycle structural profitability while making our company more resilient. This drives our position as a market leader, enabling us to achieve greater performance and create sustainable value for our shareholders.”
A live audio discussion with Avner M. Applbaum, President and Chief Executive Officer, and Timothy P. Francis, Interim Chief Financial Officer, will be accessible by telephone on Thursday, February 22, 2024 at 8:00 a.m. CT 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 4Q and Full Year 2023 Earnings Conference Call. A slide presentation will simultaneously be available for download on the Investors page of valmont.com. A replay of the event can be accessed three hours after the call at the above link or by telephone at +1 877.660.6853 or +1 201.612.7415. Please use access code 13742393. The replay will be available through 10:59 p.m. CT on February 29, 2024.
About Valmont Industries, Inc.
For over 75 years, Valmont® 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.® 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 the pandemic 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, geopolitical risks, 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.
Website and Social Media Disclosure
The Company uses its website and social media channels identified on its website as channels of distribution of Company information. The information that the Company posts through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following the Company’s press releases, Securities and Exchange Commission filings, and public conference calls and webcasts. The contents of the Company’s website and social media channels are not part of this press release.
1Please 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)
|
|
13 and 14 Weeks Ended |
|
52 and 53 Weeks Ended |
||||||||||||
|
|
December |
|
December |
|
December |
|
December |
||||||||
|
|
30, 2023 |
|
|
31, 2022 |
|
|
30, 2023 |
|
|
31, 2022 |
|
||||
Net sales |
|
$ |
1,015,526 |
|
|
$ |
1,131,516 |
|
|
$ |
4,174,598 |
|
|
$ |
4,345,250 |
|
Cost of sales |
|
|
732,585 |
|
|
|
832,557 |
|
|
|
2,938,564 |
|
|
|
3,219,026 |
|
Gross profit |
|
|
282,941 |
|
|
|
298,959 |
|
|
|
1,236,034 |
|
|
|
1,126,224 |
|
Selling, general, and administrative expenses |
|
|
188,363 |
|
|
|
189,243 |
|
|
|
768,423 |
|
|
|
692,975 |
|
Impairment of long-lived assets |
|
|
— |
|
|
|
— |
|
|
|
140,844 |
|
|
|
— |
|
Realignment charges |
|
|
31,030 |
|
|
|
— |
|
|
|
35,210 |
|
|
|
— |
|
Operating income |
|
|
63,548 |
|
|
|
109,716 |
|
|
|
291,557 |
|
|
|
433,249 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
(15,314 |
) |
|
|
(13,256 |
) |
|
|
(56,808 |
) |
|
|
(47,534 |
) |
Interest income |
|
|
1,651 |
|
|
|
996 |
|
|
|
6,230 |
|
|
|
2,015 |
|
Gain (loss) on investments - unrealized |
|
|
1,773 |
|
|
|
932 |
|
|
|
3,564 |
|
|
|
(3,374 |
) |
Loss from divestiture of offshore wind energy structures business |
|
|
— |
|
|
|
(33,273 |
) |
|
|
— |
|
|
|
(33,273 |
) |
Other |
|
|
(6,492 |
) |
|
|
4,268 |
|
|
|
(8,091 |
) |
|
|
12,805 |
|
Other income (expense), net |
|
|
(18,382 |
) |
|
|
(40,333 |
) |
|
|
(55,105 |
) |
|
|
(69,361 |
) |
Earnings before income taxes and equity in loss of nonconsolidated subsidiaries |
|
|
45,166 |
|
|
|
69,383 |
|
|
|
236,452 |
|
|
|
363,888 |
|
Income tax expense |
|
|
10,882 |
|
|
|
28,156 |
|
|
|
90,121 |
|
|
|
108,687 |
|
Equity in loss of nonconsolidated subsidiaries |
|
|
(200 |
) |
|
|
(19 |
) |
|
|
(1,419 |
) |
|
|
(950 |
) |
Net earnings |
|
|
34,084 |
|
|
|
41,208 |
|
|
|
144,912 |
|
|
|
254,251 |
|
Loss (earnings) attributable to redeemable noncontrolling interests |
|
|
1,877 |
|
|
|
(876 |
) |
|
|
5,937 |
|
|
|
(3,388 |
) |
Net earnings attributable to Valmont Industries, Inc. |
|
|
35,961 |
|
|
|
40,332 |
|
|
|
150,849 |
|
|
|
250,863 |
|
Change in redemption value of redeemable noncontrolling interests |
|
|
(7,374 |
) |
|
|
— |
|
|
|
(7,374 |
) |
|
|
— |
|
Net earnings attributable to Valmont Industries, Inc. including change in redemption value of redeemable noncontrolling interests |
|
$ |
28,587 |
|
|
$ |
40,332 |
|
|
$ |
143,475 |
|
|
$ |
250,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average shares outstanding (000s) - Basic |
|
|
20,577 |
|
|
|
21,319 |
|
|
|
20,956 |
|
|
|
21,311 |
|
Earnings per share - Basic |
|
$ |
1.39 |
|
|
$ |
1.89 |
|
|
$ |
6.85 |
|
|
$ |
11.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average shares outstanding (000s) - Diluted |
|
|
20,764 |
|
|
|
21,656 |
|
|
|
21,159 |
|
|
|
21,580 |
|
Earnings per share - Diluted |
|
$ |
1.38 |
|
|
$ |
1.86 |
|
|
$ |
6.78 |
|
|
$ |
11.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends per share |
|
$ |
0.60 |
|
|
$ |
0.55 |
|
|
$ |
2.40 |
|
|
$ |
2.20 |
|
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
|
13 and 14 Weeks Ended |
52 and 53 Weeks Ended |
|||||||||||
|
|
December 30, |
December 31, |
December 30, |
December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
||||
Infrastructure |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
745,713 |
|
$ |
765,077 |
|
$ |
2,999,637 |
|
$ |
2,909,746 |
|
Gross profit |
|
|
201,968 |
|
|
201,978 |
|
|
842,081 |
|
|
736,611 |
|
as a percent of net sales |
|
|
27.1 |
% |
|
26.4 |
% |
|
28.1 |
% |
|
25.3 |
% |
Selling, general, and administrative expenses |
|
|
103,227 |
|
|
102,387 |
|
|
424,997 |
|
|
382,112 |
|
as a percent of net sales |
|
|
13.8 |
% |
|
13.4 |
% |
|
14.2 |
% |
|
13.1 |
% |
Impairment of long-lived assets |
|
|
— |
|
|
— |
|
|
3,571 |
|
|
— |
|
Realignment charges |
|
|
16,191 |
|
|
— |
|
|
17,260 |
|
|
— |
|
Operating income |
|
|
82,550 |
|
|
99,591 |
|
|
396,253 |
|
|
354,499 |
|
as a percent of net sales |
|
|
11.1 |
% |
|
13.0 |
% |
|
13.2 |
% |
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
||||
Agriculture |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
269,813 |
|
$ |
333,167 |
|
$ |
1,174,961 |
|
$ |
1,335,285 |
|
Gross profit |
|
|
80,973 |
|
|
94,378 |
|
|
393,953 |
|
|
381,793 |
|
as a percent of net sales |
|
|
30.0 |
% |
|
28.3 |
% |
|
33.5 |
% |
|
28.6 |
% |
Selling, general, and administrative expenses |
|
|
58,833 |
|
|
53,894 |
|
|
230,729 |
|
|
202,530 |
|
as a percent of net sales |
|
|
21.8 |
% |
|
16.2 |
% |
|
19.6 |
% |
|
15.2 |
% |
Impairment of long-lived assets |
|
|
— |
|
|
— |
|
|
137,273 |
|
|
— |
|
Realignment charges |
|
|
8,194 |
|
|
— |
|
|
9,101 |
|
|
— |
|
Operating income |
|
|
13,946 |
|
|
40,484 |
|
|
16,850 |
|
|
179,263 |
|
as a percent of net sales |
|
|
5.2 |
% |
|
12.2 |
% |
|
1.4 |
% |
|
13.4 |
% |
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
— |
|
$ |
33,272 |
|
$ |
— |
|
$ |
100,219 |
|
Gross profit |
|
|
— |
|
|
2,603 |
|
|
— |
|
|
7,820 |
|
as a percent of net sales |
|
|
NM |
|
|
7.8 |
% |
|
NM |
|
|
7.8 |
% |
Selling, general, and administrative expenses |
|
|
— |
|
|
1,158 |
|
|
— |
|
|
5,561 |
|
as a percent of net sales |
|
|
NM |
|
|
3.5 |
% |
|
NM |
|
|
5.5 |
% |
Operating income |
|
|
— |
|
|
1,445 |
|
|
— |
|
|
2,259 |
|
as a percent of net sales |
|
|
NM |
|
|
4.3 |
% |
|
NM |
|
|
2.3 |
% |
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
||||
Selling, general, and administrative expenses |
|
$ |
26,303 |
|
$ |
31,804 |
|
$ |
112,697 |
|
$ |
102,772 |
|
Realignment charges |
|
|
6,645 |
|
|
— |
|
|
8,849 |
|
|
— |
|
Operating loss |
|
|
(32,948 |
) |
|
(31,804 |
) |
|
(121,546 |
) |
|
(102,772 |
) |
NM = not meaningful
Valmont has aggregated its business segments into two global reportable segments as follows.
Infrastructure: This segment consists of the manufacture and distribution of products and solutions to serve infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to protect metal products.
Agriculture: This segment consists of the manufacture of center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.
In addition to these two reportable segments, the Company had a business and related activities that were not more than 10% of consolidated sales, operating income, or assets. This business, the offshore wind energy structures business, was reported in the “Other” segment until its divestiture in fiscal 2022.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in millions)
(Unaudited)
The backlog of orders for the principal products manufactured and marketed was $1,465.5 million as of December 30, 2023 and $1,656.4 million as of December 31, 2022. An order is reported in our backlog upon receipt of a purchase order from the customer or execution of a sales order contract. We anticipate that most of the fiscal 2023 backlog of orders will be filled during fiscal 2024. As of December 30, 2023 and December 31, 2022, total backlog by segment was as follows:
|
|
|
|
|
|
|
|
|
December 30, |
|
December 31, |
||
|
|
2023 |
|
2022 |
||
Infrastructure |
|
$ |
1,299.6 |
|
$ |
1,339.1 |
Agriculture |
|
|
165.9 |
|
|
317.3 |
Total backlog |
|
$ |
1,465.5 |
|
$ |
1,656.4 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
|
Thirteen weeks ended December 30, 2023 |
||||||||||||
|
|
Infrastructure |
|
Agriculture |
|
Intersegment |
|
Consolidated |
|||||
Geographical Market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
575,166 |
|
$ |
136,378 |
|
$ |
(4,240 |
) |
|
$ |
707,304 |
International |
|
|
173,124 |
|
|
135,266 |
|
|
(168 |
) |
|
|
308,222 |
Total sales |
|
$ |
748,290 |
|
$ |
271,644 |
|
$ |
(4,408 |
) |
|
$ |
1,015,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission, Distribution, and Substation |
|
$ |
316,674 |
|
$ |
— |
|
$ |
— |
|
|
$ |
316,674 |
Lighting and Transportation |
|
|
236,210 |
|
|
— |
|
|
— |
|
|
|
236,210 |
Coatings |
|
|
84,129 |
|
|
— |
|
|
(2,409 |
) |
|
|
81,720 |
Telecommunications |
|
|
56,660 |
|
|
— |
|
|
— |
|
|
|
56,660 |
Solar |
|
|
54,617 |
|
|
— |
|
|
(168 |
) |
|
|
54,449 |
Irrigation Equipment and Parts |
|
|
— |
|
|
244,148 |
|
|
(1,831 |
) |
|
|
242,317 |
Technology Products and Services |
|
|
— |
|
|
27,496 |
|
|
— |
|
|
|
27,496 |
Total sales |
|
$ |
748,290 |
|
$ |
271,644 |
|
$ |
(4,408 |
) |
|
$ |
1,015,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourteen weeks ended December 31, 2022 |
||||||||||||||
|
|
Infrastructure |
|
Agriculture |
|
Other |
|
Intersegment |
|
Consolidated |
||||||
Geographical Market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
588,867 |
|
$ |
202,560 |
|
$ |
— |
|
$ |
(5,932 |
) |
|
$ |
785,495 |
International |
|
|
182,470 |
|
|
132,506 |
|
|
33,272 |
|
|
(2,227 |
) |
|
|
346,021 |
Total sales |
|
$ |
771,337 |
|
$ |
335,066 |
|
$ |
33,272 |
|
$ |
(8,159 |
) |
|
$ |
1,131,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission, Distribution, and Substation |
|
$ |
302,444 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
302,444 |
Lighting and Transportation |
|
|
239,453 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
239,453 |
Coatings |
|
|
92,441 |
|
|
— |
|
|
— |
|
|
(4,032 |
) |
|
|
88,409 |
Telecommunications |
|
|
87,577 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
87,577 |
Solar |
|
|
49,422 |
|
|
— |
|
|
— |
|
|
(2,228 |
) |
|
|
47,194 |
Irrigation Equipment and Parts |
|
|
— |
|
|
302,965 |
|
|
— |
|
|
(1,899 |
) |
|
|
301,066 |
Technology Products and Services |
|
|
— |
|
|
32,101 |
|
|
— |
|
|
— |
|
|
|
32,101 |
Other |
|
|
— |
|
|
— |
|
|
33,272 |
|
|
— |
|
|
|
33,272 |
Total sales |
|
$ |
771,337 |
|
$ |
335,066 |
|
$ |
33,272 |
|
$ |
(8,159 |
) |
|
$ |
1,131,516 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
|
Fifty-two weeks ended December 30, 2023 |
||||||||||||
|
|
Infrastructure |
|
Agriculture |
|
Intersegment |
|
Consolidated |
|||||
Geographical Market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
2,318,801 |
|
$ |
587,056 |
|
$ |
(16,282 |
) |
|
$ |
2,889,575 |
International |
|
|
691,266 |
|
|
595,167 |
|
|
(1,410 |
) |
|
|
1,285,023 |
Total sales |
|
$ |
3,010,067 |
|
$ |
1,182,223 |
|
$ |
(17,692 |
) |
|
$ |
4,174,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission, Distribution, and Substation |
|
$ |
1,243,768 |
|
$ |
— |
|
$ |
— |
|
|
$ |
1,243,768 |
Lighting and Transportation |
|
|
964,072 |
|
|
— |
|
|
— |
|
|
|
964,072 |
Coatings |
|
|
354,330 |
|
|
— |
|
|
(9,020 |
) |
|
|
345,310 |
Telecommunications |
|
|
252,165 |
|
|
— |
|
|
— |
|
|
|
252,165 |
Solar |
|
|
195,732 |
|
|
— |
|
|
(1,410 |
) |
|
|
194,322 |
Irrigation Equipment and Parts |
|
|
— |
|
|
1,069,425 |
|
|
(7,262 |
) |
|
|
1,062,163 |
Technology Products and Services |
|
|
— |
|
|
112,798 |
|
|
— |
|
|
|
112,798 |
Total sales |
|
$ |
3,010,067 |
|
$ |
1,182,223 |
|
$ |
(17,692 |
) |
|
$ |
4,174,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-three weeks ended December 31, 2022 |
||||||||||||||
|
|
Infrastructure |
|
Agriculture |
|
Other |
|
Intersegment |
|
Consolidated |
||||||
Geographical Market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
2,234,339 |
|
$ |
766,929 |
|
$ |
— |
|
$ |
(26,248 |
) |
|
$ |
2,975,020 |
International |
|
|
694,080 |
|
|
579,743 |
|
|
100,219 |
|
|
(3,812 |
) |
|
|
1,370,230 |
Total sales |
|
$ |
2,928,419 |
|
$ |
1,346,672 |
|
$ |
100,219 |
|
$ |
(30,060 |
) |
|
$ |
4,345,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission, Distribution, and Substation |
|
$ |
1,184,660 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
1,184,660 |
Lighting and Transportation |
|
|
940,462 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
940,462 |
Coatings |
|
|
356,707 |
|
|
— |
|
|
— |
|
|
(15,327 |
) |
|
|
341,380 |
Telecommunications |
|
|
320,342 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
320,342 |
Solar |
|
|
126,248 |
|
|
— |
|
|
— |
|
|
(3,346 |
) |
|
|
122,902 |
Irrigation Equipment and Parts |
|
|
— |
|
|
1,231,587 |
|
|
— |
|
|
(11,387 |
) |
|
|
1,220,200 |
Technology Products and Services |
|
|
— |
|
|
115,085 |
|
|
— |
|
|
— |
|
|
|
115,085 |
Other |
|
|
— |
|
|
— |
|
|
100,219 |
|
|
— |
|
|
|
100,219 |
Total sales |
|
$ |
2,928,419 |
|
$ |
1,346,672 |
|
$ |
100,219 |
|
$ |
(30,060 |
) |
|
$ |
4,345,250 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
|
December 30, |
|
December 31, |
|||
|
|
2023 |
|
2022 |
||
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
203,041 |
|
$ |
185,406 |
Receivables, net |
|
|
657,960 |
|
|
604,181 |
Inventories |
|
|
658,428 |
|
|
728,762 |
Contract assets |
|
|
175,721 |
|
|
174,539 |
Prepaid expenses and other current assets |
|
|
91,754 |
|
|
87,697 |
Refundable income taxes |
|
|
725 |
|
|
— |
Total current assets |
|
|
1,787,629 |
|
|
1,780,585 |
Property, plant, and equipment, net |
|
|
617,394 |
|
|
595,578 |
Goodwill and other non-current assets |
|
|
1,072,425 |
|
|
1,180,833 |
Total assets |
|
$ |
3,477,448 |
|
$ |
3,556,996 |
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current installments of long-term debt |
|
$ |
719 |
|
$ |
1,194 |
Notes payable to banks |
|
|
3,205 |
|
|
5,846 |
Accounts payable |
|
|
358,311 |
|
|
360,312 |
Accrued expenses |
|
|
277,764 |
|
|
248,320 |
Contract liabilities |
|
|
70,978 |
|
|
172,915 |
Income taxes payable |
|
|
— |
|
|
3,664 |
Dividends payable |
|
|
12,125 |
|
|
11,742 |
Total current liabilities |
|
|
723,102 |
|
|
803,993 |
Long-term debt, excluding current installments |
|
|
1,107,885 |
|
|
870,935 |
Operating lease liabilities |
|
|
162,743 |
|
|
155,469 |
Other non-current liabilities |
|
|
66,646 |
|
|
84,887 |
Total liabilities |
|
|
2,060,376 |
|
|
1,915,284 |
Redeemable noncontrolling interests |
|
|
62,792 |
|
|
60,865 |
Shareholders' equity |
|
|
1,354,280 |
|
|
1,580,847 |
Total liabilities, redeemable noncontrolling interests, and shareholders' equity |
|
$ |
3,477,448 |
|
$ |
3,556,996 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
|
52 and 53 Weeks Ended |
|||||||
|
|
December 30, |
|
December 31, |
||||
|
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net earnings |
|
$ |
144,912 |
|
|
$ |
254,251 |
|
Depreciation and amortization |
|
|
98,708 |
|
|
|
97,167 |
|
Contribution to defined benefit pension plan |
|
|
(17,345 |
) |
|
|
(17,155 |
) |
Impairment of long-lived assets |
|
|
140,844 |
|
|
|
— |
|
Loss (gain) on divestitures |
|
|
(2,994 |
) |
|
|
33,273 |
|
Change in working capital |
|
|
(66,342 |
) |
|
|
(56,092 |
) |
Other |
|
|
8,992 |
|
|
|
14,821 |
|
Net cash flows provided by operating activities |
|
|
306,775 |
|
|
|
326,265 |
|
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property, plant, and equipment |
|
|
(96,771 |
) |
|
|
(93,288 |
) |
Proceeds from divestiture, net of cash divested |
|
|
6,369 |
|
|
|
— |
|
Proceeds from property damage insurance claims |
|
|
7,468 |
|
|
|
— |
|
Acquisitions, net of cash acquired |
|
|
(32,676 |
) |
|
|
(39,287 |
) |
Other |
|
|
329 |
|
|
|
495 |
|
Net cash flows used in investing activities |
|
|
(115,281 |
) |
|
|
(132,080 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from long-term borrowings |
|
|
370,012 |
|
|
|
253,999 |
|
Principal payments on long-term borrowings |
|
|
(134,748 |
) |
|
|
(336,403 |
) |
Net payments on short-term borrowings |
|
|
(3,298 |
) |
|
|
(7,577 |
) |
Purchase of treasury shares |
|
|
(345,279 |
) |
|
|
(40,474 |
) |
Dividends to redeemable noncontrolling interests |
|
|
(662 |
) |
|
|
(714 |
) |
Purchase of redeemable noncontrolling interests |
|
|
— |
|
|
|
(7,338 |
) |
Dividends paid |
|
|
(49,515 |
) |
|
|
(45,813 |
) |
Other |
|
|
(12,915 |
) |
|
|
2,415 |
|
Net cash flows used in financing activities |
|
|
(176,405 |
) |
|
|
(181,905 |
) |
Effect of exchange rates on cash and cash equivalents |
|
|
2,546 |
|
|
|
(4,106 |
) |
Net change in cash and cash equivalents |
|
|
17,635 |
|
|
|
8,174 |
|
Cash and cash equivalents - beginning of period |
|
|
185,406 |
|
|
|
177,232 |
|
Cash and cash equivalents - end of period |
|
$ |
203,041 |
|
|
$ |
185,406 |
|
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 table below discloses the impacts of the impairment of long-lived assets, realignment charges, and non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership on net earnings for fiscal 2023, as well as the impact of the loss from Argentine peso hyperinflation and non-recurring tax benefit items on net earnings. Amounts may be impacted by rounding. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Thirteen |
|
|
|
|
Fifty-two |
|
|
|
||||||
|
|
weeks ended |
|
Diluted |
|
weeks ended |
|
Diluted |
||||||||
|
|
December |
|
earnings per |
|
December |
|
earnings per |
||||||||
|
|
30, 2023 |
|
|
share1 |
|
30, 2023 |
|
|
share1 |
||||||
Net earnings attributable to Valmont Industries, Inc. including change in redemption value of redeemable noncontrolling interests - as reported |
$ |
28,587 |
|
$ |
1.38 |
$ |
143,475 |
$ |
6.78 |
|||||||
Less: Change in redemption value of redeemable noncontrolling interests |
|
|
7,374 |
|
|
|
0.36 |
|
|
|
7,374 |
|
|
|
0.35 |
|
Net earnings attributable to Valmont Industries, Inc. |
|
|
35,961 |
|
|
|
1.73 |
|
|
|
150,849 |
|
|
|
7.13 |
|
Impairment of long-lived assets |
|
|
— |
|
|
|
— |
|
|
|
140,844 |
|
|
|
6.66 |
|
Realignment charges |
|
|
31,030 |
|
|
|
1.49 |
|
|
|
35,210 |
|
|
|
1.66 |
|
Other non-recurring charges |
|
|
5,626 |
|
|
|
0.27 |
|
|
|
5,626 |
|
|
|
0.27 |
|
Total adjustments, pre-tax |
|
|
36,656 |
|
|
|
1.77 |
|
|
|
181,680 |
|
|
|
8.59 |
|
Tax effect of adjustments2 |
|
|
(9,118 |
) |
|
|
(0.44 |
) |
|
|
(14,550 |
) |
|
|
(0.69 |
) |
Loss from Argentine peso hyperinflation, net of tax, attributable to Valmont Industries, Inc. |
|
|
2,535 |
|
|
|
0.12 |
|
|
|
2,535 |
|
|
|
0.12 |
|
Non-recurring tax benefit items |
|
|
— |
|
|
|
— |
|
|
|
(3,588 |
) |
|
|
(0.17 |
) |
Net earnings attributable to Valmont Industries, Inc. - adjusted |
|
$ |
66,034 |
|
|
$ |
3.18 |
|
|
$ |
316,926 |
|
|
$ |
14.98 |
|
Average shares outstanding (000s) - diluted |
|
|
|
|
|
20,764 |
|
|
|
|
|
|
21,159 |
|
||
We previously presented non-GAAP financial measures adjusted for Prospera intangible asset amortization and stock-based compensation recognized for the Prospera employees to provide investors with a better understanding of Agriculture segment performance related to traditional segment products. The Company conducted its annual impairment testing of intangible asset value as of September 2, 2023 and significantly reduced the Prospera intangible asset value. Additionally, the Board of Directors approved certain realignment activities commencing in the third quarter of fiscal 2023 that affected the future stock compensation recognized for the Prospera employees. As a result, we do not consider our historical adjustments related to Prospera to arrive at non-GAAP financial measures to be relevant to investor understanding of fourth quarter of fiscal 2023, second half of fiscal 2023, and future segment performance. Since these items had been specific adjustments to net earnings for the first half of fiscal 2023, we removed what would otherwise have been their effect on fiscal 2023 results which is presented as “further adjusted” net earnings below.
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Thirteen |
|
|
|
|
Fifty-two |
|
|
|
||||
|
|
weeks ended |
|
Diluted |
|
weeks ended |
|
Diluted |
||||||
|
|
December |
|
earnings per |
|
December |
|
earnings per |
||||||
|
|
30, 2023 |
|
share1 |
|
30, 2023 |
|
|
share1 |
|||||
Net earnings attributable to Valmont Industries, Inc. - adjusted |
|
$ |
66,034 |
|
$ |
3.18 |
|
$ |
316,926 |
|
|
$ |
14.98 |
|
Prospera intangible asset amortization |
|
|
— |
|
|
— |
|
|
3,290 |
|
|
|
0.16 |
|
Prospera stock-based compensation |
|
|
— |
|
|
— |
|
|
4,278 |
|
|
|
0.20 |
|
Tax effect of adjustments2 |
|
|
— |
|
|
— |
|
|
(1,092 |
) |
|
|
(0.05 |
) |
Net earnings attributable to Valmont Industries, Inc. - further adjusted |
|
$ |
66,034 |
|
$ |
3.18 |
|
$ |
323,402 |
|
|
$ |
15.28 |
|
Average shares outstanding (000s) - diluted |
|
|
|
|
|
20,764 |
|
|
|
|
|
21,159 |
|
|
1Earnings per share includes rounding
|
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 impacts of the loss from the divestiture of the offshore wind energy structures business, intangible asset amortization (Prospera), and stock-based compensation recognized for the Prospera employees on net earnings for fiscal 2022 results. Amounts may be impacted by rounding. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fourteen |
|
|
|
|
Fifty-three |
|
|
|
||||||
|
|
weeks ended |
|
Diluted |
|
weeks ended |
|
Diluted |
||||||||
|
|
December |
|
earnings per |
|
December |
|
earnings per |
||||||||
|
|
31, 2022 |
|
|
share1 |
|
31, 2022 |
|
|
share1 |
||||||
Net earnings attributable to Valmont Industries, Inc. - as reported |
|
$ |
40,332 |
|
|
$ |
1.86 |
|
|
$ |
250,863 |
|
|
$ |
11.62 |
|
Loss from divestiture of offshore wind energy structures business |
|
|
33,273 |
|
|
|
1.54 |
|
|
|
33,273 |
|
|
|
1.54 |
|
Prospera intangible asset amortization |
|
|
1,645 |
|
|
|
0.08 |
|
|
|
6,580 |
|
|
|
0.30 |
|
Prospera stock-based compensation |
|
|
2,373 |
|
|
|
0.11 |
|
|
|
9,896 |
|
|
|
0.46 |
|
Total adjustments, pre-tax |
|
|
37,291 |
|
|
|
1.72 |
|
|
|
49,749 |
|
|
|
2.31 |
|
Tax effect of adjustments2 |
|
|
(367 |
) |
|
|
(0.02 |
) |
|
|
(2,473 |
) |
|
|
(0.11 |
) |
Net earnings attributable to Valmont Industries, Inc. - adjusted |
|
$ |
77,256 |
|
|
$ |
3.57 |
|
|
$ |
298,139 |
|
|
$ |
13.82 |
|
Average shares outstanding (000s) - diluted |
|
|
|
|
|
21,656 |
|
|
|
|
|
|
21,580 |
|
||
1Earnings per share includes rounding |
2The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction. |
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 impacts of the impairment of long-lived assets, realignment charges, and non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership on fiscal 2023 results. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted operating income (loss) to be taken into consideration by management and investors with the related reported GAAP measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ended December 30, 2023 |
|
|||||||||||
Operating Income (Loss) Reconciliation |
|
Infrastructure |
|
Agriculture |
|
Corporate |
|
Consolidated |
||||||
Operating income (loss) - as reported |
|
$ |
82,550 |
|
$ |
13,946 |
|
$ |
(32,948 |
) |
|
$ |
63,548 |
|
Realignment charges |
|
|
16,191 |
|
|
8,194 |
|
|
6,645 |
|
|
|
31,030 |
|
Other non-recurring charges |
|
|
— |
|
|
5,626 |
|
|
— |
|
|
|
5,626 |
|
Adjusted operating income (loss) |
|
$ |
98,741 |
|
$ |
27,766 |
|
$ |
(26,303 |
) |
|
$ |
100,204 |
|
Net sales - as reported |
|
|
745,713 |
|
|
269,813 |
|
|
— |
|
|
|
1,015,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) as a % of net sales |
|
|
11.1 |
% |
|
5.2 |
% |
|
NM |
|
|
|
6.3 |
% |
Adj. operating inc. (loss) as a % of net sales |
|
|
13.2 |
% |
|
10.3 |
% |
|
NM |
|
|
|
9.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-two weeks ended December 30, 2023 |
|
|||||||||||
Operating Income (Loss) Reconciliation |
|
Infrastructure |
|
Agriculture |
|
Corporate |
|
Consolidated |
||||||
Operating income (loss) - as reported |
|
$ |
396,253 |
|
$ |
16,850 |
|
$ |
(121,546 |
) |
|
$ |
291,557 |
|
Impairment of long-lived assets |
|
|
3,571 |
|
|
137,273 |
|
|
— |
|
|
|
140,844 |
|
Realignment charges |
|
|
17,260 |
|
|
9,101 |
|
|
8,849 |
|
|
|
35,210 |
|
Other non-recurring charges |
|
|
— |
|
|
5,626 |
|
|
— |
|
|
|
5,626 |
|
Adjusted operating income (loss) |
|
$ |
417,084 |
|
$ |
168,850 |
|
$ |
(112,697 |
) |
|
$ |
473,237 |
|
Net sales - as reported |
|
|
2,999,637 |
|
|
1,174,961 |
|
|
— |
|
|
|
4,174,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) as a % of net sales |
|
|
13.2 |
% |
|
1.4 |
% |
|
NM |
|
|
|
7.0 |
% |
Adj. operating inc. (loss) as a % of net sales |
|
|
13.9 |
% |
|
14.4 |
% |
|
NM |
|
|
|
11.3 |
% |
We previously presented non-GAAP financial measures adjusted for Prospera intangible asset amortization and stock-based compensation recognized for the Prospera employees to provide investors with a better understanding of Agriculture segment performance related to traditional segment products. The Company conducted its annual impairment testing of intangible asset value as of September 2, 2023 and significantly reduced the Prospera intangible asset value. Additionally, the Board of Directors approved certain realignment activities commencing in the third quarter of fiscal 2023 that affected the future stock compensation recognized for the Prospera employees. As a result, we do not consider our historical adjustments related to Prospera to arrive at non-GAAP financial measures to be relevant to investor understanding of fourth quarter of fiscal 2023, second half of fiscal 2023, and future segment performance. Since these items had been specific adjustments to operating income (loss) for the first half of fiscal 2023, we removed what would otherwise have been their effect on fiscal 2023 results which is presented as “further adjusted” operating income (loss) below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-two weeks ended December 30, 2023 |
|
|||||||||||
Operating Income (Loss) Reconciliation |
|
Infrastructure |
|
Agriculture |
|
Corporate |
|
Consolidated |
||||||
Adjusted operating income (loss) |
|
$ |
417,084 |
|
$ |
168,850 |
|
$ |
(112,697 |
) |
|
$ |
473,237 |
|
Prospera intangible asset amortization |
|
|
— |
|
|
3,290 |
|
|
— |
|
|
|
3,290 |
|
Prospera stock-based compensation |
|
|
— |
|
|
4,278 |
|
|
— |
|
|
|
4,278 |
|
Further adjusted operating income (loss) |
|
$ |
417,084 |
|
$ |
176,418 |
|
$ |
(112,697 |
) |
|
$ |
480,805 |
|
Net sales - as reported |
|
|
2,999,637 |
|
|
1,174,961 |
|
|
— |
|
|
|
4,174,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj. operating inc. (loss) as a % of net sales |
|
|
13.9 |
% |
|
14.4 |
% |
|
NM |
|
|
|
11.3 |
% |
Further adj. oper. inc. (loss) as a % of net sales |
|
|
13.9 |
% |
|
15.0 |
% |
|
NM |
|
|
|
11.5 |
% |
NM = not meaningful |
||||||||||||||
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 impacts of the intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on 2022 results. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted operating income (loss) to be taken into consideration by management and investors with the related reported GAAP measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourteen weeks ended December 31, 2022 |
|
||||||||||||||
Operating Income (Loss) Reconciliation |
|
Infrastructure |
|
Agriculture |
|
Other |
|
Corporate |
|
Consolidated |
|||||||
Operating income (loss) - as reported |
|
$ |
99,591 |
|
$ |
40,484 |
|
$ |
1,445 |
|
$ |
(31,804 |
) |
|
$ |
109,716 |
|
Prospera intangible asset amortization |
|
|
— |
|
|
1,645 |
|
|
— |
|
|
— |
|
|
|
1,645 |
|
Prospera stock-based compensation |
|
|
— |
|
|
2,373 |
|
|
— |
|
|
— |
|
|
|
2,373 |
|
Adjusted operating income (loss) |
|
$ |
99,591 |
|
$ |
44,502 |
|
$ |
1,445 |
|
$ |
(31,804 |
) |
|
$ |
113,734 |
|
Net sales - as reported |
|
|
765,077 |
|
|
333,167 |
|
|
33,272 |
|
|
— |
|
|
|
1,131,516 |
|
Adjusted net sales |
|
|
765,077 |
|
|
333,167 |
|
|
— |
|
|
— |
|
|
|
1,098,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) as a % of net sales |
|
|
13.0 |
% |
|
12.2 |
% |
|
4.3 |
% |
|
NM |
|
|
|
9.7 |
% |
Adj. operating inc. (loss) as a % of net sales |
|
|
13.0 |
% |
|
13.4 |
% |
|
4.3 |
% |
|
NM |
|
|
|
10.1 |
% |
Adj. operating inc. (loss) as a % of adj. net sales |
|
|
13.0 |
% |
|
13.4 |
% |
|
NM |
|
|
NM |
|
|
|
10.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-three weeks ended December 31, 2022 |
|
||||||||||||||
Operating Income (Loss) Reconciliation |
|
Infrastructure |
|
Agriculture |
|
Other |
|
Corporate |
|
Consolidated |
|||||||
Operating income (loss) - as reported |
|
$ |
354,499 |
|
$ |
179,263 |
|
$ |
2,259 |
|
$ |
(102,772 |
) |
|
$ |
433,249 |
|
Prospera intangible asset amortization |
|
|
— |
|
|
6,580 |
|
|
— |
|
|
— |
|
|
|
6,580 |
|
Prospera stock-based compensation |
|
|
— |
|
|
9,896 |
|
|
— |
|
|
— |
|
|
|
9,896 |
|
Adjusted operating income (loss) |
|
$ |
354,499 |
|
$ |
195,739 |
|
$ |
2,259 |
|
$ |
(102,772 |
) |
|
$ |
449,725 |
|
Net sales - as reported |
|
|
2,909,746 |
|
|
1,335,285 |
|
|
100,219 |
|
|
— |
|
|
|
4,345,250 |
|
Adjusted net sales |
|
|
2,909,746 |
|
|
1,335,285 |
|
|
— |
|
|
— |
|
|
|
4,245,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) as a % of net sales |
|
|
12.2 |
% |
|
13.4 |
% |
|
2.3 |
% |
|
NM |
|
|
|
10.0 |
% |
Adj. operating inc. (loss) as a % of net sales |
|
|
12.2 |
% |
|
14.7 |
% |
|
2.3 |
% |
|
NM |
|
|
|
10.3 |
% |
Adj. operating inc. (loss) as a % of adj. net sales |
|
|
12.2 |
% |
|
14.7 |
% |
|
NM |
|
|
NM |
|
|
|
10.6 |
% |
NM = not meaningful |
|||||||||||||||||
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF EXCLUDING OTHER SEGMENT NET SALES
(Dollars in thousands)
(Unaudited)
Excluding Other segment net sales from the fourth quarter and fiscal year ended December 31, 2022, which we refer to in this reconciliation as “Adjusted Net Sales”, is a non-GAAP measure. The Other segment net sales were generated by the offshore wind energy structures business which was divested in December 2022. Adjusted Net Sales should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP, or as a measure of our operating performance or liquidity. The table below shows how Adjusted Net Sales is calculated from the Company’s Statements of Earnings. Adjusted Net Sales is calculated as total net sales less Other segment net sales. Adjusted Net Sales allows investors to analyze our operating performance in light of net sales of a divested business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
13 and 14 Weeks Ended |
|
|
|
|
52 and 53 Weeks Ended |
|
|
|
||||||||||||
|
|
December 30, |
|
December 31, |
|
Percent |
|
December 30, |
|
December 31, |
|
Percent |
||||||||||
|
|
2023 |
|
2022 |
|
|
Change |
|
2023 |
|
2022 |
|
|
Change |
||||||||
Net sales |
|
$ |
1,015,526 |
|
$ |
1,131,516 |
|
|
|
(10.3 |
)% |
|
$ |
4,174,598 |
|
$ |
4,345,250 |
|
|
|
(3.9 |
)% |
Less: Other segment net sales |
|
|
— |
|
|
(33,272 |
) |
|
|
NM |
|
|
|
— |
|
|
(100,219 |
) |
|
|
NM |
|
Adjusted net sales |
|
$ |
1,015,526 |
|
$ |
1,098,244 |
|
|
|
(7.5 |
)% |
|
$ |
4,174,598 |
|
$ |
4,245,031 |
|
|
|
(1.7 |
)% |
NM = not meaningful |
||||||||||||||||||||||
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF ADJUSTED RETURN ON INVESTED CAPITAL
(Dollars in thousands)
(Unaudited)
Return on Invested Capital (“ROIC”) and Adjusted ROIC are non-GAAP measures. Accordingly, Invested Capital, ROIC, and Adjusted ROIC should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP, or as a measure of our operating performance or liquidity. The table below shows how Invested Capital, ROIC, and Adjusted ROIC are calculated from our Statements of Earnings and Balance Sheets. ROIC is calculated as after-tax operating income divided by the average of beginning and ending Invested Capital. Adjusted ROIC is calculated as after-tax operating income, adjusted for impairment of long-lived assets, realignment charges, and non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership then divided by the average of beginning and ending Invested Capital. Invested Capital represents total assets minus total liabilities (excluding interest-bearing debt and redeemable noncontrolling interests). ROIC and Adjusted ROIC are some of our key operating ratios, as they allow investors to analyze our operating performance in light of the amount of investment required to generate our operating profit. ROIC and Adjusted ROIC are also measures used to determine management incentives.
|
|
|
|
|
|
|
Fifty-two |
||
|
|
weeks ended |
||
|
|
December 30, |
||
|
|
2023 |
||
Operating income |
|
$ |
291,557 |
|
Effective tax rate |
|
|
38.1 |
% |
Tax effect on operating income |
|
|
(111,124 |
) |
After-tax operating income |
|
|
180,433 |
|
Average invested capital |
|
|
2,504,474 |
|
Return on invested capital |
|
|
7.2 |
% |
|
|
|
|
|
Operating income |
|
|
291,557 |
|
Impairment of long-lived assets |
|
|
140,844 |
|
Realignment charges |
|
|
35,210 |
|
Other non-recurring charges |
|
|
5,626 |
|
Adjusted operating income |
|
|
473,237 |
|
Adjusted effective tax rate1 |
|
|
25.9 |
% |
Tax effect on adjusted operating income |
|
|
(122,665 |
) |
After-tax adjusted operating income |
|
|
350,572 |
|
Average invested capital |
|
|
2,504,474 |
|
Adjusted return on invested capital |
|
|
14.0 |
% |
|
|
|
|
|
|
|
December 30, |
||
|
|
2023 |
||
Total assets |
|
|
3,477,448 |
|
Less: Accounts payable |
|
|
(358,311 |
) |
Less: Accrued expenses |
|
|
(277,764 |
) |
Less: Defined benefit pension asset |
|
|
(15,404 |
) |
Less: Deferred compensation |
|
|
(32,623 |
) |
Less: Other noncurrent liabilities |
|
|
(12,818 |
) |
Less: Dividends payable |
|
|
(12,125 |
) |
Less: Lease liability |
|
|
(162,743 |
) |
Less: Contract liability |
|
|
(70,978 |
) |
Less: Deferred tax liability |
|
|
(21,205 |
) |
Total invested capital |
|
$ |
2,513,477 |
|
Beginning of year invested capital |
|
$ |
2,495,471 |
|
Average invested capital |
|
$ |
2,504,474 |
|
1See Regulation G Reconciliation of Adjusted Effective Tax Rate |
ROIC and Adjusted ROIC, as presented, may not be comparable to similarly titled measures of other companies. |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF ADJUSTED EFFECTIVE TAX RATE
(Dollars in thousands)
(Unaudited)
Excluding significant non-recurring items from the fourth quarter and fiscal year ended December 30, 2023 from the calculation of effective tax rate, which we refer to as “Adjusted Effective Tax Rate”, is a non-GAAP measure. Adjusted Effective Tax Rate should not be considered in isolation or as a substitute for the effective tax rate prepared in accordance with GAAP. The table below shows how Adjusted Effective Tax Rate is calculated from the Company’s Statements of Earnings. Adjusted Effective Tax Rate is calculated as total earnings before income taxes and equity in loss of nonconsolidated subsidiaries plus the significant non-recurring items of impairment of long-lived assets, realignment charges, non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership, the loss from Argentine peso hyperinflation, and non-recurring tax benefit items. Adjusted Effective Tax Rate allows investors to analyze our effective tax rate in light of these non-recurring items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Thirteen weeks ended |
|
Fifty-two weeks ended |
||||||||||||||||
|
|
December 30, 2023 |
|
December 30, 2023 |
||||||||||||||||
|
|
Earnings before
|
|
Income
|
|
Effective
|
|
Earnings before
|
|
Income
|
|
Effective
|
||||||||
As reported |
|
$ |
45,166 |
|
$ |
10,882 |
|
|
24.1 |
% |
|
$ |
236,452 |
|
$ |
90,121 |
|
|
38.1 |
% |
Impairment of long-lived assets |
|
|
— |
|
|
— |
|
|
|
|
|
140,844 |
|
|
4,387 |
|
|
|
||
Realignment charges |
|
|
31,030 |
|
|
7,675 |
|
|
|
|
|
35,210 |
|
|
8,720 |
|
|
|
||
Other non-recurring charges |
|
|
5,626 |
|
|
1,443 |
|
|
|
|
|
5,626 |
|
|
1,443 |
|
|
|
||
Loss from Argentine peso hyperinflation |
|
|
5,132 |
|
|
1,453 |
|
|
|
|
|
5,132 |
|
|
1,453 |
|
|
|
||
Non-recurring tax benefit items |
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
3,588 |
|
|
|
||
Adjusted |
|
$ |
86,954 |
|
$ |
21,453 |
|
|
24.7 |
% |
|
$ |
423,264 |
|
$ |
109,712 |
|
|
25.9 |
% |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF FREE CASH FLOW
(Dollars in thousands)
(Unaudited)
We use the non-GAAP measure of free cash flow, which we define as net cash flows provided by operating activities reduced by the purchase of property, plant, and equipment. We believe that free cash flow is a useful performance measure for management and useful to investors as the basis for comparing our performance with other companies. Our measure of free cash flow may not be directly comparable to similar measures used by other companies.
|
|
|
|
|
|
|
Fifty-two |
||
|
|
weeks ended |
||
|
|
December 30, |
||
|
|
2023 |
|
|
Net cash flows provided by operating activities |
|
$ |
306,775 |
|
Net cash flows used in investing activities |
|
|
(115,281 |
) |
Net cash flows used in financing activities |
|
|
(176,405 |
) |
|
|
|
|
|
Net cash flows provided by operating activities |
|
$ |
306,775 |
|
Purchase of property, plant, and equipment |
|
|
(96,771 |
) |
Free cash flow |
|
$ |
210,004 |
|
