Exhibit 99.1

 

 

 

News Release

For Immediate Release

 

Contact:

Renee Campbell

July 23, 2018

 

402-963-1057

 

 

Valmont Reports Second Quarter 2018 Results

 

Second Quarter 2018 Financial Summary

 

 

 

GAAP

 

Adjusted(1)

 

 

 

6/30/2018

 

7/1/2017

 

 

 

6/30/2018

 

7/1/2017

 

 

 

 

 

Q2 2018

 

Q2 2017

 

vs. Q2 2017

 

Q2 2018

 

Q2 2017

 

vs. Q2 2017

 

Revenue

 

$

682,405

 

$

712,737

 

down 4.3%

 

$

682,405

 

$

712,737

 

down 4.3%

 

Operating Income

 

$

63,670

 

$

78,450

 

down 18.9%

 

$

70,689

 

$

78,450

 

down 9.9%

 

Operating Income as a % of Net Sales

 

9.3

%

11.0

%

 

 

10.4

%

11.0

%

 

 

Net Earnings

 

$

32,960

 

$

45,664

 

down 27.8%

 

$

44,709

 

$

45,664

 

down 2.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

$

1.46

 

$

2.01

 

down 27.4%

 

$

1.98

 

$

2.01

 

down 1.5%

 

Average Shares Outstanding

 

22,573

 

22,740

 

 

 

22,573

 

22,740

 

 

 

 

Omaha, NE - Valmont Industries, Inc. (NYSE: VMI), a leading global provider of engineered products and services for infrastructure development and irrigation equipment and services for agriculture, today reported second quarter 2018 results.

 

Second Quarter 2018 Highlights

 

·                  Higher revenues in the Engineered Support Structures and Coatings segments were more than offset by lower sales in the Irrigation and Utility Support Structures segments

 

·                  Late-quarter market headwinds contributed to unfavorable sales comparisons in the Irrigation segment

 

·                  Farmers in North America delayed equipment purchase decisions due to increased uncertainty over tariff and trade policies, and a meaningful decline in grain prices during the quarter

 


(1)Please see Reg G reconciliation of non-GAAP financial measures to GAAP measures at end of the document.

 

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·                  The truckers’ strike in Brazil led to an unexpected, country-wide business interruption, which hindered the Company’s operations during the quarter, contributing to lower international irrigation sales and profitability

 

·                  Unfavorable sales comparisons in the Utility segment were largely due to project timing and product mix

 

·                  Despite lower volumes, price recovery and project mix led to higher adjusted operating margins

 

·                  Repurchased 203,900 shares of Company stock for $29.2 million, at an average price of $143.28 per share

 

·                  Extended the average duration of long-term debt during an attractive interest rate environment, reducing interest expense by approximately $2.5 million per year

 

·                  Completed the previously-announced divestiture of the grinding media business, (Donhad Pty. Ltd.) on April 30, 2018, generating net cash proceeds of $61.0 million

 

“Our focus on price recovery and maintaining gross profit served us well as we combatted challenging end-market dynamics this quarter,” said Stephen G. Kaniewski, President and Chief Executive Officer. “Our performance demonstrates our team’s agility to quickly respond to rapidly changing market conditions.”

 

Second Quarter 2018 Segment Review

 

Infrastructure

 

Engineered Support Structures Segment (37% of Sales)
Poles, towers and components for the global lighting, traffic and wireless communication markets, engineered access systems, integrated structure solutions for smart cities, and highway safety products

 

Sales of $250.7 million were 5.9% higher than second quarter 2017, 2.5% was attributable to favorable foreign currency translation, with the remainder due to price and organic growth. Sales growth was mostly driven by improved lighting and traffic structures demand in North America and Europe. In the Asia Pacific region, sales decreased, mainly due to significantly lower wireless communication structures demand in China.

 

Double-digit sales growth of North American lighting and traffic products was driven by increased transportation market demand, and price recovery of higher steel costs. The sales increase was partially offset by lower commercial lighting sales, as actions to fully recover price temporarily impacted demand. In Europe, lighting sales also grew, aided by improving economic conditions across the region, and increased funding for government infrastructure spending.

 


(1) Please see Reg G reconciliation of GAAP operating income, net earnings and EPS to Adjusted figures at end of document

(3) Excludes any potential acquisitions, and grinding media, (Donhad) revenue in both 2018 and 2017

(4)Excludes $20 million of pre-tax 2018 restructuring expenses

 

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Continued infrastructure investment in Australia and India led to higher highway safety product sales in those regions.

 

Sales of North American wireless communication products and components were higher compared to last year, led by demand from carriers and tower companies preparing site development for 5G implementation. A pause in spending by the largest wireless carrier in China resulted in decreased site and tower demand. Access Systems sales rose slightly above last year.

 

Operating income was $13.0 million or 5.2% of sales ($18.4 million, or 7.3% adjusted(1)) compared to $20.3 million, or 8.6% of sales in 2017. As expected, profitability was impacted by lower volumes due to price recovery actions in certain markets.

 

Utility Support Structures Segment (29% of Sales)

Steel and concrete structures for global utility transmission, distribution and generation applications, wind and offshore structures, and inspection services

 

Sales of $197.7 million decreased 6.1% compared to last year, mostly due to lower volumes attributed to a less favorable product mix in North America. Higher steel costs were recovered through increased pricing. Sales volumes of offshore wind structures in Northern Europe were lower than last year, due to a challenging pricing environment.

 

Operating income was $20.8 million, or 10.5% of sales ($22.3 million, or 11.3% adjusted(1)) compared to $22.4 million or 10.6% of sales last year. Despite lower sales and under- performance in offshore wind, margins improved due to a more favorable project mix compared to 2017.

 

Coatings Segment (13% of Sales)

Global galvanizing, painting and anodizing services to preserve and protect metal products

 

Global sales of $91.6 million were 14.8% higher than last year, reflecting price recovery of higher zinc costs and improved volumes. Increased broad-based industrial demand across all regions drove sales higher. Sales to other Valmont segments were comparable to last year.

 

Operating income was $14.9 million, or 16.2% of sales, compared to $12.1 million, or 15.2% of sales in 2017. Higher volumes, pricing to recover zinc cost increases, and improved operating leverage, all contributed to favorable results. Profitability was also aided this quarter by recent implementation of the GalvTracTM management tool, aligning with the Company’s strategy to use innovative technology to drive productivity improvements, and operational best practices across its global locations.

 


(1) Please see Reg G reconciliation of GAAP operating income, net earnings and EPS to Adjusted figures at end of document

(3) Excludes any potential acquisitions, and grinding media, (Donhad) revenue in both 2018 and 2017

(4)Excludes $20 million of pre-tax 2018 restructuring expenses

 

-more-



 

Agriculture

 

Irrigation Segment (24% of Sales)

Agricultural irrigation equipment, parts, services and tubular products, water management solutions, and technology for precision agriculture

 

Global sales of $162.9 million were 13.5% below last year. In North America, the increased uncertainty of tariff and trade policies late in the quarter pressured grain prices, causing farmers to delay purchase decisions. As expected, project sales in the second quarter of 2017 did not repeat this year, contributing to unfavorable comparisons. Irrigation technology product and service sales were higher, resulting from the Company’s strategy to drive adoption of integrated technology offerings, supported by increasing global demand for precision irrigation solutions.

 

International sales declined from last year, due to smaller project sizes.  Sales were further impacted by project movements out of the second quarter. In Brazil, currently the Company’s largest international market, the truckers’ strike that began in late May disrupted business country-wide. As a result, factory operations were suspended, unfavorably impacting sales for the quarter. Despite robust market demand, longer approvals for government-sponsored financing programs in Brazil delays the timing of orders released for shipment.

 

Operating income was lower at $27.7 million, or 17.0% of sales, compared to $34.7 million, or 18.4% of sales in 2017. Price increases implemented during the quarter successfully offset inflationary costs. Segment profitability was unfavorably impacted by lower project volumes, and some productivity impacts resulting from the Brazil strike.

 

Other (1% of Sales)
Manufacture of forged steel grinding media for the mining industry

 

Sales in grinding media were $4.7 million, and second quarter operating loss was $0.3 million. The divestiture of the grinding media business, (Donhad Pty. Ltd.) was completed on April 30, 2018. Going forward, the Company will no longer report on the “Other” segment.

 

Operational Transformation Update

 

As the Company executes on its operational transformation strategy, additional actions were taken during the quarter. These primarily included the consolidation of three Engineered Support Structures’ facilities in China to a single location, and completion of the Hazelton, PA factory consolidation in the Utility segment. The resulting pre-tax expenses were $7.0 million, predominately cash.

 

Through ongoing lean initiatives, assessment of local market conditions, and supply chain optimization efforts, additional opportunities in the Asia Pacific region have been

 


(1) Please see Reg G reconciliation of GAAP operating income, net earnings and EPS to Adjusted figures at end of document

(3) Excludes any potential acquisitions, and grinding media, (Donhad) revenue in both 2018 and 2017

(4)Excludes $20 million of pre-tax 2018 restructuring expenses

 

-more-



 

identified. Anticipated full-year expenses attributed to these combined actions have increased from the $10 million previously communicated, to approximately $20 million ($14 million cash and $6 million non-cash). An annualized payback of 12-18 months is expected on the $14 million of cash expense.

 

2018 Outlook

 

The Company’s updated 2018 guidance is as follows.

 

2018 Updated Guidance

 

GAAP Diluted EPS

 

$6.12 - $6.22(2)

 

Adjusted Diluted EPS(1)

 

$7.55 - $7.65

 

Revenue Growth(3)

 

4%

 

Operating Profitability Growth(4)

 

25 bps

 

Free Cash Flow

 

1x Net Earnings

 

ROIC (after tax)

 

>10%

 

 


(2) Change to GAAP guidance from the July 12, 2018 release is the result of increased pre-tax restructuring

expenses and minor revisions to the accounting for the divestiture of the grinding media business.

 

Mr. Kaniewski stated, “As we consider the outlook for the remainder of the year, we remain very positive on our markets and businesses. The steps we are taking to transform our operational footprint support our strategy to become a market-focused, growth-oriented organization that is well-positioned for the future, and creating shareholder value.”

 

“Turning to our markets, in the Engineered Support Structures segment, we expect favorable revenue and operating profit comparisons, as a result of pricing actions and improved demand in the lighting and traffic business, and the upcoming transition to 5G. We anticipate favorable third quarter comparisons in our Utility segment, supported by current backlogs. Full-year revenue and operating profit should approximate 2017 results. Irrigation segment results are expected to be below last year due to challenging end-market conditions, but as always, international project activity can influence sales. Although Brazil’s current political environment and truckers’ strike are impacting full-year sales and profitability, market demand remains robust there. Our Coatings segment is expected to perform in line with first half results, tracking with strong industrial demand.”

 

Added Mr. Kaniewski, “We believe our flexible, global footprint enables us to withstand cost impacts resulting from current tariff and trade policies. However, the effect on end-market demand remains dynamic. Additional opportunities to favorably transform our supply chain in the Asia Pacific region have been identified. We believe executing on these initiatives will lower our cost structure, while continuing to provide high service levels to our customers.”

 


(1) Please see Reg G reconciliation of GAAP operating income, net earnings and EPS to Adjusted figures at end of document

(3) Excludes any potential acquisitions, and grinding media, (Donhad) revenue in both 2018 and 2017

(4)Excludes $20 million of pre-tax 2018 restructuring expenses

 

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An audio discussion of Valmont’s second quarter 2018 results will be available live by dialing 1-877-407-6184 or 1-201-389-0877 (no Conference ID needed), or via webcast, at 8:00 a.m. CDT on July 24, 2018, by pointing browsers to this link: Valmont Industries Q2 2018 Earnings Conference Call. A replay is available by accessing the above link, or by telephone at 1-877-660-6853 or 1-201-612-7415, and enter Conference ID 13680596, beginning July 24, 2018 at 11:00 a.m. CDT through 10:59 p.m. CDT on July 31, 2018. The Company’s slide presentation for the call will be simultaneously available on the Investor Relations page at www.valmont.com.

 

Valmont is a global leader, designing and manufacturing engineered products that support global infrastructure development and agricultural productivity. Its products for infrastructure serve highway, transportation, wireless communication, electric transmission, and industrial construction and energy markets. Its irrigation equipment and services for large-scale agriculture improves farm productivity while conserving fresh water resources. In addition, Valmont provides coatings services that protect against corrosion and improve the service lives of steel and other metal products.

 

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 material, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments. The Company cautions that any forward-looking statement included in this press release is made as of the date of this press release and the Company does not undertake to update any forward-looking statement.

 


(1) Please see Reg G reconciliation of GAAP operating income, net earnings and EPS to Adjusted figures at end of document

(3) Excludes any potential acquisitions, and grinding media, (Donhad) revenue in both 2018 and 2017

(4)Excludes $20 million of pre-tax 2018 restructuring expenses

 



 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(unaudited)

 

 

 

Second Quarter

 

Year-to-Date

 

 

 

13 Weeks Ended

 

26 Weeks Ended

 

 

 

30-Jun-18

 

1-Jul-17

 

30-Jun-18

 

1-Jul-17

 

Net sales

 

$

682,405

 

$

712,737

 

$

1,381,089

 

$

1,350,210

 

Cost of sales

 

507,406

 

529,457

 

1,036,850

 

1,002,325

 

Gross profit

 

174,999

 

183,280

 

344,239

 

347,885

 

Selling, general and administrative expenses

 

111,329

 

104,830

 

216,609

 

204,779

 

Operating income

 

63,670

 

78,450

 

127,630

 

143,106

 

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest expense

 

(11,791

)

(10,818

)

(22,865

)

(22,122

)

Interest income

 

1,446

 

967

 

2,713

 

1,894

 

Loss from divestiture of grinding media business (Donhad)

 

(6,084

)

 

(6,084

)

 

Other

 

1,844

 

(192

)

703

 

853

 

 

 

(14,585

)

(10,043

)

(25,533

)

(19,375

)

Earnings before income taxes

 

49,085

 

68,407

 

102,097

 

123,731

 

Income tax expense

 

14,405

 

21,085

 

26,937

 

36,448

 

Net earnings

 

34,680

 

47,322

 

75,160

 

87,283

 

Less: Earnings attributable to non-controlling interests

 

(1,720

)

(1,658

)

(2,919

)

(2,640

)

Net earnings attributable to Valmont Industries, Inc.

 

$

32,960

 

$

45,664

 

$

72,241

 

$

84,643

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding (000’s) - Basic

 

22,438

 

22,517

 

22,523

 

22,494

 

Earnings per share - Basic

 

$

1.47

 

$

2.03

 

$

3.21

 

$

3.76

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding (000’s) - Diluted

 

22,573

 

22,740

 

22,684

 

22,700

 

Earnings per share - Diluted

 

$

1.46

 

$

2.01

 

$

3.18

 

$

3.73

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

0.375

 

$

0.375

 

$

0.750

 

$

0.750

 

 

-more-

 



 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(unaudited)

 

 

 

Second Quarter

 

Year-to-Date

 

 

 

13 Weeks Ended

 

26 Weeks Ended

 

 

 

30-Jun-18

 

1-Jul-17

 

30-Jun-18

 

1-Jul-17

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

Engineered Support Structures

 

$

250,711

 

$

236,803

 

$

475,665

 

$

441,752

 

Utility Support Structures

 

197,719

 

210,604

 

407,581

 

410,869

 

Coatings

 

91,572

 

79,781

 

176,519

 

153,249

 

Infrastructure products

 

540,002

 

527,188

 

1,059,765

 

1,005,870

 

 

 

 

 

 

 

 

 

 

 

Irrigation

 

162,936

 

188,287

 

350,889

 

355,511

 

Other

 

4,681

 

21,072

 

23,080

 

40,666

 

Less: Intersegment sales

 

(25,214

)

(23,810

)

(52,645

)

(51,837

)

Total

 

$

682,405

 

$

712,737

 

$

1,381,089

 

$

1,350,210

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

 

 

Engineered Support Structures

 

12,965

 

20,288

 

19,912

 

29,752

 

Utility Support Structures

 

20,841

 

22,394

 

44,208

 

46,601

 

Coatings

 

14,868

 

12,108

 

26,735

 

21,514

 

Infrastructure products

 

48,674

 

54,790

 

90,855

 

97,867

 

 

 

 

 

 

 

 

 

 

 

Irrigation

 

27,728

 

34,670

 

61,615

 

64,961

 

Other

 

(334

)

1,859

 

(913

)

3,945

 

Adjustment to LIFO inventory valuation method

 

(1,651

)

(434

)

(2,732

)

(1,213

)

Corporate

 

(10,747

)

(12,435

)

(21,195

)

(22,454

)

Total

 

$

63,670

 

$

78,450

 

$

127,630

 

$

143,106

 

 

Valmont has aggregated its business segments into four global reportable segments as follows.

 

Engineered Support Structures: This segment consists of the manufacture of engineered metal and composite pole, towers, and components for global lighting, traffic, and wireless communication markets, engineered access systems, integrated structure solutions for smart cities, and highway safety products.

 

Utility Support Structures: This segment consists of the manufacture of engineered steel and concrete structures for the global utility transmission, distribution, and generation applications, wind and offshore structures outside of North America, and inspection services.

 

Coatings: This segment consists of global galvanizing, painting and anodizing services.

 

Irrigation: This segment consists of the global manufacture of agricultural irrigation equipment, parts and services, tubular products, water management solutions, and technology for precision agriculture.

 

In addition to these four reportable segments, the Company had other businesses and activities that individually are not more than 10% of consolidated sales, operating income or assets. This includes the manufacture of forged steel grinding media and is reported in the “Other” category until its divestiture.

 

-more-

 



 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

 

 

 

30-Jun-18

 

1-Jul-17

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

722,588

 

$

448,222

 

Accounts receivable, net

 

472,849

 

496,962

 

Inventories

 

381,971

 

382,648

 

Prepaid expenses

 

127,843

 

43,545

 

Refundable and deferred income taxes

 

9,841

 

4,830

 

Total current assets

 

1,715,092

 

1,376,207

 

Property, plant and equipment, net

 

492,688

 

520,107

 

Goodwill and other assets

 

571,581

 

626,848

 

 

 

$

2,779,361

 

$

2,523,162

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current installments of long-term debt

 

$

863

 

$

921

 

Notes payable to banks

 

271

 

376

 

Accounts payable

 

193,612

 

193,087

 

Accrued expenses

 

151,176

 

171,191

 

Dividend payable

 

8,412

 

8,472

 

Total current liabilities

 

354,334

 

374,047

 

Long-term debt, excluding current installments

 

988,520

 

754,436

 

Other long-term liabilities

 

286,683

 

292,233

 

Shareholders’ equity

 

1,149,824

 

1,102,446

 

 

 

$

2,779,361

 

$

2,523,162

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands) and unaudited

 

 

 

YTD

 

YTD

 

 

 

30-Jun-18

 

1-Jul-17

 

Cash flows from operating activities

 

 

 

 

 

Net Earnings

 

$

75,160

 

$

87,283

 

Depreciation and amortization

 

41,657

 

41,754

 

Loss from divestiture of grinding media business

 

6,084

 

 

Contribution to defined benefit pension plan

 

(731

)

(25,379

)

Change in working capital

 

(73,192

)

(64,304

)

Other

 

4,680

 

16,376

 

Net cash flows from operating activities

 

53,658

 

55,730

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Purchase of property, plant, and equipment

 

(31,816

)

(26,183

)

Proceeds from sale of assets

 

64,393

 

 

Acquisitions

 

(9,300

)

 

Other

 

783

 

3,546

 

Net cash flows from investing activities

 

24,060

 

(22,637

)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from long-term borrowings

 

237,641

 

 

Net borrowings on short and long-term agreements

 

130

 

(803

)

Purchase of treasury shares

 

(43,999

)

 

Purchase of noncontrolling interest

 

(5,510

)

 

Dividends paid

 

(17,003

)

(16,913

)

Other

 

(6,194

)

4,223

 

Net cash flows from financing activities

 

165,065

 

(13,493

)

Effect of exchange rates on cash and cash equivalents

 

(13,000

)

16,106

 

Net change in cash and cash equivalents

 

229,783

 

35,706

 

Cash and cash equivalents - beginning of year

 

492,805

 

412,516

 

Cash and cash equivalents - end of period

 

$

722,588

 

$

448,222

 

 

-more-

 



 

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 on (a) diluted earnings per share of (1) restructuring costs related to the plan announced in February 2018 and (2) the loss from divestiture of its grinding media business, (b) operating income of restructuring costs and the divestiture of grinding media business, and (c) segment operating income of restructuring costs. 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.

 

 

 

13 Weeks
Ended June 30,
2018

 

Diluted
earnings per
share

 

26 Weeks
Ended June 30,
2018

 

Diluted
earnings per
share

 

 

 

Net earnings attributable to Valmont Industries, Inc. - as reported

 

$

32,960

 

$

1.46

 

$

72,241

 

$

3.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expenses - pre-tax

 

7,019

 

0.31

 

11,419

 

0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from divestiture of grinding media business, pre-tax

 

6,084

 

0.27

 

6,084

 

0.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Adjustments

 

13,103

 

0.58

 

17,503

 

0.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax effect of adjustments *

 

(1,354

)

(0.06

)

(2,429

)

(0.11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to Valmont Industries, Inc. - Adjusted

 

$

44,709

 

$

1.98

 

$

87,315

 

$

3.84

 

 

 

Average shares outstanding (000’s) - Diluted

 

 

 

22,573

 

 

 

22,684

 

 

 

 


* The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction,

 

Operating Income Reconciliation

 

13 Weeks
Ended June 30,
2018

 

13 Weeks
Ended July 1,
2017

 

26 Weeks
Ended June 30,
2018

 

26 Weeks
Ended July 1,
2017

 

 

 

Operating income - as reported

 

$

63,670

 

$

78,450

 

$

127,630

 

$

143,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expenses

 

7,019

 

 

11,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income

 

70,689

 

78,450

 

139,049

 

143,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss/(income) from divested grinding media business

 

334

 

(1,859

)

913

 

(3,945

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income, from ongoing operations

 

$

71,023

 

$

76,591

 

$

139,962

 

$

139,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales - as reported

 

$

682,405

 

$

712,737

 

$

1,381,089

 

$

1,350,210

 

 

 

Net sales from divested grinding media business

 

(4,681

)

(21,072

)

(23,080

)

(40,666

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Sales

 

$

677,724

 

$

691,665

 

$

1,358,009

 

$

1,309,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

 

9.3

%

11.0

%

9.2

%

10.6

%

 

 

Adjusted operating income from ongoing operations, as a % of Adjusted Sales

 

10.5

%

11.1

%

10.3

%

10.6

%

 

 

 

Segment Operating Income Reconciliation

 

Engineered
Infrastructure
Products

 

Utility Support
Structures

 

Coatings

 

Irrigation

 

Other/
Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Second Quarter Ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Operating income - as reported

 

$

12,965

 

$

20,841

 

$

14,868

 

$

27,728

 

$

(12,732

)

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expenses

 

5,419

 

1,474

 

 

 

126

 

Adjusted Operating Income

 

$

18,384

 

$

22,315

 

$

14,868

 

$

27,728

 

$

(12,606

)

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

250,711

 

197,719

 

91,572

 

162,936

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

 

5.2

%

10.5

%

16.2

%

17.0

%

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income as a % of Sales

 

7.3

%

11.3

%

16.2

%

17.0

%

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Second Quarter Ended July 1, 2017

 

 

 

 

 

 

 

 

 

 

 

 

Operating income - as reported

 

$

20,288

 

$

22,394

 

$

12,108

 

$

34,670

 

$

(11,010

)

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

236,803

 

210,604

 

79,781

 

188,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income as a % of Sales

 

8.6

%

10.6

%

15.2

%

18.4

%

NM

 

 

-more-

 



 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OF EFFECT OF SIGNIFICANT NON-RECURRING ITEMS ON ESTIMATED 2018 RESULTS

REGULATION G RECONCILIATION

(Dollars in thousands, except per share amounts)

 

The non-GAAP tables below disclose the impact on the range of estimated diluted earnings per share of (1) restructuring costs related to the plan announced in February 2018, (2) preliminary loss from the divestiture of the grinding media business, which occurred on April 30, 2018 and (3) certain refinancing expenses associated with redemption of bonds completed in the third quarter of 2018.  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 as non-recurring transactions were or expected to be recognized in 2018.

 

Reconciliation of Range of Net Earnings - Full Year 2018

 

Low End

 

High End

 

Adjustments

 

 

 

 

 

Estimated net earnings - GAAP

 

$

138,666

 

$

140,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated restructuring expense, pre-tax

 

 

 

 

 

20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from divestiture of grinding media, pre-tax

 

 

 

 

 

6,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redemption of long-term debt expenses, pre-tax

 

 

 

 

 

14,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total pre-tax adjustments

 

 

 

 

 

40,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated tax benefit from above expenses*

 

 

 

 

 

(8,500

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Adjustments, after-tax

 

 

 

 

 

$

32,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated net earnings - Adjusted

 

$

171,000

 

$

173,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share Range - GAAP

 

$

6.12

 

$

6.22

 

 

 

 

 

 

 

Diluted Earnings Per Share Range - Adjusted

 

$

7.55

 

$

7.65

 

 

 

 

 

 

 

 


*The tax effect of adjustments is calculated based on income tax rate in each applicable jurisdiction.

 

-END-

 


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