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 fourth quarter and fiscal year ended December 31, 2022.
Fourth Quarter 2022 Highlights (all metrics compared to Fourth Quarter 2021 unless otherwise noted)
- Net Sales of $1.1 billion increased 17.5%, a fourth quarter record
- Operating Income increased 116.2% to $109.7 million, or 9.7% of net sales (increased 32.9% to $113.7 million or 10.1% adjusted1) compared to $50.8 million or 5.3% of net sales ($85.6 million or 8.9% adjusted1)
- Diluted Earnings per Share (“EPS”) of $1.86 ($3.57 adjusted1) compared to $1.25 ($2.73 adjusted1)
- GAAP EPS includes a pre-tax loss of $33.3 million or $1.54 per diluted share from the divestiture of the offshore wind energy structures business
- Generated strong operating cash flows of $142.5 million
- Repurchased 60,200 shares of company stock for $20.0 million
- Announced and completed the divestiture of the offshore wind energy structures business, Valmont SMTM, which had been reported in the Renewable Energy product line in the Infrastructure segment and is now reported as “Other”
- Incurred GAAP tax rate of 40.6%; adjusted tax rate was 27.4% excluding the loss generated from the divested offshore wind energy structures business which provided no tax benefit
Full Year 2022 Highlights (all metrics compared to Full Year 2021 unless otherwise noted)
- Record Net Sales of $4.3 billion, an increase of 24.1%
- Strong sales growth as Infrastructure grew to a record $2.9 billion and Agriculture grew to a record $1.3 billion, including 17.6% growth in agriculture technology products and services
- Operating Income increased 51.1% to $433.2 million, or 10.0% of net sales (increased 34.6% to $449.7 million or 10.3% adjusted1) compared to $286.8 million or 8.2% of net sales ($334.0 million or 9.5% adjusted1)
- Higher operating income was led by favorable pricing and volume growth in both Infrastructure and Agriculture
- Diluted EPS of $11.62 ($13.82 adjusted1) compared to $9.10 ($10.92 adjusted1)
- Generated strong operating cash flows of $326.3 million, a significant improvement compared to 2021, driven by higher net earnings and improvements in working capital performance
- Capital expenditures were $93.3 million, including approximately $30.0 million for strategic investments including a new concrete utility structures facility in Bristol, Indiana and irrigation capacity expansions in Brazil and Dubai
- Deployed $39.3 million of cash to acquire a majority interest in ConcealFab, accelerating the Infrastructure segment’s global telecommunications growth strategy
- Returned $86.3 million of capital to shareholders through dividends of $45.8 million and share repurchases of $40.5 million
- Achieved Return on Invested Capital of 12.9% (13.3% adjusted1)
- Year-end backlog of approximately $1.7 billion, an increase of 2.1% since the end of fiscal 2021, reflecting sustained pricing and continued strong market demand across the portfolio
- Realigned financial reporting from four reportable segments to two: Infrastructure and Agriculture, to elevate focus on market growth strategies, capital allocation, and technology development
1Please see Reg G reconciliation to GAAP measures at end of document
Key Financial Metrics
Fourth Quarter 2022 |
| GAAP |
| Adjusted1 |
| |||||||||||||
|
| 14 weeks |
| 13 weeks |
|
|
|
| 14 weeks |
| 13 weeks |
|
|
| ||||
(000's except per share amounts) |
| 12/31/2022 |
| 12/25/2021 |
|
|
|
| 12/31/2022 |
| 12/25/2021 |
|
|
| ||||
|
| Q4 2022 |
| Q4 2021 |
| vs. Q4 2021 |
|
| Q4 2022 |
| Q4 2021 |
| vs. Q4 2021 |
| ||||
Net Sales |
| $ | 1,131,516 |
| $ | 963,278 |
| 17.5 | % |
| $ | 1,131,516 |
| $ | 963,278 |
| 17.5 | % |
Operating Income |
|
| 109,716 |
|
| 50,754 |
| 116.2 | % |
|
| 113,734 |
|
| 85,555 |
| 32.9 | % |
Operating Income as a % of Net Sales |
|
| 9.7 | % |
| 5.3 | % |
|
|
|
| 10.1 | % |
| 8.9 | % |
|
|
Net Earnings |
|
| 40,332 |
|
| 26,856 |
| 50.2 | % |
|
| 77,256 |
|
| 58,751 |
| 31.5 | % |
Diluted Earnings Per Share |
| $ | 1.86 |
| $ | 1.25 |
| 48.8 | % |
| $ | 3.57 |
| $ | 2.73 |
| 30.8 | % |
Average Shares Outstanding |
|
| 21,656 |
|
| 21,523 |
|
|
|
|
| 21,656 |
|
| 21,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2022 |
| GAAP |
| Adjusted1 |
| |||||||||||||
|
| 53 weeks |
| 52 weeks |
|
|
|
| 53 weeks |
| 52 weeks |
|
|
| ||||
(000's except per share amounts) |
| 12/31/2022 |
| 12/25/2021 |
|
|
|
| 12/31/2022 |
| 12/25/2021 |
|
|
| ||||
|
| FY 2022 |
| FY 2021 |
| vs. FY 2021 |
|
| FY 2022 |
| FY 2021 |
| vs. FY 2021 |
| ||||
Net Sales |
| $ | 4,345,250 |
| $ | 3,501,575 |
| 24.1 | % |
| $ | 4,345,250 |
| $ | 3,501,575 |
| 24.1 | % |
Operating Income |
|
| 433,249 |
|
| 286,785 |
| 51.1 | % |
|
| 449,725 |
|
| 334,049 |
| 34.6 | % |
Operating Income as a % of Net Sales |
|
| 10.0 | % |
| 8.2 | % |
|
|
|
| 10.3 | % |
| 9.5 | % |
|
|
Net Earnings |
|
| 250,863 |
|
| 195,630 |
| 28.2 | % |
|
| 298,139 |
|
| 234,811 |
| 27.0 | % |
Diluted Earnings Per Share |
| $ | 11.62 |
| $ | 9.10 |
| 27.7 | % |
| $ | 13.82 |
| $ | 10.92 |
| 26.6 | % |
Average Shares Outstanding |
|
| 21,580 |
|
| 21,493 |
|
|
|
|
| 21,580 |
|
| 21,493 |
|
|
|
“The Valmont team delivered another strong quarter of continued growth and outstanding performance, achieving record net sales and further margin improvement year-over-year,” said Stephen G. Kaniewski, President and Chief Executive Officer. “These results were driven by a continued commitment to our disciplined pricing strategies, robust demand for our industry-leading products and services, and solid execution by our global teams. Ongoing investments in grid reliability, transportation infrastructure, 5G buildouts, and the clean energy transition are leading to a multi-year runway for growth across our Infrastructure businesses. Continued positive agriculture market fundamentals are driving demand for our irrigation products and technology solutions as elevated commodity prices, global drought conditions and ongoing food security concerns are all supporting market demand. I am very pleased with our ability to effectively manage our operations to best serve our customers and meet this broad-based demand. Our results further demonstrate the value of our long-term strategy led by sustainable growth initiatives across our businesses, operational excellence and price leadership.”
Kaniewski added, “Reflecting on 2022, our full-year results exceeded the goals we set at the beginning of the year, despite a continued volatile environment, demonstrating the resiliency and relentless focus of our global team. We achieved record net sales of $4.3 billion and delivered record diluted earnings per share of $13.82 on an adjusted basis, an increase of 26.5% year-over-year. We significantly improved return on invested capital through strategic capital allocation and improved working capital performance, which also contributed to a substantial improvement in free cash flow. We continue to profitably grow and perform at a high level, leveraging the strength and sustainability of our Valmont business model. I am extremely proud of our team of more than 11,000 employees around the world and want to congratulate and thank them for their dedication, hard work, and execution. Together, we remain committed to providing our customers with vital infrastructure products and solutions to advance agricultural productivity with an unwavering focus on employee safety and increasing shareholder value."
Fourth Quarter 2022 Segment Review
Infrastructure (67.6% of Net Sales)
Products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation, and telecommunications, and coatings services to preserve metal products
Sales of $771.3 million grew 15.0% year-over-year with double-digit sales growth across all product lines, net of 2.7% unfavorable foreign currency translation impacts. Higher sales were driven by favorable pricing globally, higher volumes, notably in the Lighting and Transportation and Renewable Energy product lines, and sales from the ConcealFab acquisition.
Operating Income improved to $99.6 million or 13.0% of net sales compared to $77.3 million or 11.6% of net sales ($77.8 million or 11.6% adjusted1) in 2021, driven by favorable pricing and higher volumes.
Agriculture (29.4% 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 $335.1 million increased 21.1% year-over-year, with global sales growth led by higher average selling prices of irrigation equipment and higher volumes, primarily driven by continued strength in North America and Brazil, and higher sales of technology products and services.
Operating Income improved to $40.5 million, or 12.2% of net sales ($44.5 million or 13.4% adjusted1) compared to $28.6 million or 10.5% of net sales ($33.0 million or 12.1% 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.
Other (3.0% of Net Sales)
Offshore wind energy structures business
Sales of $33.3 million grew 44.1% year-over-year and operating income was $1.4 million compared to an operating loss of $31.3 million in 2021. As previously announced, the divestiture of the offshore wind energy structures business was completed in December 2022.
Balance Sheet, Liquidity, and Capital Allocation
The Company generated full-year 2022 operating cash flows of $326.3 million through strong earnings and effectively managing working capital while supporting strong sales growth. At the end of 2022, cash and cash equivalents were $185.4 million. Valmont purchased $20.0 million of company stock in the fourth quarter and $81.4 million remains on the current authorization with no expiration.
Providing 2023 Full Year Financial Outlook and Key Assumptions
Based on an unchanged positive outlook for underlying business growth across the portfolio that was highlighted last quarter, the Company is providing its 2023 full-year net sales and diluted earnings per share outlook and key assumptions for the year.
- Net Sales Growth (vs. PY) of 4% to 7%, which reflects the divestiture of the offshore wind energy structures business
- GAAP Diluted Earnings per Share of $14.70 to $15.25 ($15.35 to $15.90 adjusted1)
- Effective tax rate of 28% to 29%, primarily due to expected geographic mix of earnings
- Minimal expected foreign currency translation impact to net sales
- Capital expenditures expected to be in the range of $105 to $125 million to support strategic growth and digital transformation initiatives
- Continued elevated inflation, stabilizing raw material costs and ongoing R&D investments
Kaniewski continued, “We are excited and confident about the opportunity to drive multi-year revenue and profitability growth by capitalizing on the strong market drivers across our businesses and continuing to support our customers. These factors, along with our proven track record of execution and a backlog of $1.7 billion, give us confidence in our 2023 outlook. The long-term need for critical infrastructure investment globally is driving sustainable demand across our Infrastructure businesses. Favorable agriculture economics and market trends globally, a strong international project pipeline and increasing adoption of innovative technology solutions are providing momentum for our Agriculture business. Our balance sheet remains strong, giving us the flexibility to execute on our strategies. We enter this year from a position of strength with a talented team and are investing in the future to meet the needs of our customers and deliver value to our stakeholders.”
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, February 23, 2023 at 8:00 a.m. CST 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 4Q and Full Year 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 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 13734761. The replay will be available through 10:59 p.m. CST on March 02, 2023.
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 the pandemic 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.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Fourth Quarter |
| Year-to-Date | ||||||||||||
|
| 14 and 13 Weeks Ended |
| 53 and 52 Weeks Ended | ||||||||||||
|
| 31-Dec-22 |
| 25-Dec-21 |
| 31-Dec-22 |
| 25-Dec-21 | ||||||||
Net sales |
| $ | 1,131,516 |
|
| $ | 963,278 |
|
| $ | 4,345,250 |
|
| $ | 3,501,575 |
|
Cost of sales |
|
| 832,557 |
|
|
| 740,994 |
|
|
| 3,219,026 |
|
|
| 2,617,686 |
|
Gross profit |
|
| 298,959 |
|
|
| 222,284 |
|
|
| 1,126,224 |
|
|
| 883,889 |
|
Selling, general, and administrative expenses |
|
| 189,243 |
|
|
| 165,034 |
|
|
| 692,975 |
|
|
| 590,608 |
|
Impairment of goodwill and intangible assets |
|
| — |
|
|
| 6,496 |
|
|
| — |
|
|
| 6,496 |
|
Operating income |
|
| 109,716 |
|
|
| 50,754 |
|
|
| 433,249 |
|
|
| 286,785 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest expense |
|
| (13,256 | ) |
|
| (11,146 | ) |
|
| (47,534 | ) |
|
| (42,612 | ) |
Interest income |
|
| 996 |
|
|
| 298 |
|
|
| 2,015 |
|
|
| 1,192 |
|
Gain (loss) on investments (unrealized) |
|
| 932 |
|
|
| 364 |
|
|
| (3,374 | ) |
|
| 1,920 |
|
Loss from divestiture of offshore wind energy structures business |
|
| (33,273 | ) |
|
| — |
|
|
| (33,273 | ) |
|
| — |
|
Other |
|
| 4,268 |
|
|
| 2,501 |
|
|
| 12,805 |
|
|
| 12,798 |
|
Other income (expense), net |
|
| (40,333 | ) |
|
| (7,983 | ) |
|
| (69,361 | ) |
|
| (26,702 | ) |
Earnings before income taxes |
|
| 69,383 |
|
|
| 42,771 |
|
|
| 363,888 |
|
|
| 260,083 |
|
Income tax expense |
|
| 28,156 |
|
|
| 15,092 |
|
|
| 108,687 |
|
|
| 61,414 |
|
Equity in earnings (loss) of nonconsolidated subsidiaries |
|
| (19 | ) |
|
| 135 |
|
|
| (950 | ) |
|
| (944 | ) |
Net earnings |
|
| 41,208 |
|
|
| 27,814 |
|
|
| 254,251 |
|
|
| 197,725 |
|
Less: Earnings attributable to non-controlling interests |
|
| (876 | ) |
|
| (958 | ) |
|
| (3,388 | ) |
|
| (2,095 | ) |
Net earnings attributable to Valmont Industries, Inc. |
| $ | 40,332 |
|
| $ | 26,856 |
|
| $ | 250,863 |
|
| $ | 195,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Average shares outstanding (000's) - Basic |
|
| 21,319 |
|
|
| 21,227 |
|
|
| 21,311 |
|
|
| 21,193 |
|
Earnings per share - Basic |
| $ | 1.89 |
|
| $ | 1.27 |
|
| $ | 11.77 |
|
| $ | 9.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Average shares outstanding (000's) - Diluted |
|
| 21,656 |
|
|
| 21,523 |
|
|
| 21,580 |
|
|
| 21,493 |
|
Earnings per share - Diluted |
| $ | 1.86 |
|
| $ | 1.25 |
|
| $ | 11.62 |
|
| $ | 9.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash dividends per share |
| $ | 0.55 |
|
| $ | 0.50 |
|
| $ | 2.20 |
|
| $ | 2.00 |
|
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||||||
SUMMARY OPERATING RESULTS | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Fourth Quarter |
| Year-to-Date | ||||||||||||
|
| 14 and 13 Weeks Ended |
| 53 and 52 Weeks Ended | ||||||||||||
|
| 31-Dec-22 |
| 25-Dec-21 |
| 31-Dec-22 |
| 25-Dec-21 | ||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Infrastructure |
| $ | 771,337 |
|
| $ | 670,481 |
|
| $ | 2,928,419 |
|
| $ | 2,372,100 |
|
Agriculture |
|
| 335,066 |
|
|
| 276,757 |
|
|
| 1,346,672 |
|
|
| 1,028,717 |
|
Other |
|
| 33,272 |
|
|
| 23,087 |
|
|
| 100,219 |
|
|
| 123,001 |
|
Total |
|
| 1,139,675 |
|
|
| 970,325 |
|
|
| 4,375,310 |
|
|
| 3,523,818 |
|
Less: Intersegment sales |
|
| (8,159 | ) |
|
| (7,047 | ) |
|
| (30,060 | ) |
|
| (22,243 | ) |
Total |
| $ | 1,131,516 |
|
| $ | 963,278 |
|
| $ | 4,345,250 |
|
| $ | 3,501,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Infrastructure |
| $ | 99,591 |
|
| $ | 77,253 |
|
| $ | 354,499 |
|
| $ | 273,598 |
|
Agriculture |
|
| 40,484 |
|
|
| 28,560 |
|
|
| 179,263 |
|
|
| 137,027 |
|
Other |
|
| 1,445 |
|
|
| (31,268 | ) |
|
| 2,259 |
|
|
| (40,192 | ) |
Corporate |
|
| (31,804 | ) |
|
| (23,791 | ) |
|
| (102,772 | ) |
|
| (83,648 | ) |
Total |
| $ | 109,716 |
|
| $ | 50,754 |
|
| $ | 433,249 |
|
| $ | 286,785 |
|
The backlog of orders for the principal products manufactured and marketed was $1,656.4 million at the end of the 2022 fiscal year and $1,621.9 at the end of the 2021 fiscal year. An order is reported in our backlog upon receipt of a purchase order from the customer or execution of a sales order contract. We anticipate that most of the 2022 backlog of orders will be filled during fiscal year 2023. At year-end, the segments with backlog were as follows (dollar amounts in millions):
|
| 12/31/2022 |
| 12/25/2021 | ||
Infrastructure |
| $ | 1,339.1 |
| $ | 1,086.3 |
Agriculture |
|
| 317.3 |
|
| 471.0 |
Other |
|
| — |
|
| 64.6 |
|
| $ | 1,656.4 |
| $ | 1,621.9 |
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 metal products.
Agriculture: This segment consists of the manufacture of center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.
In addition to these two reportable segments, the Company had a business and related activities that is not more than 10% of consolidated sales, operating income, or assets. This includes the offshore wind energy structures business and was reported in the “Other” segment until its divestiture in 2022.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||||||
SUMMARY OPERATING RESULTS | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Fourteen weeks ended December 31, 2022 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| Intersegment |
|
|
| |||
|
| Infrastructure |
| Agriculture |
| Other |
| Sales |
| Consolidated | ||||||
Geographical market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
North America |
| $ | 588,867 |
| $ | 202,560 |
| $ | — |
| $ | (5,932 | ) |
| $ | 785,495 |
International |
|
| 182,470 |
|
| 132,506 |
|
| 33,272 |
|
| (2,227 | ) |
|
| 346,021 |
Total |
| $ | 771,337 |
| $ | 335,066 |
| $ | 33,272 |
| $ | (8,159 | ) |
| $ | 1,131,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transmission, Distribution, and Substation |
| $ | 302,444 |
| $ | — |
| $ | — |
| $ | — |
|
| $ | 302,444 |
Lighting and Transportation |
|
| 239,453 |
|
| — |
|
| — |
|
| — |
|
|
| 239,453 |
Coatings |
|
| 92,441 |
|
| — |
|
| — |
|
| (4,032 | ) |
|
| 88,409 |
Telecommunications |
|
| 87,577 |
|
| — |
|
| — |
|
| — |
|
|
| 87,577 |
Renewable Energy |
|
| 49,422 |
|
| — |
|
| 33,272 |
|
| (2,228 | ) |
|
| 80,466 |
Irrigation Equipment and Parts, excluding Technology |
|
| — |
|
| 302,965 |
|
| — |
|
| (1,899 | ) |
|
| 301,066 |
Technology Products and Services |
|
| — |
|
| 32,101 |
|
| — |
|
| — |
|
|
| 32,101 |
Total |
| $ | 771,337 |
| $ | 335,066 |
| $ | 33,272 |
| $ | (8,159 | ) |
| $ | 1,131,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Thirteen weeks ended December 25, 2021 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| Intersegment |
|
|
| |||
|
| Infrastructure |
| Agriculture |
| Other |
| Sales |
| Consolidated | ||||||
Geographical market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
North America |
| $ | 478,019 |
| $ | 150,478 |
| $ | — |
| $ | (7,047 | ) |
| $ | 621,450 |
International |
|
| 192,462 |
|
| 126,279 |
|
| 23,087 |
|
| — |
|
|
| 341,828 |
Total |
| $ | 670,481 |
| $ | 276,757 |
| $ | 23,087 |
| $ | (7,047 | ) |
| $ | 963,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transmission, Distribution, and Substation |
| $ | 266,625 |
| $ | — |
| $ | — |
| $ | — |
|
| $ | 266,625 |
Lighting and Transportation |
|
| 216,198 |
|
| — |
|
| — |
|
| — |
|
|
| 216,198 |
Coatings |
|
| 77,747 |
|
| — |
|
| — |
|
| (2,752 | ) |
|
| 74,995 |
Telecommunications |
|
| 75,697 |
|
| — |
|
| — |
|
| — |
|
|
| 75,697 |
Renewable Energy |
|
| 34,214 |
|
| — |
|
| 23,087 |
|
| — |
|
|
| 57,301 |
Irrigation Equipment and Parts, excluding Technology |
|
| �� |
|
| 251,258 |
|
| — |
|
| (4,295 | ) |
|
| 246,963 |
Technology Products and Services |
|
| — |
|
| 25,499 |
|
| — |
|
| — |
|
|
| 25,499 |
Total |
| $ | 670,481 |
| $ | 276,757 |
| $ | 23,087 |
| $ | (7,047 | ) |
| $ | 963,278 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||||||
SUMMARY OPERATING RESULTS | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Fifty-three weeks ended December 31, 2022 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| Intersegment |
|
|
| |||
|
| Infrastructure |
| Agriculture |
| Other |
| Sales |
| Consolidated | ||||||
Geographical market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
North America |
| $ | 2,234,339 |
| $ | 766,929 |
| $ | — |
| $ | (26,248 | ) |
| $ | 2,975,020 |
International |
|
| 694,080 |
|
| 579,743 |
|
| 100,219 |
|
| (3,812 | ) |
|
| 1,370,230 |
Total |
| $ | 2,928,419 |
| $ | 1,346,672 |
| $ | 100,219 |
| $ | (30,060 | ) |
| $ | 4,345,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transmission, Distribution, and Substation |
| $ | 1,184,660 |
| $ | — |
| $ | — |
| $ | — |
|
| $ | 1,184,660 |
Lighting and Transportation |
|
| 940,462 |
|
| — |
|
| — |
|
| — |
|
|
| 940,462 |
Coatings |
|
| 356,707 |
|
| — |
|
| — |
|
| (15,327 | ) |
|
| 341,380 |
Telecommunications |
|
| 320,342 |
|
| — |
|
| — |
|
| — |
|
|
| 320,342 |
Renewable Energy |
|
| 126,248 |
|
| — |
|
| 100,219 |
|
| (3,346 | ) |
|
| 223,121 |
Irrigation Equipment and Parts, excluding Technology |
|
| — |
|
| 1,231,587 |
|
| — |
|
| (11,387 | ) |
|
| 1,220,200 |
Technology Products and Services |
|
| — |
|
| 115,085 |
|
| — |
|
| — |
|
|
| 115,085 |
Total |
| $ | 2,928,419 |
| $ | 1,346,672 |
| $ | 100,219 |
| $ | (30,060 | ) |
| $ | 4,345,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Fifty-two weeks ended December 25, 2021 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| Intersegment |
|
|
| |||
|
| Infrastructure |
| Agriculture |
| Other |
| Sales |
| Consolidated | ||||||
Geographical market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
North America |
| $ | 1,724,531 |
| $ | 545,574 |
| $ | — |
| $ | (22,243 | ) |
| $ | 2,247,862 |
International |
|
| 647,569 |
|
| 483,143 |
|
| 123,001 |
|
| — |
|
|
| 1,253,713 |
Total |
| $ | 2,372,100 |
| $ | 1,028,717 |
| $ | 123,001 |
| $ | (22,243 | ) |
| $ | 3,501,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product line: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transmission, Distribution, and Substation |
| $ | 935,099 |
| $ | — |
| $ | — |
| $ | — |
|
| $ | 935,099 |
Lighting and Transportation |
|
| 825,923 |
|
| — |
|
| — |
|
| — |
|
|
| 825,923 |
Coatings |
|
| 309,647 |
|
| — |
|
| — |
|
| (10,575 | ) |
|
| 299,072 |
Telecommunications |
|
| 238,527 |
|
| — |
|
| — |
|
| — |
|
|
| 238,527 |
Renewable Energy |
|
| 62,904 |
|
| — |
|
| 123,001 |
|
| — |
|
|
| 185,905 |
Irrigation Equipment and Parts, excluding Technology |
|
| — |
|
| 930,858 |
|
| — |
|
| (11,668 | ) |
|
| 919,190 |
Technology Products and Services |
|
| — |
|
| 97,859 |
|
| — |
|
| — |
|
|
| 97,859 |
Total |
| $ | 2,372,100 |
| $ | 1,028,717 |
| $ | 123,001 |
| $ | (22,243 | ) |
| $ | 3,501,575 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Dollars in thousands) | ||||||
(unaudited) | ||||||
|
|
|
|
|
|
|
|
| 12/31/2022 |
| 12/25/2021 | ||
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 185,406 |
| $ | 177,232 |
Accounts receivable, net |
|
| 604,181 |
|
| 571,593 |
Inventories |
|
| 728,762 |
|
| 728,834 |
Contract assets - costs and profits in excess of billings |
|
| 174,539 |
|
| 142,643 |
Prepaid expenses and other assets |
|
| 87,697 |
|
| 83,646 |
Refundable income taxes |
|
| — |
|
| 8,815 |
Total current assets |
|
| 1,780,585 |
|
| 1,712,763 |
Property, plant, and equipment, net |
|
| 595,578 |
|
| 598,605 |
Goodwill and other assets |
|
| 1,180,833 |
|
| 1,135,881 |
|
| $ | 3,556,996 |
| $ | 3,447,249 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current installments of long-term debt |
| $ | 1,194 |
| $ | 4,884 |
Notes payable to banks |
|
| 5,846 |
|
| 13,439 |
Accounts payable |
|
| 360,312 |
|
| 347,841 |
Accrued expenses |
|
| 248,320 |
|
| 253,330 |
Contract liabilities - billings in excess of costs and earnings |
|
| 172,915 |
|
| 135,746 |
Income taxes payable |
|
| 3,664 |
|
| — |
Dividends payable |
|
| 11,742 |
|
| 10,616 |
Total current liabilities |
|
| 803,993 |
|
| 765,856 |
Long-term debt, excluding current installments |
|
| 870,935 |
|
| 947,072 |
Operating lease liabilities |
|
| 155,469 |
|
| 147,759 |
Other long-term liabilities |
|
| 84,887 |
|
| 172,965 |
Shareholders' equity |
|
| 1,641,712 |
|
| 1,413,597 |
|
| $ | 3,556,996 |
| $ | 3,447,249 |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Dollars in thousands) | ||||||||
(unaudited) | ||||||||
|
|
|
|
|
|
| ||
|
| 53 Weeks Ended |
| 52 Weeks Ended | ||||
|
| 31-Dec-22 |
| 25-Dec-21 | ||||
Cash flows from operating activities |
|
|
|
|
|
| ||
Net Earnings |
| $ | 254,251 |
|
| $ | 197,725 |
|
Depreciation and amortization |
|
| 97,167 |
|
|
| 92,577 |
|
Impairment of long-lived assets |
|
| — |
|
|
| 27,911 |
|
Contribution to defined benefit pension plan |
|
| (17,155 | ) |
|
| (1,924 | ) |
Loss on sale of offshore wind energy structures business |
|
| 33,273 |
|
|
| — |
|
Change in working capital |
|
| (56,092 | ) |
|
| (284,739 | ) |
Other |
|
| 14,821 |
|
|
| 34,388 |
|
Net cash flows from operating activities |
|
| 326,265 |
|
|
| 65,938 |
|
|
|
|
|
|
|
| ||
Cash flows from investing activities |
|
|
|
|
|
| ||
Purchase of property, plant, and equipment |
|
| (93,288 | ) |
|
| (107,790 | ) |
Acquisitions |
|
| (39,287 | ) |
|
| (312,500 | ) |
Other |
|
| 495 |
|
|
| 2,982 |
|
Net cash flows from investing activities |
|
| (132,080 | ) |
|
| (417,308 | ) |
|
|
|
|
|
|
| ||
Cash flows from financing activities |
|
|
|
|
|
| ||
Proceeds from long-term borrowings |
|
| 253,999 |
|
|
| 312,485 |
|
Principal payments on long-term borrowings |
|
| (336,403 | ) |
|
| (91,313 | ) |
Net payments on short-term borrowings |
|
| (7,577 | ) |
|
| (20,241 | ) |
Purchase of treasury shares |
|
| (40,474 | ) |
|
| (26,100 | ) |
Dividends to noncontrolling interests |
|
| (714 | ) |
|
| — |
|
Purchase of noncontrolling interests |
|
| (7,338 | ) |
|
| — |
|
Dividends paid |
|
| (45,813 | ) |
|
| (41,412 | ) |
Other |
|
| 2,415 |
|
|
| 81 |
|
Net cash flows from financing activities |
|
| (181,905 | ) |
|
| 133,500 |
|
Effect of exchange rates on cash and cash equivalents |
|
| (4,106 | ) |
|
| (5,624 | ) |
Net change in cash and cash equivalents |
|
| 8,174 |
|
|
| (223,494 | ) |
Cash and cash equivalents - beginning of year |
|
| 177,232 |
|
|
| 400,726 |
|
Cash and cash equivalents - end of period |
| $ | 185,406 |
|
| $ | 177,232 |
|
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 the loss from the divestiture of the offshore wind energy structures business on fiscal 2022 results. Further, 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 and 2021 results. We believe the adjustments for Prospera allow for a better investor understanding of Agriculture segment performance related to traditional segment products. The non-GAAP tables below also disclose the impact of the nonrecurring impairment of long-lived assets for the offshore wind energy structures business, a write off a receivable following arbitration of a commercial transaction from 2014, acquisition diligence, severance 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.
|
|
|
|
|
|
|
| |||||||||
|
| Fourteen |
| Diluted |
| Fifty-three |
| Diluted | ||||||||
|
| weeks ended |
| earnings per |
| weeks ended |
| earnings per | ||||||||
|
| December 31, |
| share |
| December 31, |
| share | ||||||||
Net earnings attributable to Valmont Industries, Inc. - as reported |
| $ | 40,332 |
|
| $ | 1.86 |
|
| $ | 250,863 |
| $ | 11.62 |
| |
Loss from divestiture of offshore wind energy structures business |
|
| 33,273 |
|
|
| 1.54 |
|
|
| 33,273 |
|
| 1.54 |
| |
Prospera intangible asset amortization |
|
| 1,645 |
|
|
| 0.08 |
|
|
| 6,580 |
|
| 0.30 |
| |
Stock-based compensation - Prospera |
|
| 2,373 |
|
|
| 0.11 |
|
|
| 9,896 |
|
| 0.46 |
| |
Total Adjustments, pre-tax1 |
|
| 37,291 |
|
|
| 1.72 |
|
|
| 49,749 |
|
| 2.31 |
| |
Tax effect of adjustments2 |
|
| (367 | ) |
|
| (0.02 | ) |
|
| (2,473 | ) |
| (0.11 | ) | |
Net earnings attributable to Valmont Industries, Inc. - Adjusted1 |
| $ | 77,256 |
|
| $ | 3.57 |
|
| $ | 298,139 |
| $ | 13.82 |
| |
Average shares outstanding (000’s) - Diluted |
|
|
|
| 21,656 |
|
|
|
| 21,580 |
| |||||
|
| |||||||||||||||
| Thirteen |
| Diluted |
| Fifty-two |
| Diluted | |||||||||
| weeks ended |
| earnings per |
| weeks ended |
| earnings per | |||||||||
| December 25, |
| share |
| December 25, |
| share | |||||||||
Net earnings attributable to Valmont Industries, Inc. - as reported | $ | 26,856 | $ | 1.25 | $ | 195,630 |
| $ | 9.10 | |||||||
Impairment of long-lived assets - offshore wind energy structures business | 27,911 | 1.30 | 27,911 |
| 1.30 | |||||||||||
Prospera intangible asset amortization | 1,470 | 0.07 | 3,396 |
| 0.16 | |||||||||||
Stock-based compensation - Prospera | 2,928 | 0.14 | 5,240 |
| 0.24 | |||||||||||
Write-off of a receivable, pre-tax | — | — | 5,545 |
| 0.26 | |||||||||||
Acquisition diligence expense, pre-tax | — | — | 1,120 |
| 0.05 | |||||||||||
Severance expense, pre-tax | 2,492 | 0.12 | 4,052 |
| 0.19 | |||||||||||
Total Adjustments, pre-tax1 | 34,801 | 1.62 | 47,264 |
| 2.20 | |||||||||||
Change in U.K. statutory tax rate | — | — | (2,819 | ) |
| (0.13 | ) | |||||||||
Valuation allowance against offshore wind energy structures business' tax assets | 5,076 | 0.24 | 5,076 |
| 0.24 | |||||||||||
Tax effect of adjustments2 | (7,982 | ) | (0.37 | ) | (10,340 | ) |
| (0.48 | ) | |||||||
Net earnings attributable to Valmont Industries, Inc. - Adjusted1 | $ | 58,751 | $ | 2.73 | $ | 234,811 |
| $ | 10.92 | |||||||
Average shares outstanding (000’s) - Diluted | 21,523 |
| 21,493 | |||||||||||||
1Earnings per share includes rounding | ||||||||||||||||
2The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction. |
|
|
|
|
|
|
| ||||||||||||||
|
| Fourteen weeks ended December 31, 2022 | ||||||||||||||||||
Operating Income Reconciliation |
| Infrastructure |
| Agriculture |
| Other |
| Corporate |
| Valmont | ||||||||||
Operating income - as reported |
| $ | 99,591 |
|
| $ | 40,484 |
|
| $ | 1,445 |
|
| $ | (31,804 | ) |
| $ | 109,716 |
|
Stock-based compensation - Prospera |
|
| — |
|
|
| 2,373 |
|
|
| — |
|
|
| — |
|
|
| 2,373 |
|
Prospera intangible asset amortization |
|
| — |
|
|
| 1,645 |
|
|
| — |
|
|
| — |
|
|
| 1,645 |
|
Adjusted Operating Income |
| $ | 99,591 |
|
| $ | 44,502 |
|
| $ | 1,445 |
|
| $ | (31,804 | ) |
| $ | 113,734 |
|
Net Sales - as reported |
|
| 765,077 |
|
|
| 333,167 |
|
|
| 33,272 |
|
|
| NM |
|
|
| 1,131,516 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Operating Income as a % of Net Sales |
|
| 13.0 | % |
|
| 12.2 | % |
|
| 4.3 | % |
|
| NM |
|
|
| 9.7 | % |
Adj. Operating Income as a % of Net Sales |
|
| 13.0 | % |
|
| 13.4 | % |
|
| 4.3 | % |
|
| NM |
|
|
| 10.1 | % |
|
|
|
|
|
|
| ||||||||||||||
|
| Thirteen weeks ended December 25, 2021 | ||||||||||||||||||
Operating Income Reconciliation |
| Infrastructure | Agriculture | Other | Corporate | Valmont | ||||||||||||||
Operating income - as reported |
| $ | 77,253 |
|
| $ | 28,560 |
|
| $ | (31,268 | ) |
| $ | (23,791 | ) |
| $ | 50,754 |
|
Impairment of long-lived assets |
|
| — |
|
|
| — |
|
|
| 27,911 |
|
|
| — |
|
|
| 27,911 |
|
Stock-based compensation |
|
| — |
|
|
| 2,928 |
|
|
| — |
|
|
| — |
|
|
| 2,928 |
|
Prospera intangible asset amortization |
|
| — |
|
|
| 1,470 |
|
|
| — |
|
|
| — |
|
|
| 1,470 |
|
Severance expense, pre-tax |
|
| 500 |
|
|
| — |
|
|
| 1,992 |
|
|
| — |
|
|
| 2,492 |
|
Adjusted Operating Income |
| $ | 77,753 |
|
| $ | 32,958 |
|
| $ | (1,365 | ) |
| $ | (23,791 | ) |
| $ | 85,555 |
|
Net Sales - as reported |
|
| 667,728 |
|
|
| 272,463 |
|
|
| 23,087 |
|
|
| NM |
|
|
| 963,278 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Operating Income as a % of Net Sales |
|
| 11.6 | % |
|
| 10.5 | % |
|
| (135.4 | )% |
|
| NM |
|
|
| 5.3 | % |
Adj. Operating Income as a % of Net Sales |
|
| 11.6 | % |
|
| 12.1 | % |
|
| (5.9 | )% |
|
| NM |
|
|
| 8.9 | % |
|
|
|
|
|
| |||||||||||||||
|
| Fifty-three weeks ended December 31, 2022 | ||||||||||||||||||
Operating Income Reconciliation |
| Infrastructure | Agriculture | Other | Corporate | Valmont | ||||||||||||||
Operating income - as reported |
| $ | 354,499 |
|
| $ | 179,263 |
|
| $ | 2,259 |
|
| $ | (102,772 | ) |
| $ | 433,249 |
|
Stock-based compensation - Prospera |
|
| — |
|
|
| 9,896 |
|
|
| — |
|
|
| — |
|
|
| 9,896 |
|
Prospera intangible asset amortization |
|
| — |
|
|
| 6,580 |
|
|
| — |
|
|
| — |
|
|
| 6,580 |
|
Adjusted Operating Income |
| $ | 354,499 |
|
| $ | 195,739 |
|
| $ | 2,259 |
|
| $ | (102,772 | ) |
| $ | 449,725 |
|
Net Sales - as reported |
|
| 2,909,746 |
|
|
| 1,335,285 |
|
|
| 100,219 |
|
|
| NM |
|
|
| 4,345,250 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Operating Income as a % of Net Sales |
|
| 12.2 | % |
|
| 13.4 | % |
|
| 2.3 | % |
|
| NM |
|
|
| 10.0 | % |
Adj. Operating Income as a % of Net Sales |
|
| 12.2 | % |
|
| 14.7 | % |
|
| 2.3 | % |
|
| NM |
|
|
| 10.3 | % |
|
|
|
|
|
| |||||||||||||||
| Fifty-two weeks ended December 25, 2021 | |||||||||||||||||||
Operating Income Reconciliation | Infrastructure | Agriculture | Other | Corporate |
| Valmont | ||||||||||||||
Operating income - as reported | $ | 273,598 |
|
| $ | 137,027 |
|
| $ | (40,192 | ) |
| $ | (83,648 | ) |
| $ | 286,785 |
| |
Impairment of long-lived assets |
| — |
|
|
| — |
|
|
| 27,911 |
|
|
| — |
|
|
| 27,911 |
| |
Prospera intangible asset amortization |
| — |
|
|
| 3,396 |
|
|
| — |
|
|
| — |
|
|
| 3,396 |
| |
Stock-based compensation - Prospera |
| — |
|
|
| 5,240 |
|
|
| — |
|
|
| — |
|
|
| 5,240 |
| |
Write-off of a receivable, pre-tax |
| — |
|
|
| — |
|
|
| 5,545 |
|
|
| — |
|
|
| 5,545 |
| |
Acquisition diligence expense, pre-tax |
| — |
|
|
| — |
|
|
| — |
|
|
| 1,120 |
|
|
| 1,120 |
| |
Severance expense, pre-tax |
| 500 |
|
|
| 910 |
|
|
| 2,642 |
|
|
| — |
|
|
| 4,052 |
| |
Adjusted Operating Income | $ | 274,098 |
|
| $ | 146,573 |
|
| $ | (4,094 | ) |
| $ | (82,528 | ) |
| $ | 334,049 |
| |
Net Sales - as reported |
| 2,361,524 |
|
|
| 1,017,050 |
|
|
| 123,001 |
|
|
| NM |
|
|
| 3,501,575 |
| |
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating Income as a % of Net Sales |
| 11.6 | % |
|
| 13.5 | % |
|
| (32.7 | )% |
|
| NM |
|
|
| 8.2 | % | |
Adj. Operating Income as a % of Net Sales |
| 11.6 | % |
|
| 14.4 | % |
|
| (3.3 | )% |
|
| NM |
|
|
| 9.5 | % |
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
REGULATION G RECONCILIATION OF ADJUSTED RETURN ON INVESTED CAPITAL
(Dollars in thousands)
(unaudited)
Return on Invested Capital is a non-GAAP measure. Accordingly, Invested Capital and Return on Invested Capital should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP, or as a measure of our operating performance or liquidity. The table below shows how Invested Capital and Return on Invested Capital are calculated from our income statement and balance sheet. Return on Invested Capital is calculated as Operating Income (after-tax) divided by average of beginning and ending Invested Capital. Invested Capital represents total assets minus total liabilities (excluding interest-bearing debt). Return on Invested Capital is one of our key operating ratios, as it allows investors to analyze our operating performance in light of the amount of investment required to generate our operating profit. Return on Invested Capital is also a measure used to determine management incentives.
|
| 2022 | ||
Operating income |
| $ | 433,249 |
|
Adjusted effective tax rate1 |
|
| 27.7 | % |
Tax effect on operating income |
|
| (119,872 | ) |
After-tax operating income |
|
| 313,377 |
|
Average invested capital |
|
| 2,437,232 |
|
Return on invested capital |
|
| 12.9 | % |
|
|
|
| |
|
|
|
| |
Adjusted operating income |
|
| 449,725 |
|
Adjusted effective tax rate1 |
|
| 27.7 | % |
Tax effect on operating income |
|
| (124,431 | ) |
After-tax operating income |
|
| 325,294 |
|
Average invested capital |
|
| 2,437,232 |
|
Adjusted return on invested capital |
|
| 13.3 | % |
|
|
|
| |
|
|
|
| |
Total assets |
|
| 3,556,996 |
|
Less: Accounts payable |
|
| (360,312 | ) |
Less: Accrued expenses |
|
| (248,320 | ) |
Less: Income taxes payable |
|
| (3,664 | ) |
Less: Defined benefit pension asset |
|
| (24,216 | ) |
Less: Deferred compensation |
|
| (30,316 | ) |
Less: Other noncurrent liabilities |
|
| (13,480 | ) |
Less: Dividends payable |
|
| (11,742 | ) |
Less: Lease liability |
|
| (155,469 | ) |
Less: Contract liability |
|
| (172,915 | ) |
Less: Deferred tax liability |
|
| (41,091 | ) |
Total invested capital |
| $ | 2,495,471 |
|
Beginning of year invested capital |
| $ | 2,378,992 |
|
Average invested capital |
| $ | 2,437,232 |
|
1The adjusted effective tax rate for 2022 excludes the $33,273 loss from divestiture of the offshore wind energy structures business which is not deductible for tax purposes. The effective tax rate including the loss on the divestiture is 29.9%. |
|
Return on invested capital, as presented, may not be comparable to similarly titled measures of other companies. |
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 investor understanding of Agriculture segment performance related to traditional segment products. 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 - 2023 Guidance |
| Low End |
| High End |
| Adjustments | ||||
Estimated net earnings - GAAP |
| $ | 318,900 |
| $ | 330,800 |
|
|
| |
Prospera intangible asset (proprietary technology) amortization, pre-tax |
|
|
|
|
|
|
|
| 6,700 |
|
Stock-based compensation - Prospera, pre-tax |
|
|
|
|
|
|
|
| 10,000 |
|
Total pre-tax adjustments |
|
|
|
|
|
|
|
| 16,700 |
|
Estimated tax benefit from above expenses* |
|
|
|
|
|
|
|
| (2,500 | ) |
|
|
|
|
|
|
|
|
|
| |
Total Adjustments, after-tax |
|
|
|
|
|
|
| $ | 14,200 |
|
Estimated net earnings - Adjusted |
| $ | 333,100 |
| $ | 345,000 |
|
|
| |
Diluted Earnings Per Share Range - GAAP |
| $ | 14.70 |
| $ | 15.25 |
|
|
| |
Diluted Earnings Per Share Range - Adjusted |
| $ | 15.35 |
| $ | 15.90 |
|
|
| |
* The tax effect of adjustments is calculated based on the estimated income tax rate in each applicable jurisdiction. |
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