UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 26,~~June 25, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ____________ to

Commission file number 1-31429

Valmont Industries, Inc.

(Exact name of registrant as specified in its charter)


Delaware		47-0351813
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
15000 Valmont Plaza,
Omaha,	Nebraska	68154
(Address of Principal Executive Offices)		(Zip Code)

(402) 963-1000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock $1.00 par value

VMI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non‑accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐

No x

~~21,311,439~~21,350,725

Outstanding shares of common stock as of ~~April~~July 21, 2022

VALMONT INDUSTRIES, INC

INDEX TO FORM 10-Q


		Page No.
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Statements of Earnings for the thirteen ~~weeks ended~~and twenty-six
	~~March 26,~~weeks ended June 25, 2022 and ~~March 27,~~June 26, 2021	3
	Condensed Consolidated Statements of Comprehensive Income for the thirteen
	and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021	4
	Condensed Consolidated Balance Sheets as of ~~March 26,~~June 25, 2022 and
	December 25, 2021	5
	Condensed Consolidated Statements of Cash Flows for the ~~thirteen~~twenty-six weeks
	ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021	6
	Condensed Consolidated Statements of Shareholders' Equity for the thirteen ~~weeks~~
	and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2224
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3236
Item 4.	Controls and Procedures	3236

	PART II. OTHER INFORMATION
Item 1A.	Risk Factors	3337
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3437
Item 5.	Other Information	3537
Item 6.	Exhibits	3638
Signatures		3739

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(Unaudited)


		Thirteen weeks ended				Thirteen weeks ended				Twenty-six weeks ended
		March 26, 2022		March 27, 2021				June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Product sales	Product sales	$	890,870	$	694,965		Product sales	$	1,036,289	$	805,801	$	1,927,159	$	1,500,766
Services sales	Services sales	89,950		79,921			Services sales	99,243		88,828		189,193		168,749
Net sales	Net sales	980,820		774,886			Net sales	1,135,532		894,629		2,116,352		1,669,515
Product cost of sales	Product cost of sales	673,170		518,634			Product cost of sales	781,323		608,101		1,454,493		1,126,735
Services cost of sales	Services cost of sales	58,464		51,698			Services cost of sales	61,608		56,881		120,072		108,579
Total cost of sales	Total cost of sales	731,634		570,332			Total cost of sales	842,931		664,982		1,574,565		1,235,314
Gross profit	Gross profit	249,186		204,554			Gross profit	292,601		229,647		541,787		434,201
Selling, general and administrative expenses	Selling, general and administrative expenses	154,344		127,343			Selling, general and administrative expenses	173,882		147,022		328,226		274,365

Operating income	Operating income	94,842		77,211			Operating income	118,719		82,625		213,561		159,836
Other income (expenses):	Other income (expenses):						Other income (expenses):
Interest expense	Interest expense	(11,263)		(9,999)			Interest expense	(11,386)		(10,436)		(22,649)		(20,435)
Interest income	Interest income	227		311			Interest income	285		186		512		497
Loss on investments (unrealized)		(1,063)		(109)
Gain (loss) on investments - unrealized							Gain (loss) on investments - unrealized	(2,342)		1,177		(3,405)		1,068

Other	Other	3,642		3,449			Other	2,073		4,204		5,715		7,653
		(8,457)		(6,348)				(11,370)		(4,869)		(19,827)		(11,217)
Earnings before income taxes	Earnings before income taxes	86,385		70,863			Earnings before income taxes	107,349		77,756		193,734		148,619
Income tax expense:	Income tax expense:						Income tax expense:
Current	Current	22,413		8,547			Current	27,620		25,413		50,033		33,960
Deferred	Deferred	708		6,955			Deferred	1,967		(10,673)		2,675		(3,718)
		23,121		15,502				29,587		14,740		52,708		30,242
Earnings before equity in earnings of nonconsolidated subsidiaries	Earnings before equity in earnings of nonconsolidated subsidiaries	63,264		55,361			Earnings before equity in earnings of nonconsolidated subsidiaries	77,762		63,016		141,026		118,377
Equity in loss of nonconsolidated subsidiaries	Equity in loss of nonconsolidated subsidiaries	(358)		(360)			Equity in loss of nonconsolidated subsidiaries	(555)		(359)		(913)		(719)
Net earnings	Net earnings	62,906		55,001			Net earnings	77,207		62,657		140,113		117,658
Less: (earnings)/loss attributable to noncontrolling interests		(595)		13
Less: earnings attributable to noncontrolling interests							Less: earnings attributable to noncontrolling interests	(1,099)		(547)		(1,694)		(534)
Net earnings attributable to Valmont Industries, Inc.	Net earnings attributable to Valmont Industries, Inc.	$	62,311	$	55,014		Net earnings attributable to Valmont Industries, Inc.	$	76,108	$	62,110	$	138,419	$	117,124
Earnings per share:	Earnings per share:						Earnings per share:
Basic	Basic	$	2.93	$	2.60		Basic	$	3.57	$	2.93	$	6.50	$	5.53
Diluted	Diluted	$	2.90	$	2.57		Diluted	$	3.53	$	2.89	$	6.43	$	5.46

See accompanying notes to condensed consolidated financial statements.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


		Thirteen Weeks Ended				Thirteen Weeks Ended				Twenty-six weeks ended
		March 26, 2022		March 27, 2021				June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Net earnings	Net earnings	$	62,906	$	55,001		Net earnings	$	77,207	$	62,657	$	140,113	$	117,658
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:						Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:	Foreign currency translation adjustments:						Foreign currency translation adjustments:
Unrealized translation gain (loss)	Unrealized translation gain (loss)	11,062		(12,633)			Unrealized translation gain (loss)	(43,666)		10,690		(32,050)		(1,943)

Gain (loss) on hedging activities:	Gain (loss) on hedging activities:						Gain (loss) on hedging activities:

Cash flow hedges	Cash flow hedges	—		22			Cash flow hedges	—		(313)		—		(291)

Amortization cost included in interest expense	Amortization cost included in interest expense	(16)		(16)			Amortization cost included in interest expense	(16)		(16)		(32)		(32)

Commodity hedges	Commodity hedges	20,560		9,946			Commodity hedges	(19,512)		16,308		1,048		26,254
Realized gain on commodity hedges recorded in earnings		(2,043)		—
Realized (gain) loss on commodity hedges recorded in earnings							Realized (gain) loss on commodity hedges recorded in earnings	1,545		(270)		(498)		(270)
Cross currency swaps	Cross currency swaps	1,811		3,606			Cross currency swaps	3,470		(2,095)		5,281		1,511
		20,312		13,558

Defined Benefit Pension Plan:							Defined Benefit Pension Plan:

Actuarial gain on defined benefit pension plan	Actuarial gain on defined benefit pension plan	686		832			Actuarial gain on defined benefit pension plan	124		843		256		1,675
Other comprehensive income		32,060		1,757
Other comprehensive income (loss)							Other comprehensive income (loss)	(58,055)		25,147		(25,995)		26,904
Comprehensive income	Comprehensive income	94,966		56,758			Comprehensive income	19,152		87,804		114,118		144,562
Comprehensive (income) loss attributable to noncontrolling interests	Comprehensive (income) loss attributable to noncontrolling interests	(1,688)		486			Comprehensive (income) loss attributable to noncontrolling interests	932		(1,573)		(756)		(1,087)
Comprehensive income attributable to Valmont Industries, Inc.	Comprehensive income attributable to Valmont Industries, Inc.	$	93,278	$	57,244		Comprehensive income attributable to Valmont Industries, Inc.	$	20,084	$	86,231	$	113,362	$	143,475

See accompanying notes to condensed consolidated financial statements.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)


		March 26, 2022		December 25, 2021			June 25, 2022		December 25, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	149,700	$	177,232	Cash and cash equivalents	$	154,579	$	177,232
Receivables, net	Receivables, net	616,538		571,593		Receivables, net	627,876		571,593
Inventories	Inventories	807,471		728,834		Inventories	786,600		728,834
Contract assets	Contract assets	161,633		142,643		Contract assets	200,522		142,643
Prepaid expenses and other assets	Prepaid expenses and other assets	105,233		83,646		Prepaid expenses and other assets	87,070		83,646
Refundable income taxes	Refundable income taxes	—		8,815		Refundable income taxes	—		8,815
Total current assets	Total current assets	1,840,575		1,712,763		Total current assets	1,856,647		1,712,763
Property, plant and equipment, at cost	Property, plant and equipment, at cost	1,451,044		1,422,101		Property, plant and equipment, at cost	1,452,413		1,422,101
Less accumulated depreciation and amortization	Less accumulated depreciation and amortization	840,826		823,496		Less accumulated depreciation and amortization	844,850		823,496
Net property, plant and equipment	Net property, plant and equipment	610,218		598,605		Net property, plant and equipment	607,563		598,605

Goodwill	Goodwill	707,692		708,566		Goodwill	741,743		708,566
Other intangible assets, net	Other intangible assets, net	169,424		175,364		Other intangible assets, net	192,333		175,364
Other assets	Other assets	253,574		251,951		Other assets	276,466		251,951
Total assets	Total assets	$	3,581,483	$	3,447,249	Total assets	$	3,674,752	$	3,447,249

LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current installments of long-term debt	Current installments of long-term debt	$	4,226	$	4,884	Current installments of long-term debt	$	3,018	$	4,884
Notes payable to banks	Notes payable to banks	8,380		13,439		Notes payable to banks	4,428		13,439
Accounts payable	Accounts payable	404,410		347,841		Accounts payable	388,498		347,841
Accrued employee compensation and benefits	Accrued employee compensation and benefits	96,547		144,559		Accrued employee compensation and benefits	107,108		144,559
Contract liabilities	Contract liabilities	168,794		135,746		Contract liabilities	175,814		135,746
Other accrued expenses	Other accrued expenses	118,535		108,771		Other accrued expenses	130,114		108,771
Income taxes payable	Income taxes payable	6,074		—		Income taxes payable	10,036		—

Dividends payable	Dividends payable	11,721		10,616		Dividends payable	11,743		10,616
Total current liabilities	Total current liabilities	818,687		765,856		Total current liabilities	830,759		765,856
Deferred income taxes	Deferred income taxes	50,604		47,849		Deferred income taxes	55,641		47,849
Long-term debt, excluding current installments	Long-term debt, excluding current installments	963,065		947,072		Long-term debt, excluding current installments	995,647		947,072
Defined benefit pension liability	Defined benefit pension liability	—		536		Defined benefit pension liability	—		536
Operating lease liabilities	Operating lease liabilities	146,493		147,759		Operating lease liabilities	154,799		147,759
Deferred compensation	Deferred compensation	36,469		35,373		Deferred compensation	33,778		35,373
Other noncurrent liabilities	Other noncurrent liabilities	61,674		89,207		Other noncurrent liabilities	50,978		89,207
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:

Common stock of $1 par value -	Common stock of $1 par value -					Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued	Authorized 75,000,000 shares; 27,900,000 issued	27,900		27,900		Authorized 75,000,000 shares; 27,900,000 issued	27,900		27,900
Additional paid in capital	Additional paid in capital	5,251		1,479		Additional paid in capital	4,321		1,479
Retained earnings	Retained earnings	2,444,897		2,394,307		Retained earnings	2,509,262		2,394,307
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(232,160)		(263,127)		Accumulated other comprehensive loss	(288,184)		(263,127)
Treasury stock	Treasury stock	(769,835)		(773,712)		Treasury stock	(764,917)		(773,712)
Total Valmont Industries, Inc. shareholders’ equity	Total Valmont Industries, Inc. shareholders’ equity	1,476,053		1,386,847		Total Valmont Industries, Inc. shareholders’ equity	1,488,382		1,386,847
Noncontrolling interest in consolidated subsidiaries	Noncontrolling interest in consolidated subsidiaries	28,438		26,750		Noncontrolling interest in consolidated subsidiaries	64,768		26,750
Total shareholders’ equity	Total shareholders’ equity	1,504,491		1,413,597		Total shareholders’ equity	1,553,150		1,413,597
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	3,581,483	$	3,447,249	Total liabilities and shareholders’ equity	$	3,674,752	$	3,447,249

See accompanying notes to condensed consolidated financial statements.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


		Thirteen weeks ended				Twenty-six weeks ended
		March 26, 2022		March 27, 2021				June 25, 2022		June 26, 2021
Cash flows from operating activities:	Cash flows from operating activities:						Cash flows from operating activities:
Net earnings	Net earnings	$	62,906	$	55,001		Net earnings	$	140,113	$	117,658
Adjustments to reconcile net earnings to net cash flows from operations:	Adjustments to reconcile net earnings to net cash flows from operations:						Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization	Depreciation and amortization	23,884		21,031			Depreciation and amortization	48,012		44,063

Stock-based compensation	Stock-based compensation	9,463		4,671			Stock-based compensation	19,583		8,948

Defined benefit pension plan benefit	Defined benefit pension plan benefit	(2,705)		(3,676)			Defined benefit pension plan benefit	(5,242)		(7,400)
Contribution to defined benefit pension plan	Contribution to defined benefit pension plan	—		(964)			Contribution to defined benefit pension plan	(17,155)		(970)
Gain on sale of property, plant and equipment		4		60
Loss (gain) on sale of property, plant and equipment							Loss (gain) on sale of property, plant and equipment	737		(1,330)
Equity in loss in nonconsolidated subsidiaries	Equity in loss in nonconsolidated subsidiaries	358		360			Equity in loss in nonconsolidated subsidiaries	913		719
Deferred income taxes	Deferred income taxes	708		6,955			Deferred income taxes	2,675		(3,718)
Changes in assets and liabilities:	Changes in assets and liabilities:						Changes in assets and liabilities:
Receivables	Receivables	(36,643)		16,044			Receivables	(53,809)		(45,398)
Inventories	Inventories	(68,236)		(67,386)			Inventories	(56,625)		(142,218)
Prepaid expenses and other assets (current and non-current)	Prepaid expenses and other assets (current and non-current)	(4,452)		(22,514)			Prepaid expenses and other assets (current and non-current)	5,369		(19,680)
Contract assets	Contract assets	(19,486)		5,118			Contract assets	(59,536)		(17,165)
Accounts payable	Accounts payable	49,006		24,605			Accounts payable	39,875		55,445
Accrued expenses	Accrued expenses	(34,186)		(35,559)			Accrued expenses	(16,034)		(18,119)
Contract liabilities	Contract liabilities	4,308		20,051			Contract liabilities	4,798		24,963
Other noncurrent liabilities	Other noncurrent liabilities	14		4,215			Other noncurrent liabilities	(6,447)		52,229
Income taxes payable/refundable	Income taxes payable/refundable	17,760		5,141			Income taxes payable/refundable	20,792		22,158
Net cash flows from operating activities	Net cash flows from operating activities	2,703		33,153			Net cash flows from operating activities	68,019		70,185
Cash flows from investing activities:	Cash flows from investing activities:						Cash flows from investing activities:
Purchase of property, plant and equipment	Purchase of property, plant and equipment	(27,095)		(27,565)			Purchase of property, plant and equipment	(49,676)		(48,824)
Proceeds from sale of assets	Proceeds from sale of assets	2		204			Proceeds from sale of assets	45		1,595

Acquisitions, net of cash acquired							Acquisitions, net of cash acquired	(39,297)		(312,500)

Other, net	Other, net	(2,007)		(1,947)			Other, net	1,117		(1,669)
Net cash flows from investing activities	Net cash flows from investing activities	(29,100)		(29,308)			Net cash flows from investing activities	(87,811)		(361,398)
Cash flows from financing activities:	Cash flows from financing activities:						Cash flows from financing activities:
Proceeds from short-term borrowings	Proceeds from short-term borrowings	—		14,734			Proceeds from short-term borrowings	—		11,972
Payments on short-term borrowings	Payments on short-term borrowings	(5,562)		(10,759)			Payments on short-term borrowings	(9,155)		(17,021)
Proceeds from long-term borrowings	Proceeds from long-term borrowings	97,000		4,181			Proceeds from long-term borrowings	201,462		149,342
Principal payments on long-term borrowings	Principal payments on long-term borrowings	(82,529)		(712)			Principal payments on long-term borrowings	(156,973)		(15,421)

Dividends paid	Dividends paid	(10,616)		(9,556)			Dividends paid	(22,337)		(20,181)

Purchase of noncontrolling interest							Purchase of noncontrolling interest	(4,292)		—
Purchase of treasury shares	Purchase of treasury shares	—		(11,131)			Purchase of treasury shares	(9,776)		(21,600)
Proceeds from exercises under stock plans	Proceeds from exercises under stock plans	713		19,318			Proceeds from exercises under stock plans	5,846		19,891
Purchase of common treasury shares—stock plan exercises	Purchase of common treasury shares—stock plan exercises	(2,527)		(16,725)			Purchase of common treasury shares—stock plan exercises	(4,205)		(16,922)
Net cash flows from financing activities	Net cash flows from financing activities	(3,521)		(10,650)			Net cash flows from financing activities	570		90,060
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	2,386		(2,463)			Effect of exchange rate changes on cash and cash equivalents	(3,431)		(288)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(27,532)		(9,268)			Net change in cash and cash equivalents	(22,653)		(201,441)
Cash and cash equivalents—beginning of year	Cash and cash equivalents—beginning of year	177,232		400,726			Cash and cash equivalents—beginning of year	177,232		400,726
Cash and cash equivalents—end of period	Cash and cash equivalents—end of period	$	149,700	$	391,458		Cash and cash equivalents—end of period	$	154,579	$	199,285

See accompanying notes to condensed consolidated financial statements

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)


	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Treasury stock		Noncontrolling interest in consolidated subsidiaries		Total shareholders’ equity
Balance at March 27, 2021	$	27,900	$	—	$	2,282,355	$	(307,556)	$	(777,885)	$	25,288	$	1,250,102
Net earnings	—		—		62,110		—		—		547		62,657
Other comprehensive income (loss)	—		—		—		24,121		—		1,026		25,147
Cash dividends declared ($0.5 per share)	—		—		(10,606)		—		—		—		(10,606)




Purchase of treasury shares; 42,150 shares acquired	—		—		—		—		(10,469)		—		(10,469)
Stock plan exercises; 63,783 shares acquired	—		—		—		—		(197)		—		(197)
Stock options exercised; 1,245 shares issued	—		(3,500)		3,156		—		917		—		573
Stock option expense	—		619		—		—		—		—		619
Stock awards; 6,351 shares issued	—		2,881		—		—		777		—		3,658
Balance at June 26, 2021	$	27,900	$	—	$	2,337,015	$	(283,435)	$	(786,857)	$	26,861	$	1,321,484
Balance at March 26, 2022	$	27,900	$	5,251	$	2,444,897	$	(232,160)	$	(769,835)	$	28,438	1,504,491
Net earnings	—		—		76,108		—		—		1,099		77,207
Other comprehensive income (loss)	—		—		—		(56,024)		—		(2,031)		(58,055)
Cash dividends declared ($0.55 per share)	—		—		(11,743)		—		—		—		(11,743)

Purchase of noncontrolling interest	—		189		—		—		—		(4,481)		(4,292)
Addition of noncontrolling interest due to acquisition	—		—		—		—		—		41,743		41,743
Purchase of treasury shares; 38,804 shares acquired	—		—		—		—		(9,776)		—		(9,776)
Stock plan exercises; 7,080 shares acquired	—		—		—		—		(1,678)		—		(1,678)
Stock options exercised; 42,961 shares issued	—		(1,551)		—		—		6,684		—		5,133
Stock option expense	—		836		—		—		—		—		836
Stock awards; 42,145 shares issued	—		(404)		—		—		9,688		—		9,284
Balance at June 25, 2022	$	27,900	$	4,321	$	2,509,262	$	(288,184)	$	(764,917)	$	64,768	$	1,553,150

Common
stock Additional
paid-in
capital Retained
earnings Accumulated
other
comprehensive
income (loss) Treasury
stock Noncontrolling
interest in
consolidated
subsidiaries Total
shareholders’
equity
Balance at December 26, 2020 $ 27,900 $ 335 $ 2,245,035 $ (309,786) $ (781,422) $ 25,774 $ 1,207,836
Net earnings — — 55,014 — — (13) 55,001
Other comprehensive income (loss) — — — 2,230 — (473) 1,757
Cash dividends declared ($0.50 per share) — — (10,625) — — — (10,625)
Purchase of treasury shares; 50,147 shares acquired — — — — (11,131) — (11,131)
Stock plan exercises; 70,485 shares acquired — — — — (16,725) — (16,725)
Stock options exercised; 142,878 shares issued — (4,600) (7,069) — 30,987 — 19,318
Stock option expense — 648 — — — — 648
Stock awards; 2,709 shares issued — 3,617 — — 406 — 4,023
Balance at March 27, 2021 $ 27,900 $ — $ 2,282,355 $ (307,556) $ (777,885) $ 25,288 $ 1,250,102
Balance at December 25, 2021 $ 27,900 $ 1,479 $ 2,394,307 $ (263,127) $ (773,712) $ 26,750 $ 1,413,597
Net earnings — — 62,311 — — 595 62,906
Other comprehensive income — — — 30,967 — 1,093 32,060
Cash dividends declared ($0.55 per share) — — (11,721) — — — (11,721)
Stock plan exercises; 11,695 shares acquired — — — — (2,527) — (2,527)
Stock options exercised; 5,616 shares issued — (536) — — 1,249 — 713
Stock option expense — 716 — — — — 716
Stock awards; 37,748 shares issued — 3,592 — — 5,155 — 8,747
Balance at March 26, 2022 $ 27,900 $ 5,251 $ 2,444,897 $ (232,160) $ (769,835) $ 28,438 $ 1,504,491

See accompanying notes to the condensed consolidated financial statements.


	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Treasury stock		Noncontrolling interest in consolidated subsidiaries		Total shareholders’ equity
Balance at December 26, 2020	$	27,900	$	335	$	2,245,035	$	(309,786)	$	(781,422)	$	25,774	$	1,207,836
Net earnings	—		—		117,124		—		—		534		117,658
Other comprehensive income (loss)	—		—		—		26,351		—		553		26,904
Cash dividends declared ($1.00 per share)	—		—		(21,231)		—		—		—		(21,231)




Purchase of treasury shares; 92,297 shares acquired	—		—		—		—		(21,600)		—		(21,600)
Stock plan exercises; 71,268 shares acquired	—		—		—		—		(16,922)		—		(16,922)
Stock options exercised; 144,123 shares issued	—		(8,100)		(3,913)		—		31,904		—		19,891
Stock option expense	—		1,267		—		—		—		—		1,267
Stock awards; 9,060 shares issued	—		6,498		—		—		1,183		—		7,681
Balance at June 26, 2021	$	27,900	$	—	$	2,337,015	$	(283,435)	$	(786,857)	$	26,861	$	1,321,484
Balance at December 25, 2021	$	27,900	$	1,479	$	2,394,307	$	(263,127)	$	(773,712)	$	26,750	$	1,413,597
Net earnings	—		—		138,419		—		—		1,694		140,113
Other comprehensive income (loss)	—		—		—		(25,057)		—		(938)		(25,995)
Cash dividends declared ($1.10 per share)	—		—		(23,464)		—		—		—		(23,464)

Purchase of noncontrolling interest	—		189		—		—		—		(4,481)		(4,292)
Addition of noncontrolling interest due to acquisition	—		—		—		—		—		41,743		41,743
Purchase of treasury shares; 38,804 shares acquired	—		—		—		—		(9,776)		—		(9,776)
Stock plan exercises; 18,775 shares acquired	—		—		—		—		(4,205)		—		(4,205)
Stock options exercised; 48,577 shares issued	—		(2,087)		—		—		7,933		—		5,846
Stock option expense	—		1,552		—		—		—		—		1,552
Stock awards; 79,893 shares issued	—		3,188		—		—		14,843		—		18,031
Balance at June 25, 2022	$	27,900	$	4,321	$	2,509,262	$	(288,184)	$	(764,917)	$	64,768	$	1,553,150

See accompanying notes to the condensed consolidated financial statements.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Consolidated Financial Statements

The Condensed Consolidated Balance Sheet as of ~~March 26,~~June 25, 2022, the Condensed Consolidated Statements of Earnings, Comprehensive Income, ~~Cash Flows,~~ and Shareholders' Equity for the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021, and the Condensed Consolidated Statement of Cash Flows for the twenty-six weeks then ended have been prepared by Valmont Industries Inc. (the Company), without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of ~~March 26,~~June 25, 2022 and for all periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2021. The results of operations for the period ended ~~March 26,~~June 25, 2022 are not necessarily indicative of the operating results for the full year.

Change in Reportable Segments

During the first quarter of 2022, the Company's Chief Executive Officer, as the chief operating decision maker ("CODM"), made changes to the Company’s management structure and began to manage the business, allocate resources, and evaluate performance under the new structure. As a result, the Company has realigned its reportable segment structure. All prior period segment information has been recast to reflect this change in reportable segments. Refer to Note 7 for additional information.

Inventories

Inventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods.

Inventories consisted of the following:


		March 26, 2022		December 25, 2021			June 25, 2022		December 25, 2021
Raw materials and purchased parts	Raw materials and purchased parts	$	297,570	$	278,107	Raw materials and purchased parts	$	309,372	$	278,107
Work-in-process	Work-in-process	78,591		63,628		Work-in-process	72,632		63,628
Finished goods and manufactured goods	Finished goods and manufactured goods	431,310		387,099		Finished goods and manufactured goods	404,596		387,099
Total Inventory	Total Inventory	$	807,471	$	728,834	Total Inventory	$	786,600	$	728,834

Income Taxes

Earnings before income taxes for the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021, were as follows:


		Thirteen weeks ended				Thirteen weeks ended				Twenty-six weeks ended
		2022		2021				2022		2021		2022		2021
United States	United States	$	60,816	$	51,155		United States	$	62,214	$	57,090	$	123,031	$	108,245
Foreign	Foreign	25,569		19,708			Foreign	45,135		20,666		70,703		40,374
		$	86,385	$	70,863			$	107,349	$	77,756	$	193,734	$	148,619

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

Pension Benefits

The Company incurs expenses in connection with the Delta Pension Plan ("DPP"). The DPP was acquired as part of the Delta plc acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

related benefit obligation, various assumptions are made including discount rates used to value the obligation, expected return on plan assets used to fund these expenses and estimated future inflation rates. These assumptions are based on historical experience as well as current facts and circumstances. An actuarial analysis is used to measure the expense and liability associated with pension benefits.

The components of the net periodic pension (benefit) expense for the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021 were as follows:

Thirteen weeks ended
Net periodic (benefit) expense: 2022 2021
Interest cost $ 3,365 $ 2,497
Expected return on plan assets (6,202) (7,005)
Amortization of actuarial loss 132 832
Net periodic (benefit) expense $ (2,705) $ (3,676)


	Thirteen weeks ended				Twenty-six weeks ended
Net periodic (benefit) expense:	2022		2021		2022		2021
Interest cost	$	3,157	$	2,530	$	6,522	$	5,027
Expected return on plan assets	(5,818)		(7,097)		(12,020)		(14,102)
Amortization of actuarial loss	124		843		256		1,675
Net periodic benefit	$	(2,537)	$	(3,724)	$	(5,242)	$	(7,400)

Stock Plans

The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. At ~~March 26,~~June 25, 2022, ~~175,917~~1,892,141 shares of common stock remained available for issuance under the plans. On April 26, 2022, Company shareholders approved the Valmont 2022 Stock Plan, in which the maximum number of shares of common stock that may be issued under the stock plan is 2,000,000 and no additional award grants may be made under any prior Company stock plan.

Under the plans, the exercise price of each option equals the closing market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three years or on the grant's fifth anniversary. Expiration of grants is seven years to ten years from the date of grant. Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant.

The Company's compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options and restricted stock for the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021, respectively, were as follows:


		Thirteen weeks ended				Thirteen weeks ended				Twenty-six weeks ended
		2022		2021				2022		2021		2022		2021
Compensation expense	Compensation expense	$	9,463	$	4,671		Compensation expense	$	10,120	$	4,277	$	19,583	$	8,948
Income tax benefits	Income tax benefits	2,366		1,168			Income tax benefits	2,530		1,069		4,896		2,237

Fair Value

The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.

Trading Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan at ~~March 26,~~June 25, 2022 of ~~$30,650~~$28,383 ($29,982 at December 25, 2021) represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification ("ASC") 320, Accounting for Certain Investments in Debt and Equity Securities, considering the employee's ability to change investment allocation of their deferred compensation at any time. The Company's ownership of shares in Delta EMD Pty. Ltd. (JSE:DTA) is also classified as trading securities. The shares are valued at ~~$101~~$93 and $94 as of ~~March 26,~~June 25, 2022 and December 25, 2021, respectively, which is the estimated fair value. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.

Derivative Financial Instruments: The fair value of foreign currency and commodity forward contracts, and cross currency contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate.


				Fair Value Measurement Using:									Fair Value Measurement Using:
		Carrying Value March 26, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Carrying Value June 25, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Trading Securities	Trading Securities	$	30,751	$	30,751	$	—	$	—	Trading Securities	$	28,476	$	28,476	$	—	$	—
Derivative financial instruments, net	Derivative financial instruments, net	17,633		—		17,633		—		Derivative financial instruments, net	3,432		—		3,432		—


			Fair Value Measurement Using:
	Carrying Value December 25, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets (Liabilities):
Trading Securities	$	30,076	$	30,076	$	—	$	—

Derivative financial instruments, net	(4,007)		—		(4,007)		—

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

Long-Lived Assets

The Company's other non-financial assets include goodwill and other intangible assets, which are classified as Level 3 items. These assets are measured at fair value on a non-recurring basis as part of annual impairment testing. ~~Note 3 to these condensed consolidated financial statements contain additional information related to the intangible asset impairments recognized in fiscal 2021.~~

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

Leases

The Company's operating leases are included in other assets and operating lease liabilities.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net earnings, currency translation adjustments, certain derivative-related activity and changes in net actuarial gains/losses from a pension plan. Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. Accumulated other comprehensive income (loss) consisted of the following at ~~March 26,~~June 25, 2022 and December 25, 2021:


		Foreign Currency Translation Adjustments		Gain on Hedging Activities		Defined Benefit Pension Plan		Accumulated Other Comprehensive Loss			Foreign Currency Translation Adjustments		Gain on Hedging Activities		Defined Benefit Pension Plan		Accumulated Other Comprehensive Loss
Balance at December 25, 2021	Balance at December 25, 2021	$	(243,350)	$	15,777	$	(35,554)	$	(263,127)	Balance at December 25, 2021	$	(243,350)	$	15,777	$	(35,554)	$	(263,127)
Current-period comprehensive income (loss)	Current-period comprehensive income (loss)	9,969		20,312		686		30,967		Current-period comprehensive income (loss)	(31,112)		5,799		256		(25,057)
Balance at March 26, 2022		$	(233,381)	$	36,089	$	(34,868)	$	(232,160)
Balance at June 25, 2022										Balance at June 25, 2022	$	(274,462)	$	21,576	$	(35,298)	$	(288,184)

Revenue Recognition

The Company determines the appropriate revenue recognition for our contracts by analyzing the type, terms and conditions of each contract or arrangement with a customer. Contracts with customers for all businesses are fixed-price with sales tax excluded from revenue, and do not include variable consideration. Discounts included in contracts with customers, typically early pay discounts, are recorded as a reduction of net sales in the period in which the sale is recognized. Contract revenues are classified as product when the performance obligation is related to the manufacturing of goods. Contract revenues are classified as service when the performance obligation is the performance of a service. Service revenue is primarily related to the Coatings and Technology Products and Services product lines.

Customer acceptance provisions exist only in the design stage of our products and acceptance of the design by the customer is required before the project is manufactured and delivered to the customer. The Company is not entitled to any compensation solely based on design of the product and does not recognize this service as a separate performance obligation and, therefore, no revenue ~~associated~~is recognized with the design stage. ~~There is one performance obligation for revenue recognition.~~ No general rights of return exist for customers once the product has been delivered and the Company establishes provisions for estimated warranties. The Company does not sell extended warranties for any of its products.

Shipping and handling costs associated with sales are recorded as cost of goods sold. The Company elected to use the practical expedient of treating freight as a fulfillment obligation instead of a separate performance obligation and ratably recognize freight expense as the structure is being manufactured, when the revenue from the associated customer contract is being recognized over time. With the exception of the transmission, distribution, and substation structures ("TD&S") product line, the renewable energy product lines, and the telecommunication structures product line, the Company’s inventory is interchangeable for a variety of each segment’s customers. The Company has elected to not disclose the partially satisfied performance obligation at the end of the period when the contract has an original expected duration of one year or less. In addition, the Company does not adjust the amount of consideration to be received in a contract for any significant financing component if payment is expected within twelve months of transfer of control of goods or services.

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

The Company's contract asset as of ~~March 26,~~June 25, 2022 and December 25, 2021 was ~~$161,633~~$200,522 and $142,643, respectively. While most of the Infrastructure segment customers are generally invoiced upon shipment or delivery of the goods to the customer's specified location, certain customers are also invoiced by advanced billings or progress billings.

At ~~March 26,~~June 25, 2022 and December 25, 2021, total contract liabilities were ~~$221,348~~$217,698 and $213,203, respectively. At ~~March 26,~~June 25, 2022, ~~$168,794~~$175,814 was recorded as contract liabilities and ~~$52,554~~$41,884 was recorded as other noncurrent liabilities on the condensed consolidated balance sheets. Additional details are as follows:

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

•During the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022, the Company recognized ~~$28,023~~$31,149 and $59,171 of revenue that was included in the total contract liability as of December 25, ~~2021;~~2021. The revenue recognized was due to applying advance payments received for performance obligations completed during the period;

•In the thirteen and twenty-six weeks ended ~~March 27,~~June 26, 2021, the Company recognized ~~$38,102~~$31,267 and $69,369 of revenue that was included in the total contract liability as of December 26, 2020. The revenue recognized was due to applying advance payments received for performance obligations completed during the period; and

•At ~~March 26,~~June 25, 2022, the Company had ~~$105,013~~$83,681 of remaining performance obligations on contracts with an original expected duration of one year or more and expects to complete the remaining performance obligations on these contracts within the next 12 to 24 months.

Segment and Product Line Revenue Recognition

Infrastructure Segment

Steel and concrete utility structures within the TD&S product line are engineered to customer specifications resulting in limited ability to sell the structure to a different customer if an order is canceled after production commences. The continuous transfer of control to the customer is evidenced either by contractual termination clauses or by our rights to payment for work performed to-date plus a reasonable profit as the products do not have an alternative use to the Company. Since control is transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment. For our TD&S and telecommunication structure product lines, we generally recognize revenue on an inputs basis, using total production hours incurred to-date for each order as a percentage of total hours estimated to produce the order. The completion percentage is applied to the order’s total revenue and total estimated costs to determine reported revenue, cost of goods sold and gross profit. Production of an order, once started, is typically completed within three months. Depending on the product sold, revenue from renewable energy is recognized both upon shipment or delivery of goods to the customer depending on contract terms, or by using an inputs method, based on the ratio of costs incurred to-date to the total estimated costs at completion of the performance obligation. External sales agents are used in certain TD&S sales and the Company has chosen to expense estimated commissions owed to third parties by recognizing them proportionately as the goods are manufactured.

For the structures sold for lighting and transportation and for the majority of telecommunication products, revenue is recognized upon shipment or delivery of goods to the customer depending on contract terms, which is the same point in time that the customer is billed. There are also large regional customers who have unique product specifications for telecommunication structures. When the customer contract includes a cancellation clause that would require them to pay for work completed plus a reasonable margin if an order was canceled, revenue is recognized over time based on hours worked as a percent of total estimated hours to complete production.

The ~~coatings~~Coatings product line revenues are derived by providing coating services to customers’ products, which include galvanizing, anodizing, and powder coating. Revenue is recognized once the coating service has been performed and the goods are ready to be picked up or delivered to the customer which is the same time that the customer is billed.

Agriculture Segment

Revenue recognition from the manufacture of irrigation equipment and related parts and services (including tubular products for industrial customers) is generally upon shipment of the goods to the customer which is the same point in time

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

that the customer is billed. The remote monitoring subscription services recognized as part of technology services product line are primarily billed annually and revenue is recognized on a straight-line basis over the subsequent twelve months.

Disaggregation of revenue by product line is disclosed in the Business Segments and Related Revenue Information footnote (see note 7).

Recently Issued Accounting Pronouncements (not yet adopted)

In March 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP principles to contracts, hedging relationships, and other transactions that

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued due to reference rate reform. . In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified that certain optional expedients and exceptions in Topic 848 apply to derivative instruments that are affected by the discounting transition due to reference rate reform. The Company has not used any of the accommodations to date, but may use them up until December 31, 2022.

(2) ACQUISITIONS

Acquisitions of Businesses

On June 1, 2022, the Company acquired approximately 51% of ConcealFab for $39,297 in cash (net of cash acquired) and subject to working capital adjustments. Approximately $1,850 of the purchase price is contingent on seller representations and warranties that will be settled within 18 months of the acquisition date. ConcealFab is located in Colorado Springs, Colorado and its operations are reported in the Infrastructure segment. The acquisition was made to allow the Company to incorporate innovative 5G infrastructure and passive intermodulation mitigation solutions into our advanced infrastructure portfolio. Goodwill is not deductible for tax purposes. The amount allocated to goodwill was primarily attributable to anticipated synergies and other intangibles that do not qualify for separate recognition. The Company expects to finalize the purchase price allocation in the second quarter of 2023.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed of ConcealFab as of the date of acquisition:


	As of June 1, 2022

Current assets	$	21,133
Customer relationships	26,200
Trade name	5,000
Property, plant & equipment	3,813
Other assets	8,804
Goodwill	42,640
Total fair value of assets acquired	$	107,590
Current liabilities	6,426
Long-term debt	2,038
Operating lease liabilities	7,812
Deferred taxes	5,464
Other noncurrent liabilities	12
Total fair value of liabilities assumed	$	21,752
Non-controlling interest in consolidated subsidiaries	41,743
Net assets acquired	$	44,095

On May 12, 2021, the Company acquired the outstanding shares of Prospera, an artificial intelligence company focused on machine learning and computer vision in agriculture, for $300,000 in cash (net of cash acquired). The acquisition of Prospera, located in Tel Aviv, Israel, was made to allow the Company to accelerate innovation with machine learning for agronomy and is reported in the Agriculture segment. In the purchase price allocation, goodwill of $273,453, developed technology of $32,900, trade name of $2,850, property, plant, and equipment of $1,063, and a deferred tax liability of $8,223 were recorded with the remainder to net working capital. Goodwill is not deductible for tax purposes, the trade name will be amortized over 7 years, and the developed technology asset will be amortized over 5 years. The amount allocated to goodwill was primarily attributable to anticipated synergies and other intangibles that do not qualify for separate recognition. The Company finalized the purchase price allocation in the fourth quarter of 2021.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

The following table summarizes the fair values of the assets acquired and liabilities assumed of Prospera as of the date of acquisition:


	As of May 12, 2021

Current assets	$	647
Developed technology	32,900
Trade name	2,850
Property, plant & equipment	1,063
Goodwill	273,453
Total fair value of assets acquired	$	310,913
Current liabilities	2,690
Deferred taxes	8,223
Total fair value of liabilities assumed	$	10,913
Net assets acquired	$	300,000

On April 20, 2021 the Company acquired the assets of PivoTrac for $12,500 in cash. The agreed upon purchase price was $14,000, with $1,500 being held back for seller representations and ~~warranties that will be settled within 12 months of the acquisition date.~~warranties. The acquisition of PivoTrac, located in Texas, was made to allow the Company to advance its technology strategy and increase its number of connected agricultural devices and will be reported in the Agriculture segment. The ~~preliminary~~ fair values assigned were $10,800 for goodwill, $2,627 for customer relationships, and the remainder is net working capital. Goodwill is not deductible for tax purposes and the customer relationship will be amortized over 8 years. The Company ~~expects~~finalized the purchase price allocation ~~to be finalized~~ in the second quarter of 2022.

Proforma disclosures were omitted for these acquisitions as the they do not have a significant impact on the Company's financial results.

Acquisition of Noncontrolling Interests

On May 10, 2022, the Company acquired the remaining 20% of Valmont West Coast Engineering Ltd. for $4,292. As this transaction was for the acquisition of all of the remaining shares of consolidated subsidiary with no change in control, it was recorded within shareholders' equity and as a financing cash flow in the Consolidated Statements of Cash Flows.

1314

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

(3) GOODWILL AND INTANGIBLE ASSETS

Amortized Intangible Assets

The components of amortized intangible assets at ~~March 26,~~June 25, 2022 and December 25, 2021 were as follows:


		March 26, 2022						June 25, 2022
		Gross Carrying Amount		Accumulated Amortization		Weighted Average Life		Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	Customer Relationships	$	225,201	$	164,130	13 years	Customer Relationships	$	246,965	$	163,494	13 years

Patents & Proprietary Technology	Patents & Proprietary Technology	58,657		15,978		9 years	Patents & Proprietary Technology	58,188		17,861		9 years
Trade Name	Trade Name	2,850		339		6 years	Trade Name	2,850		441		7 years
Other	Other	4,511		4,087		6 years	Other	4,476		4,113		6 years
		$	291,219	$	184,534			$	312,479	$	185,909


	December 25, 2021
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	224,597	$	160,626	13 years

Patents & Proprietary Technology	58,699		13,955		9 years
Trade Name	2,850		183		7 years
Other	4,534		3,959		6 years
	$	290,680	$	178,723

Amortization expense for intangible assets for the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021, respectively was as follows:

Thirteen weeks ended
2022 2021
Amortization expense $ 5,849 $ 4,232


	Thirteen weeks ended				Twenty-six weeks ended
	2022		2021		2022		2021
Amortization expense	$	5,531	$	5,182	$	11,380	$	9,414

Estimated annual amortization expense related to finite-lived intangible assets is as follows:


		Estimated Amortization Expense			Estimated Amortization Expense
2022	2022	$	20,044	2022	$	21,425
2023	2023	17,783		2023	19,588
2024	2024	15,869		2024	17,675
2025	2025	14,435		2025	16,241
2026	2026	14,012		2026	15,823

The useful lives assigned to finite-lived intangible assets included consideration of factors such as the Company’s past and expected experience related to customer retention rates, the remaining legal or contractual life of the underlying arrangement that resulted in the recognition of the intangible asset and the Company’s expected use of the intangible asset.

1415

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

Non-amortized intangible assets

Intangible assets with indefinite lives are not amortized and consist solely of trade names. The carrying value of trade names at ~~March 26,~~June 25, 2022 and December 25, 2021 are as follows:


		March 26, 2022		December 25, 2021		Year Acquired		June 25, 2022		December 25, 2021		Year Acquired
Newmark	Newmark	$	11,111	$	11,111	2004	Newmark	$	11,111	$	11,111	2004
Convert Italia S.p.A	Convert Italia S.p.A	8,238		8,479		2018	Convert Italia S.p.A	7,916		8,479		2018
Webforge	Webforge	7,747		7,877		2010	Webforge	7,215		7,877		2010
Ingal EPS/Ingal Civil Products	Ingal EPS/Ingal Civil Products	7,511		7,637		2010	Ingal EPS/Ingal Civil Products	6,996		7,637		2010
Valmont SM	Valmont SM	5,904		6,082		2014	Valmont SM	5,673		6,082		2014
ConcealFab							ConcealFab	5,000		—		2022
Shakespeare	Shakespeare	4,000		4,000		2014	Shakespeare	4,000		4,000		2014
Walpar	Walpar	3,500		3,500		2018	Walpar	3,500		3,500		2018
Other	Other	14,729		14,721		Various	Other	14,352		14,721		Various
		$	62,740	$	63,407			$	65,763	$	63,407

In its determination of these intangible assets as indefinite-lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory, technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to maintain the value of the intangible asset. The Company expects that these intangible assets will maintain their value indefinitely. Accordingly, these assets are not amortized.

The Company’s trade names were tested for impairment as of August 28, 2021. The values of each trade name were determined using the relief-from-royalty method. Based on this evaluation, no trade names were determined to be impaired.

Goodwill

The carrying amount of goodwill by segment as of ~~March 26,~~June 25, 2022 and December 25, 2021 was as follows:


		Infrastructure Segment		Agriculture Segment		Total			Infrastructure Segment		Agriculture Segment		Total
Gross Balance December 25, 2021	Gross Balance December 25, 2021	$	456,876	$	313,512	$	770,388	Gross Balance December 25, 2021	$	456,876	$	313,512	$	770,388
Accumulated impairment losses	Accumulated impairment losses	(61,822)		—		(61,822)		Accumulated impairment losses	(61,822)		—		(61,822)
Balance at December 25, 2021	Balance at December 25, 2021	395,054		313,512		708,566		Balance at December 25, 2021	395,054		313,512		708,566

Acquisitions								Acquisitions	42,640		—		42,640

Foreign currency translation	Foreign currency translation	(1,584)		710		(874)		Foreign currency translation	(9,759)		296		(9,463)
Balance at March 26, 2022		$	393,470	$	314,222	$	707,692
Balance at June 25, 2022								Balance at June 25, 2022	$	427,935	$	313,808	$	741,743

Infrastructure Segment Agriculture Segment Total
Gross Balance March 26, 2022 $ 455,292 $ 314,222 $ 769,514
Accumulated impairment losses (61,822) — (61,822)
Balance at March 26, 2022 $ 393,470 $ 314,222 $ 707,692


	Infrastructure Segment		Agriculture Segment		Total
Gross Balance June 25, 2022	$	489,757	$	313,808	$	803,565
Accumulated impairment losses	$	(61,822)	$	—	$	(61,822)
Balance at June 25, 2022	$	427,935	$	313,808	$	741,743

~~The Company’s annual impairment test of goodwill was performed as of August 28, 2021, using primarily the discounted cash flow method. During fiscal 2022, no goodwill impairment has been recorded.~~

1516

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

The Company’s annual impairment test of goodwill was performed as of August 28, 2021, using primarily the discounted cash flow method. The estimated fair value of all our reporting units exceeded their respective carrying value, so no goodwill impairments were recorded. During fiscal 2022, no goodwill impairments have been recorded.

(4) CASH FLOW SUPPLEMENTARY INFORMATION

The Company considers all highly liquid temporary cash investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash payments for interest and income taxes (net of refunds) for the thirteen weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021 were as follows:


		2022		2021			2022		2021
Interest	Interest	$	1,613	$	111	Interest	$	22,221	$	19,657
Income taxes	Income taxes	6,699		3,347		Income taxes	29,921		11,317

(5) EARNINGS PER SHARE

The following table provides a reconciliation between Basic and Diluted earnings per share (EPS):


		Basic EPS		Dilutive Effect of Stock Options		Diluted EPS			Basic EPS		Dilutive Effect of Stock Options		Diluted EPS
Thirteen weeks ended March 26, 2022:
Thirteen weeks ended June 25, 2022:								Thirteen weeks ended June 25, 2022:
Net earnings attributable to Valmont Industries, Inc.	Net earnings attributable to Valmont Industries, Inc.	$	62,311	$	—	$	62,311	Net earnings attributable to Valmont Industries, Inc.	$	76,108	$	—	$	76,108
Weighted average shares outstanding (000's)	Weighted average shares outstanding (000's)	21,279		213		21,492		Weighted average shares outstanding (000's)	21,313		228		21,541
Per share amount	Per share amount	$	2.93	$	(0.03)	$	2.90	Per share amount	$	3.57	$	(0.04)	$	3.53
Thirteen weeks ended March 27, 2021:
Thirteen weeks ended June 26, 2021:								Thirteen weeks ended June 26, 2021:
Net earnings attributable to Valmont Industries, Inc.	Net earnings attributable to Valmont Industries, Inc.	$	55,014	$	—	$	55,014	Net earnings attributable to Valmont Industries, Inc.	$	62,110	$	—	$	62,110
Weighted average shares outstanding (000's)	Weighted average shares outstanding (000's)	21,179		250		21,429		Weighted average shares outstanding (000's)	21,193		276		21,469
Per share amount	Per share amount	$	2.60	$	(0.03)	$	2.57	Per share amount	$	2.93	$	(0.04)	$	2.89

Twenty-six weeks ended June 25, 2022								Twenty-six weeks ended June 25, 2022
Net earnings attributable to Valmont Industries, Inc.								Net earnings attributable to Valmont Industries, Inc.	$	138,419	$	—	$	138,419
Weighted average shares outstanding (000's)								Weighted average shares outstanding (000's)	21,296		220		21,516
Per share amount								Per share amount	$	6.50	$	(0.07)	$	6.43
Twenty-six weeks ended June 26, 2021:								Twenty-six weeks ended June 26, 2021:
Net earnings attributable to Valmont Industries, Inc.								Net earnings attributable to Valmont Industries, Inc.	$	117,124	$	—	$	117,124
Weighted average shares outstanding (000's)								Weighted average shares outstanding (000's)	21,186		263		21,449
Per share amount								Per share amount	$	5.53	$	(0.07)	$	5.46

At ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021, there were 47,223 and 0 outstanding stock options with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted earnings per share, respectively.

1617

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

(6) DERIVATIVE FINANCIAL INSTRUMENTS

The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency denominated transactions and investments in foreign subsidiaries. Depending on the circumstances, the Company may manage these risks by utilizing derivative financial instruments. Some derivative financial instruments are marked to market and recorded in the Company's consolidated statements of earnings, while others may be accounted for as fair value, cash flow, or net investment hedges. Derivative financial instruments have credit and market risk. The Company manages these risks of derivative instruments by monitoring limits as to the types and degree of risk that can be taken, and by entering into transactions with counterparties who are recognized, stable multinational banks. Any gains or losses from net investment hedge activities remain in ~~OCI~~other comprehensive income ("OCI") until either the sale or substantially complete liquidation of the related subsidiaries.

Fair value of derivative instruments at ~~March 26,~~June 25, 2022 and December 25, 2021 are as follows:


Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:	Balance sheet location	March 26, 2022		December 25, 2021		Derivatives designated as hedging instruments:	Balance sheet location	June 25, 2022		December 25, 2021

Commodity forward contracts	Commodity forward contracts	Accrued expenses	$	(52)	$	(5,802)	Commodity forward contracts	Accrued expenses	$	(5,252)	$	(5,802)
Foreign currency forward contracts	Foreign currency forward contracts	Prepaid expenses and other assets	236		149		Foreign currency forward contracts	Prepaid expenses and other assets	64		149
Foreign currency forward contracts	Foreign currency forward contracts	Accrued expenses	—		(118)		Foreign currency forward contracts	Accrued expenses	—		(118)
Cross currency swap contracts	Cross currency swap contracts	Prepaid expenses and other assets	17,449		1,764		Cross currency swap contracts	Prepaid expenses and other assets	8,724		1,764
Cross currency swap contracts							Cross currency swap contracts	Accrued expenses	(104)		—
			$	17,633	$	(4,007)			$	3,432	$	(4,007)

Gains (losses) on derivatives recognized in the condensed consolidated statements of earnings for the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021 are as follows:


			Thirteen weeks ended					Thirteen weeks ended			Twenty-six weeks ended
		Statements of earnings location	March 26, 2022		March 27, 2021			Statements of earnings location	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Commodity forward contracts	Commodity forward contracts	Product cost of sales	$	2,043	$	—	Commodity forward contracts	Product cost of sales	$	(1,545)	$	270	$	498	$	270
Foreign currency forward contracts	Foreign currency forward contracts	Other income	151		(218)		Foreign currency forward contracts	Other income	(234)		154		(85)		(64)
Foreign currency forward contracts		Product sales	—		—

Interest rate hedge amortization	Interest rate hedge amortization	Interest expense	(16)		(16)		Interest rate hedge amortization	Interest expense	(16)		(16)		(32)		(32)
Cross currency swap contracts	Cross currency swap contracts	Interest expense	774		711		Cross currency swap contracts	Interest expense	733		658		1,507		1,368
			$	2,952	$	477			$	(1,062)	$	1,066	$	1,888	$	1,542

Cash Flow Hedges

During 2021, the Company entered into steel hot rolled coil (HRC) forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $93,498 for the total purchase of 86,100 short ~~tons (30,500~~tons. During the second quarter of 2022, the Company entered into additional steel HRC forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $14,010 for the total purchase of 15,000 short ~~tons from May 2021 thru December 2021 and 55,600 short tons from January 2022 thru December 2022).~~tons. As of ~~March 26,~~June 25, 2022, the forward contracts had a notional amount of ~~$51,331~~$43,589 for the total purchase of ~~43,600~~42,400 short tons from ~~April~~July 2022 to ~~December 2022.~~March 2023. The gain/(loss) realized upon settlement will be recorded in product cost of sales in the condensed consolidated statements of earnings over average inventory turns.

During the first quarter of 2022, a subsidiary with a Euro functional currency entered into a foreign currency forward contract to mitigate foreign currency risk related to a large customer order denominated in U.S. dollars. The forward ~~contract, which qualifies as a fair value hedge, matures in August 2022 and has a notional amount to sell $1,800 in exchange for a stated amount of Euros.~~

1718

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

contract, which qualifies as a fair value hedge, matures in August 2022 and has a notional amount to sell $1,800 in exchange for a stated amount of Euros.

Net Investment Hedges

In 2019, the Company entered into 2 fixed-for-fixed cross currency swaps (“CCS”), swapping U.S. dollar principal and interest payments on a portion of its 5.00% senior unsecured notes due 2044 for Danish krone (DKK) and Euro denominated payments. The CCS were entered into in order to mitigate foreign currency risk on the Company's Euro and DKK investments and to reduce interest expense. Interest is exchanged twice per year on April 1 and October 1.

Key terms of the two CCS are as follows:


Currency	Notional Amount		Termination Date	Swapped Interest Rate	Set Settlement Amount
Danish Krone (DKK)	$	50,000	April 1, 2024	2.68%	DKK 333,625
Euro	$	80,000	April 1, 2024	2.825%	€71,550

The Company designated the full notional amount of the 2 CCS ($130,000) as a hedge of the net investment in certain Danish and European subsidiaries under the spot method, with all changes in the fair value of the CCS that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded as cumulative foreign currency translation within OCI. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS.

(7) BUSINESS SEGMENTS & RELATED REVENUE INFORMATION

During the first quarter of 2022, the Company's CODM changed the Company's management structure and began to manage the business, allocate resources and evaluate performance based on the new structure. As a result, the Company has realigned to a 2 reportable segment structure organized by market dynamics (Infrastructure and Agriculture). Three operating segments resulted from the new management structure and two are aggregated into the Agriculture reportable segment. The Company considers gross profit margins, nature of products sold, nature of the production processes, type and class of customer, and methods used to distribute products when assessing aggregation of operating segments. The Infrastructure segment includes the previous reportable segments of Utility Structures, Engineered Support Structures, and Coatings. All prior period segment information has been recast to reflect this change in reportable segments.

Both reportable segments are global in nature with a manager responsible for segment operational performance and the allocation of capital within the segment. Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts.

Reportable segments are as follows:

INFRASTRUCTURE: This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation, and telecommunications, and coatings services to preserve and protect metal products.

AGRICULTURE: This segment consists of the manufacture of center pivot and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.

The Company evaluates the performance of its reportable segments based upon operating income and invested capital. The Company does not allocate interest expense, non-operating income (expense), or income taxes to its reportable segments.

1819

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

Summary by Business


		Thirteen weeks ended				Thirteen weeks ended				Twenty-six weeks ended
		March 26, 2022		March 27, 2021				June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
SALES:	SALES:						SALES:
Infrastructure	Infrastructure	$	680,726	$	549,646		Infrastructure	$	764,950	$	617,604	$	1,445,676	$	1,167,250
Agriculture	Agriculture	306,580		229,664			Agriculture	377,765		281,965		684,345		511,629

Total	Total	987,306		779,310			Total	1,142,715		899,569		2,130,021		1,678,879
INTERSEGMENT SALES:	INTERSEGMENT SALES:						INTERSEGMENT SALES:
Infrastructure	Infrastructure	(3,101)		(3,201)			Infrastructure	(4,200)		(2,796)		(7,301)		(5,997)
Agriculture	Agriculture	(3,385)		(1,223)			Agriculture	(2,983)		(2,144)		(6,368)		(3,367)

Total	Total	(6,486)		(4,424)			Total	(7,183)		(4,940)		(13,669)		(9,364)
NET SALES:	NET SALES:						NET SALES:
Infrastructure	Infrastructure	677,625		546,445			Infrastructure	760,750		614,808		1,438,375		1,161,253
Agriculture	Agriculture	303,195		228,441			Agriculture	374,782		279,821		677,977		508,262

Total	Total	$	980,820	$	774,886		Total	$	1,135,532	$	894,629	$	2,116,352	$	1,669,515

OPERATING INCOME:	OPERATING INCOME:						OPERATING INCOME:
Infrastructure	Infrastructure	$	77,507	$	54,449		Infrastructure	$	84,643	$	61,550	$	162,150	$	115,999
Agriculture	Agriculture	37,475		38,748			Agriculture	58,046		41,984		95,521		80,732
Corporate	Corporate	(20,140)		(15,986)			Corporate	(23,970)		(20,909)		(44,110)		(36,895)

Total	Total	$	94,842	$	77,211		Total	$	118,719	$	82,625	$	213,561	$	159,836

Thirteen weeks ended March 26, 2022
Infrastructure Agriculture Intersegment Sales Consolidated
Geographical market:
North America $ 505,980 $ 182,255 $ (6,486) $ 681,749
International 174,746 124,325 — 299,071
Total $ 680,726 $ 306,580 $ (6,486) $ 980,820
Product line:
Transmission, Distribution and Substation $ 281,600 $ — $ — $ 281,600
Lighting and Transportation 212,767 — — 212,767
Coatings 81,976 — (3,101) 78,875
Telecommunications 61,396 — — 61,396
Renewable Energy 42,987 — — 42,987
Irrigation Equipment and Parts, excluding Technology — 278,034 (3,385) 274,649
Technology Products and Services — 28,546 — 28,546
Total $ 680,726 $ 306,580 $ (6,486) $ 980,820


	Thirteen weeks ended June 25, 2022
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	559,864	$	203,488	$	(6,716)	$	756,636
International	205,086		174,277		(467)		378,896
Total	$	764,950	$	377,765	$	(7,183)	$	1,135,532

Product line:
Transmission, Distribution and Substation	$	295,835	$	—	$	—	$	295,835
Lighting and Transportation	246,652		—		—		246,652
Coatings	90,321		—		(4,200)		86,121
Telecommunications	78,539		—		—		78,539
Renewable Energy	53,603		—		—		53,603
Irrigation Equipment and Parts, excluding Technology	—		347,585		(2,983)		344,602
Technology Products and Services	—		30,180		—		30,180
Total	$	764,950	$	377,765	$	(7,183)	$	1,135,532

1920

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)


		Thirteen weeks ended March 27, 2021									Twenty-six weeks ended June 25, 2022
		Infrastructure		Agriculture		Intersegment Sales		Consolidated			Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:	Geographical market:									Geographical market:
North America	North America	$	385,734	$	122,751	$	(4,424)	$	504,061	North America	$	1,065,844	$	385,743	$	(13,202)	$	1,438,385
International	International	163,912		106,913		—		270,825		International	379,832		298,602		(467)		677,967
Total	Total	$	549,646	$	229,664	$	(4,424)	$	774,886	Total	$	1,445,676	$	684,345	$	(13,669)	$	2,116,352

Product line:	Product line:									Product line:
Transmission, Distribution and Substation	Transmission, Distribution and Substation	$	208,444	$	—	$	—	$	208,444	Transmission, Distribution and Substation	$	577,435	$	—	$	—	$	577,435
Lighting and Transportation	Lighting and Transportation	176,516		—		—		176,516		Lighting and Transportation	459,419		—		—		459,419
Coatings	Coatings	74,793		—		(3,201)		71,592		Coatings	172,297		—		(7,301)		164,996
Telecommunications	Telecommunications	45,640		—		—		45,640		Telecommunications	139,935		—		—		139,935
Renewable Energy	Renewable Energy	44,253		—		—		44,253		Renewable Energy	96,590		—		—		96,590
Irrigation Equipment and Parts, excluding Technology	Irrigation Equipment and Parts, excluding Technology	—		207,258		(1,223)		206,035		Irrigation Equipment and Parts, excluding Technology	—		625,619		(6,368)		619,251
Technology Products and Services	Technology Products and Services	—		22,406		—		22,406		Technology Products and Services	—		58,726		—		58,726
Total	Total	$	549,646	$	229,664	$	(4,424)	$	774,886	Total	$	1,445,676	$	684,345	$	(13,669)	$	2,116,352

~~A breakdown by segment of revenue recognized over time and at a point in time for the thirteen weeks ended March 26, 2022 and March 27, 2021 is as follows:~~

Point in Time Over Time Total
Thirteen weeks ended March 26, 2022 Thirteen weeks ended March 26, 2022 Thirteen weeks ended March 26, 2022
Infrastructure $ 369,190 $ 308,435 $ 677,625
Agriculture 297,606 5,589 303,195
Total $ 666,796 $ 314,024 $ 980,820

Point in Time Over Time Total
Thirteen weeks ended March 27, 2021 Thirteen weeks ended March 27, 2021 Thirteen weeks ended March 27, 2021
Infrastructure $ 291,731 $ 254,714 $ 546,445
Agriculture 224,637 3,804 228,441
Total $ 516,368 $ 258,518 $ 774,886


	Thirteen weeks ended June 26, 2021
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	421,168	$	156,037	$	(4,940)	$	572,265
International	196,436		125,928		—		322,364
Total	$	617,604	$	281,965	$	(4,940)	$	894,629

Product line:
Transmission, Distribution and Substation	$	220,458	$	—	$	—	$	220,458
Lighting and Transportation	215,247		—		—		215,247
Coatings	80,346		—		(2,796)		77,550
Telecommunications	54,102		—		—		54,102
Renewable Energy	47,451		—		—		47,451
Irrigation Equipment and Parts, excluding Technology	—		253,450		(2,144)		251,306
Technology Products and Services	—		28,515		—		28,515
Total	$	617,604	$	281,965	$	(4,940)	$	894,629

2021

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)


	Twenty-six weeks ended June 26, 2021
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	806,902	$	278,788	$	(9,364)	$	1,076,326
International	360,348		232,841		—		593,189
Total	$	1,167,250	$	511,629	$	(9,364)	$	1,669,515

Product line:
Transmission, Distribution and Substation	$	428,902	$	—	$	—	$	428,902
Lighting and Transportation	391,763		—		—		391,763
Coatings	155,139		—		(5,997)		149,142
Telecommunications	99,742		—		—		99,742
Renewable Energy	91,704		—		—		91,704
Irrigation Equipment and Parts, excluding Technology	—		460,708		(3,367)		457,341
Technology Products and Services	—		50,921		—		50,921
Total	$	1,167,250	$	511,629	$	(9,364)	$	1,669,515

A breakdown by segment of revenue recognized over time and at a point in time for the thirteen and twenty-six weeks ended June 25, 2022 and June 26, 2021 is as follows:


	Point in Time		Over Time		Total
	Thirteen weeks ended June 25, 2022		Thirteen weeks ended June 25, 2022		Thirteen weeks ended June 25, 2022
Infrastructure	$	429,291	$	331,459	$	760,750
Agriculture	368,175		6,607		374,782
Total	$	797,466	$	338,066	$	1,135,532


	Point in Time		Over Time		Total
	Twenty-six weeks ended June 25, 2022		Twenty-six weeks ended June 25, 2022		Twenty-six weeks ended June 25, 2022
Infrastructure	$	798,481	$	639,894	$	1,438,375
Agriculture	665,781		12,196		677,977
Total	$	1,464,262	$	652,090	$	2,116,352

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)


	Point in Time		Over Time		Total
	Thirteen weeks ended June 26, 2021		Thirteen weeks ended June 26, 2021		Thirteen weeks ended June 26, 2021
Infrastructure	$	346,733	$	268,075	$	614,808
Agriculture	274,903		4,918		279,821
Total	$	621,636	$	272,993	$	894,629

~~(8) SUBSEQUENT EVENT~~

~~Acquisition~~

On April 27, 2022, the Company signed an agreement to acquire the majority ownership interest in ConcealFab, for approximately $41 million, net of cash acquired. ConcealFab is an industry leader in 5G infrastructure and passive intermodulation mitigation solutions. The acquisition will be reported in the Infrastructure segment results from the closing date. The transaction is expected to close in the second quarter of 2022 and is subject to customary closing conditions.


	Point in Time		Over Time		Total
	Twenty-six weeks ended June 26, 2021		Twenty-six weeks ended June 26, 2021		Twenty-six weeks ended June 26, 2021
Infrastructure	$	638,464	$	522,789	$	1,161,253
Agriculture	499,540		8,722		508,262
Total	$	1,138,004	$	531,511	$	1,669,515

2123

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis 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 the Company 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. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions. Many factors could affect the Company’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 COVID-19 including the effects of the outbreak on the general economy and the specific effects on the Company's business and that of its customers and suppliers, risk factors described from time to time in the Company’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.

This discussion should be read in conjunction with the financial statements and notes thereto, and the management's discussion and analysis included in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2021. Segment net sales in the table below and elsewhere are presented net of intersegment sales. See Note 7 of our condensed consolidated financial statements for additional information on segment realignment, segment sales, and intersegment sales.

2224

Results of Operations (Dollars in millions, except per share amounts)


		Thirteen weeks ended								Thirteen weeks ended					Twenty-six weeks ended
		March 26, 2022			March 27, 2021			% Incr. (Decr.)				June 25, 2022			June 26, 2021			% Incr. (Decr.)		June 25, 2022			June 26, 2021			% Incr. (Decr.)
Consolidated	Consolidated										Consolidated
Net sales	Net sales	$	980.8		$	774.9		26.6	%		Net sales	$	1,135.5		$	894.6		26.9	%	$	2,116.4		$	1,669.5		26.8	%
Gross profit	Gross profit	249.2			204.6			21.8	%		Gross profit	292.6			229.6			27.4	%	541.8			434.2			24.8	%
as a percent of sales	as a percent of sales	25.4		%	26.4		%				as a percent of sales	25.8		%	25.7		%			25.6		%	26.0		%
SG&A expense	SG&A expense	154.3			127.3			21.2	%		SG&A expense	173.9			147.0			18.3	%	328.2			$	274.4		19.6	%
as a percent of sales	as a percent of sales	15.7		%	16.4		%				as a percent of sales	15.3		%	16.4		%			15.5		%	16.4		%
Operating income	Operating income	94.8			77.2			22.8	%		Operating income	118.7			82.6			43.7	%	213.6			159.8			33.7	%
as a percent of sales	as a percent of sales	9.7		%	10.0		%				as a percent of sales	10.5		%	9.2		%			10.1		%	9.6		%
Net interest expense	Net interest expense	11.0			9.7			13.4	%		Net interest expense	11.1			10.3			7.8	%	22.1			19.9			11.1	%
Effective tax rate	Effective tax rate	23.4		%	23.0		%				Effective tax rate	27.4		%	19.0		%			27.1		%	20.3		%
Net earnings	Net earnings	$	62.3		$	55.0		13.3	%		Net earnings	$	76.1		$	62.1		22.5	%	$	138.4		$	117.1		18.2	%
Diluted earnings per share	Diluted earnings per share	$	2.90		$	2.57		12.8	%		Diluted earnings per share	$	3.53		$	2.89		22.1	%	$	6.43		$	5.46		17.8	%
Infrastructure	Infrastructure										Infrastructure
Net sales	Net sales	$	677.6		$	546.4		24.0	%		Net sales	$	760.8		$	614.8		23.7	%	$	1,438.4		$	1,161.3		23.9	%
Gross profit	Gross profit	166.8			135.6			23.0	%		Gross profit	182.1			148.1			23.0	%	349.0			283.7			23.0	%
SG&A expense	SG&A expense	89.3			81.2			10.0	%		SG&A expense	97.5			86.5			12.7	%	186.8			167.7			11.4	%
Operating income	Operating income	77.5			54.4			42.5	%		Operating income	84.6			61.6			37.3	%	162.2			116.0			39.8	%
Agriculture	Agriculture										Agriculture
Net sales	Net sales	$	303.2		$	228.4		32.7	%		Net sales	$	374.8		$	279.8		34.0	%	$	678.0		$	508.3		33.4	%
Gross profit	Gross profit	82.3			68.9			19.4	%		Gross profit	110.5			81.3			35.9	%	192.8			150.2			28.4	%
SG&A expense	SG&A expense	44.9			30.2			48.7	%		SG&A expense	52.4			39.3			33.3	%	97.3			69.5			40.0	%
Operating income	Operating income	37.5			38.7			(3.1)	%		Operating income	58.0			42.0			38.1	%	95.5			80.7			18.3	%
Net corporate expense	Net corporate expense										Net corporate expense
Gross profit	Gross profit	$	—		—			NM			Gross profit	$	—		0.3			NM		$	—		$	0.3		NM
SG&A	SG&A	20.1			16.0			25.6	%		SG&A	24.0			21.2			13.2	%	44.1			37.2			18.5	%
Operating loss	Operating loss	(20.1)			(16.0)			(25.6)	%		Operating loss	(24.0)			(20.9)			(14.8)	%	(44.1)			(36.9)			(19.5)	%

2325

Overview, Including Items Impacting Comparability

On a consolidated basis, net sales were higher in the second quarter and first ~~quarter~~half of 2022, as compared to the same ~~period~~periods of 2021, with higher sales in both reporting segments.

Average steel prices for both hot rolled coil and plate were higher, especially in North America, ~~in the first quarter of 2022, as compared to 2021,~~and have stayed at elevated levels resulting in higher cost of sales and net sales as customer pricing mechanisms and product selling price practices allowed for the recovery of that ~~inflation.~~inflation for both reportable segments.

The Company acquired the following businesses:

•ConcealFab in the second quarter of 2022, a telecommunications technology company that offers 5G infrastructure and passive intermodulation mitigation solutions (Infrastructure).

•PivoTrac in the second quarter of 2021, an agricultural technology company that offers solutions focused on remote monitoring of center pivot irrigation machines (Agriculture).

•Prospera in the second quarter of 2021, a privately-held Israeli-based artificial intelligence company, focused on machine learning and computer vision in agriculture (Agriculture).

Items of note impacting the comparability of results from net earnings ~~for~~in the ~~first~~second quarter of 2022 included amortization of identified intangible assets of $1.6 million ($1.2 million after-tax) and stock-based compensation expense of $2.5 million ($2.3 million after-tax) for the employees from the Prospera subsidiary acquired in the second quarter of 2021 (recognized within SG&A for the Agriculture segment). Items of note impacting the comparability of results from net earnings in the first half of 2022 included amortization of identified intangible assets of $3.6 million ($2.4 million after-tax) and stock-based compensation expense of $5.0 million ($4.6 million after-tax) for the employees from the Prospera subsidiary. These items were recognized within SG&A for the Agriculture segment.

~~COVID-19 Impact~~Items of note impacting comparability of results from net earnings in the second quarter and first half of 2021 included:

•charges of $5.5 million ($4.4 after-tax) related to a write-off of a receivable following arbitration,

•charges of $1.6 million ($1.3 after-tax) related to restructuring activities, and

•charges of $1.1 million ($0.8 after-tax) related to acquisition costs.

Macroeconomic Impacts on Financial Results and Liquidity

We continue to monitor several macroeconomic and geopolitical trends, that have impacted our business, including changing conditions from the COVID-19 pandemic, the on-going Russia-Ukraine conflict, inflationary cost pressures, supply chain disruptions, and labor shortages. The effects of ~~COVID~~COVID-19 and the related actions of governments and other authorities to contain ~~COVID~~COVID-19 affected and continue to affect the company’s operations, results, and cash flows. ~~We are considered an essential business because of the products and services that serve critical infrastructure sectors as defined by many governments around the world.~~ Our significant manufacturing facilities were open and fully operational as of ~~March 26,~~June 25, 2022. We continue to monitor incidence of COVID-19 on a continuous basis, particularly in areas reporting recent increases in infection. To protect the safety, health and well-being of employees, customers, suppliers and communities, CDC and WHO guidelines are being followed in all facilities.

The ultimate magnitude of COVID-19, including the extent of its impact on the Company’s financial and operational results, cash balances and available borrowings on our line of credit, will be determined by the length of time the pandemic continues, its effect on the demand for the Company’s products and services and supply chain, as well as the effect of governmental regulations imposed in response to the pandemic.

Change in Reportable Segments

On December 26, 2021, the Company's CODM began to manage the business, allocate resources and evaluate performance based on changes made to the Company's management structure. As a result, the Company has realigned its reportable segment structure. The Company reorganized from a four segment structure previously organized by product category (Utility Structures, Engineered Support Structures, Coatings, and Irrigation) to a two segment reporting structure organized by market dynamics (Infrastructure and Agriculture). All prior period information has been recast to reflect this change in reportable segments. See Note 7 to our Condensed Consolidated Financial Statements for additional information.

Backlog

The backlog of unshipped orders at ~~March 26,~~June 25, 2022 was approximately ~~$1.8~~$2.0 billion compared with approximately $1.6 billion at December 25, 2021. The increase is primarily attributed to the receipt of a large purchase order of approximately $200 million for a large project within our renewable energy product line and $135 million for a large project within our transmission, distribution, and substation product ~~line~~line. Both of these projects are within the Infrastructure reporting segment. We expect approximately ~~$1.6~~$1.7 billion of the backlog to be fulfilled within the subsequent 12 months.

Currency Translation

In the second quarter and first ~~quarter~~half of 2022, we realized an increase in operating income, as compared with 2021, ~~due in part to~~with currency translation ~~effects.~~effects relatively flat. The breakdown of this effect by segment was as follows:

Total Infrastructure Agriculture Corporate
First quarter $ 0.3 $ (0.4) $ 0.7 $ —



	Total		Infrastructure		Agriculture		Corporate
Second quarter	$	(0.2)	$	(2.1)	$	1.7	$	0.2

Year-to-date	$	0.1	$	(2.5)	$	2.4	$	0.2

Gross Profit, SG&A, and Operating Income

At a consolidated level, gross profit as a percent of sales was relatively flat in the second quarter of 2022 and decreased slightly in the first ~~quarter~~half of 2022, as compared with the same ~~period~~periods in 2021, but the amount of gross profit increased due to the higher average selling prices across all product lines more than offsetting higher costs of goods sold across the Company. Amounts of gross profit increased for both reportable segments.

The increase in the second quarter and first ~~quarter~~half of 2022 SG&A expense over the same ~~period~~periods of 2021 was due to the incremental SG&A ~~contribution~~ from the ~~recent~~May 2021 acquisition of Prospera (including intangible asset amortization, stock-based compensation, and research and development costs), higher incentives due to improved operations, and salary merit increases.

The increase in consolidated operating income in the second quarter and first ~~quarter~~half of 2022, as compared to the same ~~period~~periods of 2021, is primarily due to the increase in average selling prices more than offsetting higher costs of goods sold. This was partially offset by the increase in SG&A year over year.

Net Interest Expense

Interest expense increased in the second quarter and first ~~quarter~~half of 2022, as compared to the same ~~period~~periods in 2021, due to borrowing on the revolving line of credit.

Other Income/Expenses (including ~~Loss~~Gain (loss) on Investments - Unrealized)

The change ~~includes~~in other income/expenses in the ~~unrealized loss~~second quarter of ~~$1.1~~2022, as compared to 2021, was primarily due to a lower pension benefit of $1.2 million and the change in the valuation of deferred compensation assets, ~~which is~~ shown as ~~"Loss~~"Gain (loss) on investments ~~(unrealized)"~~- unrealized" on the condensed consolidated statements of ~~earnings.~~earnings, which resulted in lower income of $3.5 million. The change in other income/expenses in the first half of 2022, as compared to 2021, was primarily due to a lower pension benefit of $2.2 million and the change in the valuation of deferred compensation asses which resulted in lower income of $4.5 million. The change related to deferred compensation assets are offset by an opposite change of the same amount in SG&A expense.

Income Tax Expense

Our effective income tax rate in the second quarter and first ~~quarter~~half of 2022 was ~~26.8%,~~27.6% and 27.2% compared to ~~21.9%~~19.0% and 20.3% in the second quarter and first ~~quarter~~half of 2021. The increase in the effective tax rate was primarily due to a change in geographical earnings and the finalization of U.S. tax regulations related to foreign tax credits ~~and~~during 2022. In addition, there was an incremental tax benefit in 2021 driven by ~~employee stock option exercises~~a change in the United Kingdom tax rate which did not recur in 2022.

Earnings Attributable to Noncontrolling Interests

Earnings attributable to noncontrolling interests ~~was~~were higher in the second quarter and first ~~quarter~~half of 2022 as compared to 2021 due to higher net earnings of the subsidiaries Valmont does not own 100%.

Cash Flows from Operations

Our cash flows provided by operations ~~was $2.7~~were $68.0 million in the first ~~quarter~~half of fiscal 2022, as compared with ~~$33.2~~$70.2 million provided by operations in the first ~~quarter~~half of 2021. The ~~decrease in~~ operating cash ~~flow~~flows in the first ~~quarter~~half of 2022, as compared with 2021, ~~was primarily due to an~~were comparable as a significant increase in ~~receivables attributed~~the contribution to the defined benefit pension plan of approximately $17 million and overall working capital changes were offset by the increase in net ~~sales and an increase in contract assets, partially offset by an increase in accounts payable.~~earnings.

Infrastructure segment


											Thirteen weeks ended
Infrastructure	Infrastructure	Q1 2022		Q1 2021		Dollar Change		% Change		Infrastructure	Q2 2022		Q2 2021		Dollar Change		% Change
Sales, gross of intercompany eliminations:	Sales, gross of intercompany eliminations:									Sales, gross of intercompany eliminations:
Transmission, Distribution and Substation	Transmission, Distribution and Substation	281.6		208.4		73.2		35.1	%	Transmission, Distribution and Substation	295.8		220.5		75.3		34.1	%
Lighting & Transportation	Lighting & Transportation	212.8		176.5		36.3		20.6	%	Lighting & Transportation	246.7		215.2		31.5		14.6	%
Coatings	Coatings	82.0		74.8		7.2		9.6	%	Coatings	90.3		80.3		10.0		12.5	%
Telecommunications	Telecommunications	61.4		45.6		15.8		34.6	%	Telecommunications	78.5		54.1		24.4		45.1	%
Renewable Energy	Renewable Energy	43.0		44.3		(1.3)		(2.9)	%	Renewable Energy	53.6		47.5		6.1		12.8	%
Total	Total	$	680.8	$	549.6	$	131.2	23.9	%	Total	$	764.9	$	617.6	$	147.3	23.9	%

Operating Income	Operating Income	$	77.5	$	54.4	$	23.1	42.5	%	Operating Income	$	84.6	$	61.6	$	23.0	37.3	%


	Twenty-six weeks ended
Infrastructure	Q2 2022		Q2 2021		Dollar Change		% Change
Sales, gross of intercompany eliminations:
Transmission, Distribution and Substation	577.4		428.9		148.5		34.6	%
Lighting & Transportation	459.4		391.8		67.6		17.3	%
Coatings	172.3		155.1		17.2		11.1	%
Telecommunications	139.9		99.7		40.2		40.3	%
Renewable Energy	96.6		91.7		4.9		5.3	%
Total	$	1,445.6	$	1,167.2	$	278.4	23.9	%

Operating Income	$	162.2	$	116.0	$	46.2	39.8	%

Net sales in the second quarter and first ~~quarter~~half of 2022, as compared to 2021, increased for this segment across ~~almost~~ all of the product lines primarily due to higher average selling prices partially offset by ~~$7.5~~$15.7 million in second quarter of 2022 and $23.2 million in the first half of 2022 of unfavorable foreign currency translation effects. From a geography perspective, the increase in sales within North America was much higher than within international markets. The lower reported international sales in 2022, versus 2021, is partially attributed to the appreciation of the U.S. dollar.

Transmission, distribution, and substation sales increased in the second quarter and first ~~quarter~~half of 2022 as compared with 2021, primarily due to substantially higher average selling prices. This increase in average selling prices is due to a number of our sales contracts in North America containing mechanisms that tie the sales price to published steel index

pricing at the time our customer issues their purchase order. Sales volumes increased modestly in the second quarter and first half of 2022, as compared to 2021.

Lighting and transportation sales increased during the second quarter and first ~~quarter~~half of 2022, as compared to the same period in fiscal 2021, due to meaningfully higher average selling prices, primarily in North America, from the continuation of realized pricing actions. ~~A small decrease~~Sales volumes increased in ~~global~~North America for both the second quarter and first half of 2022 while volumes decreased within international markets during the first half of 2022. Reported international sales ~~volume partially offset~~also decreased in the ~~increase in average selling prices.~~second quarter and first half of 2022 due to unfavorable foreign currency translation effects.

Telecommunication sales ~~were higher~~increased in the ~~first~~second quarter of 2022, as compared with the same periods in 2021, due primarily to ~~an increase~~considerably higher average selling prices. Sales volumes increased in ~~global sales volume.~~the first half of 2022, as compared with the same period of 2021 as 5G deployments continue to increase market opportunities across all regions. Average selling prices were ~~modestly~~ higher in inthe first half of 2022, as compared to 2021.

Coatings sales increased in the second quarter and first ~~quarter~~half of 2022, as compared to the same periods in 2021, due to higher average selling prices. Renewable energy sales ~~were similar~~increased in the second quarter and first ~~quarter~~half of 2022, as compared to ~~2021.~~2021, due to improved sales volumes partially offset by unfavorable foreign currency translation effects.

Gross profit was higher in the second quarter and first ~~quarter~~half of 2022, as compared to 2021. The customer contractual pricing mechanisms and selling price management led to a large increase in average selling prices while maintaining gross profit margins in a highly inflationary environment. The increase in operating income for the second quarter and first ~~quarter~~half of 2022, as compared with 2021, is due to a 23% increase in gross profit versus ~~the 10%~~an approximately 12% increase in SG&A. The operating income margin increased to ~~11.4%~~11% in the ~~first~~second quarter of 2022, from ~~9.9%~~10% in ~~first~~second quarter of 2021, due to better leverage of fixed costs, including SG&A, in 2022.

Agriculture segment


											Thirteen weeks ended
Agriculture	Agriculture	Q1 2022		Q1 2021		Dollar Change		% Change		Agriculture	Q2 2022		Q2 2021		Dollar Change		% Change
Sales, gross of intercompany eliminations:	Sales, gross of intercompany eliminations:									Sales, gross of intercompany eliminations:
North America	North America	182.3		122.8		59.5		48.5	%	North America	203.5		156.0		47.5		30.4	%
International	International	124.3		106.9		17.4		16.3	%	International	174.3		125.9		48.4		38.4	%
Total	Total	$	306.6	$	229.7	$	76.9	33.5	%	Total	$	377.8	$	281.9	$	95.9	34.0	%

Operating Income	Operating Income	$	37.5	$	38.7	$	(1.2)	(3.1)	%	Operating Income	$	58.0	$	42.0	$	16.0	38.1	%


	Twenty-six weeks ended
Agriculture	Q2 2022		Q2 2021		Dollar Change		% Change
Sales, gross of intercompany eliminations:
North America	385.7		278.8		106.9		38.3	%
International	298.6		232.8		65.8		28.3	%
Total	$	684.3	$	511.6	$	172.7	33.8	%

Operating Income	$	95.5	$	80.7	$	14.8	18.3	%

2629

The increase in Agriculture segment net sales in the second quarter and first ~~quarter~~half of 2022, as compared to 2021, is primarily due to much higher average selling prices of irrigation equipment globally. In North America, higher sales volumes for irrigation systems and parts in 2022, as compared to 2021, were driven by improved agricultural commodity prices. International sales volumes ~~decreased~~increased in the second quarter of 2022 versus 2021 due to ~~less~~robust demand for irrigation equipment and agriculture solar products in Brazil. Overall lower project ~~work when compared to 2021.~~sales for the first half of 2022 versus 2021 more than offset the sales growth in the second quarter of 2022 resulting in slightly lower sales volume for international irrigation product line. Sales of technology-related products and services continue to increase, as growers continued adoption of technology to reduce costs and enhance profitability.

The increase in gross profit in 2022, as compared to 2021, is primarily attributed to the meaningfully higher average selling prices which more than offset the amount of inflation within cost of goods sold. SG&A was higher in the second quarter and first ~~quarter~~half of 2022, as compared to 2021, due to the SG&A from the Prospera subsidiary acquired in the second quarter of ~~2022,~~2021, including the amortization of identified intangible assets and stock-based compensation expense. Operating income for the segment was ~~slightly lower~~higher in 2022, versus 2021, due to ~~a lower~~an increase in gross profit margin ~~and~~partially offset by the higher SG&A.

Net corporate expense

Corporate SG&A expense was higher in the second quarter and first ~~quarter~~half of 2022, as compared to ~~2021. The increase~~the same periods in ~~the first quarter is~~2021, primarily due to higher incentive accruals related to business performance, an increase in rent expense, and higher compensation expense due to salary merit ~~increases.~~increases, partially offset by $3.5 million of lower expense from the change in valuation of the deferred compensation plan assets.

Liquidity and Capital Resources

Capital Allocation Philosophy

We have historically funded our growth, capital spending and acquisitions through a combination of operating cash flows and debt financing. The following are the capital allocation/priorities for cash generated:

•working capital and capital expenditure investments necessary for future sales growth;

•dividends on common stock in the range of 20% of the prior year's fully diluted net earnings;

•acquisitions; and

•return of capital to shareholders through share repurchases.

We also announced our intention to manage our capital structure to maintain our investment grade debt rating. Our most recent ratings were Baa3 by Moody's Investors Services, Inc., BBB- by Fitch Ratings, and BBB+ by Standard and Poor's Rating Services. We would be willing to allow our debt rating to fall to BBB- to finance a special acquisition or other opportunity. We expect to maintain a ratio of debt to invested capital which will support our current investment grade debt rating.

The Board of Directors in May 2014 authorized the purchase of up to $500 million of the Company's outstanding common stock from time to time over twelve months at prevailing market prices, through open market or privately-negotiated transactions. The Board of Directors authorized an additional $250 million of share purchases, without an expiration date in both February 2015 and again in October 2018. The purchases will be funded from available working capital and short-term borrowings and will be made subject to market and economic conditions. We are not obligated to make any repurchases and may discontinue the program at any time. As of ~~March 26,~~June 25, 2022, we have acquired approximately 6.5 million shares for approximately $878.0 million under this share repurchase program.

On February 22, 2022, the Company announced that the Board of Directors approved an increase to the quarterly cash dividend on the common stock to $0.55 per share, or a rate of $2.20 per share on an annualized basis, an increase of 10% from the prior quarterly cash dividend of $0.50 per share.

Sources of Financing

Our debt financing at ~~March 26,~~June 25, 2022 consisted primarily of long‑term debt and borrowings on our revolving credit facility. Our long‑term debt as of ~~March 26,~~June 25, 2022, principally consisted of:

•$450 million face value ($437.0 million carrying value) of senior unsecured notes that bear interest at 5.00% per annum and are due in October 2044.

•$305 million face value ($297.7 million carrying value) of senior unsecured notes that bear interest at 5.25% per annum and are due in October 2054.

We are allowed to repurchase the notes subject to the payment of a make-whole premium. Both tranches of these notes are guaranteed by certain of our subsidiaries.

Our revolving credit facility with JP Morgan Chase Bank, N.A., as Administrative Agent, and the other lenders party thereto, has a maturity date of October 18, 2026.

The revolving credit facility provides for $800 million of committed unsecured revolving credit loans with available borrowings thereunder to $400 million in foreign currencies. We may increase the credit facility by up to an additional $300 million at any time, subject to lenders increasing the amount of their commitments. The Company and our wholly-owned subsidiaries Valmont Industries Holland B.V. and Valmont Group Pty. Ltd., are authorized borrowers under the credit facility. The obligations arising under the revolving credit facility are guaranteed by the Company and its wholly-owned subsidiaries Valmont Telecommunications, Inc., Valmont Coatings, Inc., Valmont Newmark, Inc., and Valmont Queensland Pty. Ltd.

The interest rate on our borrowings will be, at our option, either:

(a) term SOFR (based on a 1, 3 or 6 month interest period, as selected by the Company) plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points, depending on the credit rating of the Company's senior, unsecured, long-term debt published by Standard & Poor's Rating Services and Moody's Investors Service, Inc.;

(b) the higher of

•the prime lending rate,

• the overnight bank rate plus 50 basis points, and

•term SOFR (based on a 1 month interest period) plus 100 basis points,

plus, in each case, 0 to 62.5 basis points, depending on the credit rating of our senior, unsecured, long-term debt published by Standard & Poor's Rating Services and Moody's Investors Service, Inc.; or

(c) daily simple SOFR plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points, depending on the credit rating of the Company's senior, unsecured, long-term debt published by Standard & Poor's Rating Services and Mood's Investors Service, Inc.

A commitment fee is also required under the revolving credit facility which accrues at 10 to 25 basis points, depending on the credit rating of our senior, unsecured long-term debt published by Standard and Poor's Rating Services and Moody's Investor Services, Inc., on the average daily unused portion of the commitments under the revolving credit agreement.

At ~~March 26,~~June 25, 2022 and December 25, 2021, we had outstanding borrowings of ~~$234.6~~$265.6 million and $218.9 million, respectively, under the revolving credit facility. The revolving credit facility has a maturity date of October 18, 2026 and contains a financial covenant that may limit our additional borrowing capability under the agreement. At ~~March 26,~~June 25, 2022, we had the ability to borrow ~~$565.2~~$534.4 million under this facility, after consideration of standby letters of credit of $0.2 million associated with certain insurance obligations. We also maintain certain short‑term bank lines of credit totaling $138.2 million; ~~$129.8~~$133.8 million of which was unused at ~~March 26,~~June 25, 2022.

Our senior, unsecured notes and revolving credit agreement each contain cross-default provisions which permit the acceleration of our indebtedness to them if we default on other indebtedness that results in, or permits, the acceleration of such other indebtedness.

The revolving credit facility requires maintenance of a financial leverage ratio, measured as of the last day of each of our fiscal quarters, of 3.50:1 or less. The leverage ratio is the ratio of: (a) interest-bearing debt minus unrestricted cash in excess of $50 million (but not exceeding $500 million); to (b) adjusted EBITDA. The debt agreements provide a modification of the definition of “EBITDA” to add-back any non-cash stock-based compensation in any trailing twelve month period and allow for an adjustment to EBITDA, subject to certain limitations, for non-cash charges or gains that are non-recurring in nature. The leverage ratio is permitted to increase from 3.50:1 to 3:75:1 for the four consecutive fiscal quarters after certain material acquisitions.

The amended and restated revolving credit agreement also contains customary affirmative and negative covenants or credit facilities of this type, including, among others, limitations on us and our subsidiaries with respect to indebtedness, liens, mergers and acquisitions, investments, dispositions of assets, restricted payments, transactions with affiliates and prepayments of indebtedness. The amended and restated revolving credit agreement also provides for acceleration of the obligations thereunder and exercise of other enforcement remedies upon the occurrence of customary events of default (subject to customary grace periods, as applicable).

At ~~March 26,~~June 25, 2022, we were in compliance with all covenants related to these debt agreements.

The calculation of Adjusted EBITDA-last four quarters and the Leverage ratio are presented in the tables below in Selected Financial Measures.

Cash Uses

Our principal cash requirements include working capital, capital expenditures, payments of principal and interest on our debt, payments of taxes, contributions to pension plan, and, if market conditions warrant, occasional investments in, or acquisitions of, business ventures. In addition, we regularly evaluate our ability to pay dividends or repurchase stock, all consistent with the terms of our debt agreements.

Our businesses are cyclical, but we have diversity in our markets, from a product, customer and a geographical standpoint. We have demonstrated the ability to effectively manage through business cycles and maintain liquidity. We have consistently generated operating cash flows in excess of our capital expenditures. Based on our available credit facilities, recent issuance of senior unsecured notes and our history of positive operational cash flows, we believe that we have adequate liquidity to meet our needs.

We have cash balances of ~~$149.7~~$154.6 million at ~~March 26,~~June 25, 2022, approximately ~~$134.1~~$119.7 million is held in our non-U.S. subsidiaries. If we distributed our foreign cash balances certain taxes would be applicable. At ~~March 26,~~June 25, 2022, we have a liability for foreign withholding taxes and U.S. state income taxes of ~~$3.2~~$3.4 million and $0.7 million, respectively.

Cash Flows

The following table includes a summary of our cash flow information for the ~~thirteen~~twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021:


Dollars in thousands	Dollars in thousands	2022		2021		Dollars in thousands	2022		2021
Cash flow data:	Cash flow data:					Cash flow data:
Net cash flows from operating activities	Net cash flows from operating activities	$	2,703	$	33,153	Net cash flows from operating activities	$	68,019	$	70,185
Net cash flows from investing activities	Net cash flows from investing activities	(29,100)		(29,308)		Net cash flows from investing activities	(87,811)		(361,398)
Net cash flows from financing activities	Net cash flows from financing activities	(3,521)		(10,650)		Net cash flows from financing activities	570		90,060

Working Capital and Operating Cash Flows-Net working capital was ~~$1,021.9~~$1,025.9 million at ~~March 26,~~June 25, 2022, as compared to $946.9 million at December 25, 2021. The increase in net working capital in 2022 is attributed to an increase in inventory due to the rising commodity prices and an increase in receivables, partially offset by an increase in accounts payable. Cash flow provided by operations was ~~$2.7~~$68.0 million in the first ~~quarter~~half of 2022, as compared with ~~$33.2~~$70.2 million in the first quarter of 2021. The decrease in operating cash flows in 2022, as compared to 2021, was primarily the result of an increase in receivables attributed to the increase in net sales and an increase in contract assets, partially offset by an increase in accounts payable.

2932

first half of 2021. The operating cash flows in the first half of 2022, as compared with 2021, were comparable as a significant increase in the contribution to the defined benefit pension plan and overall working capital changes were offset by the increase in net earnings.

Investing Cash Flows- Cash used in investing activities totaled ~~$29.1~~$87.8 million in the first half of 2022, compared to ~~$29.3~~$361.4 million ~~in 2021. Capital spending~~ in the first ~~quarter~~half of ~~fiscal~~2021. Investing activities in 2022 ~~was $27.1~~primarily included capital spending of $49.7 million ~~as compared to $27.6~~and the acquisition of ConcealFab for $39.3 million. For the first half of 2021, investing activities primarily included capital spending of $48.8 million and the acquisition of two businesses for ~~the same period in 2021.~~$312.5 million. We expect our capital expenditures to be in the range of $110 million to $120 million for fiscal 2022.

Financing Cash Flows- Our total interest-bearing debt was ~~$975.7~~$1,003.1 million at ~~March 26,~~June 25, 2022 and $965.4 million at December 25, 2021. Cash ~~used~~provided in financing activities totaled ~~$3.5~~$0.6 million in 2022, compared to ~~$10.7~~$90.1 million in 2021.

The financing cash ~~outflow~~provided in the first ~~quarter~~half of 2022 was primarily the result of borrowings on the revolving credit agreement of ~~$97.0 million,~~$201.5 million; mostly offset by principal payments on our long-term debt and short-term borrowings of ~~$88.1~~$166.1 million, and dividends paid of ~~$10.6~~$22.3 million, the purchase of treasury shares of $9.8 million, and the purchase of a non-controlling interest of $4.3 million. The financing cash ~~outflow~~provided for the first ~~quarter~~half of 2021 was primarily due ~~primarily~~ to borrowings on the revolving credit agreement and short-term borrowings of $161.3 million; somewhat offset by the principal payments on our long-term debt and short-term borrowings of ~~$11.5~~$32.4 million, dividends paid of ~~$9.6~~$20.2 million, and the purchase of treasury shares of ~~$11.1 million; somewhat offset by our debt borrowings of $18.9 million.~~$21.6 million

Guarantor Summarized Financial Information

We are providing the following information in compliance with Rule 3-10 and Rule 13-01 of Regulation S-X with respect to our two tranches of senior unsecured notes. All of the senior notes are guaranteed, jointly, severally, fully and unconditionally (subject to certain customary release provisions, including sale of the subsidiary guarantor, or sale of all or substantially all of its assets) by certain of the Company’s current and future direct and indirect domestic and foreign subsidiaries (collectively the “Guarantors”). The Parent is the Issuer of the notes and consolidates all Guarantors.

The financial information of Issuer and Guarantors is presented on a combined basis with intercompany balances and transactions between Issuer and Guarantors eliminated. The Issuer’s or Guarantors' amounts due from, amounts due to, and transactions with non-guarantor subsidiaries are separately disclosed.

Combined financial information is as follows:

Supplemental Combined Parent and Guarantors Financial Information

For the thirteen and twenty-six weeks ended ~~March 26,~~June 25, 2022 and ~~March 27,~~June 26, 2021


		Thirteen weeks ended				Thirteen weeks ended				Twenty-six weeks ended
Dollars in thousands	Dollars in thousands	March 26, 2022		March 27, 2021			Dollars in thousands	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Net sales	Net sales	$	661,749	$	482,722		Net sales	$	734,500	$	563,833	$	1,396,249	$	1,031,513
Gross Profit	Gross Profit	164,359		135,521			Gross Profit	180,909		147,208		345,268		282,443
Operating income	Operating income	69,093		52,966			Operating income	73,044		51,695		142,137		110,829
Net earnings	Net earnings	41,808		31,028			Net earnings	46,029		29,750		88,337		66,075
Net earnings attributable to Valmont Industries, Inc.	Net earnings attributable to Valmont Industries, Inc.	41,816		31,022			Net earnings attributable to Valmont Industries, Inc.	46,582		29,668		90,525		65,993

Supplemental Combined Parent and Guarantors Financial Information

~~March 26,~~June 25, 2022 and December 25, 2021


Dollars in thousands	Dollars in thousands	March 26, 2022		December 25, 2021		Dollars in thousands	June 25, 2022		December 25, 2021
Current assets	Current assets	$	873,174	$	801,797	Current assets	$	848,769	$	801,797
Noncurrent assets	Noncurrent assets	850,780		807,294		Noncurrent assets	888,944		807,294
Current liabilities	Current liabilities	387,967		383,394		Current liabilities	408,971		383,394
Noncurrent liabilities	Noncurrent liabilities	200,925		1,305,756		Noncurrent liabilities	1,326,515		1,305,756
Noncontrolling interest in consolidated subsidiaries	Noncontrolling interest in consolidated subsidiaries	1,835		1,844		Noncontrolling interest in consolidated subsidiaries	1,783		1,844

Included in noncurrent assets is a due from non-guarantor subsidiaries receivable of ~~$117,723~~$154,905 and $93,613 at ~~March 26,~~June 25, 2022 and December 25, 2021. Included in noncurrent liabilities is a due to non-guarantor subsidiaries payable of ~~$200,925~~$195,142 and $236,577 at ~~March 26,~~June 25, 2022 and December 25, 2021.

Selected Financial Measures

We are including the following financial measures for the company.

Adjusted EBITDA. Earnings before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) is one of our key financial ratios in that it is the basis for determining our maximum borrowing capacity at any one time. Our bank credit agreements contain a financial covenant that our total interest‑bearing debt not exceed 3.50x Adjusted EBITDA (or 3.75x Adjusted EBITDA after certain material acquisitions) for the most recent four quarters. These bank credit agreements allow us to add estimated EBITDA from acquired businesses for periods we did not own the acquired businesses. The bank credit agreements also provide for an adjustment to EBITDA, subject to certain specified limitations, for non-cash charges or gains that are non-recurring in nature. If this financial covenant is violated, we may incur additional financing costs or be required to pay the debt before its maturity date. Adjusted EBITDA is non-GAAP measure and, accordingly, 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 calculation of Adjusted EBITDA-last four quarters ~~(March 28,~~(June 26, 2021 to ~~March 26,~~June 25, 2022) is as follows:

Dollars in thousands

2022

Net cash flows from operations

~~35,488~~63,772

Interest expense

~~43,875~~44,826

Income tax expense

~~69,034~~83,880

~~Loss on investment~~

~~(4)~~

Impairment of long-lived assets

(27,911)

~~Impairment of goodwill and intangible assets~~

—

~~Impairment of property, plant and equipment~~

—

Deferred income tax (expense) benefit

~~6,176~~ (6,465)

Noncontrolling interest

~~(2,704)~~(3,255)

Pension plan ~~expense~~benefit

~~13,596~~12,409

Contribution to pension plan

~~960~~18,109

Changes in assets and liabilities, net of acquisitions

~~306,202~~298,390

Other

65 (2,242)

EBITDA

~~444,777~~481,513

Impairment of long-lived assets

27,911

Adjusted EBITDA

~~472,688~~509,424


	2022
Net earnings attributable to Valmont Industries, Inc.	$	~~202,926~~216,925
Interest expense	~~43,875~~44,826
Income tax expense	~~69,034~~83,880
Stock based compensation	~~33,512~~39,355
Depreciation and amortization expense	~~95,430~~96,527
EBITDA	$	~~444,777~~481,513
Impairment of long-lived assets	27,911




Adjusted EBITDA	$	~~472,688~~509,424

EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. In October 2021, our revolving credit facility was amended to allow the Company to add-back any non-cash stock-based compensation in any trailing twelve month period and allow for an adjustment to EBITDA, subject to certain limitations, for non-cash charges or gains that are non-recurring in nature.

Leverage ratio. Leverage ratio is calculated as the sum of interest-bearing debt minus unrestricted cash in excess of $50 million (but not exceeding $500 million); divided by Adjusted EBITDA. The leverage ratio is one of the key financial

ratios in the covenants under our major debt agreements and the ratio cannot exceed 3.5 (or 3.75x after certain material acquisitions) for any reporting period (four quarters). If those covenants are violated, we may incur additional financing costs or be required to pay the debt before its maturity date. Leverage ratio is a non-GAAP measure and, accordingly, 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 calculation of this ratio at ~~March 26,~~June 25, 2022 is as follows:


Dollars in thousands	2022
Interest-bearing debt	$	~~975,671~~1,003,093
Less: Cash and cash equivalents in excess of $50 million	~~99,700~~104,579
Net indebtedness	$	~~875,971~~898,514
Adjusted EBITDA	~~472,688~~509,424
Leverage Ratio	~~1.85~~1.76

Leverage ratio, as presented, may not be comparable to similarly titled measures of other companies.

Financial Obligations and Financial Commitments

There have been no material changes to our financial obligations and financial commitments as described on page 29 in our Form 10-K for the fiscal year ended December 25, 2021.

Critical Accounting Policies

There were no changes in our critical accounting policies as described on pages 34-37 in our Form 10-K for the fiscal year ended December 25, 2021 during the three months ended ~~March 26,~~June 25, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in the company's market risk during the quarter ended ~~March 26,~~June 25, 2022. For additional information, refer to the section "Risk Management" in our Form 10-K for the fiscal year ended December 25, 2021.

Item 4. Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 is (1) accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

No changes in the Company's internal control over financial reporting occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

3236

PART II. OTHER INFORMATION

~~ITEM 1A –~~Item 1A. Risk Factors

There have been no material changes from risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K. See the discussion of the Company’s risk factors under Part I, Item 1A in each of the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021.

~~PART II. OTHER INFORMATION~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

~~Period~~

Total Number of
Shares Purchased

Average Price
paid per share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs

~~Approximate Dollar Value of Maximum Number of Shares that may yet be Purchased under the Program (1)~~

~~December 26, 2021 to January 22, 2022~~

—

~~121,862,000~~

~~January 23, 2022 to February 26, 2022~~

—

~~121,862,000~~

~~February 27, 2022 to March 26, 2022~~

—

~~121,862,000~~

~~Total~~

—

~~121,862,000~~


Period	Total Number of Shares Purchased	Average Price paid per share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Maximum Number of Shares that may yet be Purchased under the Program (1)
March 27, 2022 to April 23, 2022	—	$	—	—	$	121,862,000
April 24, 2022 to May 28, 2022	38,804	251.93		38,804	112,086,000
May 29, 2022 to June 25, 2022	—	—		—	112,086,000
Total	38,804	$	251.93	38,804	$	112,086,000

(1) On May 13, 2014, we announced a new capital allocation philosophy which included a share repurchase program. Specifically, the Board of Directors authorized the purchase of up to $500 million of the Company's outstanding common stock from time to time over twelve months at prevailing market prices, through open market or privately-negotiated transactions. On February 24, 2015 and again on October 31, 2018, the Board of Directors authorized an additional purchase of up to $250 million of the Company's outstanding common stock with no stated expiration date bringing total authorization to $1.0 billion. As of ~~March 26,~~June 25, 2022, we have acquired ~~6,475,406~~6,514,210 shares for approximately ~~$878.0~~$887.9 million under this share repurchase program.

Item 5. Other Information

~~Submission of Matters~~

Amendment to ~~a Vote of Security Holders~~

Valmont's annual meeting of stockholders was held on April 26, 2022. The stockholders elected four directors to serve three-year terms, approved, on an advisory basis, a resolution approving Valmont's named executive officer compensation, and ratified the appointment of Deloitte & Touche LLP as independent auditors for fiscal 2022. For the annual meeting there were 21,305,027 shares outstanding and eligible to vote of which 19,822,859 were present at the meeting in person or by proxy. The tabulation for each matter voted upon at the meeting was as follows:Bylaws

~~Election of Directors:~~

For Withheld Broker Non-Votes
Kaj den Daas 17,487,351 1,343,066 992,442
James B. Milliken 16,994,281 1,836,136 992,442
Catherine James Paglia 18,084,128 746,289 992,442
Ritu Favre 18,095,109 735,308 992,442

~~Approve Valmont 2022 Stock Plan:~~


~~For~~			~~17,658,437~~
~~Against~~			~~1,031,748~~
~~Abstain~~			~~140,232~~
~~Broker non-votes~~			~~992,442~~

~~Advisory vote on executive compensation:~~


~~For~~			~~18,090,339~~
~~Against~~			~~594,734~~
~~Abstain~~			~~145,344~~
~~Broker non-votes~~			~~992,442~~

~~Proposal to ratify the appointment of Deloitte & Touche LLP as independent auditors for fiscal 2022:~~


~~For~~			~~18,833,293~~
~~Against~~			~~965,315~~
~~Abstain~~			~~24,251~~

~~Compensatory Arrangements~~

~~At Valmont’s annual shareholders meeting on April~~On July 26, 2022, the ~~shareholders~~Board of Directors of Valmont approved ~~the Valmont 2022 Stock Plan.~~amendments to Article II, Section 7 of Valmont’s bylaws. The stock plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, deferred stock units and other forms of stock-based compensation to officers and other employees of Valmont and its subsidiaries. The maximum number of shares of Valmont's common stock that may be issued under the stock plan is 2,000,000. Following approvalbylaw amendment affirms electronic transmission by members of the ~~stock plan by shareholders, no additional award grants may be made under any prior Valmont stock plan. The principal features~~Board of ~~the plan are summarized on pages 38~~Directors pursuant to ~~43 of Valmont’s~~ ~~proxy statement~~ for the annual meeting of shareholders held on April 26, 2022. The forgoing description and the proxy statement summary are qualified in their entirety by reference to the Valmont 2022 Stock Plan, filed as an Exhibit 10.1 to this report.

Delaware law.

3537

Item 6. Exhibits

(a) Exhibits


Exhibit No.						Description
10 .13.1						~~Valmont 2022 Stock Plan. This document was filed~~The Company's By-Laws, as ~~Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 14, 2022 (Commission file number 001-1429) and herein incorporated by reference.~~amended.
22.1						List of Issuer and Guarantor Subsidiaries. This document was filed as Exhibit 22.1 to the Company's Quarterly Report on Form 10-Q (Commission file number 001-31429) for the quarter ended September 25, 2021 and is incorporated herein by reference.
31.1*						Section 302 Certificate of Chief Executive Officer
31.2*						Section 302 Certificate of Chief Financial Officer
32.1*						Section 906 Certifications of Chief Executive Officer and Chief Financial Officer
101						The following financial information from Valmont's Quarterly Report on Form 10-Q for the quarter ended ~~March 26,~~June 25, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders' Equity, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information.
104						Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

3638

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf and by the undersigned hereunto duly authorized.


			VALMONT INDUSTRIES, INC. (Registrant)
			/s/ AVNER M. APPLBAUM
			Avner M. Applbaum Executive Vice President and Chief Financial Officer

Dated the 27th day of ~~April,~~July, 2022.

3739


	Thirteen weeks ended March 26, 2022
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	505,980	$	182,255	$	(6,486)	$	681,749
International	174,746		124,325		—		299,071
Total	$	680,726	$	306,580	$	(6,486)	$	980,820

Product line:
Transmission, Distribution and Substation	$	281,600	$	—	$	—	$	281,600
Lighting and Transportation	212,767		—		—		212,767
Coatings	81,976		—		(3,101)		78,875
Telecommunications	61,396		—		—		61,396
Renewable Energy	42,987		—		—		42,987
Irrigation Equipment and Parts, excluding Technology	—		278,034		(3,385)		274,649
Technology Products and Services	—		28,546		—		28,546
Total	$	680,726	$	306,580	$	(6,486)	$	980,820


	For	Withheld	Broker Non-Votes
Kaj den Daas	17,487,351	1,343,066	992,442
James B. Milliken	16,994,281	1,836,136	992,442
Catherine James Paglia	18,084,128	746,289	992,442
Ritu Favre	18,095,109	735,308	992,442