Valmont Reports Second Quarter 2022 Results and Raises Full-Year Guidance

Rhea-AI Summary

Valmont Industries (NYSE: VMI) reported record financial results for Q2 2022, with net sales reaching $1.1 billion, a 26.9% increase year-over-year. Operating income also rose to $118.7 million, representing 10.5% of net sales, while diluted EPS increased by 22.1% to $3.53. The company noted strong market demand, leading to a backlog of $2.0 billion, a 24.7% increase since the end of 2021. Valmont returned $21.5 million to shareholders and announced an increase in its 2022 financial outlook, projecting net sales growth of 20% to 21%.

Positive

• Record net sales of $1.1 billion, up 26.9% year-over-year.
• Operating income increased to $118.7 million, representing 10.5% of net sales.
• Diluted EPS rose to $3.53, a 22.1% increase from the previous year.
• Record backlog of $2.0 billion, a 24.7% increase since 2021.
• Increased full-year net sales growth outlook from 11%-17% to 20%-21%.

Negative

• Effective tax rate increased to 27.6% from 19.0% in 2021, impacting net earnings.

Achieved Record Sales and Earnings per Share

OMAHA, Neb.--(BUSINESS WIRE)-- Valmont Industries, Inc. (NYSE: VMI), a global leader that provides vital infrastructure and advances agricultural productivity while driving innovation through technology, today reported financial results for the second quarter ended June 25, 2022.

Second Quarter 2022 Highlights (all metrics compared to Second Quarter 2021 unless otherwise noted)

• Record Net Sales of $1.1 billion increased 26.9%
• Operating Income increased to $118.7 million, or 10.5% of net sales ($122.9 million or 10.8% adjusted¹) compared to $82.6 million or 9.2% of net sales ($90.9 million or 10.2% adjusted¹)
• Record Diluted Earnings per Share (EPS) of $3.53 ($3.70 adjusted¹) compared to $2.89 ($3.06 adjusted¹)
• Benefited from strong market demand across the portfolio, leading to a record backlog of $2.0 billion, an increase of 24.7% since the end of fiscal 2021, and an increase of 13.4% since the end of first quarter 2022
• Returned $21.5 million to shareholders through dividends and share repurchases
• Incurred an effective tax rate of 27.6% compared to 19.0% in 2021, primarily due to the geographic mix of earnings and an incremental U.K. tax benefit in 2021 that did not repeat in 2022
• Commenced production at the newly-built spun concrete pole manufacturing facility in Bristol, Indiana, that will be accompanied by a 500-kilowatt solar array expected to fully offset the site’s energy consumption
• Acquired a majority interest in ConcealFab, a leader in 5G infrastructure and passive intermodulation (PIM) mitigation solutions for the telecommunications market

Key Financial Metrics

Second Quarter 2022		GAAP										Adjusted1
(000's except per share amounts)		06/25/2022 2Q 2022				06/26/2021 2Q 2021				vs. 2Q 2021		06/25/2022 2Q 2022				06/26/2021 2Q 2021				vs. 2Q 2021
Net Sales		$	1,135,532			$	894,629			26.9%		$	1,135,532			$	894,629			26.9%
Operating Income			118,719				82,625			43.7%			122,859				90,850			35.2%
Operating Income as a % of Net Sales			10.5	%			9.2	%					10.8	%			10.2	%
Net Earnings			76,108				62,110			22.5%			79,682				65,752			21.2%
Diluted Earnings Per Share		$	3.53			$	2.89			22.1%		$	3.70			$	3.06			20.9%
Average Shares Outstanding			21,541				21,469						21,541				21,469
YTD 2022		GAAP										Adjusted1
(000's except per share amounts)		06/25/2022 FY 2022				06/26/2021 FY 2021				vs. FY 2021		06/25/2022 FY 2022				06/26/2021 FY 2021				vs. FY 2021
Net Sales		$	2,116,352			$	1,669,515			26.8%		$	2,116,352			$	1,669,515			26.8%
Operating Income			213,561				159,836			33.6%			221,844				168,061			32.0%
Operating Income as a % of Net Sales			10.1	%			9.6	%					10.5	%			10.1	%
Net Earnings			138,419				117,124			18.2%			145,570				120,776			20.5%
Diluted Earnings Per Share		$	6.43			$	5.46			17.8%		$	6.77			$	5.63			20.2%
Average Shares Outstanding			21,516				21,449						21,516				21,449

"We delivered record quarterly revenue, an increase of 27% year-over-year, and record adjusted earnings per share that increased 21%," said Stephen G. Kaniewski, President and Chief Executive Officer. "Operating margin improvement was driven by our ability to successfully execute on pricing strategies, higher volumes, and better fixed-cost leverage. We continue to prioritize actions to better serve our customers by leveraging our global manufacturing footprint, strategically expanding capacity in key growth markets, and implementing sourcing strategies to help mitigate continuing supply chain volatility. We are seeing strong demand for our products and solutions across global infrastructure and agriculture markets and our Valmont teams around the world are doing an excellent job of delivering value to our customers every day. We are executing consistently on our strategy of creating sustainable growth across our businesses and long-term value for our shareholders."

Second Quarter 2022 Segment Review

Infrastructure (67.0% of Net Sales)

Products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation and telecommunications, and coatings services to preserve and protect metal products

Sales of $765.0 million grew 23.9% year-over-year with double-digit sales growth across all product lines, net of a 2.5% unfavorable foreign currency translation impact. Higher sales were driven by favorable pricing globally, primarily in the Transmission, Distribution and Substation (TD&S), Lighting and Transportation (L&T), and Telecommunications product lines, and higher volumes, notably in the Renewable Energy, Telecommunications and TD&S product lines.

Operating Income improved to $84.6 million or 11.1% of net sales compared to $61.6 million or 10.0% ($67.7 million or 11.0% adjusted¹) in 2021, driven by favorable pricing and improved fixed-cost leverage, including SG&A.

On June 1, 2022, Valmont acquired a majority interest in ConcealFab, advancing the Company's growth strategy to deliver industry-leading 5G infrastructure solutions for the telecommunications market.

Agriculture (33.0% of Net Sales)

Center pivot and linear irrigation equipment for agricultural markets, including parts and tubular products; advanced technology solutions for precision agriculture

Sales of $377.8 million increased 34.0% year-over-year, led by higher average selling prices of irrigation equipment globally and higher volumes, notably in North America and Brazil. In Brazil, revenues grew more than $40.0 million year-over-year, demonstrating robust market demand for irrigation equipment and ag solar products.

Operating Income was $58.0 million, or 15.5% of net sales ($62.2 million or 16.6% adjusted¹) compared to $42.0 million or 15.0% of net sales ($42.9 million or 15.3% adjusted¹) in 2021. The benefit of higher average selling prices and additional volume leverage was partially offset by higher SG&A, including incremental R&D expense for technology investments.

Realignment of Reporting Segments

On April 6, 2022, the Company announced that it had realigned its reporting segment structure beginning with its first quarter 2022 financial results. The new reporting segments are Infrastructure (includes the previous segments of Utility Support Structures, Engineered Support Structures and Coatings) and Agriculture (a renaming of the previous Irrigation segment). A recast of comparable prior-year segment financial information for 2020 and 2021 affected by the change is available in a summary presentation on the Investors page at Valmont.com. The Company's historical GAAP balance sheet, income statement and cash flows are not affected.

Balance Sheet, Liquidity and Capital Allocation

The Company generated year-to-date operating cash flows of $68.0 million through strong earnings and managing working capital to mitigate supply chain volatility while supporting strong revenue growth. At the end of the second quarter, cash and cash equivalents were $154.6 million. Valmont purchased approximately $10.0 million of company stock in the second quarter and approximately $112.0 million remains on the current authorization with no expiration.

Increasing Full Year 2022 Financial Outlook and Updating Key Assumptions

The Company is increasing its 2022 full-year net sales and diluted earnings per share outlook from the previous indications that were communicated last quarter, and is providing updated key assumptions for the year.

2022 Full Year Financial Outlook			Previous Outlook			Revised Outlook
Net Sales Growth (vs. PY)			11% to 17%			20% to 21%
GAAP Diluted EPS1			$12.30 to $12.80			$12.90 to $13.30
Adjusted Diluted EPS1			$13.00 to $13.50			$13.60 to $14.00
Tax Rate			~ 26.5%			~ 27.5%
FX Translation Impact on Net Sales			0.0%			~ (2.0%)

• Revised net sales growth is primarily due to favorable pricing to offset continued broad-based inflation
• Now expecting a full-year tax rate of ~27.5% due to the geographic mix of earnings
• Now expecting a ~2.0% unfavorable foreign currency translation impact on net sales vs. prior year
• Capital expenditures continue to be in the range of $110.0 - $120.0 million to support strategic growth and Industry 4.0 advanced manufacturing initiatives

Kaniewski continued, "We've had a very strong first half of the year and are increasing our full-year outlook based on this performance and several other positive factors, including our record backlog of $2.0 billion, which reflects continued strong, global market drivers across our businesses and provides significant momentum as we look ahead to the balance of 2022 and into 2023. Additionally, broad-based market strength for infrastructure products and solutions that help deliver safety, security and reliability while also participating in the change to renewable generation sources across our markets, are driving robust demand globally. Favorable agricultural market fundamentals and continued heightened concerns over food security have led to increasing activity levels across global markets. While inflation and supply chain volatility continue, we remain focused on what we can control: leveraging the strength of our organization to deliver innovative products and solutions to our customers, maintaining cost discipline, advancing operational excellence, and executing on our pricing strategies. Additionally, our balance sheet is strong and gives us flexibility to execute our long-term strategic plan. Through our diversified business portfolio, organizational emphasis on ESG principles and return on invested capital focus, we are well-positioned to drive sustainable, profitable growth and deliver long-term value to our shareholders."

A live audio discussion with Stephen G. Kaniewski, President and Chief Executive Officer, and Avner M. Applbaum, Executive Vice President and Chief Financial Officer, will be accessible by telephone on Thursday, July 21, 2022 at 8:00 a.m. CDT by dialing 1-844-200-6205 or 1-646-904-5544 using access code 849925, or via webcast by pointing browsers to this link: Valmont Industries 2Q 2022 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 two hours after the call at the above link or by telephone at 1-866-813-9403 or 1-929-458-6194. Please use access code 917263. The replay will be available through 5:00 p.m. CDT on July 28, 2022.

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 COVID-19 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.

1 Please see Reg G reconciliation to GAAP measures at end of document

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in thousands, except per share amounts) (unaudited)
	Second Quarter								Year-to-Date
	13 Weeks Ended								26 Weeks Ended
	25-Jun-22				26-Jun-21				25-Jun-22				26-Jun-21
Net sales	$	1,135,532			$	894,629			$	2,116,352			$	1,669,515
Cost of sales		842,931				664,982				1,574,565				1,235,314
Gross profit		292,601				229,647				541,787				434,201
Selling, general and administrative expenses		173,882				147,022				328,226				274,365
Operating income		118,719				82,625				213,561				159,836
Other income (expense)
Interest expense		(11,386	)			(10,436	)			(22,649	)			(20,435	)
Interest income		285				186				512				497
Gain (loss) on investments (unrealized)		(2,342	)			1,177				(3,405	)			1,068
Other		2,073				4,204				5,715				7,653
Other income (expense), net		(11,370	)			(4,869	)			(19,827	)			(11,217	)
Earnings before income taxes		107,349				77,756				193,734				148,619
Income tax expense		29,587				14,740				52,708				30,242
Equity in loss of nonconsolidated subsidiaries		(555	)			(359	)			(913	)			(719	)
Net earnings		77,207				62,657				140,113				117,658
Less: earnings attributable to non-controlling interests		(1,099	)			(547	)			(1,694	)			(534	)
Net earnings attributable to Valmont Industries, Inc.	$	76,108			$	62,110			$	138,419			$	117,124
Average shares outstanding (000's) - Basic		21,313				21,193				21,296				21,186
Earnings per share - Basic	$	3.57			$	2.93			$	6.50			$	5.53
Average shares outstanding (000's) - Diluted		21,541				21,469				21,516				21,449
Earnings per share - Diluted	$	3.53			$	2.89			$	6.43			$	5.46
Cash dividends per share	$	0.55			$	0.50			$	1.10			$	1.00

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OPERATING RESULTS (Dollars in thousands) (Unaudited)
	Second Quarter								Year-to-Date
	13 Weeks Ended								26 Weeks Ended
	25-Jun-22				26-Jun-21				25-Jun-22				26-Jun-21
Net sales
Infrastructure	$	764,950			$	617,604			$	1,445,676			$	1,167,250
Agriculture		377,765				281,965				684,345				511,629
Total		1,142,715				899,569				2,130,021				1,678,879
Less: Intersegment sales		(7,183	)			(4,940	)			(13,669	)			(9,364	)
Total	$	1,135,532			$	894,629			$	2,116,352			$	1,669,515
Operating Income
Infrastructure	$	84,643			$	61,550			$	162,150			$	115,999
Agriculture		58,046				41,984				95,521				80,732
Corporate		(23,970	)			(20,909	)			(44,110	)			(36,895	)
Total	$	118,719			$	82,625			$	213,561			$	159,836

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

Infrastructure: This segment consists of the manufacture and distribution of products and solutions to serve infrastructure markets of utility, renewable energy, lighting, transportation and telecommunications, and coatings services to preserve and protect metal products.

Agriculture: This segment consists of the manufacture of center pivot and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES SUMMARY OPERATING RESULTS (Dollars in thousands) (Unaudited)
	Thirteen weeks ended June 25, 2022
	Infrastructure				Agriculture				Intersegment Sales				Consolidated
Geographical market:
North America	$	559,864			$	203,488			$	(6,716	)		$	756,636
International		205,086				174,277				(467	)			378,896
Total	$	764,950			$	377,765			$	(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
Renewable Energy		53,603				—				—				53,603
Irrigation Equipment and Parts, excluding Technology		—				347,585				(2,983	)			344,602
Technology Products and Services		—				30,180				—				30,180
Total	$	764,950			$	377,765			$	(7,183	)		$	1,135,532

	Thirteen weeks ended June 26, 2021
	Infrastructure				Agriculture				Intersegment Sales				Consolidated
Geographical market:
North America	$	421,168			$	156,037			$	(4,940	)		$	572,265
International		196,436				125,928				—				322,364
Total	$	617,604			$	281,965			$	(4,940	)		$	894,629
Product line:
Transmission, Distribution and Substation	$	220,458			$	—			$	—			$	220,458
Lighting and Transportation		215,247				—				—				215,247
Coatings		80,346				—				(2,796	)			77,550
Telecommunications		54,102				—				—				54,102
Renewable Energy		47,451				—				—				47,451
Irrigation Equipment and Parts, excluding Technology		—				253,450				(2,144	)			251,306
Technology Products and Services		—				28,515				—				28,515
Total	$	617,604			$	281,965			$	(4,940	)		$	894,629

	Twenty-six weeks ended June 25, 2022
	Infrastructure				Agriculture				Intersegment Sales				Consolidated
Geographical market:
North America	$	1,065,844			$	385,743			$	(13,202	)		$	1,438,385
International		379,832				298,602				(467	)			677,967
Total	$	1,445,676			$	684,345			$	(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
Renewable Energy		96,590				—				—				96,590
Irrigation Equipment and Parts, excluding Technology		—				625,619				(6,368	)			619,251
Technology Products and Services		—				58,726				—				58,726
Total	$	1,445,676			$	684,345			$	(13,669	)		$	2,116,352

	Twenty-six weeks ended June 26, 2021
	Infrastructure				Agriculture				Intersegment Sales				Consolidated
Geographical market:
North America	$	806,902			$	278,788			$	(9,364	)		$	1,076,326
International		360,348				232,841				—				593,189
Total	$	1,167,250			$	511,629			$	(9,364	)		$	1,669,515
Product line:
Transmission, Distribution and Substation	$	428,902			$	—			$	—			$	428,902
Lighting and Transportation		391,763				—				—				391,763
Coatings		155,139				—				(5,997	)			149,142
Telecommunications		99,742				—				—				99,742
Renewable Energy		91,704				—				—				91,704
Irrigation Equipment and Parts, excluding Technology		—				460,708				(3,367	)			457,341
Technology Products and Services		—				50,921				—				50,921
Total	$	1,167,250			$	511,629			$	(9,364	)		$	1,669,515

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited)
	25-Jun-22			25-Dec-21
ASSETS
Current assets:
Cash and cash equivalents	$	154,579		$	177,232
Accounts receivable, net		627,876			571,593
Inventories		786,600			728,834
Contract asset - costs and profits in excess of billings		200,522			142,643
Prepaid expenses and other assets		87,070			83,646
Refundable income taxes		—			8,815
Total current assets		1,856,647			1,712,763
Property, plant and equipment, net		607,563			598,605
Goodwill and other assets		1,210,542			1,135,881
	$	3,674,752		$	3,447,249
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt	$	3,018		$	4,884
Notes payable to banks		4,428			13,439
Accounts payable		388,498			347,841
Accrued expenses		237,222			253,330
Contract liability - billings in excess of costs and earnings		175,814			135,746
Income taxes payable		10,036			—
Dividend payable		11,743			10,616
Total current liabilities		830,759			765,856
Long-term debt, excluding current installments		995,647			947,072
Operating lease liabilities		154,799			147,759
Other long-term liabilities		140,397			172,965
Shareholders' equity		1,553,150			1,413,597
	$	3,674,752		$	3,447,249

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited)
	26 Weeks Ended
	25-Jun-22				26-Jun-21
Cash flows from operating activities
Net Earnings	$	140,113			$	117,658
Depreciation and amortization		48,012				44,063
Contribution to defined benefit pension plan		(17,155	)			(970	)
Change in working capital		(115,170	)			(140,014	)
Other		12,219				49,448
Net cash flows from operating activities		68,019				70,185
Cash flows from investing activities
Purchase of property, plant, and equipment		(49,676	)			(48,824	)
Acquisitions		(39,297	)			(312,500	)
Other		1,162				(74	)
Net cash flows from investing activities		(87,811	)			(361,398	)
Cash flows from financing activities
Proceeds from long-term borrowings		201,462				149,342
Principal payments on long-term borrowings		(156,973	)			(15,421	)
Net (payments)/proceeds on short-term borrowings		(9,155	)			(5,049	)
Purchase of treasury shares		(9,776	)			(21,600	)
Purchase of noncontrolling interest		(4,292	)			—
Dividends paid		(22,337	)			(20,181	)
Other		1,641				2,969
Net cash flows from financing activities		570				90,060
Effect of exchange rates on cash and cash equivalents		(3,431	)			(288	)
Net change in cash and cash equivalents		(22,653	)			(201,441	)
Cash and cash equivalents - beginning of year		177,232				400,726
Cash and cash equivalents - end of period	$	154,579			$	199,285

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 2022 results. We believe the adjustments for Prospera allow for a better comparison of future Agriculture segment performance as compared to historical results. The non-GAAP tables below also disclose the impact of a write off a receivable following arbitration of a commercial transaction from 2014, acquisition diligence and restructuring expenses on segment operating income and net earnings as well as the impact of the U.K. tax rate change on net earnings (adjusts GAAP tax rate from 19.0% to 22.5%) on fiscal 2021 results. Amounts may be impacted by rounding. We believe it is useful when considering company performance for the non-GAAP adjusted net earnings and operating income to be taken into consideration by management and investors with the related reported GAAP measures.

	Thirteen weeks ended June 25, 2022				Diluted earnings per share				Twenty-six weeks ended June 25, 2022				Diluted earnings per 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
Stock-based compensation - Prospera		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

	Thirteen weeks ended June 26, 2021				Diluted earnings per share				Twenty-six weeks ended June 26, 2021				Diluted earnings per share
Net earnings attributable to Valmont Industries, Inc. - as reported	$	62,110			$	2.89			$	117,124			$	5.46
Write-off of a receivable, pre-tax		5,545				0.26				5,545				0.26
Acquisition diligence expense, pre-tax		1,120				0.05				1,120				0.05
Restructuring expense, pre-tax		1,560				0.07				1,560				0.07
Total Adjustments, pre-tax1		8,225				0.38				8,225				0.38
Change in U.K. statutory tax rate		(2,819	)			(0.13	)			(2,819	)			(0.13	)
Tax effect of adjustments2		(1,764	)			(0.08	)			(1,754	)			(0.08	)
Net earnings attributable to Valmont Industries, Inc. - Adjusted1	$	65,752			$	3.06			$	120,776			$	5.63
Average shares outstanding (000’s) - Diluted						21,469								21,449

1Earnings per share includes rounding

2The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction.

		Thirteen weeks ended June 25, 2022
Operating Income Reconciliation		Infrastructure				Agriculture				Corporate				Valmont
Operating income - as reported		$	84,643			$	58,046			$	(23,970	)		$	118,719
Stock-based compensation - Prospera			—				2,495				—				2,495
Prospera intangible asset amortization			—				1,645				—				1,645
Adjusted Operating Income		$	84,643			$	62,186			$	(23,970	)		$	122,859
Net Sales - as reported			760,750				374,782				NM				1,135,532
Operating Income as a % of Net Sales			11.1	%			15.5	%			NM				10.5	%
Adjusted Operating Income as a % of Net Sales			11.1	%			16.6	%			NM				10.8	%

		Thirteen weeks ended June 26, 2021
Operating Income Reconciliation		Infrastructure				Agriculture				Corporate				Valmont
Operating income - as reported		$	61,550			$	41,984			$	(20,909	)		$	82,625
Write-off of a receivable, pre-tax			5,545				—				—				5,545
Acquisition diligence expense, pre-tax			—				—		—		1,120				1,120
Restructuring expense, pre-tax			650				910				—				1,560
Adjusted Operating Income		$	67,745			$	42,894			$	(19,789	)		$	90,850
Net Sales - as reported			614,808				279,821				NM				894,629
Operating Income as a % of Net Sales			10.0	%			15.0	%			NM				9.2	%
Adjusted Operating Income as a % of Net Sales			11.0	%			15.3	%			NM				10.2	%

		Twenty-six weeks ended June 25, 2022
Operating Income Reconciliation		Infrastructure				Agriculture				Corporate				Valmont
Operating income - as reported		$	162,150			$	95,521			$	(44,110	)		$	213,561
Stock-based compensation - Prospera			—				4,993				—				4,993
Prospera intangible asset amortization			—				3,290				—				3,290
Adjusted Operating Income		$	162,150			$	103,804			$	(44,110	)		$	221,844
Net Sales - as reported			1,438,375				677,977				NM				2,116,352
Operating Income as a % of Net Sales			11.3	%			14.1	%			NM				10.1	%
Adjusted Operating Income as a % of Net Sales			11.3	%			15.3	%			NM				10.5	%

		Twenty-six weeks ended June 26, 2021
Operating Income Reconciliation		Infrastructure				Agriculture				Corporate				Valmont
Operating income - as reported		$	115,999			$	80,732			$	(36,895	)		$	159,836
Write-off of a receivable, pre-tax			5,545				—				—				5,545
Acquisition diligence expense, pre-tax			—				—		—		1,120				1,120
Restructuring expense, pre-tax			650				910				—				1,560
Adjusted Operating Income		$	122,194			$	81,642			$	(35,775	)		$	168,061
Net Sales - as reported			1,161,253				508,262				NM				1,669,515
Operating Income as a % of Net Sales			10.0	%			15.9	%			NM				9.6	%
Adjusted Operating Income as a % of Net Sales			10.5	%			16.1	%			NM				10.1	%

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF FORECASTED GAAP AND ADJUSTED EARNINGS
(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 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 comparison of future Agriculture segment performance as compared to historical results. 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 - 2022 Guidance	Low End				High End				Adjustments
Estimated net earnings - GAAP	$	279,000			$	287,600
Prospera intangible asset (proprietary technology) amortization, pre-tax										6,800
Stock-based compensation - Prospera, pre-tax										10,000
Total pre-tax adjustments										16,800
Estimated tax benefit from above expenses*										(2,200	)
Total Adjustments, after-tax									$	14,600
Estimated net earnings - Adjusted	$	293,600			$	302,200
Diluted Earnings Per Share Range - GAAP	$	12.90			$	13.30
Diluted Earnings Per Share Range - Adjusted	$	13.60			$	14.00

__________________

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220720005960/en/

Renee Campbell

renee.campbell@valmont.com

Source: Valmont Industries, Inc.

FAQ

What were Valmont Industries' Q2 2022 financial results?

Valmont Industries reported record net sales of $1.1 billion and diluted EPS of $3.53 for Q2 2022.

How did Valmont Industries perform compared to Q2 2021?

Compared to Q2 2021, Valmont's net sales increased by 26.9% and diluted EPS rose by 22.1%.

What is the current backlog for Valmont Industries?

Valmont Industries has a record backlog of $2.0 billion, up 24.7% since the end of fiscal 2021.

What updates did Valmont Industries provide on its 2022 financial outlook?

Valmont increased its 2022 financial outlook for net sales growth to 20%-21% and diluted EPS to $12.90-$13.30.

What was the operating income for Valmont Industries in Q2 2022?

Operating income for Q2 2022 was $118.7 million, or 10.5% of net sales.