Valmont Industries, Inc. (VMI) reported a first-quarter 2025 profit of $87.3 million or $4.32 per share. This compares to the profit of $87.8 million or $4.32 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $4.24.The company’s revenues were $969.3 million in the quarter, down 0.9% year over year. The top line missed the Zacks Consensus Estimate of $975.6 million.(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)VMI’s Segment ReviewThe first-quar ...

Financial Data and Key Metrics Changes - Consolidated net sales for Q1 2025 were $969.3 million, a decrease of 0.9% year-over-year, but increased modestly on a constant currency basis [35][46] - Gross margin was 30%, down 130 basis points from the prior year, primarily due to a higher mix of international projects in the agriculture segment [35] - Operating income was $128.3 million, representing 13.2% of sales, with diluted earnings per share at $4.32, consistent with the prior year [35][46] Business Line Data and Key Metrics Changes - Infrastructure sales decreased by 2.4%, with utility sales increasing by 2.4% driven by higher volumes and average selling prices [37] - Agriculture sales increased by 3.3%, approximately 6% on a constant currency basis, with international sales significantly up, particularly in the EMEA region and Brazil [40][41] Market Data and Key Metrics Changes - North American market conditions for agriculture remain challenged, with projected declines in corn and soybean prices [26] - The telecommunications business saw strong sales growth of nearly 30%, driven by favorable carrier spending [39] Company Strategy and Development Direction - The company is focused on capturing the global infrastructure wave by expanding capabilities and optimizing capacity, with a $30 million investment in CapEx for Q1 2025 [11][12] - A local-for-local supply chain strategy has been implemented to reduce exposure to tariffs and better serve global customers [9][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating disruptions while positioning the business for long-term growth, despite slight declines in consolidated net sales [6][7] - The outlook for 2025 remains optimistic, with net sales projected between $4.0 billion and $4.2 billion and diluted earnings per share expected between $17.20 and $18.80 [46][53] Other Important Information - The company is actively mitigating near-term tariffs, with a comprehensive plan to offset an estimated $80 million in tariff exposure [48][50] - A 13% dividend increase was announced during the quarter, and a stock repurchase program of $700 million was initiated [44] Q&A Session Summary Question: Have price actions been implemented to offset all of the tariff impacts to date? - Management indicated that about half of the $80 million tariff exposure is being addressed through pricing actions, with expectations for higher pricing and possibly lower volumes included in guidance [58][60] Question: What is the outlook for the telecom business for the rest of the year? - Management expressed strong confidence in continued growth in telecom, driven by carrier investments in 5G upgrades and modernization [63][64] Question: What is the expectation for volume growth in the utility and lighting & transportation segments? - Management expects mid-single-digit volume growth for infrastructure, excluding solar, with improvements noted in order rates for lighting [108][117] Question: How is the company managing its tariff situation and USMCA compliance? - Management confirmed that their Mexico operations are USMCA compliant and emphasized ongoing efforts to manage tariffs and costs effectively [121][122]

Disclosure Regarding Forward-Looking Statements These slides (and the accompanying oral discussion) contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions made by management, considering its experience in the industries where Valmont operates, perceptions of historical trends, current conditions, expected future developments, and other relevant factors. It is important to note that these statements are not guar ...

Valmont Industries (VMI) came out with quarterly earnings of $4.32 per share, beating the Zacks Consensus Estimate of $4.24 per share. This compares to earnings of $4.32 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.89%. A quarter ago, it was expected that this infrastructure equipment maker would post earnings of $3.66 per share when it actually produced earnings of $3.84, delivering a surprise of 4.92%.Over the last four ...

Financial Performance - Net sales for Q1 2025 decreased by 0.9% to $969.3 million compared to $977.8 million in Q1 2024, with a 0.5% increase in constant currency[5]. - Operating income was $128.3 million, representing 13.2% of net sales, down from $131.6 million or 13.5% of net sales in the prior year[5]. - Diluted earnings per share remained unchanged at $4.32 compared to the previous year[5]. - Net earnings for the thirteen weeks ended March 29, 2025, were $86.663 million, slightly down from $88.429 million in the prior year, a decrease of about 2.0%[31]. - The adjusted EBITDA for the four fiscal quarters ended March 29, 2025, was $640.829 million, providing insights into the company's core operating performance[36]. Cash Flow and Liquidity - Operating cash flows increased significantly to $65.1 million from $23.3 million, with cash and cash equivalents at $184.4 million and a net leverage ratio of approximately 1.0x[5]. - Cash and cash equivalents increased to $184.399 million as of March 29, 2025, compared to $164.315 million at the end of 2024, marking an increase of approximately 12.5%[29]. - The leverage ratio as of March 29, 2025, was 0.97, indicating a stable financial position relative to debt levels[38]. - The company reported a net cash flow from operating activities of $65.130 million for the thirteen weeks ended March 29, 2025, compared to $23.332 million in the same period in 2024, showing a significant improvement[31]. Segment Performance - Infrastructure segment sales decreased by 2.4% to $706.2 million, while Agriculture segment sales increased by 3.3% to $267.3 million[7][10]. - Operating income in the Agriculture segment decreased by 11.6% to $36.2 million, or 13.6% of net sales, due to volume declines in North America[12]. - North America sales for the Infrastructure segment increased to $577.197 million from $568.572 million year-over-year, reflecting a growth of about 1.1%[27]. - The Infrastructure segment's sales totaled $706.221 million for the thirteen weeks ended March 29, 2025, down from $723.614 million in the prior year, a decline of approximately 2.4%[27]. - Net sales for the thirteen weeks ended March 29, 2025, totaled $969,314, with Infrastructure contributing $703,491 and Agriculture $265,823[42]. Outlook and Projections - The company reaffirmed its full-year 2025 financial outlook, projecting net sales between $4.0 billion and $4.2 billion and diluted earnings per share between $17.20 and $18.80[14]. - Capital expenditures for 2025 are expected to be between $140 million and $160 million[14]. - Fiscal 2025 net sales outlook ranges from $4,000,000 to $4,200,000, with a low end of $3,025,000 for Infrastructure and $975,000 for Agriculture[42]. - Year-over-year change in net sales is projected at (1.8)% for consolidated sales, with Infrastructure at 0.9% and Agriculture at (9.4)%[42]. - The company anticipates a net sales range of $3,160,000 to $4,060,000 in constant currency for Fiscal 2025[42]. Foreign Exchange Impact - The impact of foreign exchange on net sales for the same period was $13,153, with $6,070 for Infrastructure and $7,083 for Agriculture[42]. - The company expects a foreign exchange impact of $60,000 on net sales for Fiscal 2025, with $25,000 attributed to Infrastructure and $35,000 to Agriculture[42]. - The projected year-over-year change in net sales at constant currency is (1.1)% for consolidated sales, with Infrastructure at 2.1% and Agriculture at (7.1)%[42]. - The foreign exchange rates assumed for translation effects include BRL/USD at 5.90, AUD/USD at 1.58, and EUR/USD at 0.96[42]. - The company reported a net sales increase of 6.6% in constant currency for Agriculture in the thirteen weeks ended March 29, 2025[42]. Shareholder Returns - The company plans to return $12.0 million to shareholders in dividends, increasing the quarterly dividend by 13% to $0.68 per diluted share[5]. Backlog and Current Assets - The total backlog as of March 29, 2025, was $1,489.2 million, up from $1,436.7 million at the end of 2024, indicating an increase of approximately 3.6%[40]. - The company’s total current assets increased to $1,722.817 million as of March 29, 2025, from $1,683.392 million at the end of 2024, reflecting a growth of about 2.3%[29].

Company Overview - Valmont Industries (VMI) shares increased by 4.7% to $298.97 in the last trading session, following a significant volume of shares traded, contrasting with an 18.2% loss over the past four weeks [1] Tariff Impact and Mitigation Strategies - Valmont provided an update on the estimated impacts of U.S. tariffs on imports from Mexico, Canada, and China, as well as on imported steel and aluminum, detailing mitigation strategies such as pricing actions, cost control, productivity improvements, and supply-chain optimizations [2] - The company anticipates being cost-neutral on a dollar basis in the second half of fiscal 2025, even without USMCA tariff exclusions for imports from Mexico and Canada [3] Earnings Expectations - Valmont is expected to report quarterly earnings of $4.23 per share, reflecting a year-over-year decrease of 2.1%, with revenues projected at $977.37 million, down 0.1% from the previous year [4] - The consensus EPS estimate for the quarter has been revised 1.6% higher over the last 30 days, indicating a positive trend in earnings estimate revisions, which typically correlates with stock price appreciation [5] Industry Context - Valmont operates within the Zacks Steel - Pipe and Tube industry, where another company, Tenaris S.A. (TS), closed 0.7% higher at $39.63, with a 4.3% return over the past month [5] - Tenaris' consensus EPS estimate for the upcoming report has increased by 17.3% over the past month, although it represents a year-over-year decrease of 37.8% [6]

Core Viewpoint - Valmont Industries (VMI) shares have declined approximately 9.9% since the last earnings report, underperforming the S&P 500, raising questions about future performance leading up to the next earnings release [1] Group 1: Earnings and Estimates - Recent estimates for Valmont have trended upward over the past month, indicating a positive outlook [2][4] - The most recent earnings report highlighted important catalysts that may influence future performance [1] Group 2: VGM Scores - Valmont currently holds a strong Growth Score of A, while its Momentum Score is rated B, and it has a C grade for Value, placing it in the middle 20% for that investment strategy [3] - The aggregate VGM Score for Valmont is A, which is significant for investors not focused on a single strategy [3] Group 3: Outlook - The upward trend in estimates suggests a promising outlook for Valmont, with a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4]

Business Segments - Valmont Industries operates in two reportable segments: Infrastructure and Agriculture, focusing on manufacturing products and services for infrastructure and agricultural markets[11][12][34]. - The Infrastructure segment includes utility structures, lighting and transportation solutions, coatings services, telecommunications products, and solar trackers, addressing the growing demand for reliable energy and infrastructure resilience[15][18][19][20][26]. - The Agriculture segment manufactures center pivot and linear irrigation equipment, with a focus on enhancing agricultural productivity and water conservation, serving fields from four to over 500 acres[34][36]. Government and Market Demand - The U.S. government is investing in infrastructure improvements through the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), which allocate resources for enhancing bridges, public safety, and modernizing the electrical grid[18][19]. - The demand for mechanized irrigation systems is driven by factors such as water scarcity, government support programs, and the need for efficient farming solutions, with potential water application efficiency improvements of 40% to 90% compared to traditional methods[36][39]. - The U.S. Department of Agriculture forecasted U.S. net farm income for 2025 to be $180.1 billion, a 29.5% increase compared to 2024, which may positively impact sales of mechanized irrigation equipment[66]. Technology and Innovation - Valmont's technology solutions in agriculture include over 150,000 connected devices for monitoring and optimizing irrigation, which help farmers improve crop yields and conserve resources[34][35]. - The company acquired Prospera Technologies, Ltd. in fiscal 2021 to enhance its capabilities in artificial intelligence and machine learning for agronomic monitoring[34]. Competitive Position - Valmont maintains a competitive edge in the mechanized irrigation industry, recognized as a leader among four main participants, focusing on product durability, reliability, and service capabilities[40]. - The company’s competitive strategy emphasizes delivering high-value, innovative solutions at competitive prices, leveraging extensive production capacity across its facilities[27][28]. Financial Performance - Consolidated net sales for fiscal 2024 were $4,075,034, a decrease of 2.4% compared to $4,174,598 in fiscal 2023[159]. - Gross profit increased to $1,241,212 in fiscal 2024, representing a 0.4% increase from $1,236,034 in fiscal 2023, with gross profit as a percentage of net sales rising to 30.5%[159]. - Operating income surged by 79.9% to $524,584 in fiscal 2024, compared to $291,557 in fiscal 2023, driven by lower selling, general, and administrative expenses[159]. - Net earnings attributable to Valmont Industries, Inc. increased by 130.9% to $348,259 in fiscal 2024, with diluted earnings per share rising to $17.19, a 153.5% increase from $6.78 in fiscal 2023[159]. Order Backlog and Future Outlook - As of December 28, 2024, the company's backlog of orders for principal products was $1,436.7 million, down from $1,465.5 million as of December 30, 2023[52]. - The company anticipates that the majority of the fiscal 2024 backlog will be fulfilled in fiscal 2025, indicating a positive outlook for future revenue[52]. - The consolidated backlog of unshipped orders as of December 28, 2024, was approximately $1.4 billion, down from $1.5 billion as of December 30, 2023[176]. Shareholder Returns - The company paid a total of $48.4 million in dividends in fiscal 2024, a decrease from $49.5 million in fiscal 2023[152]. - The Board of Directors approved a quarterly cash dividend of $0.68 per share, representing an increase of over 13%[204]. - The company has repurchased 8,235,697 shares for approximately $1,334.0 million under its share repurchase program[153]. - The total authorization for the share repurchase program is $1,400.0 million, with no expiration date[153]. Risks and Challenges - Legal and regulatory risks, including trade policies and tariffs, could adversely affect the company's business, potentially leading to a decline in sales and profits[82]. - The company faces strong competition in its markets, which may pressure margins and require adjustments in pricing strategies[102]. - Rising interest rates have increased the company's borrowing costs, impacting its financial flexibility[95]. - The company is facing rising insurance premiums and costs due to increased frequency of extreme weather events[120]. - Compliance with climate change regulations may result in higher costs for raw materials and transportation[118]. Operational Insights - The company employed a total of 10,986 employees as of December 28, 2024, with 6,355 in the U.S. and 4,631 internationally[54][56]. - The company operates over 80 manufacturing plants across six continents, with 30% of net sales influenced by global trade relations[82]. - The company maintains strong relationships with major steel producers to mitigate risks related to raw material availability and pricing fluctuations[48]. - The cost of steel has historically constituted approximately one-third of the manufacturing cost, with a hypothetical 20% change in steel prices potentially affecting net sales by approximately $110.0 million[72]. Acquisitions and Divestitures - The company acquired an additional 9% of ConcealFab, Inc. and the remaining 25% of Valmont Substations, LLC, enhancing its infrastructure segment[46]. - The company divested its extractive business and George Industries, focusing on core operations in the infrastructure segment[46][51]. - The company acquired HR Products for $37.3 million in fiscal 2023, enhancing its Agriculture segment[168].

Core Viewpoint - Valmont Industries, Inc. (VMI) reported strong financial results for the fourth quarter of 2024, with significant year-over-year profit growth and revenue exceeding estimates [1][2]. Financial Performance - The company reported a profit of $77.6 million or $3.84 per share for Q4 2024, compared to $28.6 million or $1.38 per share in the same quarter last year, beating the Zacks Consensus Estimate of $3.66 [1]. - Revenues for the quarter were $1,037.3 million, reflecting a 2.1% increase year-over-year and surpassing the Zacks Consensus Estimate of $1,006.3 million [2]. Segment Review - Infrastructure segment revenues increased by approximately 2.1% year-over-year to $763.6 million, although it fell short of the estimate of $766.9 million. Utility sales rose by about 5.9% due to pricing and product mix improvements [3]. - Agriculture segment revenues reached $278 million, up 2.3% year-over-year, exceeding the estimate of $236.7 million. International sales saw strong growth, particularly in Europe, the Middle East, and Africa, as well as Brazil [4]. Financial Health - Operating cash flows totaled $572.7 million for the 52 weeks ending December 28, 2024. Cash and cash equivalents at the end of Q4 were $164.3 million [5]. - The company returned $118.4 million to shareholders through share repurchases and dividends in 2024 and fully repaid borrowings on its revolving credit facility, achieving a net leverage ratio of 1 [5]. 2025 Outlook - Valmont anticipates net sales between $4 billion and $4.2 billion for 2025, with earnings per share expected in the range of $17.20 to $18.80. Capital expenditures are projected to be between $140 million and $160 million, with an effective tax rate around 26% [6]. Stock Performance - VMI shares have increased by 61.8% over the past year, outperforming the industry growth of 30% [7].

Financial Data and Key Metrics Changes - Fourth quarter net sales reached $1.0 billion, an increase of 2.1% year-over-year, while operating income rose nearly 20% to $120 million, resulting in an operating margin of 11.6% [35][36] - Full year net sales decreased 2.4% to $4.1 billion, but operating income increased 10.9% to $525 million, with operating margins improving by 160 basis points to 12.9% [42][54] - Earnings per share for the full year reached a record $17.19, improving nearly 15% due to enhanced operating income and a reduction in share count from repurchases [42][54] Business Line Data and Key Metrics Changes - Infrastructure segment sales increased 2.1% in Q4, with operating income growing 24% to $122 million, driven by utility and telecom growth, although lighting and transportation sales declined by 2.5% [36][38] - Agriculture segment sales increased 2.3% in Q4, with North American irrigation equipment volumes slightly lower, while international sales rose nearly 10% [39][40] - Coatings sales increased by 3.4%, with telecommunications business seeing strong growth of nearly 31% as carriers returned to normalized spending [38][39] Market Data and Key Metrics Changes - Utility markets remain strong, driven by increased CapEx spending due to energy demand, with Valmont positioned to capitalize on these trends [19][25] - North American lighting business is recovering, while telecommunications spending has returned to normalized levels, supporting growth [22][25] - In agriculture, market conditions in North America are stable, but cash receipts for key crops are projected to decline, impacting capital investment decisions [27][30] Company Strategy and Development Direction - The company aims to optimize capacity to meet growing demand, particularly in the utility market, with significant investments in new capabilities and capacity [11][12] - Focus on profitable growth and improved cost structure has led to margin expansion, with a commitment to employee safety and talent development [16][17] - Capital allocation strategy includes 50% of operating cash flows directed towards growth investments and 50% towards shareholder returns, with a new $700 million buyback authorization [50][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to seize opportunities and create long-term sustainable value despite market uncertainties in 2025 [18][54] - The company anticipates net sales for 2025 to be between $4.0 billion and $4.2 billion, with diluted earnings per share projected to grow by 5% at the midpoint [44][45] - Management highlighted the importance of addressing tariffs and their impact on pricing strategies, with a focus on maintaining strong customer relationships [75][82] Other Important Information - The company has a strong backlog entering 2025, with a focus on infrastructure megatrends driving sustained demand [25][54] - Recent project wins, such as a $45 million project in the Middle East, demonstrate the company's commitment to building sustainable food systems [30][136] Q&A Session Summary Question: Insights on Agriculture Market Dynamics - Management noted that both North America and Brazil face pressure from corn and soybean prices, impacting profitability, but expressed optimism about project activity in the EMEA region [59][60] Question: Operating Margin Expectations - Management indicated that there are opportunities for margin improvement through operational efficiencies and cost management, with a goal of achieving mid-teens margins in the long term [63][64] Question: Tariff Impact on Guidance - Management confirmed that the guidance accounts for the impact of tariffs and rising steel prices, emphasizing a proactive approach to pricing strategies [73][82] Question: Capital Allocation and M&A Strategy - Management clarified that the focus for M&A will be on businesses that align with core operations and provide meaningful growth opportunities, rather than transformational acquisitions [119][120] Question: Substation Demand and Margins - Management highlighted strong demand for substations, particularly related to data center expansions, and noted that this segment has strong margins due to its complexity [131][134]