Valmont Announces Capital Allocation Philosophy
Board Approves $500 Million Share Repurchase Program and Increases Annual
Dividend by 50% to $1.50/share
OMAHA, Neb., May 13, 2014
OMAHA, Neb., May 13, 2014 /PRNewswire/ -- Valmont Industries, Inc. (NYSE:
VMI), a leading global provider of engineered products and services for
infrastructure and mechanized irrigation equipment for agriculture, today
announced that its Board of Directors has adopted a capital allocation
philosophy. "Valmont has achieved record results over the past several years,
as well as completing a number of important acquisitions. As a result of this
performance, the company has accumulated large cash balances and substantial
unused debt capacity," said Valmont's CEO, Mogens Bay.
The Directors approved the following priorities for Valmont's capital:
oWorking capital investment necessary for future sales growth;
oCapital expenditures, estimated at approximately $340 million in the
aggregate for the period 2014 – 2016;
oDividends on common shares in the range of 15% of the prior year's fully
diluted net earnings;
oReturn of capital to shareholders through share repurchases.
Valmont plans to manage its capital structure to maintain a Moody's debt
rating of Baa2, and a Standard and Poor's BBB debt rating, with a lesser debt
rating of Baa3 and BBB- being reserved for special opportunities. The capital
allocation policy resulted in a decision to increase the dividend by 50% and
to authorize a share repurchase program.
"Our capital allocation philosophy and the resulting decisions strike a
prudent balance between returning excess capital to shareholders while at the
same time preserving financial freedom to fund continued growth, both
organically and through acquisitions," stated Mr. Bay.
The Directors approved an increased quarterly cash dividend of 37.5 cents per
share payable on July 15, 2014 to shareholders of record on June 27, 2014.
The Directors also authorized the Company to purchase up to $500 million of
its outstanding common stock from time to time over the next twelve months at
prevailing market prices, through open market or privately-negotiated
transactions. The purchases will be funded from available working capital and
short-term borrowings and will be made subject to market and economic
conditions. Valmont is not obligated to make any repurchases and may
discontinue the program at any time. Valmont currently has approximately 26.8
million shares outstanding.
Valmont is a global leader in designing and manufacturing poles, towers and
structures for lighting and traffic, wireless communication, wind energy, oil
and gas exploration applications 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.
SOURCE Valmont Industries, Inc.
Contact: Jeff Laudin, Phone:402-963-1158, Fax: 402-963-1198
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