Valmont Industries (VMI) 2025 Conference June 11, 2025 04:45 PM ET Speaker0 Good afternoon, everyone. My name is David Kieran. I am part of the investment banking team at Wells Fargo Securities, and I'm pleased to be joined on the stage this afternoon with Valmont Industries, our time at the Wells Fargo Conference CFO, Executive Vice President and Chief Financial Officer, Tom Ligori and Senior Vice President of Investor Relations and Treasurer, Renee Campbell are here with us today. Thank you for joining us ...

Valmont Industries (VMI) FY Conference June 04, 2025 11:00 AM ET Speaker0 Okay. Good morning. We'll go ahead and get started. I'm Brian Draub, the Industrial Technology Analyst at William Blair. Thank you all for coming to the Valmont presentation. I'm required to inform you quickly that you can find a full list of research disclosures on our website, williamblair.com. So today, as you know, we have the team from Valmont here. We have Renee Campbell, who is senior vice president, investor relations and trea ...

A month has gone by since the last earnings report for Valmont Industries (VMI) . Shares have added about 9.3% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Valmont due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then?It turns o ...

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]