New book by Larry Connors Click here Improve your trading - See how
For the first nine months of 2009, sales were $1,388.0 million versus $1,414.2 million in 2008. Valmont's nine-month net earnings were $120.6 million, or $4.59 per diluted share, compared with 2008 nine-month net earnings of $103.9 million, or $3.95 per diluted share.
Third Quarter Summary:
"Outstanding results in the Utility Support Structures Segment along with a slight improvement in the Engineered Support Structures Segment more than offset significant sales and earnings declines in our other segments," said Mogens C. Bay, Valmont's Chairman and Chief Executive Officer. "Profitability in the Utility Support Structures Segment was exceptionally strong due to excellent factory fixed cost and SG&A expense leverage and the benefit of falling steel costs.
"In the Irrigation Segment, results were significantly lower in sharp contrast to 2008's record third quarter results. Lower crop prices and the outlook for a decline in global farm income in 2009 deterred farmers from purchasing irrigation equipment.
"In our Engineered Support Structures Segment, sales were slightly higher, largely due to the contribution of acquisitions made after last year's third quarter. Sales and earnings improved in international markets, while North American markets faced continued weakness in commercial lighting and lower sales in wireless communication products.
"Coatings Segment revenues were lower due to a general decline in manufacturing activity as a result of the U.S. economic recession.
"In total, consolidated operating income improved 1.4% and was 14.5% of sales, mostly due to the strong earnings contribution from the Utility Support Structures Segment."
Third Quarter Segment Review:
Utility Support Structures Segment (35% of 3rd Quarter Net Sales)
Steel and concrete structures for the North American electric utility industry.
Sales increased 33.4% to $150.7 million compared with $113.0 million in 2008. The increase in sales reflects higher volumes and shipments to fulfill project orders that were in backlog.
Driving the demand for Valmont's utility structures is the need to increase the capacity of the electrical transmission grid following a period of under-investment. There is also a drive to improve the grid's reliability in order to lower the risk of service interruption. Increasing investment in wind and solar farms also adds to the demand for transmission structures. Valmont expects these trends to continue to support long-term sales growth in the Utility Support Structures Segment. Near-term however, some utilities are deferring projects in response to the economic recession. Therefore, we believe that in the short-term, sales will decline in this segment.
Operating income improved to $40.4 million and was 26.8% of sales due to better fixed operating cost leverage on increased volumes. Declines in material costs, particularly steel, also contributed to the increase in operating income.
Engineered Support Structures Segment (40% of 3rd Quarter Net Sales)
Structures and specialty structures for lighting and traffic, wireless communication and overhead signs, worldwide. Includes utility structures outside of North America.
Third quarter sales were 1.8% higher at $190.4 million. In North America, commercial lighting demand fell due to weakness in residential and commercial construction markets as a result of the current economic recession. In Europe, results were also impacted by the global recession, however third quarter sales improved due to an increase in project activity for export. Acquisitions completed after the third quarter last year contributed to the higher sales in Europe.
Specialty structures sales fell in North America, due to lower levels of activity among wireless carriers. In the Chinese market, specialty structures sales were essentially flat and utility product sales were lower.
Historically, the U.S. Highway bill has been a strong driver of demand for Valmont's lighting and traffic structures. The 2005 highway bill was recently extended for a short period of time and a new highway bill is not expected soon. Until a new multi-year highway bill is passed, we will not have good visibility in this business.
Operating income improved 12% to $18.2 million or 9.6% of segment sales. The increase in operating income resulted from improved results in international markets, operational improvements and the impact of acquisitions.
Irrigation Segment (17% of 3rd Quarter Net Sales)
Center pivot and linear move mechanized irrigation equipment and parts for agriculture in global markets.
Sales fell 50% to $75.2 million compared with $150.4 million in 2008. We believe the substantial decline in sales was the result of farmer's expectations for lower crop prices and income in 2009.
This year's results stand in sharp contrast to the record third quarter 2008 results. Last year global coarse grain demand was strong and commodity prices were higher. Irrigation Segment results this year also reflect a more normal seasonal pattern than last year's third quarter.
Operating income declined 78% to $5.6 million due to lower sales and the associated volume de-leverage of fixed operating costs.
Despite slower demand for irrigation equipment this year, we believe nothing has changed in the long-term outlook. A growing world population should continue to put increased pressure on farmers to increase productivity and use less water. We believe Valmont with its leadership position in the industry is well positioned to benefit from improved demand when conditions improve.
Coatings Segment (5% of 3rd Quarter Net Sales)
Hot-dip galvanizing, anodizing and powder coatings to protect against corrosion of steel and aluminum in North American markets.
Sales of $29.7 million were 17.3% below last year. The sales decrease reflects the U.S. economic recession and weaker demand from industrial fabricators.
Operating income declined 18% to $7.6 million. Despite lower production volumes, the quality of earnings was maintained with operating income at 25.6% of segment sales.
Fourth Quarter Outlook:
"Our outlook for the fourth quarter is for lower sales with earnings similar to last year's levels," Mr. Bay said. "The backlog in the utility business is significantly below last year's levels. Additionally, the continued global economic recession and the lack of a multi-year U.S. highway bill constrain growth in our Engineered Support Structures and Coatings Segments.
"In the Irrigation Segment, fourth quarter results will still be driven by the weak outlook for lower farm income and crop prices.
"We believe our market leadership positions and industry, product line and geographic diversification leave us well positioned for strong performance when the global economic recession abates. We participate in attractive markets with solid long-term growth drivers. Our global infrastructure businesses support roadway development and electrification necessary for economic growth. In the agricultural markets, our irrigation equipment helps improve grower productivity and save fresh water resources. We will continue to be prudent in our management of capital and maintain a conservative financial profile."
An audio discussion of Valmont's third 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#: 82132649 or via the Internet at 8:00 a.m. October 16, 2009 CDT, by pointing browsers to: http://www.valmont.com/page.aspx?id=445&pid=21. After the event you may listen by accessing the above link or by telephone. Dial 1-800-642-1687 or 706-645-9291, and enter the Conference ID#: 82132649 beginning October 16, 2009 at 10:30 a.m. CDT through 12:00 p.m. CDT on October 23, 2009.
Valmont is the global leader in designing and manufacturing poles, towers and structures for lighting and traffic, wireless communication and utility markets, 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.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
Third Quarter Year-to-Date
13 Weeks Ended 39 Weeks Ended
-------------- --------------
26-Sep-09 27-Sep-08 26-Sep-09 27-Sep-08
--------- --------- --------- ---------
Net sales $434,010 $494,801 $1,387,974 $1,414,216
Cost of sales 297,652 359,802 978,619 1,026,206
------- ------- ------- ---------
Gross profit 136,358 134,999 409,355 388,010
Selling, general and
administrative expenses 73,625 73,103 218,887 212,278
------ ------ ------- -------
Operating income 62,733 61,896 190,468 175,732
------ ------ ------- -------
Other income (expense)
Interest expense (3,587) (4,264) (11,847) (13,446)
Interest income 370 382 986 1,880
Miscellaneous 2,106 (376) 1,916 (2,234)
----- ---- ----- ------
(1,111) (4,258) (8,945) (13,800)
------ ------ ------ -------
Earnings before
income taxes,
minority interest, and
equity in earnings of
nonconsolidated
subsidiaries 61,622 57,638 181,523 161,932
Income tax expense 20,338 19,588 59,644 55,190
------ ------ ------ ------
Earnings before
minority interest,
equity in earnings of
nonconsolidated
subsidiaries 41,284 38,050 121,879 106,742
Earnings in
nonconsolidated
subsidiaries 84 412 579 369
-- --- --- ---
Net earnings 41,368 38,462 122,458 107,111
------ ------ ------- -------
Earnings attributable to
the non-controlling
interest (894) (1,478) (1,890) (3,164)
---- ------ ----- ------
Net earnings
attributable to
Valmont Industries,
Inc. $40,474 $36,984 $120,568 $103,947
======= ======= ======== ========
Average shares
outstanding (000's)
- Basic 25,963 25,864 25,936 25,793
====== ====== ====== ======
Earnings per share -
Basic $1.56 $1.43 $4.65 $4.03
===== ===== ===== =====
Average shares
outstanding (000's)
- Diluted 26,402 26,362 26,257 26,321
====== ====== ====== ======
Earnings per share -
Diluted $1.53 $1.40 $4.59 $3.95
===== ===== ===== =====
Cash dividends per share $0.150 $0.130 $0.430 $0.365
====== ====== ====== ======
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Dollars in thousands)
(unaudited)
Third Quarter Year-to-Date
13 Weeks Ended 39 Weeks Ended
-------------- --------------
26-Sep-09 27-Sep-08 26-Sep-09 27-Sep-08
--------- --------- --------- ---------
Net sales
Engineered
Support
Structures $190,398 $187,069 $531,327 $527,466
Utility Support
Structures 150,719 112,986 525,925 315,458
Coatings 29,683 35,889 88,295 108,217
------ ------ ------ -------
Infrastructure
products 370,800 335,944 1,145,547 951,141
Irrigation 75,230 150,445 279,339 440,890
Other 16,944 33,564 54,247 89,815
Less: Intersegment
sales (28,964) (25,152) (91,159) (67,630)
------- ------- ------- -------
Total $434,010 $494,801 $1,387,974 $1,414,216
======== ======== ========== ==========
Operating Income
Engineered
Support
Structures $18,193 $16,247 $40,308 $44,402
Utility Support
Structures 40,372 14,620 126,797 43,025
Coatings 7,581 9,284 19,965 24,915
----- ----- ------ ------
Infrastructure
products 66,146 40,151 187,070 112,342
Irrigation 5,633 25,249 27,479 75,663
Other 3,046 5,821 9,921 15,521
Corporate (12,085) (9,325) (33,995) (27,794)
------- ------ ------- -------
Total $62,740 $61,896 $190,475 $175,732
======= ======= ======== ========
Valmont has aggregated its business segments into four reportable segments
as follows.
Engineered Support Structures: This segment consists of the
manufacture of engineered metal structures and components for the
lighting, traffic and wireless communication industries worldwide,
international utility markets, and for other specialty applications.
Utility Support Structures: This segment consists of the manufacture
of engineered steel and concrete structures primarily for the North
American utility industry.
Coatings: This segment consists of galvanizing and other coating
services.
Irrigation: This segment consists of the manufacture of agricultural
irrigation equipment and related parts and services.
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 tubular products
and distribution of industrial fasteners, are reported in the "Other"
category.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
26-Sep-09 27-Sep-08
--------- ---------
ASSETS
------
Current assets:
Cash and cash equivalents $129,844 $68,095
Accounts receivable, net 296,267 318,723
Inventories 216,483 313,600
Prepaid expenses 26,596 19,612
Refundable and deferred income taxes 31,894 32,223
------ ------
Total current assets 701,084 752,253
Property, plant and equipment, net 286,666 265,210
Goodwill and other assets 300,961 285,430
------- -------
$1,288,711 $1,302,893
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current installments of long-term debt $977 $2,341
Notes payable to banks 24,950 28,234
Accounts payable 118,463 177,102
Accrued expenses 120,866 130,499
Dividend payable 3,941 3,399
----- -----
Total current liabilities 269,197 341,575
Long-term debt, excluding current
installments 171,710 265,086
Other long-term liabilities 69,882 62,026
Shareholders' equity 777,922 634,206
------- -------
$1,288,711 $1,302,893
========== ==========
SOURCE Valmont Industries, Inc.
http://www.valmont.com
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.