8-K
VALMONT INDUSTRIES INC (VMI)
8-K
2023-01-11
For: 2023-01-11
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April 04, 2026
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
January 11, 2023
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) | | (I.R.S. Employer Identification No.) |
| | | |
| 15000 Valmont Plaza | | 68154 |
| Omaha **** NE | | |
| (Address of Principal Executive Offices) | | (Zip Code) |
( 402 ) 963-1000
Registrant's telephone number, including area code
(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 7.01. Regulation FD Disclosure
On January 11, 2023, Valmont Industries, Inc. (the “Company”) will post a presentation, a copy of which is furnished as Exhibit 99.1 to this report, on its website. Exhibit 99.1 is being furnished in accordance with Regulation FD of the Securities and Exchange Commission.
The information in this Item 7.01 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 7.01 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.
(d) Exhibits.
| | ||
|---|---|---|
| Exhibit No. | | Description |
| 99.1 | | Presentation Slides January 2023 |
| 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. | ||
| Date: | January 10, 2023 | | | |
| | By: | /s/ AVNER M. APPLBAUM | ||
| | | Name: | Avner M. Applbaum | |
| | | Title: | Executive Vice President and Chief Financial Officer |
Exhibit 99.1
| © 2023 Valmont<br>®<br>Industries, Inc.<br>Valmont Industries, Inc.<br>Investor Presentation<br>January 2023 | ||
|---|---|---|
| Disclosure Regarding Forward<br>-<br>Looking Statements<br>Jan 2023<br>These slides contain (and the accompanying oral discussion will contain) “forward<br>-<br>looking statements” within the meaning of the<br>Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other fa<br>cto<br>rs<br>that could cause the actual results of the Company to differ materially from the results expressed or implied by such stateme<br>nts<br>,<br>including general economic and business conditions, conditions affecting the industries served by the Company and its subsidi<br>ari<br>es<br>including the continuing and developing effects of the pandemic including the effects of the outbreak on the general economy<br>and<br>the specific economic responses to the Company’s products and services, the overall market acceptance of such products and<br>services, the integration of acquisitions and other factors disclosed in the Company’s periodic reports filed with the Securi<br>tie<br>s and<br>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<br>pr<br>oducts,<br>product pricing, domestic and international competitive environments, geopolitical risks and actions and policy changes of do<br>mes<br>tic<br>and foreign governments. Consequently, such forward<br>-<br>looking statements should be regarded as the Company’s current plans,<br>estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly release the result<br>s o<br>f<br>any revisions to these forward<br>-<br>looking statements that may be made to reflect any future events or circumstances after the date<br>of<br>such statements or to reflect the occurrence of anticipated or unanticipated events.<br>2<br> | Valmont Industries, Inc. | |
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| 3<br>Jan 2023<br>01<br>02<br>03<br>04<br>Join Our Purpose:<br>Conserving Resources. Improving Life.<br>®<br>Solving customers’ challenges by providing<br>unique products and<br>solutions<br>, enhanced with technical innovation and aligned to long<br>-<br>term secular growth drivers<br>Executing our strategy and delivering sustainable, long<br>-<br>term profitable<br>growth:<br>>12% Operating Margin & >11% ROIC<br>Employing the<br>Valmont Business Model<br>to drive strong results and<br>create sustainable<br>long<br>-<br>term shareholder value<br>Deploying a balanced<br>capital allocation framework<br>that supports<br>both reinvesting in the business and returning capital to shareholders<br> | Valmont Industries, Inc. | |
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| Valmont Snapshot (NYSE: VMI)<br>4<br>Delivering Innovative Solutions for Infrastructure and Agriculture Markets<br>Jan 2023<br>$2,224<br>$1,012<br>3Q 2022 YTD<br>Sales<br>3<br>($M)<br>3Q 2022 YTD<br>Operating Income<br>4<br>($M)<br>Omaha, NE<br>Headquarters<br>$3.5B<br>2021<br>Net Sales<br>$7B<br>Market Cap<br>1<br>100+<br>Countries of<br>Operation<br>2<br>85<br>Manufacturing<br>Sites<br>2<br>~11,000<br>Total<br>Employees<br>2<br>Agriculture<br>Infrastructure<br>Modernizing Critical<br>Infrastructure<br>Advancing Agriculture<br>Productivity<br>INFRASTRUCTURE<br>AGRICULTURE<br>1<br>As of<br>01/09/23<br>..<br>2<br>See 2021 Annual Report<br>..<br>3<br>Includes intersegment sales.<br>4<br>Adjusted Operating Income; Please see Company’s Reg G table at end of presentation.<br>256<br>256<br>139<br>151<br>GAAP<br>Adjusted<br> | Valmont Industries, Inc. | |
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| Expansive Footprint Serves Global Customer Base<br>Operational Excellence Enhances Localization and Creates Flexibility<br>Jan 2023<br>5<br>72%<br>14%<br>14%<br>Americas<br>EMEA<br>APAC<br>2021 Sales by Geography<br> | Valmont Industries, Inc. | |
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| Market Drivers<br>Infrastructure<br>Segment | Delivering<br>Safety, Security and Reliability<br>6<br>Jan 2023<br>1,802<br>2,224<br>3Q 2021 YTD<br>3Q 2022 YTD<br>Sales<br>1<br>•<br>Strong engineering capabilities<br>•<br>Cross<br>-<br>sharing of commercial, operational<br>and development resources<br>•<br>Breadth of product offerings<br>•<br>Unparalleled response time and customer<br>service<br>•<br>Unique global footprint<br>Product Lines<br>3Q 2022 YTD<br>Sales %<br>Transmission, Distribution and Substation (TD&S)<br>40%<br>Lighting and Transportation (L&T)<br>32%<br>Coatings<br>12%<br>Telecommunications<br>10%<br>Renewable energy<br>6%<br>Competitive Advantages<br>•<br>Multi<br>-<br>year stimulus spend to replace aging<br>and upgrade unreliable infrastructure<br>•<br>Renewable generation and vehicle<br>electrification<br>•<br>Utility capex spending<br>•<br>Corrosion protection<br>•<br>Smart cities and smart grids<br>•<br>5G deployment<br>74%<br>26%<br>Sales by Geography 3Q 2022 YTD<br>1<br>North America<br>International<br>1<br>Includes intersegment sales.<br>2<br>Adjusted Operating Income; Please see Company’s Reg G table at end of presentation.<br>187<br>256<br>194<br>256<br>3Q 2021 YTD<br>3Q 2022 YTD<br>Operating Income<br>2<br>GAAP<br>Adjusted<br>10.4%<br>10.8%<br>11.6%<br>11.6%<br> | Valmont Industries, Inc. |
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| Agriculture Segment | Enabling Growers to do More with Less<br>7<br>Jan 2023<br>1<br>Technology sales are reported as a subset of total Agriculture segment sales<br>2<br>Includes intersegment sales.<br>3<br>Adjusted Operating Income; Please see Company’s Reg G table at end of presentation.<br>Product Lines<br>3Q 2022 YTD<br>Sales %<br>North American Irrigation<br>56%<br>International Irrigation<br>44%<br>Agricultural Technology<br>1<br>8%<br>•<br>#1 global market share position with the<br>best dealer<br>-<br>distribution network<br>•<br>Global footprint, local presence<br>•<br>Strong Valley brand<br>•<br>Valley University for dealer education and<br>training<br>•<br>Leader in autonomous crop management<br>•<br>Split Shipment philosophy allows freight<br>maximization, reduced shipping lead times<br>and improved product availability<br>•<br>Constraints on freshwater require customers<br>to be more efficient with water use<br>•<br>Food security concerns and governments’<br>desire to become self<br>-<br>sufficient<br>•<br>Large installed base creates replacement<br>opportunity<br>•<br>Digital farm and autonomous management to<br>reduce input costs, increase land productivity<br>and minimize farm labor costs<br>•<br>Helping customers meet ESG initiatives<br>Market Drivers<br>Competitive Advantages<br>56%<br>44%<br>Sales by Geography 3Q 2022<br>2<br>YTD<br>North America<br>International<br>752<br>1,012<br>3Q 2021 YTD<br>3Q 2022 YTD<br>Sales<br>1<br>108<br>139<br>114<br>151<br>3Q 2021 YTD<br>3Q 2022 YTD<br>Operating<br>Income<br>2,3<br>GAAP<br>Adjusted<br>14.4%<br>15.2%<br>13.8%<br>14.9%<br> | Valmont Industries, Inc. |
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| Elevating<br>Delivering Sustainable, Long<br>-<br>Term Profitable Growth<br>8<br>Jan 2023<br>Accelerating<br>Innovating<br>Growth by Expanding Markets that We Serve<br>•<br>Growing services and technology in both segments while also reducing cyclicality<br>•<br>Focusing on high<br>-<br>growth sectors such as Telecommunications and Renewable Energy<br>•<br>Strategically adding incremental capacity in markets with superior demand growth<br>Outcomes by Optimizing Talent and Technology<br>•<br>Leadership using technology to drive productive disruption<br>•<br>Aligning technology investments with global megatrends<br>•<br>Competitive advantage in delivering customer solutions and optimizing talent<br>•<br>Enhancing talent development through innovation<br>ESG Drives Sustainable Outcomes in Operations and for Customers<br>•<br>Culture of continuous improvement drives sustainable operations<br>•<br>Fully operationalized ESG<br>–<br>from Board of Directors to day<br>-<br>to<br>-<br>day management<br>•<br>Upgrading, replacing and protecting critical infrastructure<br>•<br>Helping growers conserve water and reduce inputs<br> | Valmont Industries, Inc. | |
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| Elevating | Operational Excellence Drives Sustainable Solutions<br>Jan 2023<br>Infuse Lean Thinking Into Our Culture;<br>Use<br>Continuous Improvement As Our Enabler<br>9<br>Enablers<br>Strategic Priorities<br>Operational Excellence<br>with ESG Focus<br>Enhanced<br>Organizational<br>Structure<br>Culture of Lean<br>Excellence<br>Focus on<br>Disruptive<br>Innovation<br>Drive<br>Simplification<br>Living our tagline:<br>Conserving Resources.<br>Improving Life.<br>®<br>Strategic integration, not<br>simply “check the box”<br>Expanding from internal<br>focus to external influence<br>Centralized<br>organizational structure<br>drives standard<br>processes<br>Strong leadership<br>establishing functional<br>excellence<br>Elevate lean thinking<br>and vision to world<br>class levels<br>Focus on continuous<br>improvement in<br>systems, processes<br>and tools<br>Drive results via<br>systematic problem<br>-<br>solving & data analytics<br>Industry 4.0 with<br>connected equipment<br>Cutting<br>-<br>edge<br>technology in<br>manufacturing<br>processes<br>Technology roadmap<br>informed by need of the<br>business<br>Support<br>Platform<br>Design<br>initiatives<br>Continuously evaluate<br>Global Footprint<br>Strategy<br>Systems / Supply<br>Chain<br>optimization<br>Solving customers’ challenges while optimizing resources and empowering talent<br> | Valmont Industries, Inc. |
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| Jan 2023<br> | Valmont Industries, Inc.<br>10<br>Sustainability is in our DNA<br>•<br>We have lived our corporate purpose for<br>76 years<br>•<br>Our purpose connects what businesses we are in, how we<br>deliver value<br>to customers, how we<br>innovate<br>, and how we<br>manage<br>key resources<br>•<br>Our team members are<br>solving essential societal problems<br>, including<br>lack of food security, threat to vital infrastructure from climate change, and<br>energy poverty | |
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| Jan 2023<br>11<br>Elevating | Delivering on ESG Commitments<br>Source: 2022 Valmont Sustainability Report<br> | Valmont Industries, Inc. |
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| Accelerating | Expanding the Markets We Serve<br>Expanding Our Total Addressable Market by Proactively Capturing Industry Trends<br>Jan 2023<br>12<br>MARKET<br>GROWTH<br>NEW PRODUCTS<br>& SERVICES<br>GEOGRAPHIC<br>EXPANSION<br>2021<br>VALMONT<br>SHARE<br>$<br>3.5B<br>New Products<br>& Services<br>Market Growth<br>Geographic<br>Expansion<br>•<br>Renewable Energy<br>•<br>Transportation<br>Signage<br>•<br>Total Productive<br>Maintenance<br>•<br>Smart Grid Technology<br>•<br>Bridge Girders<br>•<br>Bus Charging Stations<br>•<br>PIM Mitigation<br>•<br>Small Cell<br>•<br>Value<br>-<br>added Services<br>•<br>Digital Transformation<br>•<br>Services<br>•<br>Highway Safety and<br>Signage<br>•<br>Expanding Component<br>Business<br>•<br>Leverage Poles Footprint<br>•<br>M&A<br>•<br>Greenfield sites<br>•<br>Larger, Corporate<br>Farms and<br>Key Accounts<br>(Consolidation)<br>•<br>M&A / Partnerships<br>•<br>Technology Solutions<br>•<br>Higher Value Crops<br>•<br>International Projects<br>(e.g., Egypt, Ag Solar)<br>•<br>International<br>Food Security<br>Infrastructure<br>Agriculture<br> | Valmont Industries, Inc. |
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| Accelerating | Well Positioned for Solar Growth<br>13<br>Jan 2023<br>Increased Renewable Energy Demand is Catapulting Solar Growth<br>VALMONT<br>SOLAR<br>AG<br>SOLAR<br>•<br>2018<br>–<br>Convert Italia acquisition<br>•<br>Focus on distributed generation projects<br>•<br>Key international markets have more pronounced barriers to entry<br>and favorable legislation<br>•<br>Targeting additional growth in domestic US market<br>•<br>Strong competitive advantages<br>•<br>Current estimated sales of ~$120M in 2022<br>•<br>2020<br>–<br>Solbras<br>majority stake acquisition<br>•<br>Integrated with our world<br>-<br>class Valley dealer network<br>•<br>Became the sole global provider in this underserved market<br>•<br>Partner of choice due to unparalleled service and support<br>•<br>Current estimated sales to exceed $100M by the end of 2022<br> | Valmont Industries, Inc. |
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| Innovating | Targeting Megatrends with Technology<br>14<br>Our Products and Solutions, Enhanced by Innovative Technology, are Addressing Global Megatrends<br>Jan 2023<br>INFRASTRUCTURE<br>AGRICULTURE<br>Valmont<br>Technology<br>Automation, AI, ML,<br>Smart, Lean, Agile<br>Digitalization<br>Enabling digital transformation<br>for us and our customers<br>Sustainability<br>Conserving Resources,<br>Improving Life<br>Energy Transition<br>Increasing renewable<br>demand & electrification<br>Food Security<br>Helping feed the world’s<br>growing population<br> | Valmont Industries, Inc. |
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| Innovating | Industry Leading Ag Technologies<br>15<br>Jan 2023<br>Focusing on Technology Services to help Farmers<br>D<br>o More With Less<br>ROI for a tech<br>-<br>enhanced pivot is as soon as Year One<br>The Challenge<br>Extreme weather, availability of labor and constraints on water are<br>challenges faced by customers. Growers need plant level insights to be<br>most efficient with their resources.<br>Our Solution<br>Valmont invests in and acquires technologies to build out an integrated ag<br>tech ecosystem.<br>Bundling Insights from<br>Prospera<br>with pivot sales provides<br>tremendous value to our customers and unprecedented visibility to the field,<br>enabling them actionable insights to produce greater crop yields.<br>Impact<br>Integrating irrigation and technology improves the return on investment for<br>farmers. By focusing on recurring revenue services that provide value to our<br>customers, we are preparing the business to better withstand cyclicality.<br> | Valmont Industries, Inc. |
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| 16<br>Jan 2023<br>~10% CAGR<br>Total Shareholder<br>Return<br>Over Past 15<br>Years<br>1<br>Value<br>Creation<br>1<br>Total Shareholder Return Annual CAGR from<br>Dec 31 2007 to Dec 30 2022;<br>Source: FactSet<br>Valmont Business Model Drives Strong Results<br>Committed to<br>Focus Areas<br>Establishes our priorities and ensures we<br>are doing the right things that align with<br>shareholder expectations<br>United by<br>Core Values<br>Who we are, how we approach our<br>mission, and how we engage with others<br>Enabling<br>Value Creation<br>Creating value for all stakeholders<br> | Valmont Industries, Inc. | |
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| Agriculture<br>Infrastructure<br>Infrastructure<br>Infrastructure<br>Infrastructure<br>Infrastructure<br>Agriculture<br>Agriculture<br>Agriculture<br>Infrastructure<br>2018<br>2018<br>2018<br>2018/2019<br>2019<br>2019<br>2020<br>2021<br>2021<br>2022<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>✓<br>Accelerating | Growing Through Strategic M&A<br>17<br>Jan 2023<br>Creating Value by Investing in High<br>-<br>Growth Sectors Through Disciplined M&A<br> | Valmont Industries, Inc. |
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| Strong Peak to Trough Performance<br>18<br>Ability to Execute During Economic Uncertainty<br>Jan 2023<br>1<br>Excludes restructuring charges, impairments and significant one<br>-<br>time adjustments. Please see Company’s Reg. G table at end of pr<br>esentation.<br>Trough<br>Trough<br>Peak<br>$2,746<br>$2,757<br>$2,767<br>$2,895<br>$3,502<br>$267<br>$202<br>$228<br>$226<br>$287<br>$267<br>$269<br>$228<br>$268<br>$334<br> $-<br> $100<br> $200<br> $300<br> $400<br> $500<br> $600<br> $700<br> $-<br> $500<br> $1,000<br> $1,500<br> $2,000<br> $2,500<br> $3,000<br> $3,500<br> $4,000<br>2017<br>2018<br>2019<br>2020<br>2021<br>Sales<br>GAAP Operating Income<br>Adjusted Operating Income<br>Sales and Operating Income<br>($M)<br>1<br>Highlights<br>•<br>Focused growth strategy driving<br>improved performance<br>•<br>Working together to solve<br>customer challenges<br>•<br>Investing in and delivering<br>innovative technology<br>•<br>Expanding market presence<br>•<br>Growing margins through strategic<br>pricing, operational excellence,<br>and adherence to business model<br>•<br>Aligned with megatrends and<br>positioned for continued growth<br> | Valmont Industries, Inc. | |
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| Capital Allocation Framework<br>19<br>Disciplined and Balanced Capital Allocation Driving Shareholder Value<br>Jan 2023<br>GROWING OUR BUSINESS<br>RETURNING CASH TO SHAREHOLDERS<br>30%<br>Capital Expenditures<br>39%<br>Acquisitions<br>19%<br>Share Repurchases<br>12%<br>Dividends<br>•<br>Investments to support strategic<br>growth initiatives, digital customer<br>experience, Industry 4.0 advanced<br>manufacturing & ESG<br>•<br>Prioritize capital projects with high<br>ROIC<br>•<br>Strategic fit: Technology<br>acceleration, portfolio breadth,<br>high<br>-<br>growth businesses, global<br>product line focus<br>•<br>Focus on revenue growth and<br>ROIC<br>•<br>Rigor around due diligence and<br>integration<br>•<br>Opportunistic approach,<br>supported by free cash flow<br>•<br>Repurchased ~2 million shares at<br>an average price of $<br>142.92<br>per<br>share<br>•<br>~$101M remains on current<br>authorization<br>•<br>10% dividend increase<br>announced February 2022<br>•<br>Payout ratio target: 22% of<br>earnings<br>•<br>Current payout: ~16%<br>2018<br>–<br>Q3 2022<br>Use of Cash: $<br>1.5 Billion<br> | Valmont Industries, Inc. | |
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| Strong Balance Sheet and Ample Liquidity<br>20<br>Jan 2023<br>Cash<br>$166M<br>Total Long<br>-<br>Term Debt<br>$935M<br>Shareholders’ Equity<br>$1,573M<br>Total Debt to Adj. EBITDA<br>1<br>1.5x<br>Available<br>Credit under<br>Revolving Credit Facility<br>2<br>$595M<br>Cash<br>$166M<br>Total Available Liquidity<br>$761M<br>As of September 24, 2022<br>►<br>Long<br>-<br>term debt<br>mostly fixed<br>-<br>rate, with long<br>-<br>dated maturities to 2044 and 2054<br>►<br>Total Debt to Adjusted EBITDA remains within our<br>desired range of 1.5 to 2.5 times<br>►<br>Capital allocation strategy has not changed,<br>and the primary focus is to maintain liquidity to support operations<br>1<br>See slide 38 for calculation of Adjusted EBITDA and Leverage Ratio.<br>2<br>$800M Total Revolver less borrowings and Standby LC’s of $205M.<br> | Valmont Industries, Inc. | |
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| Jan 2023<br>21<br>2012<br>-<br>2021 Historical Free Cash Flow<br>1<br>1<br>Adjusted earnings for purposes of calculating FCF conversion may not agree to the adjusted net earnings. The difference is du<br>e<br>to cash restructuring, debt refinancing, or other non<br>-<br>recurring expenses which were settled in cash in the year of occurrence.<br>($M)<br>2012<br>2013<br>2014<br>2015<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>Net cash flows from operating activities<br>$ 197.1<br>$ 396.4<br>$ 174.1<br>$ 272.3<br>$ 232.8<br>$ 133.1<br>$ 153.0<br>$ 307.6<br>$ 316.3<br>$ 65.9<br>Net cash flows from investing activities<br>(136.7)<br>(131.7)<br>(256.9)<br>(48.2)<br>(53.0)<br>(49.6)<br>(155.4)<br>(168.1)<br>(104.0)<br>(417.3)<br>Net cash flows from financing activities<br>(16.4)<br>(37.4)<br>(136.8)<br>(32.0)<br>(95.2)<br>(32.0)<br>(162.1)<br>(98.9)<br>(173.8)<br>133.5<br>Net cash flows from operating activities<br>$ 197.1<br>$ 396.4<br>$ 174.1<br>$ 272.3<br>$ 232.8<br>$ 133.1<br>$ 153.0<br>$ 307.6<br>$ 316.3<br>$ 65.9<br>Purchase of plant, property, and equipment<br>(97.1)<br>(106.8)<br>(73.0)<br>(45.5)<br>(57.9)<br>(55.3)<br>(72.0)<br>(97.4)<br>(106.7)<br>(107.8)<br>Free Cash flows<br>100.0<br>289.7<br>101.1<br>226.8<br>174.9<br>77.8<br>81.0<br>210.2<br>209.6<br>(41.9)<br>Net earnings attributed to Valmont Industries, Inc.<br>$ 234.1<br>$ 278.5<br>$ 183.9<br>$ 40.1<br>$ 175.5<br>$ 120.5<br>$ 101.8<br>$ 146.4<br>$ 140.7<br>$ 195.6<br>Adjusted net earnings attributed to Valmont Industries, Inc.<br>N/A<br>$ 295.1<br>$ 187.7<br>$ 131.7<br>$ 139.9<br>$ 162.7<br>$ 130.4<br>N/A<br>$ 159.8<br>$ 222.3<br>Free Cash Flow Conversion<br>-<br>GAAP<br>0.43<br>1.04<br>0.55<br>5.66<br>1.00<br>0.65<br>0.80<br>1.44<br>1.49<br>(0.21)<br>Free Cash Flow Conversion<br>-<br>Adjusted<br>N/A<br>0.98<br>0.53<br>1.71<br>1.25<br>0.48<br>0.62<br>N/A<br>1.31<br>(0.19)<br>1) Reconciliation of Net Earnings to Adjusted Figures<br>Net earnings attributed to Valmont Industries, Inc.<br>$ 234.1<br>$ 278.5<br>$ 183.9<br>$ 40.1<br>$ 175.5<br>$ 120.5<br>$ 101.8<br>$ 146.4<br>$ 140.7<br>$ 195.6<br>Change in valuation allowance against deferred tax assets<br>-<br>-<br>-<br>7.1<br>(20.7)<br>41.9<br>-<br>-<br>-<br>5.0<br>Impairment of long<br>-<br>lived assets<br>-<br>12.2<br>-<br>61.8<br>1.1<br>-<br>28.6<br>-<br>19.1<br>21.7<br>Reversal of contingent liability<br>-<br>-<br>-<br>(16.6)<br>-<br>-<br>-<br>-<br>-<br>Other non<br>-<br>recurring expenses (non<br>-<br>cash)<br>-<br>-<br>-<br>18.1<br>-<br>-<br>-<br>-<br>Deconsolidation of Delta EMD, after<br>-<br>tax and NCI<br>-<br>4.4<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>Noncash loss from Delta EMD shares<br>-<br>-<br>3.8<br>4.6<br>0.6<br>0.2<br>-<br>-<br>-<br>-<br>Adjusted net earnings attributed to Valmont Industries, Inc.<br>$ 234.1<br>$ 295.1<br>$ 187.7<br>$ 131.7<br>$ 139.9<br>$ 162.7<br>$ 130.4<br>$ 146.4<br>$ 159.8<br>$ 222.3<br>10 Year Average FCF is $143M; Last 5 Years Has Averaged $107M<br> | Valmont Industries, Inc. | |
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| Jan 2023<br>22<br>Years of rapid raw material cost inflation<br>GAAP<br>0.43X<br>1.04X<br>0.55X<br>5.66X<br>1.00X<br>0.65X<br>0.80X<br>1.44X<br>1.49X<br>(0.21X)<br>Adj.<br>N/A<br>0.98X<br>0.53X<br>1.71X<br>1.25X<br>0.48X<br>0.62X<br>N/A<br>1.31X<br>(0.19X)<br>2012<br>–<br>2021 Free Cash Flow<br>1<br>($M)<br>100<br>290<br>101<br>227<br>175<br>78<br>81<br>210<br>210<br>(42)<br>143<br> (100)<br> (50)<br> -<br> 50<br> 100<br> 150<br> 200<br> 250<br> 300<br> 350<br>2012<br>2013<br>2014<br>2015<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>10 Year<br>Avg<br>10<br>-<br>yr Avg. $143M<br>GAAP 1.28X<br>Adj. 0.84X<br>Historical FCF Conversion by Year<br>1<br>Strong Free Cash Flow throughout the Cycle<br>1<br>We use the non<br>-<br>GAAP measure of FCF, which we define as GAAP net cash flows from operating activities reduced by capex. We belie<br>ve that FCF is a useful performance measure for management and useful to investors as the basis for comparing our performance<br>wi<br>th other<br>companies. Our measure of FCF may not be directly comparable to similar measures used by other companies.<br> | Valmont Industries, Inc. | |
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| GAAP<br>100%<br>65%<br>80%<br>144%<br>149%<br>(21%)<br>Adj.<br>125%<br>48%<br>62%<br>N/A<br>131%<br>(19%)<br>Strong Free Cash Flow Generation<br>23<br>1<br>We use the non<br>-<br>GAAP measure of FCF, which we define as GAAP net cash flows from operating activities reduced by capex. We believ<br>e that FCF is a useful performance measure for management and useful to investors as the basis for<br>comparing our performance with other companies. Our measure of FCF may not be directly comparable to similar measure use by o<br>the<br>r companies.<br>$175<br>$78<br>$81<br>$210<br>$210<br>$(42)<br> $(100)<br> $(50)<br> $-<br> $50<br> $100<br> $150<br> $200<br> $250<br>Free Cash Flow<br>1<br>($M)<br>Historical FCF Conversion by Year<br>1<br>Highlights<br>•<br>Strategic working capital<br>initiatives including inventory<br>optimization, supply chain<br>finance<br>•<br>Using analytics Robotic<br>Process Automation and<br>BI tools to drive cash<br>optimization<br>•<br>Focused on cash conversion<br>cycle<br>•<br>Disciplined, process<br>-<br>oriented<br>approach to business<br>investments<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| Our 3<br>–<br>5 Year Financial Targets<br>24<br>13<br>-<br>15%<br>EPS Growth<br>1<br>7%<br>-<br>12%<br>Revenue Growth<br>1<br>>1.0x<br>Net Earnings<br>FCF Conversion<br>Key Assumptions<br>•<br>Greater near to medium term focus<br>on funding growth with R&D<br>•<br>FCF conversion long<br>-<br>term over the cycle<br>•<br>Acquisitions over time are necessary to<br>achieve top end of range<br>1<br>Estimated compound annualized growth rates from base year 2020<br>>12%<br>Operating Margin<br>>11%<br>ROIC<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 25<br>Jan 2023<br>01<br>02<br>03<br>04<br>Join Our Purpose:<br>Conserving Resources. Improving Life.<br>®<br>Solving customers’ challenges by providing<br>unique products and<br>solutions<br>, enhanced with technical innovation and aligned to long<br>-<br>term secular growth drivers<br>Executing our strategy and delivering sustainable, long<br>-<br>term profitable<br>growth:<br>>12% Operating Margin & >11% ROIC<br>Employing the<br>Valmont Business Model<br>to drive strong results and<br>create sustainable<br>long<br>-<br>term shareholder value<br>Deploying a balanced<br>capital allocation framework<br>that supports<br>both reinvesting in the business and returning capital to shareholders<br> | Valmont Industries, Inc. | |
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| THANK YOU<br>Jan 2023<br>26<br> | Valmont Industries, Inc. | |
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| APPENDIX<br>27<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 28<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>Operating Income Reconciliation<br><br><br><br>Operating income - as reported<br>$<br> 255,722<br>$<br> 138,779<br>$<br> (70,968)<br>$<br> 323,533<br>Stock-based compensation - Prospera<br> —<br> 7,523<br> —<br> 7,523<br>Prospera intangible asset amortization<br> —<br> 4,935<br> —<br> 4,935<br>Adjusted Operating Income<br>$<br> 255,722<br>$<br> 151,237<br>$<br> (70,968)<br>$<br> 335,991<br>Net Sales - as reported<br> 2,211,616<br> 1,002,118<br>NM<br> 3,213,734<br>Operating Income as a % of Net Sales<br> 11.6<br>%<br> 13.8<br>%<br>NM<br> 10.1<br>%<br>Adjusted Operating Income as a % of Net Sales<br> 11.6<br>%<br> 15.1<br>%<br>NM<br> 10.5<br>%<br>Infrastructure<br>Agriculture<br>Corporate<br>Valmont<br>Thirty-nine weeks ended September 24, 2022<br>The non<br>-<br>GAAP tables below disclose the impact of intangible asset amortization (<br>Prospera<br>) and stock<br>-<br>based compensation recognized for the<br>Prospera<br>employees on fiscal 2022 results. We believe the adjustments for<br>Prospera<br>allow for a better investor understanding of Agriculture segment performance<br>related to traditional segment products. Amounts may be impacted by rounding. We believe it is useful when considering compan<br>y p<br>erformance for the<br>non<br>-<br>GAAP adjusted net earnings and operating income to be taken into consideration by management and investors with the related<br>reported GAAP<br>measures.<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 29<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact of 1) the nonrecurring impairment of long<br>-<br>lived assets for the offshore and other<br>steel structures<br>reporting unit (SM) 2) intangible asset amortization and stock<br>-<br>based compensation recognized on the<br>Prospera<br>subsidiary, 3) a write off a<br>receivable following arbitration of a commercial transaction from 2014, 4) acquisition diligence, 5) severance expenses on se<br>gme<br>nt operating<br>income and net earnings and 6) the impact of the U.K. tax rate change on net earnings (adjusts statutory tax rate from 19% to<br>25<br>%). Amounts may<br>be impacted by rounding. We believe the adjustments for<br>Prospera<br>allow for a better comparison of future Irrigation segment performance as<br>compared to historical results. We believe it is useful when considering company performance for the non<br>-<br>GAAP adjusted net earni<br>ngs and<br>operating income to be taken into consideration by management and investors with the related reported GAAP measures.<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 30<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact of 1) the intangible asset amortization and stock<br>-<br>based compensation recognized on<br>the<br>Prospera<br>subsidiary, 2) a write off a receivable following arbitration of a commercial transaction from 2014, 3) acquisition diligence<br>, 4<br>) restructuring<br>expenses on segment operating income and net earnings and 6) the impact of the U.K. tax rate change on net earnings (adjusts<br>sta<br>tutory tax rate<br>from 19% to 25%). Amounts may be impacted by rounding. We believe the adjustments for<br>Prospera<br>allow for a better comparison of future<br>Irrigation segment performance as compared to historical results. We believe it is useful when considering company performanc<br>e f<br>or the non<br>-<br>GAAP adjusted net earnings and operating income to be taken into consideration by management and investors with the related r<br>epo<br>rted GAAP<br>measures.<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 31<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, and tradenames, (<br>2)<br>restructuring costs and non<br>-<br>recurring asset impairments (b) operating income from these expenses, and (c) segment operating inco<br>me for<br>these items. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non<br>-<br>GAAP<br>adjusted net earnings and operating income to be taken into consideration by management and investors with the related report<br>ed<br>GAAP<br>measures.<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 32<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact on (a) diluted earnings per share of (1) debt refinancing expenses (2) impairment<br>of goodwill and<br>tradename (3) restructuring and related asset impairment costs (4) non<br>-<br>recurring costs of a vendor quality issue that we expect<br>to recover through future<br>purchases (5) acquisition diligence expenses and (6) the loss from divestiture of its grinding media business, (b) operating<br>inc<br>ome of (1) impairment of<br>goodwill and tradename (2) restructuring and related asset impairment costs (3) a non<br>-<br>recurring vendor quality issue (4) acquisi<br>tion diligence expenses,<br>and (c) segment operating income for these same 4 categories of expenses. Amounts may be impacted by rounding. We believe it<br>is<br>useful when<br>considering company performance for the non<br>-<br>GAAP adjusted net earnings and operating income to be taken into consideration by ma<br>nagement and<br>investors with the related reported GAAP measures.<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 33<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact of intangible asset amortization (<br>Prospera<br>) and stock<br>-<br>based compensation recognized for the<br>Prospera<br>employees on fiscal 2022 results. We believe the adjustments for<br>Prospera<br>allow for a better investor understanding of Agriculture segment performance<br>related to traditional segment products. Amounts may be impacted by rounding. We believe it is useful when considering compan<br>y p<br>erformance for the<br>non<br>-<br>GAAP adjusted net earnings and operating income to be taken into consideration by management and investors with the related<br>reported GAAP<br>measures.<br>1<br>Earnings per share includes rounding<br>2<br>The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 34<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact of 1) the nonrecurring impairment of long<br>-<br>lived assets for the offshore and other<br>steel structures<br>reporting unit (SM) 2) intangible asset amortization and stock<br>-<br>based compensation recognized on the<br>Prospera<br>subsidiary, 3) a write off a<br>receivable following arbitration of a commercial transaction from 2014, 4) acquisition diligence, 5) severance expenses on se<br>gme<br>nt operating<br>income and net earnings and 6) the impact of the U.K. tax rate change on net earnings (adjusts statutory tax rate from 19% to<br>25<br>%). Amounts may<br>be impacted by rounding. We believe the adjustments for<br>Prospera<br>allow for a better comparison of future Irrigation segment performance as<br>compared to historical results. We believe it is useful when considering company performance for the non<br>-<br>GAAP adjusted net earni<br>ngs and<br>operating income to be taken into consideration by management and investors with the related reported GAAP measures.<br>1<br>Earnings per share includes rounding<br>2<br>The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 35<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact of 1) the intangible asset amortization and stock<br>-<br>based compensation recognized on<br>the<br>Prospera<br>subsidiary, 2) a write off a receivable following arbitration of a commercial transaction from 2014, 3) acquisition diligence<br>, 4<br>) restructuring expenses on<br>segment operating income and net earnings and 6) the impact of the U.K. tax rate change on net earnings (adjusts statutory ta<br>x r<br>ate from 19% to 25%).<br>Amounts may be impacted by rounding. We believe the adjustments for<br>Prospera<br>allow for a better comparison of future Irrigation segment performance<br>as compared to historical results. We believe it is useful when considering company performance for the non<br>-<br>GAAP adjusted net ea<br>rnings and operating<br>income to be taken into consideration by management and investors with the related reported GAAP measures.<br>1<br>Earnings per share includes rounding<br>2<br>The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 36<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact on (a) diluted earnings per share of (1) impairment of goodwill, and tradenames, (<br>2)<br>restructuring costs and non<br>-<br>recurring asset impairments (b) operating income from these expenses, and (c) segment operating inco<br>me for<br>these items. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non<br>-<br>GAAP<br>adjusted net earnings and operating income to be taken into consideration by management and investors with the related report<br>ed<br>GAAP<br>measures.<br>1<br>Earnings per share includes rounding<br>2<br>The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 37<br>Reconciliation of Non<br>-<br>GAAP Financial Measures to Reported Financial Measures<br>The non<br>-<br>GAAP tables below disclose the impact on (a) diluted earnings per share of (1) debt refinancing expenses (2) impairment<br>of goodwill and<br>tradename (3) restructuring and related asset impairment costs (4) non<br>-<br>recurring costs of a vendor quality issue that we expect<br>to recover through future<br>purchases (5) acquisition diligence expenses and (6) the loss from divestiture of its grinding media business, (b) operating<br>inc<br>ome of (1) impairment of<br>goodwill and tradename (2) restructuring and related asset impairment costs (3) a non<br>-<br>recurring vendor quality issue (4) acquisi<br>tion diligence expenses,<br>and (c) segment operating income for these same 4 categories of expenses. Amounts may be impacted by rounding. We believe it<br>is<br>useful when<br>considering company performance for the non<br>-<br>GAAP adjusted net earnings and operating income to be taken into consideration by ma<br>nagement and<br>investors with the related reported GAAP measures.<br>1<br>Earnings per share includes rounding<br>2<br>The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction<br>Jan 2023<br> | Valmont Industries, Inc. | |
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| 38<br>Calculation of Adjusted EBITDA and Leverage Ratio<br>Certain of our debt agreements contain covenants that require us to maintain certain coverage ratios. Our Debt/Adjusted<br>EBITDA may not exceed 3.5X Adjusted EBITDA (or 3.75X Adjusted EBITDA after certain material acquisitions) of the prior<br>four quarters. See “Leverage Ratio “ below.<br>($000s)<br>TTM<br>09/24/2022<br>Net earnings attributable to Valmont Industries, Inc.<br>237,387<br>$<br><br>Interest expense<br>45,423<br><br><br>Income tax expense<br>95,623<br><br><br>Stock-based compensation<br>40,823<br><br><br>Depreciation and amortization expense<br>97,615<br><br><br>EBITDA<br>516,871<br><br><br>Asset impairments<br>27,911<br><br><br>Adjusted EBITDA - last four quarters<br>544,782<br>$<br><br>Net indebtedness<br>825,949<br>$<br><br>Leverage ratio<br>1.52<br><br><br>Interest-bearing debt<br>942,170<br>$<br><br>Less: cash and cash equivalents in excess of $50 million<br>116,221<br><br><br>Net indebtedness<br>825,949<br>$<br><br>Jan 2023<br> | Valmont Industries, Inc. | |
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