Valmont Announces Fourth Quarter and Fiscal Year 2012 Results

        Valmont Announces Fourth Quarter and Fiscal Year 2012 Results


- Fourth quarter sales increased 8%, operating income rose 44%.

- Fourth quarter Utility Support Structures Segment sales rose 25%, operating
income increased 60%.

- Fourth quarter Irrigation Segment sales improved 13%, operating income
increased 49%.

- Fourth quarter diluted earnings per share were $2.43, compared with $1.83
diluted per-share adjusted earnings reported in the fourth quarter of 2011
(see table on last page).

PR Newswire

OMAHA, Neb., Feb. 12, 2013

OMAHA, Neb., Feb. 12, 2013 /PRNewswire/ --Valmont Industries, Inc. (NYSE:
VMI), a leading global provider of engineered products and services for
infrastructure and mechanized irrigation equipment for agriculture, reported
fourth quarter sales of $815.0 million compared with $752.7 million for the
same period of 2011. Fourth quarter 2012 operating income was $111.7 million
versus $77.4 million in 2011. When comparing this year's $2.43 fourth quarter
diluted earnings per share to last year's reported fourth quarter diluted
earnings per share of $4.33, it should be noted that included in last year's
fourth quarter was $2.50 per share of favorable one-time items recognized as a
result of a reorganization of the Company's legal structure. Excluding those
favorable one-time items, fourth quarter 2011 diluted earnings per share were

For fiscal 2012, sales were $3.0 billion versus $2.7 billion in 2011.
Operating income for fiscal 2012 was $382.3 million versus $263.3 million in
2011. Valmont's fiscal year net earnings were $234.1 million, or $8.75 per
diluted share compared with 2011 fiscal year earnings of $228.3 million, or
$8.60 per diluted share, which included the aforementioned $2.50 per share of
favorable one-time items in the fourth quarter of 2011.

Fourth Quarter Review:

"The main drivers of record fourth quarter operating results were the
substantial sales increases in the Utility Support Structures and Irrigation
Segments," said Mogens C. Bay, Valmont's Chairman and Chief Executive Officer.
"Increased sales of wireless communication products and intercompany sales of
utility products contributed to improved results in the Engineered
Infrastructure Products Segment. In the Coatings Segment, a decline in
Australian demand was the main reason for lower sales. Those businesses
reported in "Other" had improved operating margins despite lower sales.

"Increased volumes in both the Utility Support Structures and Irrigation
Segments allowed us to realize significant fixed cost leverage during the
quarter. This led to a 13.7% operating margin for the quarter, compared with
last year's 10.3%."

Fourth Quarter Segment Review:

Utility Support Structures Segment (30% of 4th Quarter Sales)

Steel and concrete structures for the global electric utility industry.

Sales of $252.6 million were 25% higher than 2011, mostly as a result of
increased large-project demand from North American utility customers. Electric
utilities continued to invest in structures for the transmission grid to
improve reliability, add physical capacity and increase the interconnectivity
of regional transmission grids. International utility sales increased,
primarily due to higher export sales from China.

Valmont believes the transmission infrastructure needed to meet the objectives
of improved reliability and interconnectivity will drive a multi-year period
of high demand for utility structures. Consequently, in addition to capacity
expansions announced earlier in the year, the Company made an additional
investment in manufacturing capacity by purchasing a facility in Columbus,
Nebraska during the fourth quarter.

Operating income rose 60% to $47.1 million, which represents 18.7% of sales.
The increase in operating income was due to an improving mix of orders and the
positive impact of volume and SG&A leverage.

Irrigation Segment (24% of 4th Quarter Sales)

Center pivot and linear move mechanized irrigation equipment and parts for
agriculture in global markets.

Sales rose 13% to $203.4 million, with gains in North America more than
offsetting a decline in international sales. While sales increased in most
regions, total international sales declined due to a reduction in project
business in North Africa.

North American demand was supported by a couple of factors. Historically high
crop prices resulted in high levels of farm income. In addition, last summer's
drought impacted many growing regions of the U.S. Following periods of
drought, in addition to the inherent benefits of mechanized irrigation, the
economic benefits of irrigation during a drought becomes an additional driver.
As a result, a large number of growers are seeking the benefits of irrigation.
This led to record order rates and greatly improved sales during the fourth

Long-term drivers remain strong for the irrigation market. World population
growth and dietary improvement create a long-term increasing demand for food.
Water availability concerns will pressure agriculture to reduce its water
consumption over time. Valmont's mechanized irrigation equipment helps to
provide a solution to this global dilemma by improving farm productivity and
using water efficiently.

Operating income grew 49% to $40.5 million and was 19.9% of segment sales. The
improvement in operating margin was largely the result of operating leverage,
a favorable sales mix and good factory performance.

Engineered Infrastructure Products Segment (27% of 4th Quarter Sales)

Lighting, traffic and highway safety products, wireless communication
structures and components, and industrial gratings and access systems

Fourth quarter sales were $229.1 million, a 4% increase over 2011. In North
America, sales of lighting and traffic products were flat and the market
environment was little changed. Intercompany sales to the utility division
were higher than last year.

Sales of lighting and traffic structures in Europe were lower due to continued
economic weakness and government austerity programs. Lower sales comparisons
also reflect the exit in 2011 from certain geographic operations.

In the Asia-Pacific region, sales rose in all product lines, particularly in
the Webforge engineered access systems business.

Sales of wireless communication structures and components were higher in North
American markets and lower in China.

Operating income was $13.1 million, or 5.7% of segment sales. Excluding the
impact of one-time charges to reduce the carrying value of certain trade names
in the fourth quarter of 2011, fourth quarter segment operating income in 2012
was slightly improved over 2011. The improvement was mostly due to increased
performance in wireless communication in North America and broad improvement
in the Asia-Pacific businesses, which more than offset decreased profitability
in the global lighting businesses.

Coatings Segment (10% of 4th Quarter Sales)

Hot-dip galvanizing, and other coatings to protect against corrosion of steel
and aluminum in global markets.

Sales of $83.2 million were 7% lower than last year. Most of the sales decline
was attributable to reduced demand in Australian markets reflecting a slowdown
in construction in eastern Australia. In North America, sales were comparable
to last year with increased internal irrigation and utility demand offsetting
lower custom demand.

During the fourth quarter, the Company acquired Pure Metal Galvanizing in
Ontario, Canada. This acquisition expands Valmont's North American footprint
and complements our global portfolio. The acquisition had minimal impact on
fourth quarter results. Integration activities are proceeding on schedule.

Operating income declined 10% to $17.1 million, or 20.5% of segment sales due
to the reduction in Australian volumes.

2012 Fiscal Year Review:

"Very strong utility and irrigation market demand were the main drivers of
record results in 2012," said Mr. Bay. "Looking at results by segment, the
Utility Support Structures Segment benefited from significantly increased
investments by utility companies in the transmission grid. In the Irrigation
Segment, increased demand for feed-grains, strong crop prices and historically
high farm incomes led to record demand for mechanized irrigation equipment. In
the second half of the year, widespread drought in North America accelerated
demand. Sales in international irrigation markets were modestly higher for the
year. In the Engineered Infrastructure Products Segment, sales increases in
the North American and Asia-Pacific regions more than offset lower sales in
Europe. The most significant contributor to increased profitability for the
segment was improved performance in the North American wireless communication
business. Our coatings business operated well, generating increased
profitability on slightly lower sales.

"For the year, operating income as a percent of sales for the Company improved
substantially from 9.9% to 12.6%."

Subsequent Event:

On February 5, 2013 the Company acquired privately-held Locker Group Holdings
Pty Ltd., a market leader in Australia and Asia for the manufacture of
perforated and expanded metal for the non-residential market, industrial
flooring and handrails for the access systems market, and screening media for
applications in the industrial and mining sectors.

2013 Outlook:

"We expect another record performance in 2013," Mr. Bay said, "The current
demand for Utility Support Structures is strong as reflected by our record
backlogs at year end. We expect a solid first-half in the Irrigation Segment,
which also had record year-end backlogs. In the Coatings Segment we expect
solid demand and continued good performance. In the Engineered Infrastructure
Products Segment, despite continued restraint in government spending we still
expect a modest sales increase and continued profitability gains. While it is
still early in the year, we currently expect low teens revenue growth and high
teens earnings growth for 2013."

An audio discussion of Valmont's fourth quarter results by Mogens C. Bay,
Chairman and Chief Executive Officer and Terry J. McClain, Senior Vice
President and Chief Financial Officer, will be available live by telephone by
dialing 1-877-493-2981 and entering Conference ID#:  98703081 or via the
Internet at 8:00 a.m. CST February 13, 2013, by pointing browsers to: After the event you may listen
by accessing the above link or by telephone. Dial 1-855-859-2056 or
404-537-3406, and enter the Conference ID#:  98703081  beginning February 13,
2013 at 10:00 a.m. CST through 12:00 p.m. CST on February 20, 2013.

Valmont a the global leader in designing and manufacturing poles, towers and
structures for lighting and traffic, wireless communication and utility
markets, industrial access systems, highway safety barriers and a provider of
protective coating services. Valmont also leads the world in mechanized
irrigation equipment for agriculture, enhancing food production while
conserving and protecting natural water resources. In addition, Valmont
produces a wide variety of tubing for commercial and industrial applications.

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 material, availability and market acceptance of new products,
product pricing, domestic and international competitive environments, 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.

(Dollars in thousands, except per share amounts)
                          Fourth Quarter            Year-to-Date
                          13 Weeks Ended            52 Weeks Ended
                          29-Dec-12    31-Dec-11    29-Dec-12    31-Dec-11
Net sales                 $       $       $        $  
                          815,037      752,730      3,029,541    2,661,480
Cost of sales             590,692      557,785      2,227,085    1,994,670
 Gross profit    224,345      194,945      802,456      666,810
Selling, general and      112,601      117,588      420,160      403,500
administrative expenses
 Operating       111,744      77,357       382,296      263,310
Other income (expense):
 Interest expense     (7,968)      (9,460)      (31,625)     (36,175)
 Interest income      2,191        2,346        8,272        9,265
 Other                (560)        (1,867)      347          (2,643)
                          (6,337)      (8,981)      (23,006)     (29,553)
 Earnings before
income taxes and equity
in earnings of            105,407      68,376       359,290      233,757
Income tax expense        39,497       (46,022)     126,502      4,590
 Earnings before
equity in earnings of     65,910       114,398      232,788      229,167
Equity in earnings of
nonconsolidated           817          3,550        6,128        8,059
 Net earnings    66,727       117,948      238,916      237,226
Less: Earnings
attributable to           (1,691)      (3,217)      (4,844)      (8,918)
non-controlling interests
 Net earnings    $       $       $       $    
attributable to Valmont    65,036     114,731      234,072     228,308
Industries, Inc.
Average shares
outstanding (000's) -     26,517       26,361       26,471       26,329
Earnings per share -      $       $       $       $      
Basic                        2.45      4.35      8.84   8.67
Average shares
outstanding (000's) -     26,812       26,499       26,764       26,550
Earnings per share -      $       $       $       $      
Diluted                      2.43      4.33      8.75   8.60
Cash dividends per share  $       $       $       $      
                            0.225      0.180      0.855   0.705

(Dollars in thousands)
                             Fourth Quarter            Year-to-Date
                             13 Weeks Ended            52 Weeks Ended
                             29-Dec-12    31-Dec-11    29-Dec-12    31-Dec-11
 Engineered              $        $          $        $  
Infrastructure               229,115      220,003      882,106     817,593
Support                      252,556      202,848      873,520      624,870
 Coatings                83,155       88,905       334,552      327,322
 Irrigation              203,427      180,640      750,641      666,007
 Other                   82,980       85,009       328,737      331,986
 Total              851,233      777,405      3,169,556    2,767,778
Infrastructure               (11,731)     (6,961)      (48,793)     (24,996)
Support                      (785)        2,634        (3,857)      (4,105)
 Coatings                (14,216)     (12,251)     (52,478)     (46,534)
 Irrigation              449          (103)        (49)         (111)
 Other                   (9,913)      (7,994)      (34,838)     (30,552)
 Total              (36,196)     (24,675)     (140,015)    (106,298)
Net sales
Infrastructure               217,384      213,042      833,313      792,597
Support                      251,771      205,482      869,663      620,765
 Coatings                68,939       76,654       282,074      280,788
 Irrigation              203,876      180,537      750,592      665,896
 Other                   73,067       77,015       293,899      301,434
 Total              $        $          $         $
                             815,037      752,730      3,029,541    2,661,480
Operating Income
Engineered               $        $        $        $   
Infrastructure                13,106     9,846         54,013    40,753
Support                      47,124       29,429       129,025      70,643
 Coatings                17,070       19,056       71,641       58,656
 Irrigation              40,450       27,136       143,605      107,759
 Other                  13,162       12,769       46,575       45,670
 Corporate               (19,168)     (20,879)     (62,563)     (60,171)
 Total              $        $         $        $  
                             111,744      77,357       382,296     263,310
The backlog of orders for the principal products manufactured and marketed was
$903 million at the end of the 2012 fiscal year and $703 million at the end of
the 2011 fiscal year. We anticipate that most of the backlog of orders will be
filled during fiscal year 2013. At year-end, the segments with backlog were as
follows (dollar amounts in millions):
                  29-Dec-12               31-Dec-11
Engineered        $                   $    
Infrastructure     212                   208
Utility Support   434                     383
Irrigation       231                     97
Other            26                      15
                  $                   $    
                   903                   703
The company has four reportable segments based on its management structure.
Engineered Infrastructure Products:This segment consists of the manufacture of
engineered metal structures and components for global lighting and traffic,
wireless communication, roadway safety and access systems applications.
Utility Support Structures:This segment consists of the manufacture of
engineered steel and concrete structures for the global utility industry.
Coatings:This segment consists of global galvanizing, painting and anodizing
Irrigation:This segment consists of the manufacture of agricultural irrigation
equipment and related parts and services worldwide.
In addition to these four reportable segments, Valmont also has other
businesses that individually are not more than 10% of consolidated net sales.
These businesses, which include the manufacture of forged steel grinding
media, tubular products, electrolytic manganese dioxide and industrial
fasteners, are reported in the "Other" category.

(Dollars in thousands)
                                            29-Dec-12         31-Dec-11
Current assets:
 Cash and cash equivalents              $   414,129     $   362,894
 Accounts receivable, net               515,902           426,683
 Inventories                            412,384           393,782
 Prepaid expenses                       25,144            25,765
 Refundable and deferred income taxes   58,381            43,819
 Total current assets              1,425,940         1,252,943
Property, plant and equipment, net          512,612           454,877
Goodwill and other assets                   629,999           598,256
                                            $ 2,568,551      $ 2,306,076
Current liabilities:
 Current installments of long-term debt $      224  $      235
 Notes payable to banks                 13,375            11,403
 Accounts payable                       212,424           216,729
 Accrued expenses                       180,408           157,128
 Income taxes payable                   -                 17,808
 Dividend payable                       6,002             4,767
 Total current liabilities         412,433           408,070
Long-term debt, excluding current           472,593           474,415
Other long-term liabilities                 276,515           225,680
Shareholders' equity                        1,407,010         1,197,911
                                            $ 2,568,551      $ 2,306,076

(Dollars in thousands, except per share amounts)
Non-recurring items listed below relate to: a one-time tax benefit from a
legal reorganization and the net effect of other significant 2011
non-recurring items.
                                Quarter ended    Diluted
                                December 31,     earnings per
                                2011             share
Net earnings attributable to                     $    
Valmont Industries, Inc. - as   $   114,731    4.33
Tax benefit from legal          (66,026)         -2.49
Other non-recurring items - net (215)            -0.01
of tax
Net earnings attributable to                     $    
Valmont Industries, Inc. -      $    48,490   1.83

SOURCE Valmont Industries, Inc.

Contact: Jeff Laudin, Phone: 402-963-1158, Fax: 402-963-1198
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