Valmont Reports First Quarter 2024 Results and Raises Full-Year 2024 Guidance

Published

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 first quarter ended March 30, 2024.

President and Chief Executive Officer Avner M. Applbaum commented, “We are pleased to have achieved strong quarterly results that reflect our team’s focus on execution and commitment to enhancing shareholder value. We meaningfully expanded margins year-over-year on lower sales through successful commercial execution, improved operational efficiencies in our facilities, and reduced SG&A expenses due to structural cost improvement actions taken in late 2023. In Infrastructure, our strong results reflect continued robust utility market demand and effective pricing strategies across the portfolio, and we achieved another quarter of operating margin improvement year-over-year even as telecommunications markets remain muted. In Agriculture, as expected, sales in North America and Brazil were lower as backlog levels in those regions normalized this year compared to the first quarter of 2023, and we continue to see soft but stable market demand amid lower grain prices. Our performance this quarter demonstrates the effectiveness of our Valmont Business Model, and we remain confident in our strategies, focusing on value creation and delivering outstanding results.”

First Quarter 2024 Highlights (all metrics compared to First Quarter 2023 unless otherwise noted)

  • Net Sales decreased 8.0% to $1.0 billion compared to $1.1 billion
  • Operating Income increased 11.0% to $131.6 million or 13.5% of net sales compared to $118.5 million or 11.1% of net sales
  • Diluted Earnings per Share grew 24.5% to $4.32 compared to $3.47
  • Generated operating cash flows of $23.3 million; cash and cash equivalents at the end of the first quarter were $169.2 million
  • Completed the $120.0 million Accelerated Share Repurchase program resulting in the repurchase of approximately 96,200 additional shares of Company stock in the first quarter

Key Financial Metrics

 

 

 

 

 

 

 

 

 

First Quarter 2024

 

 

(000s except per-share amounts)

 

3/30/2024

 

4/1/2023

 

 

 

 

Q1 2024

 

Q1 2023

 

vs. Q1 2023

Net Sales

 

$

977,828

 

$

1,062,481

 

(8.0

)%

Gross Profit

 

 

306,216

 

 

308,585

 

(0.8

)%

Gross Profit as a % of Net Sales

 

 

31.3

%

 

29.0

%

 

Operating Income

 

 

131,553

 

 

118,466

 

11.0

%

Operating Income as a % of Net Sales

 

 

13.5

%

 

11.1

%

 

Net Earnings Attributable to Valmont Industries, Inc.

 

 

87,822

 

 

74,540

 

17.8

%

Diluted Earnings per Share

 

 

4.32

 

 

3.47

 

24.5

%

Weighted Average Shares Outstanding

 

 

20,321

 

 

21,512

 

 

First Quarter 2024 Segment Review

Infrastructure (73.7% of Net Sales)

Products and solutions to serve the infrastructure markets of utility, solar, lighting and transportation, and telecommunications, along with coatings services to protect metal products

Sales of $723.6 million decreased 1.7% year-over-year. Higher volumes in the Transmission, Distribution, and Substation and Solar product lines were driven by continued strong utility market demand and ongoing investments in the global energy transition. These volume increases, and favorable pricing across the portfolio, were more than offset by significantly lower Telecommunications volumes.

Operating Income was $117.9 million or 16.4% of net sales compared to $94.4 million or 12.9% of net sales in the first quarter of 2023 driven by commercial and pricing strategies, deliberate actions that improved overall cost of goods sold, and lower SG&A expenses.

Agriculture (26.3% of Net Sales)

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

Sales of $258.7 million decreased 22.1% year-over-year. In North America, irrigation equipment volumes were lower as the first quarter of 2023 benefited from the ongoing delivery of elevated backlog. Average irrigation selling prices were slightly lower compared to last year.

International sales decreased compared to last year. Primary drivers were lower sales in Brazil due to more normalized backlog levels as compared to the first quarter of 2023 and softer soybean prices, along with a decrease in Middle East project sales. The sales contribution from the HR Products acquisition partially offset the lower sales.

Operating Income was $41.0 million or 15.9% of net sales compared to $53.3 million or 16.1% of net sales in the first quarter of 2023. Improvement in gross profit margins and the benefit of lower SG&A expenses were more than offset by the impact of lower volumes.

Balance Sheet, Liquidity, and Capital Allocation

The Company generated operating cash flows of $23.3 million, and cash and cash equivalents were $169.2 million at the end of the first quarter. During the quarter, Valmont completed the $120.0 million Accelerated Share Repurchase (“ASR”) program commenced in the fourth quarter of 2023. The total number of shares of Valmont common stock repurchased under the ASR program was 535,141 shares at an average price of $224.24 per share, and $136.1 million remains on the authorized share repurchase program. Fitch Ratings, Inc. reaffirmed the Company’s BBB-/Stable credit rating during the quarter. Valmont remains committed to maintaining its investment-grade rating.

Raising 2024 Full-Year Financial Outlook and Updating Key Assumptions

Considering current strong market demand and an expectation of continued positive performance in the Infrastructure segment, along with improved visibility of international agriculture projects, the Company is increasing its 2024 full-year net sales and diluted earnings per share outlook from the previous indications that were communicated last quarter and providing updated key assumptions for the year.

 

Metric

Previous Outlook

Current Outlook

Net Sales Change

(3.0%) to flat

(2.0%) to 0.5%

Infrastructure Net Sales

Growth Approaching Mid-Single Digits

No Change from Previous Outlook

Agriculture Net Sales

Down 15 to 20% vs. PY

Down 10 to 15% vs. PY

Diluted Earnings per Share

$14.25 to $15.50

$15.40 to $16.40

  • Effective tax rate of approximately 26%
  • Minimal expected foreign currency translation impact on net sales
  • Capital expenditures now expected to be in the range of $110.0 to $125.0 million to support strategic growth initiatives

Applbaum added, “We are raising our 2024 net sales and diluted earnings per share expectations as we remain focused on execution, commercial excellence, and operational efficiencies to drive margin expansion. Improved visibility to international agriculture projects supports a slightly more positive view of Agriculture sales for the full year. Demand for our Infrastructure products remains strong. We are making strategic capacity investments to meet the needs of our customers and take advantage of the visible opportunities ahead of us. Our broad exposure to infrastructure and agriculture markets helps us manage market cycles and share resources across businesses, improving efficiency and returns on investment. We believe these advantages will become increasingly important as the energy transition accelerates and agriculture markets recover, positioning us well to allocate resources to opportunities that strengthen our core businesses and deliver strong returns on invested capital. By effectively managing costs, we are further enhancing our ability to expand margins. We remain focused on driving sustainable growth while delivering superior value to our shareholders for years to come.”

A live audio discussion with Avner M. Applbaum, President and Chief Executive Officer, and Timothy P. Francis, Interim Chief Financial Officer, will be accessible by telephone on Thursday, May 2, 2024 at 8:00 a.m. CT by dialing +1 877.407.6184 or +1 201.389.0877 (no Conference ID needed), or via webcast by pointing browsers to this link: Valmont Industries 1Q 2024 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 three hours after the call at the above link or by telephone at +1 877.660.6853 or +1 201.612.7415. Please use access code 13742903. The replay will be available through 10:59 p.m. CT on Thursday, May 9, 2024.

About Valmont Industries, Inc.

For nearly 80 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, 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 materials, 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.

Website and Social Media Disclosure

The Company uses its website and social media channels identified on its website as channels of distribution of Company information. The information that the Company posts through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following the Company’s press releases, Securities and Exchange Commission filings, and public conference calls and webcasts. The contents of the Company’s website and social media channels are not part of this press release.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars and shares in thousands, except per-share amounts)

(Unaudited)

 

 

 

Thirteen weeks ended

 

 

March 30,

 

April 1,

 

 

2024

 

2023

Net sales

 

$

977,828

 

 

$

1,062,481

 

Cost of sales

 

 

671,612

 

 

 

753,896

 

Gross profit

 

 

306,216

 

 

 

308,585

 

Selling, general, and administrative expenses

 

 

174,663

 

 

 

190,119

 

Operating income

 

 

131,553

 

 

 

118,466

 

Other income (expenses):

 

 

 

 

 

 

Interest expense

 

 

(16,221

)

 

 

(13,105

)

Interest income

 

 

1,779

 

 

 

830

 

Gain on deferred compensation investments

 

 

1,431

 

 

 

1,194

 

Other

 

 

(105

)

 

 

(2,376

)

Total other income (expenses)

 

 

(13,116

)

 

 

(13,457

)

Earnings before income taxes and equity in loss of nonconsolidated subsidiaries

 

 

118,437

 

 

 

105,009

 

Income tax expense

 

 

29,988

 

 

 

31,843

 

Equity in loss of nonconsolidated subsidiaries

 

 

(20

)

 

 

(821

)

Net earnings

 

 

88,429

 

 

 

72,345

 

Loss (earnings) attributable to redeemable noncontrolling interests

 

 

(607

)

 

 

2,195

 

Net earnings attributable to Valmont Industries, Inc.

 

$

87,822

 

 

$

74,540

 

 

 

 

 

 

 

 

Weighted average shares outstanding - Basic

 

 

20,188

 

 

 

21,269

 

Earnings per share - Basic

 

$

4.35

 

 

$

3.50

 

 

 

 

 

 

 

 

Weighted average shares outstanding - Diluted

 

 

20,321

 

 

 

21,512

 

Earnings per share - Diluted

 

$

4.32

 

 

$

3.47

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

0.60

 

 

$

0.60

 

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(Unaudited)

 

 

 

Thirteen weeks ended

 

 

March 30,

April 1,

 

 

2024

2023

Infrastructure

 

 

 

 

 

Net sales

 

$

720,733

 

$

732,140

 

Gross profit

 

 

217,617

 

 

200,432

 

as a percent of net sales

 

 

30.2

%

 

27.4

%

Selling, general, and administrative expenses

 

 

99,753

 

 

106,080

 

as a percent of net sales

 

 

13.8

%

 

14.5

%

Operating income

 

 

117,864

 

 

94,352

 

as a percent of net sales

 

 

16.4

%

 

12.9

%

 

 

 

 

 

 

Agriculture

 

 

 

 

 

Net sales

 

$

257,095

 

$

330,341

 

Gross profit

 

 

88,599

 

 

108,153

 

as a percent of net sales

 

 

34.5

%

 

32.7

%

Selling, general, and administrative expenses

 

 

47,626

 

 

54,830

 

as a percent of net sales

 

 

18.5

%

 

16.6

%

Operating income

 

 

40,973

 

 

53,323

 

as a percent of net sales

 

 

15.9

%

 

16.1

%

 

 

 

 

 

 

Corporate

 

 

 

 

 

Selling, general, and administrative expenses

 

$

27,284

 

$

29,209

 

Operating loss

(27,284

)

(29,209

)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Dollars in thousands)

(Unaudited)

 

 

 

Thirteen weeks ended March 30, 2024

 

 

Infrastructure

 

Agriculture

 

Intersegment

 

Consolidated

Geographical Market:

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

568,572

 

$

159,915

 

$

(4,466

)

 

$

724,021

International

 

 

155,042

 

 

98,820

 

 

(55

)

 

 

253,807

Total sales

 

$

723,614

 

$

258,735

 

$

(4,521

)

 

$

977,828

 

 

 

 

 

 

 

 

 

 

 

 

 

Product Line:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission, Distribution, and Substation

 

$

325,256

 

$

 

$

 

 

$

325,256

Lighting and Transportation

 

 

222,096

 

 

 

 

 

 

 

222,096

Coatings

 

 

87,090

 

 

 

 

(2,826

)

 

 

84,264

Telecommunications

 

 

53,961

 

 

 

 

 

 

 

53,961

Solar

 

 

35,211

 

 

 

 

(55

)

 

 

35,156

Irrigation Equipment and Parts

 

 

 

 

233,120

 

 

(1,640

)

 

 

231,480

Technology Products and Services

 

 

 

 

25,615

 

 

 

 

 

25,615

Total sales

 

$

723,614

 

$

258,735

 

$

(4,521

)

 

$

977,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen weeks ended April 1, 2023

 

 

Infrastructure

 

Agriculture

 

Intersegment

 

Consolidated

Geographical Market:

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

584,083

 

$

182,869

 

$

(5,374)

 

$

761,578

International

 

 

152,023

 

 

149,294

 

 

(414)

 

 

300,903

Total sales

 

$

736,106

 

$

332,163

 

$

(5,788)

 

$

1,062,481

 

 

 

 

 

 

 

 

 

 

 

 

 

Product Line:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission, Distribution, and Substation

 

$

314,820

 

$

 

$

 

$

314,820

Lighting and Transportation

 

 

229,136

 

 

 

 

 

 

229,136

Coatings

 

 

90,114

 

 

 

 

(3,552)

 

 

86,562

Telecommunications

 

 

68,137

 

 

 

 

 

 

68,137

Solar

 

 

33,899

 

 

 

 

(414)

 

 

33,485

Irrigation Equipment and Parts

 

 

 

 

299,181

 

 

(1,822)

 

 

297,359

Technology Products and Services

 

 

 

 

32,982

 

 

 

 

32,982

Total sales

 

$

736,106

 

$

332,163

 

$

(5,788)

 

$

1,062,481

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

 

 

 

March 30,

 

December 30,

 

 

2024

 

2023

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

169,195

 

$

203,041

Receivables, net

 

 

659,036

 

 

657,960

Inventories

 

 

668,743

 

 

658,428

Contract assets

 

 

191,483

 

 

175,721

Prepaid expenses and other current assets

 

 

91,114

 

 

92,479

Total current assets

 

 

1,779,571

 

 

1,787,629

Property, plant, and equipment, net

 

 

608,403

 

 

617,394

Goodwill and other non-current assets

 

 

1,077,407

 

 

1,072,425

Total assets

 

$

3,465,381

 

$

3,477,448

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,

 

 

 

 

 

 

AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current installments of long-term debt

 

$

620

 

$

719

Notes payable to banks

 

 

2,029

 

 

3,205

Accounts payable

 

 

327,414

 

 

358,311

Accrued expenses

 

 

238,322

 

 

277,764

Contract liabilities

 

 

84,041

 

 

70,978

Income taxes payable

 

 

10,295

 

 

Dividends payable

 

 

12,113

 

 

12,125

Total current liabilities

 

 

674,834

 

 

723,102

Long-term debt, excluding current installments

 

 

1,107,644

 

 

1,107,885

Operating lease liabilities

 

 

157,279

 

 

162,743

Other non-current liabilities

 

 

71,353

 

 

66,646

Total liabilities

 

 

2,011,110

 

 

2,060,376

Redeemable noncontrolling interests

 

 

44,980

 

 

62,792

Shareholders' equity

 

 

1,409,291

 

 

1,354,280

Total liabilities, redeemable noncontrolling interests, and shareholders' equity

 

$

3,465,381

 

$

3,477,448

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

 

 

 

Thirteen weeks ended

 

 

March 30,

 

April 1,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings

 

$

88,429

 

 

$

72,345

 

Depreciation and amortization

 

 

23,536

 

 

 

24,558

 

Contribution to defined benefit pension plan

 

 

(16,714

)

 

 

(15,259

)

Change in working capital

 

 

(88,924

)

 

 

(83,206

)

Other

 

 

17,005

 

 

 

22,761

 

Net cash flows from operating activities

 

 

23,332

 

 

 

21,199

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property, plant, and equipment

 

 

(15,010

)

 

 

(22,361

)

Other

 

 

(3,629

)

 

 

572

 

Net cash flows from investing activities

 

 

(18,639

)

 

 

(21,789

)

Cash flows from financing activities:

 

 

 

 

 

 

Net proceeds (payments) on short-term borrowings

 

 

(1,136

)

 

 

5,302

 

Proceeds from long-term borrowings

 

 

10

 

 

 

125,000

 

Principal payments on long-term borrowings

 

 

(175

)

 

 

(10,796

)

Dividends paid

 

 

(12,126

)

 

 

(11,742

)

Purchase of redeemable noncontrolling interests

 

 

(17,745

)

 

 

 

Purchase of treasury shares

 

 

 

 

 

(111,115

)

Other

 

 

(3,662

)

 

 

(9,658

)

Net cash flows from financing activities

 

 

(34,834

)

 

 

(13,009

)

Effect of exchange rates on cash and cash equivalents

 

 

(3,705

)

 

 

1,141

 

Net change in cash and cash equivalents

 

 

(33,846

)

 

 

(12,458

)

Cash and cash equivalents—beginning of period

 

 

203,041

 

 

 

185,406

 

Cash and cash equivalents—end of period

 

$

169,195

 

 

$

172,948

 

 

Renee Campbell renee.campbell@valmont.com

Source: Valmont Industries, Inc.

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