8-K
VALMONT INDUSTRIES INC (VMI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
October 22, 2024
Date of Report (Date of earliest event reported)
Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
| 1-31429 | 47-0351813 | |
|---|---|---|
| (Commission File Number) | | (IRS Employer Identification No.) |
| | | |
| 15000 Valmont Plaza | | 68154 |
| Omaha, **** Nebraska | | |
| (Address of principal executive offices) | | (Zip Code) |
( 402 ) 963-1000
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | |
|---|---|---|---|---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, $1.00 par value | | VMI | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02. Results of Operations and Financial Condition.
Valmont Industries, Inc. issued a press release on October 22, 2024 announcing its financial results for its fiscal quarter ended September 28, 2024. The press release, along with the presentation to be used during its earnings call on October 23, 2024, are furnished with this Form 8-K as Exhibit 99.1 and Exhibit 99.2, respectively.
The information in this Item 2.02 is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
| | | |
|---|---|---|
| Exhibit No. | | Description |
| 99.1 | | Press Release dated October 22, 2024 |
| 99.2 | | Presentation Slides for earnings call on October 23, 2024 |
| 104 | | Cover Page Interactive File (the cover page XBRL tags are embedded in the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | |
|---|---|---|---|---|
| | VALMONT INDUSTRIES, INC. | |||
| | | | | |
| | By: | /s/ TIMOTHY P. FRANCIS | ||
| | Name: | Timothy P. Francis | | |
| | Title: | Chief Accounting Officer |
Date: October 22, 2024
Exhibit 99.1
| | | | |
|---|---|---|---|
| | FOR IMMEDIATE RELEASE | ||
| | | | |
| Contact: | Renee Campbell | | |
| Email: | renee.campbell@valmont.com | | |
| Date: | October 22, 2024 | |
Valmont Reports Third Quarter 2024 Results Net Sales and Operating Income Aligned with Expectations Generated Strong Operating Cash Flows of $225 Million
OMAHA, Neb.-- 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 third quarter ended September 28, 2024.
President and Chief Executive Officer Avner M. Applbaum commented, “Our team delivered another solid quarter, expanding operating margins and generating strong operating cash flows despite lower sales. The Infrastructure segment benefited from strong utility market demand and an improving telecommunications market in North America. Pricing discipline, a more favorable product mix, and a leaner cost structure contributed to margin improvement. In Agriculture, while North American and Brazilian markets remain muted, I’m proud of our swift response in supplying replacement equipment to support our dealers following the Midwest U.S. storms earlier this year. I want to thank the Valmont team for their hard work and execution in delivering higher operating margins and cash flows. Overall, I’m pleased with our continued progress towards our strategic priorities and creating long-term value for our stakeholders.”
Third Quarter 2024 Highlights (all metrics compared to Third Quarter 2023 unless otherwise noted)
| ● | Net sales of $1.0 billion decreased 2.9%, as strong growth in Transmission, Distribution, and Substation (“Utility”) and Telecommunications was offset by lower sales in Solar and international Agriculture, specifically Brazil |
|---|---|
| ● | Operating income increased to $125.7 million or 12.3% of net sales compared to an operating loss of ($24.2) million [adjusted^1^operating income of $120.8 million or 11.5% of net sales] |
| --- | --- |
| ● | Diluted earnings per share (“EPS”) of $4.11 compared to diluted loss per share of ($2.34) [$4.12 EPS adjusted^1^] |
| --- | --- |
| ● | Generated operating cash flows of $225.1 million; cash and cash equivalents at the end of the third quarter were $200.5 million |
| --- | --- |
| ● | Returned $52.2 million to shareholders through share repurchases and dividends |
| --- | --- |
| ● | Reduced revolving credit facility borrowings by approximately $120.0 million |
| --- | --- |
| ● | Reaffirming 2024 full-year financial outlook |
| --- | --- |
^1^Please see Reg G reconciliation to GAAP measures at end of document
Key Financial Metrics
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Third Quarter 2024 | | GAAP | | Adjusted^1^ | | |||||||||||||
| (In thousands, except per-share amounts) | **** | 9/28/2024 | **** | 9/30/2023 | **** | | **** | | 9/28/2024 | **** | 9/30/2023 | **** | | | ||||
| | | Q3 2024 | | Q3 2023 | | vs. Q3 2023 | | | Q3 2024 | | Q3 2023 | | vs. Q3 2023 | | ||||
| Net Sales | | $ | 1,020,175 | | $ | 1,050,295 | | (2.9) | % | | $ | 1,020,175 | | $ | 1,050,295 | | (2.9) | % |
| Gross Profit | | | 301,693 | | | 315,111 | | (4.3) | % | | | 301,693 | | | 315,111 | | (4.3) | % |
| Gross Profit as a % of Net Sales | | | 29.6 | % | | 30.0 | % | | | | | 29.6 | % | | 30.0 | % | | |
| Operating Income (Loss) | | | 125,735 | | | (24,190) | | NM | | | | 125,735 | | | 120,834 | | 4.1 | % |
| Operating Inc. (Loss) as a % of Net Sales | | | 12.3 | % | | (2.3) | % | | | | | 12.3 | % | | 11.5 | % | | |
| Net Earnings (Loss) Attrib. to VMI | | | 83,068 | | | (49,028) | | NM | | | | 83,068 | | | 86,976 | | (4.5) | % |
| Diluted Earnings (Loss) per Share | | | 4.11 | | | (2.34) | | NM | | | | 4.11 | | | 4.12 | | (0.2) | % |
| Weighted Average Shares Outstanding | | | 20,234 | | | 20,951 | | | | | | 20,234 | | | 21,131 | | |
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year-to-Date 2024 | | GAAP | | Adjusted^1^ | | |||||||||||||
| (In thousands, except per-share amounts) | **** | 9/28/2024 | **** | 9/30/2023 | **** | | **** | | 9/28/2024 | **** | 9/30/2023 | **** | | | ||||
| | | FY 2024 | | FY 2023 | | vs. FY 2023 | | | FY 2024 | | FY 2023 | | vs. FY 2023 | | ||||
| Net Sales | | $ | 3,037,740 | | $ | 3,159,072 | | (3.8) | % | | $ | 3,037,740 | | $ | 3,159,072 | | (3.8) | % |
| Gross Profit | | | 928,191 | | | 953,093 | | (2.6) | % | | | 928,191 | | | 953,093 | | (2.6) | % |
| Gross Profit as a % of Net Sales | | | 30.6 | % | | 30.2 | % | | | | | 30.6 | % | | 30.2 | % | | |
| Operating Income | | | 404,596 | | | 228,009 | | NM | | | | 404,596 | | | 380,601 | | 6.3 | % |
| Operating Income as a % of Net Sales | | | 13.3 | % | | 7.2 | % | | | | | 13.3 | % | | 12.0 | % | | |
| Net Earnings Attributable to VMI^2^ | | | 270,606 | | | 114,888 | | NM | | | | 270,606 | | | 257,368 | | 5.1 | % |
| Diluted Earnings per Share^2^ | | | 13.34 | | | 5.40 | | NM | | | | 13.34 | | | 12.09 | | 10.3 | % |
| Weighted Average Shares Outstanding | | | 20,283 | | | 21,290 | | | | | | 20,283 | | | 21,290 | | |
^2^Q2 2024 included a tax benefit of approximately $3.0 million or $0.15 per share due to the reduction of a valuation allowance on a tax loss carryforward in a foreign subsidiary
NM = not meaningful
Third Quarter 2024 Segment Review
Infrastructure (74.1% of Net Sales)
Products and solutions to serve the infrastructure markets of utility, solar, lighting and transportation, and telecommunications, along with coatings services to protect metal products
Sales of $758.6 million increased slightly year over year. Strong sales growth in Utility and Telecommunications was offset by lower Lighting and Transportation (“L&T”) and Solar sales.
Utility sales grew nearly 15.0%, primarily due to a favorable project mix and higher volumes of distribution and substation products. Telecommunications volumes were higher, driven by increased carrier spending amid a stabilizing North American market environment. Lower L&T volumes were driven by lighting market softness, the strategic exit from select lower-margin products, and transportation project timing. Solar volumes were significantly lower due to the non-recurrence of a large international utility-scale project in the third quarter 2023, and last quarter’s strategic decision to exit certain low-margin projects.
Pricing improved across the segment, as a favorable mix and pricing discipline more than offset the impact of steel index deflation.
Operating income increased to $123.7 million or 16.3% of net sales compared to $103.4 million or 13.7% of net sales [adjusted^1^operating income of $108.0 million or 14.3% of net sales] in the third quarter of 2023. This improvement was driven by pricing discipline, lower SG&A expenses, and a reduction in cost of goods sold, primarily due to lower steel costs.
Agriculture (25.9% of Net Sales)
Center pivot and linear irrigation equipment components for agricultural markets, including aftermarket parts and tubular products, and advanced technology solutions for precision agriculture ^1^Please see Reg G reconciliation to GAAP measures at end of document
Sales of $265.3 million decreased 11.1% year over year. In North America, irrigation equipment volumes were slightly lower. An increase in replacement sales driven by severe weather events earlier in 2024 was offset by continued agriculture market softness amid lower grain prices. Average irrigation selling prices were similar to last year.
International sales decreased year over year, with significantly lower sales in Brazil due to normalizing backlog levels and lower grain prices, which impacted growers’ buying behavior. This decline was partially offset by sales growth in the Europe, Middle East, and Africa (“EMEA”) region and the contribution from the HR Products acquisition.
Operating income was $28.9 million or 11.0% of net sales compared to an operating loss of ($99.7) million [adjusted^1^operating income of $38.5 million or 13.0% of net sales] in the third quarter of 2023. The benefit of reduced SG&A expenses was offset by the impact of lower volumes and a higher mix of project sales.
Balance Sheet, Liquidity, and Capital Allocation
The Company generated strong operating cash flows of $225.1 million. Cash and cash equivalents at the end of the third quarter were $200.5 million. Valmont paid $12.1 million in dividends and repurchased $40.1 million of Company stock, with $81.0 million remaining on the authorized share repurchase program. Additionally, the Company reduced borrowings on its revolving credit facility by approximately $120.0 million this quarter, bringing the total year-to-date net reduction to approximately $210.0 million.
Reaffirming 2024 Full-Year Financial Outlook and Providing Key Assumptions
The Company is reaffirming its full-year 2024 net sales and diluted earnings per share outlook that was provided in the second quarter.
| ● | Net sales change (vs. prior year) of (3.5%) to (1.5%) |
|---|---|
| o | Infrastructure net sales growth of Flat to 1.5% vs. prior year |
| --- | --- |
| o | Agriculture net sales expected to decrease (15.0%) to (10.0%) vs. prior year |
| --- | --- |
| ● | Diluted earnings per share of $16.50 to $17.30 |
| --- | --- |
| ● | Effective tax rate expected to be slightly below 26% |
| --- | --- |
| ● | Minimal expected foreign currency translation impact on net sales |
| --- | --- |
| ● | For cash flow purposes, capital expenditures now expected to be in the range of $85.0 to $95.0 million to support strategic growth initiatives (vs. prior expectation of $95.0 to $110.0 million) |
| --- | --- |
Mr. Applbaum added, “We’ve performed well during the first three quarters of the year, reinforcing our confidence in achieving our full-year outlook. Our diverse exposure to infrastructure and agriculture markets helps us navigate market cycles effectively, and our focus on operational excellence and growth investments positions us to meet rising demand. In addition, we remain disciplined in driving margin expansion through pricing and expense management. Combined with a balanced capital allocation framework, this positions us to deliver lasting and meaningful shareholder returns.”
A live audio discussion with Avner M. Applbaum, President and Chief Executive Officer, and Thomas Liguori, Executive Vice President and Chief Financial Officer, will be accessible by telephone on Wednesday, October 23, 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 3Q 2024 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 13742907. The replay will be available through 10:59 p.m. CT on Wednesday, October 30, 2024. ^1^Please see Reg G reconciliation to GAAP measures at end of document
About Valmont Industries, Inc.
For nearly 80 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, 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 materials, 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.
^1^Please see Reg G reconciliation to GAAP measures at end of document
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per-share amounts)
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirteen weeks ended | | Thirty-nine weeks ended | ||||||||
| | | September 28, | | September 30, | | September 28, | | September 30, | ||||
| | | 2024 | **** | 2023 | **** | 2024 | **** | 2023 | ||||
| Net sales | | $ | 1,020,175 | | $ | 1,050,295 | | $ | 3,037,740 | | $ | 3,159,072 |
| Cost of sales | | | 718,482 | | | 735,184 | | | 2,109,549 | | | 2,205,979 |
| Gross profit | | | 301,693 | | | 315,111 | | | 928,191 | | | 953,093 |
| Selling, general, and administrative expenses | | | 175,958 | | | 194,277 | | | 523,595 | | | 580,060 |
| Impairment of goodwill and other intangible assets | | | — | | | 140,844 | | | — | | | 140,844 |
| Realignment charges | | | — | | | 4,180 | | | — | | | 4,180 |
| Operating income (loss) | | | 125,735 | | | (24,190) | | | 404,596 | | | 228,009 |
| Other income (expenses): | | | | | | | | | ||||
| Interest expense | | | (14,313) | | | (13,472) | | | (46,380) | | | (41,494) |
| Interest income | | | 2,080 | | | 3,186 | | | 5,358 | | | 4,579 |
| Gain (loss) on deferred compensation investments | | | 1,160 | | | (344) | | | 3,116 | | | 1,791 |
| Gain on divestiture | | | — | | | — | | | — | | | 2,994 |
| Other | | | (2,307) | | | 165 | | | (3,662) | | | (4,593) |
| Total other income (expenses) | | | (13,380) | | | (10,465) | | | (41,568) | | | (36,723) |
| Earnings (loss) before income taxes and equity in loss of nonconsolidated subsidiaries | | | 112,355 | | | (34,655) | | | 363,028 | | | 191,286 |
| Income tax expense | | | 29,724 | | | 15,461 | | | 90,779 | | | 79,239 |
| Equity in loss of nonconsolidated subsidiaries | | | (21) | | | (199) | | | (60) | | | (1,219) |
| Net earnings (loss) | | | 82,610 | | | (50,315) | | | 272,189 | | | 110,828 |
| Loss (earnings) attributable to redeemable noncontrolling interests | | | 458 | | | 1,287 | | | (1,583) | | | 4,060 |
| Net earnings (loss) attributable to Valmont Industries, Inc. | | $ | 83,068 | | $ | (49,028) | | $ | 270,606 | | $ | 114,888 |
| | | | | | | | | | | | | |
| Weighted average shares outstanding - Basic | | | 20,092 | | | 20,951 | | | 20,152 | | | 21,083 |
| Earnings (loss) per share - Basic | | $ | 4.13 | | $ | (2.34) | | $ | 13.43 | | $ | 5.45 |
| | | | | | | | | | | | | |
| Weighted average shares outstanding - Diluted | | | 20,234 | | | 20,951 | | | 20,283 | | | 21,290 |
| Earnings (loss) per share - Diluted | | $ | 4.11 | | $ | (2.34) | | $ | 13.34 | | $ | 5.40 |
| | | | | | | | | | | | | |
| Cash dividends per share | | $ | 0.60 | | $ | 0.60 | | $ | 1.80 | | $ | 1.80 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirteen weeks ended | | Thirty-nine weeks ended | | ||||||||
| | | September 28, | | September 30, | | September 28, | | September 30, | | ||||
| | | 2024 | **** | 2023 | **** | 2024 | **** | 2023 | | ||||
| Infrastructure | | | | | | | | | | | | | |
| Net sales | | $ | 756,370 | | $ | 753,626 | | $ | 2,237,533 | | $ | 2,253,924 | |
| Gross profit | | | 223,333 | | | 214,841 | | | 673,353 | | | 640,113 | |
| as a percentage of net sales | | | 29.5 | % | | 28.5 | % | | 30.1 | % | | 28.4 | % |
| Selling, general, and administrative expenses | | | 99,676 | | | 106,800 | | | 298,251 | | | 321,770 | |
| as a percentage of net sales | | | 13.2 | % | | 14.2 | % | | 13.3 | % | | 14.3 | % |
| Impairment of goodwill and other intangible assets | | | — | | | 3,571 | | | — | | | 3,571 | |
| Realignment charges | | | — | | | 1,069 | | | — | | | 1,069 | |
| Operating income | | | 123,657 | | | 103,401 | | | 375,102 | | | 313,703 | |
| as a percentage of net sales | | | 16.3 | % | | 13.7 | % | | 16.8 | % | | 13.9 | % |
| | | | | | | | | | | | | | |
| Agriculture | | | | | | | | | | | | | |
| Net sales | | $ | 263,805 | | $ | 296,669 | | $ | 800,207 | | $ | 905,148 | |
| Gross profit | | | 78,360 | | | 100,270 | | | 254,838 | | | 312,980 | |
| as a percentage of net sales | | | 29.7 | % | | 33.8 | % | | 31.8 | % | | 34.6 | % |
| Selling, general, and administrative expenses | | | 49,467 | | | 61,760 | | | 145,001 | | | 171,896 | |
| as a percentage of net sales | | | 18.8 | % | | 20.8 | % | | 18.1 | % | | 19.0 | % |
| Impairment of goodwill and other intangible assets | | | — | | | 137,273 | | | — | | | 137,273 | |
| Realignment charges | | | — | | | 907 | | | — | | | 907 | |
| Operating income (loss) | | | 28,893 | | | (99,670) | | | 109,837 | | | 2,904 | |
| as a percentage of net sales | | | 11.0 | % | | (33.6) | % | | 13.7 | % | | 0.3 | % |
| | | | | | | | | | | | | | |
| Corporate | | | | | | | | | | | | | |
| Selling, general, and administrative expenses | | $ | 26,815 | | $ | 25,717 | | $ | 80,343 | | $ | 86,394 | |
| Realignment charges | | | — | | | 2,204 | | | — | | | 2,204 | |
| Operating loss | | | (26,815) | | | (27,921) | | | (80,343) | | | (88,598) | |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirteen weeks ended September 28, 2024 | ||||||||||
| | **** | Infrastructure | **** | Agriculture | | Intersegment | **** | Consolidated | ||||
| Geographical Market: | | | | | | | | | | | | |
| North America | | $ | 599,705 | | $ | 119,973 | | $ | (3,684) | | $ | 715,994 |
| International | | | 158,874 | | | 145,313 | | | (6) | | | 304,181 |
| Total sales | | $ | 758,579 | | $ | 265,286 | | $ | (3,690) | | $ | 1,020,175 |
| | | | | | | | | | | | | |
| Product Line: | | | | | | | | | ||||
| Transmission, Distribution, and Substation | | $ | 342,401 | | $ | — | | $ | — | | $ | 342,401 |
| Lighting and Transportation | | | 229,219 | | | — | | | — | | | 229,219 |
| Coatings | | | 88,046 | | | — | | | (2,201) | | | 85,845 |
| Telecommunications | | | 64,288 | | | — | | | — | | | 64,288 |
| Solar | | | 34,625 | | | — | | | (8) | | | 34,617 |
| Irrigation Equipment and Parts | | | — | | | 243,368 | | | (1,481) | | | 241,887 |
| Technology Products and Services | | | — | | | 21,918 | | | — | | | 21,918 |
| Total sales | | $ | 758,579 | | $ | 265,286 | | $ | (3,690) | | $ | 1,020,175 |
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirteen weeks ended September 30, 2023 | ||||||||||
| | **** | Infrastructure | **** | Agriculture | | Intersegment | **** | Consolidated | ||||
| Geographical Market: | | | | | | | | | | | | |
| North America | | $ | 572,239 | | $ | 126,828 | | $ | (3,055) | | $ | 696,012 |
| International | | | 182,837 | | | 171,655 | | | (209) | | | 354,283 |
| Total sales | | $ | 755,076 | | $ | 298,483 | | $ | (3,264) | | $ | 1,050,295 |
| | | | | | | | | | | | | |
| Product Line: | | | | | | | | | | | | |
| Transmission, Distribution, and Substation | | $ | 297,967 | | $ | — | | $ | — | | $ | 297,967 |
| Lighting and Transportation | | | 252,603 | | | — | | | — | | | 252,603 |
| Coatings | | | 88,967 | | | — | | | (1,241) | | | 87,726 |
| Telecommunications | | | 59,630 | | | — | | | — | | | 59,630 |
| Solar | | | 55,909 | | | — | | | (209) | | | 55,700 |
| Irrigation Equipment and Parts | | | — | | | 273,639 | | | (1,814) | | | 271,825 |
| Technology Products and Services | | | — | | | 24,844 | | | — | | | 24,844 |
| Total sales | | $ | 755,076 | | $ | 298,483 | | $ | (3,264) | | $ | 1,050,295 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirty-nine weeks ended September 28, 2024 | ||||||||||
| | **** | Infrastructure | **** | Agriculture | | Intersegment | **** | Consolidated | ||||
| Geographical Market: | | | | | | | | | | | | |
| North America | | $ | 1,750,420 | | $ | 441,198 | | $ | (12,836) | | $ | 2,178,782 |
| International | | | 494,515 | | | 364,526 | | | (83) | | | 858,958 |
| Total sales | | $ | 2,244,935 | | $ | 805,724 | | $ | (12,919) | | $ | 3,037,740 |
| | | | | | | | | | | | | |
| Product Line: | | | | | | | | | | | | |
| Transmission, Distribution, and Substation | | $ | 990,744 | | $ | — | | $ | — | | $ | 990,744 |
| Lighting and Transportation | | | 694,877 | | | — | | | — | | | 694,877 |
| Coatings | | | 266,710 | | | — | | | (7,321) | | | 259,389 |
| Telecommunications | | | 176,649 | | | — | | | — | | | 176,649 |
| Solar | | | 115,955 | | | — | | | (81) | | | 115,874 |
| Irrigation Equipment and Parts | | | — | | | 730,798 | | | (5,517) | | | 725,281 |
| Technology Products and Services | | | — | | | 74,926 | | | — | | | 74,926 |
| Total sales | | $ | 2,244,935 | | $ | 805,724 | | $ | (12,919) | | $ | 3,037,740 |
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirty-nine weeks ended September 30, 2023 | ||||||||||
| | **** | Infrastructure | **** | Agriculture | | Intersegment | **** | Consolidated | ||||
| Geographical Market: | | | | | | | | | | | | |
| North America | | $ | 1,743,635 | | $ | 450,678 | | $ | (12,042) | | $ | 2,182,271 |
| International | | | 518,142 | | | 459,901 | | | (1,242) | | | 976,801 |
| Total sales | | $ | 2,261,777 | | $ | 910,579 | | $ | (13,284) | | $ | 3,159,072 |
| | | | | | | | | | | | | |
| Product Line: | | | | | | | | | | |||
| Transmission, Distribution, and Substation | | $ | 927,094 | | $ | — | | $ | — | | $ | 927,094 |
| Lighting and Transportation | | | 727,862 | | | — | | | — | | | 727,862 |
| Coatings | | | 270,201 | | | — | | | (6,611) | | | 263,590 |
| Telecommunications | | | 195,505 | | | — | | | — | | | 195,505 |
| Solar | | | 141,115 | | | — | | | (1,242) | | | 139,873 |
| Irrigation Equipment and Parts | | | — | | | 825,277 | | | (5,431) | | | 819,846 |
| Technology Products and Services | | | — | | | 85,302 | | | — | | | 85,302 |
| Total sales | | $ | 2,261,777 | | $ | 910,579 | | $ | (13,284) | | $ | 3,159,072 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | September 28, | | December 30, | ||
| | | 2024 | **** | 2023 | ||
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 200,477 | | $ | 203,041 |
| Receivables, net | | | 714,010 | | | 657,960 |
| Inventories | | | 611,422 | | | 658,428 |
| Contract assets | | | 183,085 | | | 175,721 |
| Prepaid expenses and other current assets | | | 98,165 | | | 92,479 |
| Total current assets | | | 1,807,159 | | | 1,787,629 |
| Property, plant, and equipment, net | | | 609,001 | | | 617,394 |
| Goodwill and other non-current assets | | | 1,080,668 | | | 1,072,425 |
| Total assets | | $ | 3,496,828 | | $ | 3,477,448 |
| | | | | | | |
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, | | | | | ||
| AND SHAREHOLDERS' EQUITY | | | | | | |
| Current liabilities: | | | | | ||
| Current installments of long-term debt | | $ | 531 | | $ | 719 |
| Notes payable to banks | | | 1,309 | | | 3,205 |
| Accounts payable | | | 353,883 | | | 358,311 |
| Accrued expenses | | | 274,089 | | | 277,764 |
| Contract liabilities | | | 100,150 | | | 70,978 |
| Income taxes payable | | | 28,066 | | | — |
| Dividends payable | | | 12,021 | | | 12,125 |
| Total current liabilities | | | 770,049 | | | 723,102 |
| Long-term debt, excluding current installments | | | 898,201 | | | 1,107,885 |
| Operating lease liabilities | | | 149,253 | | | 162,743 |
| Other non-current liabilities | | | 91,521 | | | 66,646 |
| Total liabilities | | | 1,909,024 | | | 2,060,376 |
| Redeemable noncontrolling interests | | | 46,111 | | | 62,792 |
| Shareholders' equity | | | 1,541,693 | | | 1,354,280 |
| Total liabilities, redeemable noncontrolling interests, and shareholders' equity | | $ | 3,496,828 | | $ | 3,477,448 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | Thirty-nine weeks ended | ||||
| | | September 28, | | September 30, | ||
| | | 2024 | **** | 2023 | ||
| Cash flows from operating activities: | | | | | | |
| Net earnings | | $ | 272,189 | | $ | 110,828 |
| Depreciation and amortization | | | 70,541 | | | 73,638 |
| Contribution to defined benefit pension plan | | | (19,539) | | | (15,259) |
| Impairment of goodwill and other intangible assets | | | — | | | 140,844 |
| Gain on divestiture | | | — | | | (2,994) |
| Change in working capital | | | 44,615 | | | (110,550) |
| Other | | | 11,458 | | | (5,639) |
| Net cash flows from operating activities | | | 379,264 | | | 190,868 |
| Cash flows from investing activities: | | | | | ||
| Purchases of property, plant, and equipment | | | (53,833) | | | (71,233) |
| Proceeds from divestiture, net of cash divested | | | — | | | 6,369 |
| Proceeds from property damage insurance claims | | | — | | | 6,770 |
| Acquisitions, net of cash acquired | | | — | | | (31,839) |
| Other | | | (1,266) | | | 667 |
| Net cash flows from investing activities | | | (55,099) | | | (89,266) |
| Cash flows from financing activities: | | | | | ||
| Net repayments on short-term borrowings | | | (1,899) | | | (2,641) |
| Proceeds from long-term borrowings | | | 30,009 | | | 215,012 |
| Principal repayments on long-term borrowings | | | (240,522) | | | (109,335) |
| Dividends paid | | | (36,337) | | | (36,983) |
| Purchases of redeemable noncontrolling interests | | | (17,745) | | | — |
| Repurchases of common stock | | | (55,069) | | | (166,663) |
| Other | | | (4,314) | | | (10,881) |
| Net cash flows from financing activities | | | (325,877) | | | (111,491) |
| Effect of exchange rates on cash and cash equivalents | | | (852) | | | (2,951) |
| Net change in cash and cash equivalents | | | (2,564) | | | (12,840) |
| Cash and cash equivalents—beginning of period | | | 203,041 | | | 185,406 |
| Cash and cash equivalents—end of period | | $ | 200,477 | | $ | 172,566 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED RESULTS
REGULATION G RECONCILIATION
(Dollars and shares in thousands)
(Unaudited)
The non-GAAP table below discloses the impact of the impairment of goodwill and other intangible assets, realignment charges, intangible asset amortization (Prospera), and stock-based compensation recognized for the Prospera employees on fiscal 2023 results, as well as the impact of 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 and operating income to be taken into consideration by management and investors with the related reported GAAP measures.
The Company previously presented non-GAAP financial measures adjusted for Prospera intangible asset amortization and stock-based compensation recognized for the Prospera employees for a better investor 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 Company’s Board of Directors approved certain realignment plans subsequent to the third quarter of fiscal 2023 that significantly affected the compensation recognized for the Prospera employees. As a result of this, the Company does not consider its historical adjustments related to Prospera to arrive at non-GAAP financial measures to be relevant to investor understanding of third quarter of fiscal 2023 and future segment performance.
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirteen | | | | | Thirty-nine | | | | ||
| | | weeks ended | | Diluted | | weeks ended | | Diluted | ||||
| | | September 30, | | earnings (loss) | | September 30, | | earnings per | ||||
| | | 2023 | | per share^1,2^ | | 2023 | | share^1,2^ | ||||
| Net earnings (loss) attrib. to Valmont Industries, Inc. - as reported | | $ | (49,028) | | $ | (2.32) | | $ | 114,888 | | $ | 5.40 |
| Impairment of goodwill and other intangible assets | | | 140,844 | | | 6.67 | | | 140,844 | | | 6.62 |
| Realignment charges | | | 4,180 | | | 0.20 | | | 4,180 | | | 0.20 |
| Prospera intangible asset amortization | | | — | | | — | | | 3,290 | | | 0.15 |
| Prospera stock-based compensation | | | — | | | — | | | 4,278 | | | 0.20 |
| Total adjustments, pre-tax | | | 145,024 | | | 6.86 | | | 152,592 | | | 7.17 |
| Tax effect of adjustments^3^ | | | (5,432) | | | (0.26) | | | (6,524) | | | (0.31) |
| Non-recurring tax benefit items | | | (3,588) | | | (0.17) | | | (3,588) | | | (0.17) |
| Net earnings attributable to Valmont Industries, Inc. - adjusted | | $ | 86,976 | | $ | 4.12 | | $ | 257,368 | | $ | 12.09 |
| Average shares outstanding - diluted | | | | | | 21,131 | | | | | 21,290 |
^1^In the third quarter of fiscal 2023, the Company reported a GAAP net loss. In periods in which the Company recognizes a net loss, the Company excludes the impact of outstanding stock awards from the diluted loss per share calculation, as its inclusion would have an anti-dilutive effect. The adjusted diluted earnings per share calculation includes the impact of outstanding stock awards.
^2^Diluted earnings (loss) per share includes rounding.
^3^The 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)
(Unaudited)
The non-GAAP tables below disclose the impacts of the impairment of goodwill and other intangible assets, realignment charges, intangible asset amortization (Prospera), and stock-based compensation recognized for the Prospera employees on fiscal 2023 results. 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 weeks ended September 30, 2023 | | ||||||||||
| Operating Income (Loss) Reconciliation | | Infrastructure | Agriculture | | Corporate | Consolidated | |||||||
| Operating income (loss) - as reported | | $ | 103,401 | | $ | (99,670) | | $ | (27,921) | | $ | (24,190) | |
| Impairment of goodwill and other intangible assets | | | 3,571 | | | 137,273 | | | — | | | 140,844 | |
| Realignment charges | | | 1,069 | | | 907 | | | 2,204 | | | 4,180 | |
| Adjusted operating income (loss) | | $ | 108,041 | | $ | 38,510 | | $ | (25,717) | | $ | 120,834 | |
| Net sales - as reported | | | 753,626 | | | 296,669 | | | — | | | 1,050,295 | |
| | | | | | | | | | | | | | |
| Operating income (loss) as a % of net sales | | | 13.7 | % | | (33.6) | % | | NM | | | (2.3) | % |
| Adj. operating inc. (loss) as a % of net sales | | | 14.3 | % | | 13.0 | % | | NM | | | 11.5 | % |
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Thirty-nine weeks ended September 30, 2023 | | ||||||||||
| Operating Income (Loss) Reconciliation | | Infrastructure | Agriculture | | Corporate | Consolidated | |||||||
| Operating income (loss) - as reported | | $ | 313,703 | | $ | 2,904 | | $ | (88,598) | | $ | 228,009 | |
| Impairment of goodwill and other intangible assets | | | 3,571 | | | 137,273 | | | — | | | 140,844 | |
| Realignment charges | | | 1,069 | | | 907 | | | 2,204 | | | 4,180 | |
| Prospera intangible asset amortization | | | — | | | 3,290 | | | — | | | 3,290 | |
| Prospera stock-based compensation | | | — | | | 4,278 | | | — | | | 4,278 | |
| Adjusted operating income (loss) | | $ | 318,343 | | $ | 148,652 | | $ | (86,394) | | $ | 380,601 | |
| Net sales - as reported | | | 2,253,924 | | | 905,148 | | | — | | | 3,159,072 | |
| | | | | | | | | | | | | | |
| Operating income (loss) as a % of net sales | | | 13.9 | % | | 0.3 | % | | NM | | | 7.2 | % |
| Adj. operating inc. (loss) as a % of net sales | | | 14.1 | % | | 16.4 | % | | NM | | | 12.0 | % |
NM = not meaningful
Exhibit 99.2
| Valmont® © 2024 Industries, Inc.<br>Q3 2024 Earnings<br>Presentation<br>October 23, 2024 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| • Q3 2024 Results & Key Messages<br>• Current Market Dynamics & Long-term<br>Megatrends<br>• 2024 Outlook & Guidance<br>• Q&A<br>Today’s Agenda<br>2 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private<br>Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause<br>the actual results of the Company to differ materially from the results expressed or implied by such statements, including general economic<br>and business conditions, conditions affecting the industries served by the Company and its subsidiaries, the overall market acceptance of<br>such products and services, the integration of acquisitions and other factors disclosed in the Company’s periodic reports filed with the<br>Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and<br>financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product<br>pricing, domestic and international competitive environments, geopolitical risks and actions and policy changes of domestic and foreign<br>governments. Consequently, such forward-looking statements should be regarded as the Company’s current plans, estimates, and beliefs.<br>The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the<br>occurrence of anticipated or unanticipated events.<br>Disclosure Regarding Forward-Looking Statements<br>3 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| CEO Opening Comments<br>Avner Applbaum, President & CEO<br>4 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| Q3 2024 Results and Key Messages<br>5 October 23, 2024 | Valmont Industries, Inc.<br>NET SALES $1.02B<br>DOWN 2.9% Y/Y<br>OPERATING MARGIN 12.3%<br>UP Y/Y<br>OPERATING CASH FLOWS<br>$225 MILLION<br>The global Valmont team delivered solid performance including year-over-year growth in operating profit and operating margin, and strong<br>operating cash flows<br>Serving markets with multi-year secular megatrends, presenting long-term growth opportunities<br>Enhanced our executive leadership team by filling key roles<br>Progressing on our strategy, guided by the Valmont Business Model | ||||||||||||||
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| Multi-Year Energy<br>Transition<br>Enabling the<br>optimization to support<br>the growing need for<br>diverse energy<br>consumption including<br>renewables to address<br>connectivity demands<br>for a growing population<br>and urbanization<br>Technology &<br>Data Consumption<br>Exponential growth in<br>the volume, velocity,<br>and variety of data<br>being generated,<br>transmitted, and<br>consumed across<br>various digital<br>platforms and devices<br>Infrastructure Market Drivers<br>Steady-to-improving near-term demand across our markets, with positive long-term drivers<br>Sustained and elevated Utility capex to support grid hardening initiatives,<br>power load growth, and the energy transition<br>Lighting and Transportation headwinds from market factors and project<br>timing; U.S. Transportation order rates trending higher with future<br>benefits expected from IIJA1<br>funding; Lighting follows single-family<br>housing starts<br>Telecom improving as wireless carriers return to more normalized capex<br>amid improving North American market environment<br>Solar volumes declined as we deselected low-margin projects; expect<br>demand tailwinds from Inflation Reduction Act (“IRA”) and other<br>government subsidies in U.S. and international<br>Coatings aligns with GDP; supports internal demand<br>Near-Term Demand<br>Aging Infrastructure<br>& Resilience<br>Grid hardening and<br>building climate<br>resilience with<br>intensifying weather,<br>supported through<br>reliable infrastructure<br>6 October 23, 2024 | Valmont Industries, Inc. 1<br>Infrastructure Investment and Jobs Act<br>Global Megatrends | ||||||||||||||
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| Food<br>Security<br>Giving the means for<br>the world to produce<br>their own food and<br>enabling less<br>reliability on others<br>Sustainability &<br>Productivity<br>Water conservation and<br>being good stewards of<br>the land that is available<br>will continue to be<br>important and addressing<br>labor shortages. It is<br>about doing more with<br>less and using technology<br>to our advantage in<br>meeting those demands<br>Population<br>Growth<br>Pressure to produce<br>more food leads to an<br>intensified focus on<br>improving yields<br>(crops and livestock)<br>to meet the dietary<br>needs of a growing<br>population<br>7 October 23, 2024 | Valmont Industries, Inc.<br>Agriculture Market Drivers<br>Outlook for sustained long-term growth remains strong, despite short-term demand headwinds<br>North American grower sentiment remains muted due to expected<br>net farm income decline this year and the downward trend in grain<br>prices<br>Brazilian expected farm income is pressured due to lower soybean<br>prices, although order rates are improving over last year; the<br>country remains a key part of our long-term strategy with significant<br>market opportunity<br>International projects remain on track; robust project pipeline,<br>especially Egypt and the Middle East<br>Near-Term Demand Global Megatrends | ||||||||||||||
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| Experienced Executive Leadership Team<br>Avner M. Applbaum<br>President & Chief<br>Executive Officer<br>2020<br>Thomas Liguori<br>EVP, Chief Financial<br>Officer<br>2024<br>Diane M. Larkin<br>EVP, Global<br>Operations<br>2020<br>J. Timothy Donahue<br>Group President,<br>Infrastructure<br>2018<br>Darryl R. Matthews<br>Group President,<br>Agriculture<br>2024<br>Timothy P. Francis<br>Chief Accounting<br>Officer<br>2014<br>Renee L. Campbell<br>SVP, Investor<br>Relations & Treasurer<br>2017<br>Jennifer Paisley<br>SVP, Human<br>Resources<br>2017<br>Ellen S. Dasher<br>VP, Global Taxation<br>1996<br>R. Andrew Massey<br>VP, Chief Legal Officer<br>& Corporate Secretary<br>2006<br>The right team in place to lead Valmont forward and further advance execution of our strategy<br>New to VMI within last 5 years<br>New to role within last 2 years<br>8 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| Financial Results and Outlook<br>Tom Liguori, EVP & CFO<br>9 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| Q3 2024 Financial Summary<br>10 October 23, 2024 | Valmont Industries, Inc.<br>• Net sales decreased 2.9% compared<br>to last year as growth in<br>Infrastructure was offset by softer<br>demand in Agriculture<br>• Operating margin expanded on<br>commercial and operational<br>execution demonstrated by pricing<br>discipline, favorable product mix, and<br>controlling costs<br>• Adjusted2 diluted EPS was similar to<br>prior year as operating income<br>improvement and a lower share<br>count was offset by FX losses and a<br>more normalized adjusted2 effective<br>tax rate<br>$M, except EPS Q3 2024 Q3 2023 % Q3 2023 %<br>Net Sales 1,020.2 1,050.3 -2.9% 1,050.3 -2.9%<br>Operating Income (Loss) 125.7 (24.2) NM 120.8 +4.1%<br>Operating Margin 12.3% (2.3%) NM 11.5% +80 bps<br>Net Earnings (Loss)1 83.1 (49.0) NM 87.0 -4.5%<br>Diluted Earnings (Loss) per Share 4.11 (2.34) NM 4.12 -0.2%<br>GAAP Adjusted2<br>1 Net Earnings (Loss) Attributable to Valmont Industries, Inc.<br>2 Please see Reg G reconciliation to GAAP measures at end of document.<br>NM = Not Meaningful | ||||||||||||||
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| Q3 2024 Results | Infrastructure<br>11 October 23, 2024 | Valmont Industries, Inc.<br>Sales ($M) Operating Income ($M)<br>• Utility volumes were significantly<br>higher due to favorable project mix<br>and higher volumes of distribution<br>and substation products<br>• Lower L&T volumes were driven by<br>lighting market softness, the strategic<br>exit from select lower-margin<br>products and transportation project<br>timing<br>• Telecom volumes were higher, driven<br>by increased carrier spending amid a<br>stabilizing North American market<br>• Solar volumes were lower due to a<br>large project from 2023 that did not<br>reoccur and exit of low-margin<br>projects<br>• Operating income increased and<br>adjusted1 operating margin improved<br>200 bps, due to pricing discipline,<br>lower SG&A expenses and lower<br>COGS due to declining steel costs<br>$758.6 $755.1<br>2024 2023<br>+0.5% GAAP: +19.6%<br>$123.7<br>$103.4<br>$123.7<br>$108.0<br>2024 2023 2024 2023<br>16.3% 13.7%<br>Sales ($M) 2024 2023 %<br>Transmission, Distribution, and Substation ("Utility") $342.4 $298.0 +14.9%<br>Lighting and Transportation ("L&T") $229.2 $252.6 -9.3%<br>Coatings $88.0 $89.0 -1.0%<br>Telecommunications $64.3 $59.6 +7.8%<br>Solar $34.6 $55.9 -38.1%<br>Adjusted1<br>:<br>+14.5% 16.3% 14.3% 1 Please see Reg G reconciliation to GAAP measures at end of document. | |||||||||||||
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| Q3 2024 Results | Agriculture<br>12 October 23, 2024 | Valmont Industries, Inc.<br>• North America volumes were slightly<br>lower due to continued muted grower<br>sentiment, partially offset by storm<br>replacement orders; average<br>irrigation selling prices were similar to<br>last year<br>• International sales decreased on<br>significantly lower sales in Brazil due<br>to continued market softness driven<br>by lower grain prices, partially offset<br>by growth in EMEA and contribution<br>from the HR Products acquisition<br>• Adjusted1 operating income declined<br>as lower SG&A expenses were offset<br>by the impact of lower volumes and a<br>higher mix of project sales<br>Sales ($M) Operating Income ($M)<br>Sales ($M) 2024 2023 %<br>North America $120.0 $126.8 -5.4%<br>International $145.3 $171.7 -15.3% -11.1% GAAP: NM $265.3<br>$298.5<br>2024 2023<br>$28.9<br>$(99.7)<br>$28.9 $38.5<br>2024 2023 2024 2023 -33.6% 11.0% 11.0% 13.0%<br>Adjusted1<br>:<br>-25.0% 1 Please see Reg G reconciliation to GAAP measures at end of document.<br>NM = Not Meaningful | |||||||||||||
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| Building Solid Financial Foundation<br>13 October 23, 2024 | Valmont Industries, Inc.<br>• Q3 2024 Operating Cash Flows were<br>$225 Million, bringing our YTD<br>Operating Cash Flows to $379 Million<br>• During the quarter we reduced<br>borrowings on our revolving line of<br>credit by $120M, and Net Debt to<br>Adjusted EBITDA1 is 1.2 times<br>• Long-term debt mostly<br>fixed-rate, with long-dated maturities<br>in 2044 and 2054<br>• Strong and flexible balance sheet to<br>support balanced capital allocation<br>strategy<br>Free Cash Flows ($M) YTD 9/28/2024 Liquidity ($M) 9/28/2024<br>Net Cash Flows from Operating Activities $ 379 Cash $ 200<br>Net Cash Flows from Investing Activities (55) Total Long-Term Debt 898<br>Net Cash Flows from Financing Activities (326) Shareholders' Equity 1,542<br>Net Cash Flows from Operating Activities $ 379 Net Debt to Adj. EBITDA1 1.24x<br>Purchase of Property, Plant, & Equipment (54) Available Credit under Revolving Credit Facility2 $ 632<br>Free Cash Flows $ 325 Cash 200<br>Total Available Liquidity $ 832<br>1 Please see Adjusted EBITDA and Leverage Ratio at end of document.<br>2 $800M Total Revolver less borrowings and Standby LCs of $168M. | ||||||||||||||
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| Balanced Approach to Capital Allocation<br>2024 Year-to-Date Capital Deployment: $145M<br>14 October 23, 2024 | Valmont Industries, Inc.<br>Growing Our Business Returning Cash to Shareholders<br>• Targeting opportunities that fit<br>within our strategic priorities,<br>expand our product and market<br>reach and contribute to growth<br>• We continue to invest in<br>strategic capacity expansions<br>to increase output and<br>enhance manufacturing<br>flexibility<br>• Prioritize projects that deliver<br>high ROIC<br>• Q3 Dividends Paid: $12.1M<br>• Payout ratio target:<br>15% of earnings; current<br>payout: ~15%<br>• ~$81M remains on the current<br>share repurchase authorization<br>• Opportunistic approach,<br>supported by free cash flow<br>Capital Expenditures Acquisitions Share Repurchases Dividends<br>$54M N/A $55M $36M<br>Over the past year, we have returned ~$283M to shareholders through dividends and repurchases. | ||||||||||||||
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| Segment Assumptions<br>Reaffirming 2024 Outlook & Providing Key Assumptions<br>No change from prior outlook:<br>Infrastructure:<br>• Net sales expected to be Flat to up 1.5% vs. PY<br>• Expect Infrastructure full-year gross profit margin improvement<br>compared to 2023, although expected to be lower than 1H 2024<br>results as steel costs become more aligned with the contractual<br>steel index pricing to our customers<br>Agriculture:<br>• Net sales expected to be down 10.0% to 15.0% vs. PY<br>• Expect Agriculture fourth-quarter segment operating margins to<br>be lower due to the higher mix of international projects<br>15 October 23, 2024 | Valmont Industries, Inc.<br>(3.5%) – (1.5%)<br>Change In Net Sales Y/Y<br>$16.50 – $17.30<br>GAAP Diluted EPS<br>Key Assumptions<br>Effective tax rate expected to be slightly below<br>26.0%<br>Minimal expected foreign currency translation impact<br>on net sales<br>For cash flow purposes, capital expenditures now<br>expected to be in the range of $85 to $95 million (vs.<br>prior expectations of $95 to $110 million) | ||||||||||||||
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| CFO Closing Comments<br>Tom Liguori, EVP & CFO<br>16 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| Q&A<br>17 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| Appendix<br>18 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| Committed to Long-Term Financial Targets<br>MSD+<br>Net Sales<br>Growth1<br>Approaching<br>Mid-Teens<br>Operating<br>Margin<br>100%<br>Net Earnings<br>FCF Conversion<br>High-Teens<br>Return on Invested<br>Capital<br>Serving markets with<br>positive growth outlook<br>aligned with megatrends<br>Innovation and market<br>expansion to grow above<br>markets<br>Strategic pricing to align<br>with value we deliver<br>Streamlined organization<br>aligned with strategy<br>Operational efficiencies<br>& focus on the outliers<br>A disciplined and efficient<br>capital allocation strategy<br>Internal investments and<br>acquisitions are<br>evaluated based on<br>financial and strategic<br>criteria<br>Managing net working<br>capital to maximize cash<br>flow<br>Supply chain and<br>inventory optimization<br>1 VMI sales growth through the Agriculture cycle; organic sales growth only 19 October 23, 2024 | Valmont Industries, Inc.<br>Delivering reliable growth while expanding operating margins and ROIC to consistently create shareholder value | ||||||||||||||
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| Steel Material Index Trends<br>• The contractual price impact<br>from steel index deflation has<br>led to lower revenues during<br>2024 which are expected to<br>continue into 2025<br>• Steel cost changes impact<br>Utility the most because of the<br>contractual pricing<br>mechanisms and strong<br>backlog<br>20 October 23, 2024 | Valmont Industries, Inc.<br>AMM Steel Material Index<br>National Mills Carbon Grade<br>Cut to Length and Coiled / Hot Rolled Plate Average<br>2020 through 2024 YTD | ||||||||||||||
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| Utility Industry Capital Expenditures<br>21 October 23, 2024 | Valmont Industries, Inc.<br>Source: EEI Finance Department, member company reports, and S&P Global<br>Market Intelligence<br>Updated July 2024<br>Chart represents total company spending of U.S. Investor-Owned Electric Utilities, consolidated at the parent or appropriate holding company.<br>At the industry level, CapEx tends to be overestimated for the current, or first, year’s projection and underestimated for the two following years. We expect a<br>continued level of elevated spending after accounting for the historical trend of over- and underestimation. | ||||||||||||||
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| Infrastructure Investment and Jobs Act (IIJA)<br>22 October 23, 2024 | Valmont Industries, Inc. Source: Grassley.senate.gov<br>Infrastructure Investment and Jobs Act Spending Breakdown (In Order - Most to Least)<br>Previously-Passed Transportation Funding | $650B<br>Roads, Bridges and Related Programs | $111B<br>Energy, Power and Electric Grid Reliability | $107.5B<br>Freight and Passenger Rail | $66B<br>Broadband | $65B<br>Water and Wastewater Infrastructure | $55B<br>Public Transportation | $39.2B<br>Airports | $25B<br>Natural Disaster Prevention and Mitigation | $23.3B<br>Cleaning-Up Abandoned Sites | $21B<br>Army Corps of Engineers | $16.7B<br>Highway and Pedestrian Safety | $11B<br>Ports and Coast Guard | $7.8B<br>Cybersecurity and other Infrastructure Programs | $10.11B |
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| Wireless Carrier Spending<br>0<br>20<br>40<br>60<br>80<br>100<br>120<br>140<br>2019 2020 2021 2022 2023 2024e 2025e 2026e<br>0<br>20<br>40<br>60<br>80<br>100<br>120<br>140<br>2019 2020 2021 2022 2023 2024e 2025e 2026e<br>Auction 105: 3.5 GHz Band<br>Auction 107: C-Band (3.7 GHz)<br>Auction 110: 3.45 GHz Band<br>Auction 108: 2.5 GHz Band<br>The data does not include investments in fiber or other digital infrastructure, or expenditures for private networks. Also not included is the tower companies’ capex to acquire,<br>build, or augment existing sites. Funding from BEAD or other government programs is not included in the projections. All of this activity is additive to planned network<br>investments and construction<br>US Wireless CapEx & 5G Auction Spend (US$ billions, 2019-2026E)<br>Source: Inside Towers<br>Updated: March 2024 23 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| Single Family Housing Starts Market Forecast<br>$0<br>$50<br>$100<br>$150<br>$200<br>$250<br>$300<br>$350<br>2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028<br>Billions<br>Actual Starts Current Forecast Previous Forecast<br>Source: CMD Forecast Data<br>Updated February 2024 24 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| U.S. Net Cash Farm Income by Year<br>25 October 23, 2024 | Valmont Industries, Inc.<br>Source: USDA<br>Updated September 5, 2024 | ||||||||||||||
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| U.S. Drought Condition<br>26 October 23, 2024 | Valmont Industries, Inc.<br>Source: Drought Monitor<br>Updated October 15, 2024 | ||||||||||||||
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| The non-GAAP table below discloses the impact of impairment of goodwill and other intangible assets, realignment charges, intangible asset amortization (Prospera), and stock-based compensation recognized for the Prospera employees on fiscal 2023 results, as well as the impact of non-recurring tax benefit items on net earnings. Amounts may be impacted<br>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<br>management and investors with the related reported GAAP measures.<br>1<br>In the third quarter of fiscal 2023, we reported a GAAP net loss. In periods in which we recognize a net loss, we exclude the impact of outstanding stock awards from the diluted loss<br>per share calculation, as their inclusion would have an anti-dilutive effect. The adjusted diluted earnings per share calculation includes the impact of outstanding stock awards.<br>2Diluted earnings (loss) per share includes rounding.<br>3The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction.<br>Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures<br>Dollars in thousands, except per-share amounts<br>27 October 23, 2024 | Valmont Industries, Inc.<br>Net earnings (loss) attrib. to Valmont Industries, Inc. - as reported $ (49,028) $ (2.32) $ 114,888 $ 5.40<br>Impairment of goodwill and other intangible assets 140,844 6.67 140,844 6.62<br>Realignment charges 4,180 0.20 4,180 0.20<br>Prospera intangible asset amortization — — 3,290 0.15<br>Prospera stock-based compensation — — 4,278 0.20<br>Total adjustments, pre-tax 145,024 6.86 152,592 7.17<br>Tax effect of adjustments3<br> (5,432) (0.26) (6,524) (0.31)<br>Non-recurring tax benefit items (3,588) (0.17) (3,588) (0.17)<br>Net earnings attributable to Valmont Industries, Inc. - adjusted $ 86,976 $ 4.12 $ 257,368 $ 12.09<br>Average shares outstanding - diluted 21,131 21,290<br>earnings per<br>2023 per share1,2 2023 share2<br>September 30, earnings (loss) September 30,<br>Thirteen<br>Diluted<br>Thirty-nine<br>weeks ended weeks ended Diluted | ||||||||||||||
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| The non-GAAP tables below disclose the impact of impairment of long-lived assets, realignment charges, intangible asset amortization (Prospera), and stock-based compensation<br>recognized for the Prospera employees on fiscal 2023 results, as well as the impact of non-recurring tax benefit items on net earnings. Amounts may be impacted by rounding. We<br>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<br>investors with the related reported GAAP measures.<br>Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures<br>Dollars in thousands<br>28 October 23, 2024 | Valmont Industries, Inc.<br>Operating Income Reconciliation<br>Operating income (loss) - as reported $ 103,401 $ (99,670) $ (27,921) $ (24,190)<br>Impairment of other goodwill and intangible assets 3,571 137,273 — 140,844<br>Realignment charges 1,069 907 2,204 4,180<br>Adjusted operating income (loss) $ 108,041 $ 38,510 $ (25,717) $ 120,834<br>Net sales - as reported 753,626 296,669 — 1,050,295<br>Operating income (loss) as a % of net sales 13.7 % (33.6) % N M (2.3) %<br>Adjusted operating income as a % of net sales 14.3 % 13.0 % N M 11.5 %<br>Thirteen weeks ended September 30, 2023<br>Infrastructure Agriculture Corporate Valmont Operating Income Reconciliation<br>Operating income (loss) - as reported $ 313,703 $ 2,904 $ (88,598) $ 228,009<br>Impairment of other goodwill and intangible assets 3,571 137,273 — 140,844<br>Realignment charges 1,069 907 2,204 4,180<br>Prospera intangible asset amortization — 3,290 — 3,290<br>Prospera stock-based compensation — 4,278 — 4,278<br>Adjusted operating income (loss) $ 318,343 $ 148,652 $ (86,394) $ 380,601<br>Net sales - as reported 2,253,924 905,148 — 3,159,072<br>Operating income as a % of net sales 13.9 % 0.3 % N M 7.2 %<br>Adjusted operating income as a % of net sales 14.1 % 16.4 % N M 12.0 %<br>Infrastructure Agriculture Corporate Valmont<br>Thirty-nine weeks ended September 30, 2023<br>NM = not meaningful | ||||||||||||||
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| Excluding significant non-recurring items from the third quarter of fiscal 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<br>shows how Adjusted Effective Tax Rate is calculated from the Company’s Statements of Operations. Adjusted Effective Tax Rate is calculated as total earnings (loss) before income<br>taxes plus the significant non-recurring items of impairment of goodwill and other intangible assets, realignment charges, and non-recurring tax benefit items. Adjusted Effective Tax<br>Rate allows investors to analyze our effective tax rate in light of these non-recurring items.<br>Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures<br>Dollars in thousands<br>29 October 23, 2024 | Valmont Industries, Inc. | ||||||||||||||
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| 1Adjusted net earnings for purposes of calculating free cash flow conversion may not agree to the adjusted net earnings. The difference is due to non-recurring expenses which were<br>settled in cash in the year of occurrence as part of net cash flows from operating activities.<br>2We use the non-GAAP measure of free cash flow, which we define as GAAP net cash flows from operating activities reduced by the purchase of property, plant, and equipment. We<br>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<br>of free cash flow may not be directly comparable to similar measures used by other companies.<br>Historical Free Cash Flow1,2 (2014 – 2023)<br>Dollars in millions<br>30 October 23, 2024 | Valmont Industries, Inc.<br>2014 2015 2016 2017 2018 2019 2020 2021 2022 2023<br>Net cash flows from operating activities $ 174.1 $ 272.3 $ 232.8 $ 133.1 $ 153.0 $ 307.6 $ 316.3 $ 65.9 $ 326.3 $ 306.8<br>Net cash flows from investing activities (256.9) (48.2) (53.0) (49.6) (155.4) (168.1) (104.0) (417.3) (132.1) (115.3)<br>Net cash flows from financing activities (136.8) (32.0) (95.2) (32.0) (162.1) (98.9) (173.8) 133.5 (181.9) (176.4)<br>Net cash flows from operating activities $ 174.1 $ 272.3 $ 232.8 $ 133.1 $ 153.0 $ 307.6 $ 316.3 $ 65.9 $ 326.3 $ 306.8<br>Purchase of plant, property, and equipment (73.0) (45.5) (57.9) (55.3) (72.0) (97.4) (106.7) (107.8) (93.3) (96.8)<br> Free cash flows 101.1 226.8 174.9 77.8 81.0 210.2 209.6 (41.9) 233.0 210.0<br>Net earnings attributable to Valmont Industries, Inc. $ 183.9 $ 40.1 $ 175.5 $ 120.5 $ 101.8 $ 146.4 $ 140.7 $ 195.6 $ 250.9 $ 150.8<br>Adjusted free cash flow net earnings attributable to Valmont Industries, Inc. $ 187.7 $ 131.7 $ 139.9 $ 162.7 $ 130.4 $ 146.4 $ 159.8 $ 222.3 $ 284.2 $ 291.6<br>Free Cash Flow Conversion - GAAP 0.55 5.66 1.00 0.65 0.80 1.44 1.49 (0.21) 0.93 1.39<br>Free Cash Flow Conversion - Adjusted 0.53 1.71 1.25 0.48 0.62 1.44 1.31 (0.19) 0.82 0.72<br>Reconciliation of Net Earnings to Adjusted Figures<br>Net earnings attributed to Valmont Industries, Inc. $ 183.9 $ 40.1 $ 175.5 $ 120.5 $ 101.8 $ 146.4 $ 140.7 $ 195.6 $ 250.9 $ 150.8<br>Loss from divestiture of offshore wind energy structures business - - - - - - - - 33.3 -<br>Change in valuation allowance against deferred tax assets - 7.1 (20.7) 41.9 - - - 5.0 - -<br>Impairment of long-lived assets - 61.8 1.1 - 28.6 - 19.1 21.7 - 140.8<br>Reversal of contingent liability - - (16.6) - - - - - - -<br>Other non-recurring expenses (non-cash) - 18.1 - - - - - - - -<br>Noncash loss from Delta EMD shares 3.8 4.6 0.6 0.2 - - - - - -<br> Adjusted free cash flow net earnings attributable to Valmont Industries, Inc. $ 187.7 $ 131.7 $ 139.9 $ 162.7 $ 130.4 $ 146.4 $ 159.8 $ 222.3 $ 284.2 $ 291.6 | ||||||||||||||
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| 1We use the non-GAAP measure of free cash flow, which we define as GAAP net cash flows from operating activities reduced by the purchase of property, plant, and equipment. We<br>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<br>of free cash flow may not be directly comparable to similar measures used by other companies.<br>Free Cash Flow Throughout the Cycle<br>Dollars in millions<br>31 October 23, 2024 | Valmont Industries, Inc.<br>101<br>227<br>175<br>78 81<br>210 210<br>(42)<br>233<br>210<br>148<br> (100)<br> (50)<br> -<br> 50<br> 100<br> 150<br> 200<br> 250<br> 300<br> 350<br>2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 Year<br>Avg<br>GAAP 0.55X 5.66X 1.00X 0.65X 0.80X 1.44X 1.49X (0.21X) 0.93X 1.39X<br>Adj. 0.53X 1.71X 1.25X 0.48X 0.62X 1.44X 1.31X (0.19X) 0.82X 0.72X<br>Historical FCF Conversion by Year1<br>2014 – 2023 Free Cash Flow1<br>10-yr Avg. $148M<br>GAAP 1.37X<br>Adj. 0.87X<br>Years of rapid raw material cost inflation | ||||||||||||||
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| Certain of our debt agreements contain covenants that require us to maintain certain coverage ratios. Our Debt to Adjusted EBITDA may not exceed 3.5X Adjusted EBITDA (or<br>3.75X Adjusted EBITDA after certain material acquisitions) of the prior four fiscal quarters. See “Leverage Ratio” below.<br>Calculation of Adjusted EBITDA and Leverage Ratio<br>Dollars in thousands<br>32 October 23, 2024 | Valmont Industries, Inc.<br>Net earnings attributable to Valmont Industries, Inc. $ 306,568<br>Interest expense 61,695<br>Income tax expense 101,661<br>Depreciation and amortization expense 94,490<br>Stock-based compensation 32,074<br>EBITDA 596,488<br>Realignment charges 31,030<br>Adjusted EBITDA $ 627,518<br>Interest-bearing debt, excluding origination fees and discounts of $25,790 $ 925,831<br>Less: cash and cash equivalents in excess of $50,000 150,477<br>Net indebtedness $ 775,354<br>Net indebtedness $ 775,354<br>Leverage ratio 1.24<br>Four fiscal<br>quarters ended<br>September 28,<br>2024 | ||||||||||||||
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