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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Valmont Industries | NYSE:VMI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.96 | -0.36% | 264.61 | 265.959 | 261.67 | 264.99 | 214,438 | 01:00:00 |
Expands Operating Margins, Delivers Record Earnings per Share
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 second quarter ended July 1, 2023.
Second Quarter 2023 Highlights (all metrics compared to Second Quarter 2022 unless otherwise noted)
1 Please see Reg G reconciliation to GAAP measures at end of document
Key Financial Metrics
Second Quarter 2023
GAAP
Adjusted1
(000's except per share amounts)
07/01/2023
06/25/2022
vs. Q2 2022
07/01/2023
06/25/2022
vs. Q2 2022
Q2 2023
Q2 2022
Q2 2023
Q2 2022
Net Sales
$
1,046,296
$
1,135,532
(7.9)
%
$
1,046,296
$
1,110,100
(5.7)
%
Operating Income
133,733
118,719
12.6
%
137,642
122,859
12.0
%
Operating Income as a % of Net Sales
12.8
%
10.5
%
13.2
%
11.1
%
Net Earnings
89,376
76,108
17.4
%
92,739
79,682
16.4
%
Diluted Earnings Per Share
$
4.21
$
3.53
19.3
%
$
4.37
$
3.70
18.1
%
Average Shares Outstanding
21,229
21,541
21,229
21,541
Year-to-Date 2023
GAAP
Adjusted1
(000's except per share amounts)
07/01/2023
06/25/2022
vs. FY 2022
07/01/2023
06/25/2022
vs. FY 2022
FY 2023
FY 2022
FY 2023
FY 2022
Net Sales
$
2,108,777
$
2,116,352
(0.4)
%
$
2,108,777
$
2,072,266
1.8
%
Operating Income
252,199
213,561
18.1
%
259,767
221,844
17.1
%
Operating Income as a % of Net Sales
12.0
%
10.1
%
12.3
%
10.7
%
Net Earnings
163,916
138,419
18.4
%
170,392
145,570
17.1
%
Diluted Earnings Per Share
$
7.67
$
6.43
19.3
%
$
7.97
$
6.77
17.7
%
Average Shares Outstanding
21,370
21,516
21,370
21,516
President and Chief Executive Officer Avner M. Applbaum commented, “We delivered another quarter of strong performance, expanding operating margins in both segments and achieving record earnings per share, demonstrating the resiliency of our portfolio, value-based pricing and operational excellence strategies. I’m very pleased with the solid execution by our global teams and our ability to maintain disciplined pricing strategies across the portfolio, despite softer than expected demand in North America agriculture and telecommunications markets. As we look ahead to the remainder of the year, we remain committed to executing on our strategic framework while capitalizing on investments in growth and innovation with a firm commitment to long-term shareholder value creation opportunities across our global businesses.”
Second Quarter 2023 Segment Review
Infrastructure (73.4% of Net Sales)
Products and solutions to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to preserve metal products
Sales of $770.6 million grew 4.2% year-over-year. Sales growth was driven by favorable pricing globally, higher volumes, notably in the Solar and Transmission, Distribution, and Substation (“TD&S”) product lines, and sales from the ConcealFab acquisition, partially offset by lower Telecommunications volumes.
Operating Income improved to $116.0 million or 15.1% of net sales compared to $84.1 million or 11.4% of net sales in the second quarter of 2022, driven by favorable pricing with improved overall cost of goods sold.
Agriculture (26.6% of Net Sales)
Center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products; advanced technology solutions for precision agriculture
Sales of $279.9 million decreased 25.9% year-over-year. The benefit of higher average selling prices of irrigation equipment globally was more than offset by lower volumes. In North America, sales were lower as the second quarter of 2022 benefited from the ongoing delivery of record year-end backlog and growers delaying capital investment decisions in the quarter. International sales were lower as strong sales in Brazil were more than offset by lower sales in the EMEA region, partially due to timing of project sales. Sales of agriculture technology products and services globally were lower due to lower irrigation equipment volumes.
Operating Income decreased to $49.3 million or 17.7% of net sales ($53.2 million or 19.1% adjusted1) compared to $58.0 million or 15.5% of net sales ($62.2 million or 16.6% adjusted1) in the second quarter of 2022. Operating margin improvement was driven by favorable pricing and improved overall cost of goods sold, partially offset by higher SG&A, including incremental R&D expense for technology investments.
Other
Offshore wind energy structures business
As previously announced, the divestiture of the offshore wind energy structures business was completed in December 2022. In the second quarter of 2022, the subsequently-divested business generated sales of $25.4 million and operating income of $0.5 million.
Balance Sheet, Liquidity, and Capital Allocation
The Company generated solid second quarter 2023 operating cash flows of $88.3 million through strong earnings and effectively managing working capital. At the end of the second quarter, cash and cash equivalents were $166.9 million. During the quarter, Valmont repurchased $24.0 million of Company stock, with $346.3 million remaining on the share repurchase program.
Updating 2023 Full Year Financial Outlook and Key Assumptions
Taking into consideration second quarter sales and record diluted earnings per share results, and the near-term demand outlook for North America agriculture and telecommunications markets, the Company is updating its full-year net sales growth outlook from the previous indications that were communicated last quarter and providing updated key assumptions for the year.
2023 Full Year Financial Outlook
Previous Outlook
Revised Outlook
Net Sales Growth (vs. PY)
4% to 7%
0% to 2%
GAAP Diluted Earnings per Share
$14.80 to $15.35
No Change
Adjusted Diluted Earnings per Share1
$15.45 to $16.00
No Change
Applbaum continued, “We remain excited in our ability to drive multi-year profitable growth by capitalizing on the strong market drivers across our businesses, despite near-term softness in some markets. In the Infrastructure segment, the long-term need for critical investment globally is supporting multi-year market growth trends. Our backlog remains strong, reflecting the overall robust demand for our products and the trust our customers place in us to solve their most pressing infrastructure needs. We expect continued near-term softness in telecommunications markets as we are seeing capex spending by wireless carriers more aligned with historical trends following record levels of investment. In Agriculture, while market fundamentals remain positive, including projections of historically-high net farm income levels in the U.S., we are expecting modestly lower sales in North America in the second half of the year compared to the first half as growers continue to take a wait-and-see approach to purchasing decisions. The outcomes of the fall harvest should provide more clarity on farmer sentiment and expected buying patterns. International agriculture market demand remains strong driven by a robust project pipeline and continued sales growth in Brazil, supported by the recently-announced government financing program. Therefore, for the balance of the year, we expect international sales growth to more than offset any softness in North America, demonstrating the resilience of our increasingly diverse end markets. We continue to expect profitable growth across the portfolio, with full-year 2023 adjusted operating margins expected to approach 12%, driven by solid execution and supported by a backlog of approximately $1.5 billion. The operating margin improvement, along with a strong second quarter, supports maintaining our full-year earnings per share outlook. The organization is performing well, and our balance sheet remains strong, providing us with ample liquidity to support our capital allocation deployment strategy. We are confident in our ability to achieve our strategic objectives and deliver on our long-term financial targets, creating sustainable shareholder value.”
A live audio discussion with Avner M. Applbaum, President and Chief Executive Officer, and Timothy P. Francis, Interim Chief Financial Officer, will be accessible by telephone on Thursday, July 27, 2023 at 8:00 a.m. CDT by dialing 1-877-407-6184 or 1-201-389-0877 (no Conference ID needed), or via webcast by pointing browsers to this link: Valmont Industries 2Q 2023 Earnings Conference Call. A slide presentation will simultaneously be available for download on the Investors page of valmont.com. A replay of the event can be accessed three hours after the call at the above link or by telephone at 1-877-660-6853 or 1-201-612-7415. Please use access code 13734764. The replay will be available through 10:59 p.m. CDT on Thursday, August 3, 2023.
About Valmont Industries, Inc.
For over 75 years, Valmont® has been a global leader in creating vital infrastructure and advancing agricultural productivity. Today, we remain committed to doing more with less by innovating through technology. Learn more about how we’re Conserving Resources. Improving Life.® at valmont.com.
Concerning Forward-Looking Statements
This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which Valmont operates, as well as management’s perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. As you read and consider this release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond Valmont’s control) and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Valmont’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include among other things, the continuing and developing effects of the pandemic including the effects of the outbreak on the general economy and the specific economic effects on the Company’s business and that of its customers and suppliers, risk factors described from time to time in Valmont’s reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw material, availability and market acceptance of new products, product pricing, domestic and international competitive environments, geopolitical risks, and actions and policy changes of domestic and foreign governments. The Company cautions that any forward-looking statement included in this press release is made as of the date of this press release and the Company does not undertake to update any forward-looking statement.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen weeks ended
Twenty-six weeks ended
July 1,
June 25,
July 1,
June 25,
2023
2022
2023
2022
Net sales
$
1,046,296
$
1,135,532
$
2,108,777
$
2,116,352
Cost of sales
716,899
842,931
1,470,795
1,574,565
Gross profit
329,397
292,601
637,982
541,787
Selling, general, and administrative expenses
195,664
173,882
385,783
328,226
Operating income
133,733
118,719
252,199
213,561
Other income (expense)
Interest expense
(14,917
)
(11,386
)
(28,022
)
(22,649
)
Interest income
563
285
1,393
512
Gain (loss) on investments - unrealized
941
(2,342
)
2,135
(3,405
)
Other
612
2,073
(1,764
)
5,715
Other income (expense), net
(12,801
)
(11,370
)
(26,258
)
(19,827
)
Earnings before income taxes
120,932
107,349
225,941
193,734
Income tax expense
31,935
29,587
63,778
52,708
Equity in loss of nonconsolidated subsidiaries
(199
)
(555
)
(1,020
)
(913
)
Net earnings
88,798
77,207
161,143
140,113
Loss (earnings) attributable to non-controlling interests
578
(1,099
)
2,773
(1,694
)
Net earnings attributable to Valmont Industries, Inc.
$
89,376
$
76,108
$
163,916
$
138,419
Average shares outstanding (000's) - Basic
21,029
21,313
21,149
21,296
Earnings per share - Basic
$
4.25
$
3.57
$
7.75
$
6.50
Average shares outstanding (000's) - Diluted
21,229
21,541
21,370
21,516
Earnings per share - Diluted
$
4.21
$
3.53
$
7.67
$
6.43
Cash dividends per share
$
0.60
$
0.55
$
1.20
$
1.10
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
Thirteen weeks ended
Twenty-six weeks ended
July 1,
June 25,
July 1,
June 25,
2023
2022
2023
2022
Net sales
Infrastructure
$
770,595
$
739,518
$
1,506,701
$
1,401,590
Agriculture
279,933
377,765
612,096
684,345
Other
—
25,432
—
44,086
Total
1,050,528
1,142,715
2,118,797
2,130,021
Less: Intersegment sales
(4,232
)
(7,183
)
(10,020
)
(13,669
)
Total
$
1,046,296
$
1,135,532
$
2,108,777
$
2,116,352
Operating Income (Loss)
Infrastructure
$
115,950
$
84,127
$
210,302
$
162,443
Agriculture
49,251
58,046
102,574
95,521
Other
—
516
—
(293
)
Corporate
(31,468
)
(23,970
)
(60,677
)
(44,110
)
Total
$
133,733
$
118,719
$
252,199
$
213,561
Valmont has aggregated its business segments into two global reportable segments, as follows.
Infrastructure: This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to preserve metal products.
Agriculture: This segment consists of the manufacture of center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.
In addition to these two reportable segments, the Company had a business and related activities in 2022 that were not more than 10% of consolidated sales, operating income, or assets. This comprised the offshore wind energy structures business which was reported in the “Other” segment until its divestiture in December 2022.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
Thirteen weeks ended July 1, 2023
Intersegment
Infrastructure
Agriculture
Other
Sales
Consolidated
Geographical market:
North America
$
587,313
$
140,981
$
—
$
(3,613
)
$
724,681
International
183,282
138,952
—
(619
)
321,615
Total
$
770,595
$
279,933
$
—
$
(4,232
)
$
1,046,296
Product line:
Transmission, Distribution, and Substation
$
314,307
$
—
$
—
$
—
$
314,307
Lighting and Transportation
246,123
—
—
—
246,123
Coatings
91,120
—
—
(1,818
)
89,302
Telecommunications
67,738
—
—
—
67,738
Solar
51,307
—
—
(619
)
50,688
Irrigation Equipment and Parts
—
252,457
—
(1,795
)
250,662
Technology Products and Services
—
27,476
—
—
27,476
Total
$
770,595
$
279,933
$
—
$
(4,232
)
$
1,046,296
Thirteen weeks ended June 25, 2022
Intersegment
Infrastructure
Agriculture
Other
Sales
Consolidated
Geographical market:
North America
$
559,864
$
203,488
$
—
$
(6,716
)
$
756,636
International
179,654
174,277
25,432
(467
)
378,896
Total
$
739,518
$
377,765
$
25,432
$
(7,183
)
$
1,135,532
Product line:
Transmission, Distribution, and Substation
$
295,835
$
—
$
—
$
—
$
295,835
Lighting and Transportation
246,652
—
—
—
246,652
Coatings
90,321
—
—
(4,200
)
86,121
Telecommunications
78,539
—
—
—
78,539
Solar
28,171
—
25,432
—
53,603
Irrigation Equipment and Parts
—
347,585
—
(2,983
)
344,602
Technology Products and Services
—
30,180
—
—
30,180
Total
$
739,518
$
377,765
$
25,432
$
(7,183
)
$
1,135,532
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(Unaudited)
Twenty-six weeks ended July 1, 2023
Intersegment
Infrastructure
Agriculture
Other
Sales
Consolidated
Geographical market:
North America
$
1,171,396
$
323,850
$
—
$
(8,987
)
$
1,486,259
International
335,305
288,246
—
(1,033
)
622,518
Total
$
1,506,701
$
612,096
$
—
$
(10,020
)
$
2,108,777
Product line:
Transmission, Distribution, and Substation
$
629,127
$
—
$
—
$
—
$
629,127
Lighting and Transportation
475,259
—
—
—
475,259
Coatings
181,234
—
—
(5,370
)
175,864
Telecommunications
135,875
—
—
—
135,875
Solar
85,206
—
—
(1,033
)
84,173
Irrigation Equipment and Parts
—
551,638
—
(3,617
)
548,021
Technology Products and Services
—
60,458
—
—
60,458
Total
$
1,506,701
$
612,096
$
—
$
(10,020
)
$
2,108,777
Twenty-six weeks ended June 25, 2022
Intersegment
Infrastructure
Agriculture
Other
Sales
Consolidated
Geographical market:
North America
$
1,065,844
$
385,743
$
—
$
(13,202
)
$
1,438,385
International
335,746
298,602
44,086
(467
)
677,967
Total
$
1,401,590
$
684,345
$
44,086
$
(13,669
)
$
2,116,352
Product line:
Transmission, Distribution, and Substation
$
577,435
$
—
$
—
$
—
$
577,435
Lighting and Transportation
459,419
—
—
—
459,419
Coatings
172,297
—
—
(7,301
)
164,996
Telecommunications
139,935
—
—
—
139,935
Solar
52,504
—
44,086
—
96,590
Irrigation Equipment and Parts
—
625,619
—
(6,368
)
619,251
Technology Products and Services
—
58,726
—
—
58,726
Total
$
1,401,590
$
684,345
$
44,086
$
(13,669
)
$
2,116,352
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
July 1,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
166,907
$
185,406
Receivables, net
651,133
604,181
Inventories
729,738
728,762
Contract assets
154,410
174,539
Prepaid expenses and other current assets
99,994
87,697
Total current assets
1,802,182
1,780,585
Property, plant, and equipment, net
603,112
595,578
Goodwill and other non-current assets
1,210,546
1,180,833
Total assets
$
3,615,840
$
3,556,996
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt
$
1,041
$
1,194
Notes payable to banks
1,665
5,846
Accounts payable
346,000
360,312
Accrued expenses
240,499
248,320
Contract liabilities
124,230
172,915
Income taxes payable
23,152
3,664
Dividends payable
12,607
11,742
Total current liabilities
749,194
803,993
Long-term debt, excluding current installments
952,704
870,935
Operating lease liabilities
161,795
155,469
Other non-current liabilities
81,855
84,887
Total liabilities
1,945,548
1,915,284
Shareholders' equity
1,670,292
1,641,712
Total liabilities and shareholders' equity
$
3,615,840
$
3,556,996
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Twenty-six weeks ended
July 1,
June 25,
2023
2022
Cash flows from operating activities:
Net earnings
$
161,143
$
140,113
Depreciation and amortization
48,792
48,012
Contribution to defined benefit pension plan
(15,259
)
(17,155
)
Gain on divestiture
(2,994
)
—
Change in working capital
(98,979
)
(115,170
)
Other
16,843
12,219
Net cash flows provided by operating activities
109,546
68,019
Cash flows from investing activities:
Purchase of property, plant, and equipment
(45,393
)
(49,676
)
Proceeds from divestiture, net of cash divested
6,369
—
Proceeds from property damage insurance claims
4,844
—
Acquisitions
—
(39,297
)
Other
134
1,162
Net cash flows used in investing activities
(34,046
)
(87,811
)
Cash flows from financing activities:
Proceeds from long-term borrowings
165,012
201,462
Principal payments on long-term borrowings
(84,105
)
(156,973
)
Net payments on short-term borrowings
(4,693
)
(9,155
)
Purchase of treasury shares
(135,115
)
(9,776
)
Dividends to noncontrolling interests
(662
)
—
Purchase of noncontrolling interests
—
(4,292
)
Dividends paid
(24,376
)
(22,337
)
Other
(10,215
)
1,641
Net cash flows (used in) provided by financing activities
(94,154
)
570
Effect of exchange rates on cash and cash equivalents
155
(3,431
)
Net change in cash and cash equivalents
(18,499
)
(22,653
)
Cash and cash equivalents - beginning of year
185,406
177,232
Cash and cash equivalents - end of period
$
166,907
$
154,579
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OF EFFECT OF ITEMS ON REPORTED RESULTS
REGULATION G RECONCILIATION
(Dollars in thousands, except per share amounts)
(Unaudited)
The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2023 and 2022 results. We believe the adjustments for Prospera allow for a better investor understanding of Agriculture segment performance related to traditional segment products. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings and operating income to be taken into consideration by management and investors with the related reported GAAP measures.
Thirteen
Diluted
Twenty-six
Diluted
weeks ended
earnings per
weeks ended
earnings per
July 1, 2023
share
July 1, 2023
share
Net earnings attributable to Valmont Industries, Inc. - as reported
$
89,376
$
4.21
$
163,916
$
7.67
Prospera intangible asset amortization
1,645
0.08
3,290
0.15
Prospera stock-based compensation
2,264
0.11
4,278
0.20
Total adjustments, pre-tax1
3,909
0.18
7,568
0.35
Tax effect of adjustments2
(546
)
(0.03
)
(1,092
)
(0.05
)
Net earnings attributable to Valmont Industries, Inc. - adjusted1
$
92,739
$
4.37
$
170,392
$
7.97
Average shares outstanding (000’s) - diluted
21,229
21,370
Thirteen
Diluted
Twenty-six
Diluted
weeks ended
earnings per
weeks ended
earnings per
June 25, 2022
share
June 25, 2022
share
Net earnings attributable to Valmont Industries, Inc. - as reported
$
76,108
$
3.53
$
138,419
$
6.43
Prospera intangible asset amortization
1,645
0.08
3,290
0.15
Prospera stock-based compensation
2,495
0.12
4,993
0.23
Total adjustments, pre-tax1
4,140
0.19
8,283
0.38
Tax effect of adjustments2
(566
)
(0.03
)
(1,132
)
(0.05
)
Net earnings attributable to Valmont Industries, Inc. - adjusted1
$
79,682
$
3.70
$
145,570
$
6.77
Average shares outstanding (000’s) - diluted
21,541
21,516
1Earnings per share includes rounding
2The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON REPORTED RESULTS
REGULATION G RECONCILIATION
(Dollars in thousands, except per share amounts)
(Unaudited)
The non-GAAP tables below disclose the impact of intangible asset amortization (Prospera) and stock-based compensation recognized for the Prospera employees on fiscal 2023 and 2022 results. We believe the adjustments for Prospera allow for a better investor understanding of Agriculture segment performance related to traditional segment products. 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 July 1, 2023
Operating Income Reconciliation
Infrastructure
Agriculture
Other
Corporate
Valmont
Operating income - as reported
$
115,950
$
49,251
$
—
$
(31,468
)
$
133,733
Prospera intangible asset amortization
—
1,645
—
—
1,645
Prospera stock-based compensation
—
2,264
—
—
2,264
Adjusted operating income
$
115,950
$
53,160
$
—
$
(31,468
)
$
137,642
Net sales - as reported
768,158
278,138
—
—
1,046,296
Operating income as a % of net sales
15.1
%
17.7
%
NM
NM
12.8
%
Adj. operating income as a % of net sales
15.1
%
19.1
%
NM
NM
13.2
%
Thirteen weeks ended June 25, 2022
Operating Income Reconciliation
Infrastructure
Agriculture
Other
Corporate
Valmont
Operating income - as reported
$
84,127
$
58,046
$
516
$
(23,970
)
$
118,719
Prospera intangible asset amortization
—
1,645
—
—
1,645
Prospera stock-based compensation
—
2,495
—
—
2,495
Adjusted operating income
$
84,127
$
62,186
$
516
$
(23,970
)
$
122,859
Net sales - as reported
735,318
374,782
25,432
—
1,135,532
Adjusted net sales - as reported
735,318
374,782
—
—
1,110,100
Operating income as a % of net sales
11.4
%
15.5
%
2.0
%
NM
10.5
%
Adj. operating income as a % of net sales
11.4
%
16.6
%
2.0
%
NM
10.8
%
Adj. operating income as a % of adjusted net sales
11.4
%
16.6
%
NM
NM
11.1
%
Twenty-six weeks ended July 1, 2023
Operating Income Reconciliation
Infrastructure
Agriculture
Other
Corporate
Valmont
Operating income - as reported
$
210,302
$
102,574
$
—
$
(60,677
)
$
252,199
Prospera intangible asset amortization
—
3,290
—
—
3,290
Prospera stock-based compensation
—
4,278
—
—
4,278
Adjusted operating income
$
210,302
$
110,142
$
—
$
(60,677
)
$
259,767
Net sales - as reported
1,500,298
608,479
—
—
2,108,777
Operating income as a % of net sales
14.0
%
16.9
%
NM
NM
12.0
%
Adj. operating income as a % of net sales
14.0
%
18.1
%
NM
NM
12.3
%
Twenty-six weeks ended June 25, 2022
Operating Income Reconciliation
Infrastructure
Agriculture
Other
Corporate
Valmont
Operating income - as reported
$
162,443
$
95,521
$
(293
)
$
(44,110
)
$
213,561
Prospera intangible asset amortization
—
3,290
—
—
3,290
Prospera stock-based compensation
—
4,993
—
—
4,993
Adjusted operating income
$
162,443
$
103,804
$
(293
)
$
(44,110
)
$
221,844
Net sales - as reported
1,394,289
677,977
44,086
—
2,116,352
Adjusted net sales - as reported
1,394,289
677,977
—
—
2,072,266
Operating income as a % of net sales
11.7
%
14.1
%
(0.7
)
%
NM
10.1
%
Adj. operating income as a % of net sales
11.7
%
15.3
%
(0.7
)
%
NM
10.5
%
Adj. operating income as a % of adjusted net sales
11.7
%
15.3
%
NM
NM
10.7
%
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF EXCLUDING OTHER SEGMENT NET SALES
(Dollars in thousands, except per share amounts)
(Unaudited)
Excluding Other segment net sales from the second quarter and first half of fiscal 2022, which we refer to in this reconciliation as “Adjusted Net Sales”, is a non-GAAP measure. The Other segment net sales were generated by the offshore wind energy structures business which was divested in December 2022. Adjusted Net Sales should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP, or as a measure of our operating performance or liquidity. The table below shows how Adjusted Net Sales is calculated from the Company’s Statements of Earnings. Adjusted Net Sales is calculated as total net sales less Other segment net sales. Adjusted Net Sales allows investors to analyze our operating performance in light of the amount of net sales less net sales of a divested business.
Thirteen weeks ended
Twenty-six weeks ended
July 1,
June 25,
Percent
July 1,
June 25,
Percent
2023
2022
Change
2023
2022
Change
Net sales
$
1,046,296
$
1,135,532
(7.9)%
$
2,108,777
$
2,116,352
(0.4)%
Less: Other segment net sales
—
(25,432
)
NM
—
(44,086
)
NM
Adjusted net sales
$
1,046,296
$
1,110,100
(5.7)%
$
2,108,777
$
2,072,266
1.8%
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF FORECASTED GAAP AND ADJUSTED EARNINGS
(Dollars in thousands, except per share amounts)
(Unaudited)
The non-GAAP tables below disclose the impact on the range of estimated diluted earnings per share of the (1) amortization of the intangible asset (Prospera) and (2) stock-based compensation for Prospera employees. We believe the adjustments for Prospera allow for a better investor understanding of Agriculture segment performance related to traditional segment products. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings to be taken into consideration by management and investors with the related reported GAAP measures.
Reconciliation of Range of Net Earnings - 2023 Guidance1
Low End
High End
Adjustments
Estimated net earnings - GAAP
$
318,250
$
330,050
Prospera intangible asset (proprietary technology) amortization, pre-tax
$
6,600
Prospera stock-based compensation, pre-tax
9,800
Total pre-tax adjustments
16,400
Estimated tax benefit from above expenses2
(2,450
)
Total Adjustments, after-tax
$
13,950
Estimated net earnings - Adjusted
$
332,200
$
344,000
Diluted Earnings per Share Range - GAAP3
$
14.80
$
15.35
Diluted Earnings per Share Range - Adjusted3
$
15.45
$
16.00
1 See accompanying press release for our key assumptions
2 The tax effect of adjustments is calculated based on the estimated income tax rate in each applicable jurisdiction
3 Assumes weighted average shares outstanding of 21.5M and includes rounding
View source version on businesswire.com: https://www.businesswire.com/news/home/20230726229087/en/
Renee Campbell renee.campbell@valmont.com
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