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]

Group 1 - Valmont Industries reported revenue of $1.04 billion for the quarter ended December 2024, reflecting a 2.1% increase year-over-year [1] - The company's EPS was $3.84, up from $3.18 in the same quarter last year, exceeding the consensus estimate of $3.66 by 4.92% [1] - The reported revenue surpassed the Zacks Consensus Estimate of $1.01 billion, resulting in a surprise of 3.09% [1] Group 2 - Valmont's total sales in the Infrastructure segment were $763.64 million, below the average estimate of $776.31 million [4] - In the Agriculture segment, total sales reached $277.98 million, exceeding the average estimate of $233.80 million [4] - The company's operating income for the Infrastructure segment was $122.04 million, surpassing the average estimate of $111.75 million [4] Group 3 - Over the past month, Valmont's shares have returned -4.6%, contrasting with the Zacks S&P 500 composite's +4.7% change [3] - Valmont currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Q4 and Full-Year 2024 Earnings Presentation February 18, 2025 Valmont® © 2025 Industries, Inc. 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 devel ...

Financial Data and Key Metrics Changes - For the fourth quarter, net sales reached $1 billion, an increase of 2.1%, while operating income rose nearly 20% to $120 million, resulting in an operating margin of 11.6% [25][26] - Full year net sales decreased by 2.4% to $4.1 billion, but operating income increased by 10.9% to $525 million, with operating margins improving by 160 basis points to 12.9% [30][38] - Earnings per share for the fourth quarter was $3.84, up nearly 21%, and for the full year, it reached a record $17.19, improving nearly 15% [30][38] Business Line Data and Key Metrics Changes - Infrastructure segment sales increased by 2.1% in Q4, with operating income growing 24% to $122 million, driven by utility and telecom growth, while lighting and transportation sales declined by 2.5% [26][27] - Agriculture segment sales rose by 2.3% in Q4, with North America experiencing slight volume declines, but international sales increased nearly 10% [28][29] Market Data and Key Metrics Changes - Utility markets are strong, driven by increased CapEx spending due to energy demand, with Valmont positioned to capitalize on these trends [14][19] - North American agriculture market conditions are stable, but cash receipts for corn and soybeans are projected to decline by 4% to 6% [20][21] Company Strategy and Development Direction - The company aims to optimize capacity to meet growing demand, particularly in the utility market, and is investing in new capabilities and capacity [9][10] - Valmont is focusing on profitable growth, operational excellence, and customer-driven innovation to enhance its market position [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market challenges and achieve long-term sustainable value creation [13][39] - The outlook for 2025 includes projected net sales between $4 billion and $4.2 billion, with diluted earnings per share expected to grow by 5% at the midpoint [31][32] Other Important Information - The company plans to allocate 50% of operating cash flows towards growth investments and 50% to shareholder returns, with a new $700 million buyback authorization [35][36] - A 13% increase in the quarterly dividend was approved, reflecting the company's commitment to delivering shareholder value [38] Q&A Session Summary Question: Can you discuss the agriculture market's performance and the impact of foreign exchange? - Management noted that both North America and Brazil face challenges due to corn and soy prices, but there is strong activity in the North Africa EMEA region [42] Question: What are the expectations for operating margins in 2025? - Management indicated that there are opportunities for margin improvement through operational efficiencies and cost management, aiming for mid-teens margins in the long term [45][46] Question: How are tariffs factored into the guidance? - The company has accounted for the impact of tariffs in its guidance, focusing on pricing strategies and operational adjustments to mitigate costs [54][60] Question: Can you elaborate on the capital allocation priorities? - The company plans to increase CapEx to approximately $150 million, focusing on capacity expansion and efficiency improvements [62][64] Question: What is the outlook for the utility segment and new capabilities? - Management highlighted strong demand in the utility sector, particularly for substations, and ongoing innovation to enhance product offerings [81][96]

Core Viewpoint - Valmont Industries reported quarterly earnings of $3.84 per share, exceeding the Zacks Consensus Estimate of $3.66 per share, and showing an increase from $3.18 per share a year ago, indicating a positive earnings surprise of 4.92% [1][2] Financial Performance - The company achieved revenues of $1.04 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.09% and showing a slight increase from $1.02 billion year-over-year [2] - Over the last four quarters, Valmont has consistently surpassed consensus EPS estimates and topped revenue estimates twice [2] Stock Performance - Valmont shares have increased approximately 4.6% since the beginning of the year, outperforming the S&P 500's gain of 4% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.08 on revenues of $1.02 billion, while for the current fiscal year, the estimate is $17.96 on revenues of $4.15 billion [7] - The trend of estimate revisions for Valmont is favorable, which is a positive indicator for future stock performance [6] Industry Context - Valmont operates within the Steel - Pipe and Tube industry, which is currently ranked in the top 5% of over 250 Zacks industries, suggesting a strong industry outlook [8]

Financial Performance - Full-Year revenue reached $4.08 billion, a decrease of 2.4% compared to $4.17 billion in the previous year[9] - Fourth Quarter net sales increased by 2.1% to $1.04 billion, up from $1.02 billion[5] - Operating income for the Fourth Quarter rose to $120.0 million, representing 11.6% of net sales, compared to $63.5 million or 6.3% of net sales in the prior year[5] - Diluted earnings per share (EPS) for the Fourth Quarter increased to $3.84, a significant rise of 178.3% from $1.38 in the same quarter last year[5] - Operating cash flows surged by 66.9% to $193.4 million, compared to $115.9 million in the previous year[5] - Net sales for the thirteen weeks ended December 28, 2024, were $1,037,294, an increase from $1,015,526 for the same period in 2023, representing a growth of 2.7%[25] - Gross profit for the thirteen weeks ended December 28, 2024, was $313,021, compared to $282,941 in the prior year, reflecting a 10.6% increase[25] - Operating income for the thirteen weeks ended December 28, 2024, reached $119,988, significantly higher than $63,548 in the same quarter of 2023, marking an increase of 88.6%[25] - Earnings per share (EPS) for the thirteen weeks ended December 28, 2024, were $3.88, compared to $1.39 for the same period in 2023, indicating a substantial increase of 179.1%[25] - The company reported a net earnings increase to $78,435 for the thirteen weeks ended December 28, 2024, compared to $34,084 in the same quarter of 2023, a growth of 130.0%[25] - Net earnings for fiscal 2024 were $350,624 thousand, significantly up from $144,912 thousand in fiscal 2023, indicating a year-over-year increase of approximately 142.5%[36] Segment Performance - Infrastructure segment sales grew by 2.1% to $763.6 million, while Agriculture segment sales increased by 2.3% to $278.0 million[8][12] - The Infrastructure segment reported net sales of $760,848 for the thirteen weeks ended December 28, 2024, up from $745,713 in the prior year, a growth of 2.3%[27] - The Agriculture segment's net sales were $276,446 for the thirteen weeks ended December 28, 2024, compared to $269,813 in the same period of 2023, reflecting a 2.4% increase[27] - Year-over-year net sales change shows a decline of 1.8% in Infrastructure and an increase of 5.4% in Agriculture, resulting in a consolidated change of (3.4)% to 3.1%[58] Future Outlook - The company projects 2025 net sales between $4.0 billion and $4.2 billion, with Agriculture net sales expected to decline by approximately 9.5% to 3.5%[16] - The company forecasts a net sales outlook midpoint of $4,100 million for fiscal 2025, reflecting an expected increase of about 0.6% compared to fiscal 2024[38] - Fiscal 2025 net sales outlook ranges from $4,000,000 to $4,200,000, with a low end of $3,025,000 in Infrastructure and $975,000 in Agriculture[58] Capital and Investment - Capital expenditures for 2025 are estimated to be between $140 million and $160 million[16] - The company achieved a return on invested capital of 16.4%[9] - Return on invested capital stands at 16.4%, calculated from an average invested capital of $2,396,436[60] - Average invested capital decreased from $2,513,477 to $2,396,436 during the reporting period[60] Cash Flow and Assets - The company reported a net cash flow from operating activities of $572,678 thousand for fiscal 2024, up from $306,775 thousand in fiscal 2023, indicating an increase of approximately 86.6%[36] - Cash and cash equivalents decreased to $164,315 thousand in fiscal 2024 from $203,041 thousand in fiscal 2023, a decline of about 19.1%[34] - Total current assets decreased from $1,787,629 thousand in fiscal 2023 to $1,683,392 thousand in fiscal 2024, a reduction of approximately 5.8%[34] - The company’s total assets decreased from $3,477,448 thousand in fiscal 2023 to $3,329,972 thousand in fiscal 2024, a reduction of approximately 4.3%[34] Liabilities and Equity - Total liabilities decreased from $2,060,376 thousand in fiscal 2023 to $1,736,359 thousand in fiscal 2024, a decline of about 15.7%[34] - The leverage ratio as of December 28, 2024, was 0.99, indicating a strong balance sheet position[52] Dividends and Shareholder Returns - Cash dividends per share remained stable at $0.60 for both the thirteen weeks ended December 28, 2024, and December 30, 2023[25] - Diluted earnings per share for fiscal 2024 were $17.19, with an anticipated increase to $18.00 for fiscal 2025, representing a growth of approximately 4.7%[38] Miscellaneous - Moody's upgraded the company's credit rating to Baa2, reflecting improved financial performance[5] - The company incurred realignment charges of $31,030 thousand for the thirteen weeks ended December 30, 2023, impacting future stock compensation[47] - Impairment of goodwill and other intangible assets amounted to $140,844 thousand for the fifty-two weeks ended December 30, 2023[46] - The company has ceased considering historical adjustments related to Prospera as relevant for understanding the Agriculture segment's performance moving forward[47] - The effective tax rate for the period is reported at 25.2%, leading to an after-tax operating income of $392,534[60] - The impact of foreign exchange on net sales is estimated at $60,000 for both low and high ends in Infrastructure and Agriculture[58] - Net sales in constant currency show a year-over-year change of (0.4)% in Infrastructure and 6.6% in Agriculture, indicating a consolidated change of (1.1)% to 4.5%[58]