Washington, D.C. 20549

Form 10-Q

(Mark One)

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

~~EXCHANGE ACT OF 1934~~

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

April 1, 2023

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

~~EXCHANGE ACT OF 1934~~

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

~~(402)~~

(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☒

~~21,350,725~~

21,056,220

Outstanding shares of common stock ~~as of July 21, 2022~~at April 20, 2023

Table of Contents

VALMONT INDUSTRIES, ~~INC~~

INC.

INDEX TO FORM 10-Q

						Page No.
		~~Page No.~~
			PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Statements of Earnings for the thirteen weeks ended April 1, 2023 and ~~twenty-six~~March 26, 2022		3
	~~weeks ended June 25, 2022 and June 26, 2021~~	3
			Condensed Consolidated Statements of Comprehensive Income for the thirteen weeks ended April 1, 2023 and March 26, 2022		4
	~~and twenty-six weeks ended June 25, 2022 and June 26, 2021~~	4
			Condensed Consolidated Balance Sheets as of ~~June 25,~~April 1, 2023 and December 31, 2022 ~~and~~		5
	~~December 25, 2021~~	5
			Condensed Consolidated Statements of Cash Flows for the ~~twenty-six~~thirteen weeks ended April 1, 2023 and March 26, 2022		6
	~~ended June 25, 2022 and June 26, 2021~~	6
			Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity for the thirteen weeks ended April 1, 2023 and March 26, 2022		7
	~~and twenty-six weeks ended June 25, 2022 and June 26, 2021~~	7
			Notes to Condensed Consolidated Financial Statements		8
Item 2.	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of ~~Operation~~Operationss	24	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		36
Item 4.	Controls and Procedures		36

	PART II. OTHER INFORMATION
Item 1A.	Risk Factors		37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		37
Item 5.	Other Information	37	38
Item 6.	Exhibits	38	39
Signatures		39


				40

Table of Contents

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 Twenty-six weeks ended
June 25,
2022 June 26,
2021 June 25,
2022 June 26,
2021
Product sales $ 1,036,289 $ 805,801 $ 1,927,159 $ 1,500,766
Services sales 99,243 88,828 189,193 168,749
Net sales 1,135,532 894,629 2,116,352 1,669,515
Product cost of sales 781,323 608,101 1,454,493 1,126,735
Services cost of sales 61,608 56,881 120,072 108,579
Total cost of sales 842,931 664,982 1,574,565 1,235,314
Gross profit 292,601 229,647 541,787 434,201
Selling, general and administrative expenses 173,882 147,022 328,226 274,365
Operating income 118,719 82,625 213,561 159,836
Other income (expenses):
Interest expense (11,386) (10,436) (22,649) (20,435)
Interest income 285 186 512 497
Gain (loss) on investments - unrealized (2,342) 1,177 (3,405) 1,068
Other 2,073 4,204 5,715 7,653
(11,370) (4,869) (19,827) (11,217)
Earnings before income taxes 107,349 77,756 193,734 148,619
Income tax expense:
Current 27,620 25,413 50,033 33,960
Deferred 1,967 (10,673) 2,675 (3,718)
29,587 14,740 52,708 30,242
Earnings before equity in earnings of nonconsolidated subsidiaries 77,762 63,016 141,026 118,377
Equity in loss of nonconsolidated subsidiaries (555) (359) (913) (719)
Net earnings 77,207 62,657 140,113 117,658
Less: earnings attributable to noncontrolling interests (1,099) (547) (1,694) (534)
Net earnings attributable to Valmont Industries, Inc. $ 76,108 $ 62,110 $ 138,419 $ 117,124
Earnings per share:
Basic $ 3.57 $ 2.93 $ 6.50 $ 5.53
Diluted $ 3.53 $ 2.89 $ 6.43 $ 5.46


	Thirteen weeks ended
	April 1,		March 26,
	2023		2022
Product sales	$	958,008	$	890,870
Services sales		104,473		89,950
Net sales		1,062,481		980,820
Product cost of sales		681,790		673,170
Services cost of sales		72,106		58,464
Total cost of sales		753,896		731,634
Gross profit		308,585		249,186
Selling, general, and administrative expenses		190,119		154,344
Operating income		118,466		94,842
Other income (expenses):
Interest expense		(13,105)		(11,263)
Interest income		830		227
Gain (loss) on investments - unrealized		1,194		(1,063)
Other		(2,376)		3,642
		(13,457)		(8,457)
Earnings before income taxes		105,009		86,385
Income tax expense:
Current		24,356		22,413
Deferred		7,487		708
		31,843		23,121
Earnings before equity in loss of nonconsolidated subsidiaries		73,166		63,264
Equity in loss of nonconsolidated subsidiaries		(821)		(358)
Net earnings		72,345		62,906
Less: Loss (earnings) attributable to noncontrolling interests		2,195		(595)
Net earnings attributable to Valmont Industries, Inc.	$	74,540	$	62,311
Earnings per share:
Basic	$	3.50	$	2.93
Diluted	$	3.47	$	2.90

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)

Thirteen Weeks Ended Twenty-six weeks ended
June 25,
2022 June 26,
2021 June 25,
2022 June 26,
2021
Net earnings $ 77,207 $ 62,657 $ 140,113 $ 117,658
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
  Unrealized translation gain (loss) (43,666) 10,690 (32,050) (1,943)
         Gain (loss) on hedging activities:
   Cash flow hedges — (313) — (291)
Amortization cost included in interest expense (16) (16) (32) (32)
     Commodity hedges (19,512) 16,308 1,048 26,254
     Realized (gain) loss on commodity hedges recorded in earnings 1,545 (270) (498) (270)
     Cross currency swaps 3,470 (2,095) 5,281 1,511
         Defined Benefit Pension Plan:
Actuarial gain on defined benefit pension plan 124 843 256 1,675
Other comprehensive income (loss) (58,055) 25,147 (25,995) 26,904
Comprehensive income 19,152 87,804 114,118 144,562
Comprehensive (income) loss attributable to noncontrolling interests 932 (1,573) (756) (1,087)
Comprehensive income attributable to Valmont Industries, Inc. $ 20,084 $ 86,231 $ 113,362 $ 143,475


	Thirteen weeks ended
	April 1,		March 26,
	2023		2022
Net earnings	$	72,345	$	62,906
Other comprehensive income, net of tax:
Foreign currency translation adjustments:
Unrealized translation gains		8,189		11,062
Hedging activities:
Unrealized gain (loss) on commodity hedges		(1,476)		20,560
Realized (gain) loss on commodity hedges recorded in earnings		2,872		(2,043)
Unrealized gain (loss) on cross currency swaps		(591)		1,811
Amortization cost included in interest expense		(16)		(16)
		789		20,312
Net gain on defined benefit pension plan		91		686
Other comprehensive income		9,069		32,060
Comprehensive income		81,414		94,966
Comprehensive (income) loss attributable to noncontrolling interests		1,902		(1,688)
Comprehensive income attributable to Valmont Industries, Inc.	$	83,316	$	93,278

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)


	April 1,		December 31,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	172,948	$	185,406
Receivables, net		650,041		604,181
Inventories		725,360		728,762
Contract assets		159,785		174,539
Prepaid expenses and other assets		107,365		87,697
Total current assets		1,815,499		1,780,585
Property, plant, and equipment, at cost		1,448,466		1,433,151
Less accumulated depreciation and amortization		849,618		837,573
Net property, plant, and equipment		598,848		595,578
Goodwill		741,735		739,861
Other intangible assets, net		172,300		176,615
Defined pension benefit asset		41,744		24,216
Other assets		234,366		240,141
Total assets	$	3,604,492	$	3,556,996

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	1,165	$	1,194
Notes payable to banks		11,436		5,846
Accounts payable		368,576		360,312
Accrued employee compensation and benefits		80,362		124,355
Contract liabilities		156,333		172,915
Other accrued expenses		130,750		123,965
Income taxes payable		20,093		3,664
Dividends payable		12,634		11,742
Total current liabilities		781,349		803,993
Deferred income taxes		45,422		41,091
Long-term debt, excluding current installments		985,636		870,935
Operating lease liabilities		151,219		155,469
Deferred compensation		33,885		30,316
Other noncurrent liabilities		8,581		13,480
Shareholders’ equity:
Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued		27,900		27,900
Retained earnings		2,635,628		2,593,039
Accumulated other comprehensive loss		(266,133)		(274,909)
Treasury stock		(857,296)		(765,183)
Total Valmont Industries, Inc. shareholders’ equity		1,540,099		1,580,847
Noncontrolling interest in consolidated subsidiaries		58,301		60,865
Total shareholders’ equity		1,598,400		1,641,712
Total liabilities and shareholders’ equity	$	3,604,492	$	3,556,996

~~(Unaudited)~~
June 25,
2022 December 25,
2021
ASSETS
Current assets:
Cash and cash equivalents $ 154,579 $ 177,232
Receivables, net 627,876 571,593
Inventories 786,600 728,834
   Contract assets 200,522 142,643
Prepaid expenses and other assets 87,070 83,646
     Refundable income taxes — 8,815
        Total current assets 1,856,647 1,712,763
Property, plant and equipment, at cost 1,452,413 1,422,101
Less accumulated depreciation and amortization 844,850 823,496
Net property, plant and equipment 607,563 598,605
Goodwill 741,743 708,566
Other intangible assets, net 192,333 175,364
Other assets 276,466 251,951
Total assets $ 3,674,752 $ 3,447,249
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt $ 3,018 $ 4,884
Notes payable to banks 4,428 13,439
Accounts payable 388,498 347,841
Accrued employee compensation and benefits 107,108 144,559
   Contract liabilities 175,814 135,746
Other accrued expenses 130,114 108,771
Income taxes payable 10,036 —
         Dividends payable 11,743 10,616
Total current liabilities 830,759 765,856
Deferred income taxes 55,641 47,849
Long-term debt, excluding current installments 995,647 947,072
Defined benefit pension liability — 536
Operating lease liabilities 154,799 147,759
Deferred compensation 33,778 35,373
Other noncurrent liabilities 50,978 89,207
Shareholders’ equity:
Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued 27,900 27,900
Additional paid in capital 4,321 1,479
Retained earnings 2,509,262 2,394,307
Accumulated other comprehensive loss (288,184) (263,127)
Treasury stock (764,917) (773,712)
     Total Valmont Industries, Inc. shareholders’ equity 1,488,382 1,386,847
Noncontrolling interest in consolidated subsidiaries 64,768 26,750
Total shareholders’ equity 1,553,150 1,413,597
Total liabilities and shareholders’ equity $ 3,674,752 $ 3,447,249

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

Twenty-six weeks ended
June 25,
2022 June 26,
2021
Cash flows from operating activities:
Net earnings $ 140,113 $ 117,658
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization 48,012 44,063
Stock-based compensation 19,583 8,948
Defined benefit pension plan benefit (5,242) (7,400)
Contribution to defined benefit pension plan (17,155) (970)
           Loss (gain) on sale of property, plant and equipment 737 (1,330)
Equity in loss in nonconsolidated subsidiaries 913 719
Deferred income taxes 2,675 (3,718)
Changes in assets and liabilities:
Receivables (53,809) (45,398)
Inventories (56,625) (142,218)
  Prepaid expenses and other assets (current and non-current) 5,369 (19,680)
  Contract assets (59,536) (17,165)
Accounts payable 39,875 55,445
Accrued expenses (16,034) (18,119)
  Contract liabilities 4,798 24,963
Other noncurrent liabilities (6,447) 52,229
   Income taxes payable/refundable 20,792 22,158
Net cash flows from operating activities 68,019 70,185
Cash flows from investing activities:
Purchase of property, plant and equipment (49,676) (48,824)
Proceeds from sale of assets 45 1,595
Acquisitions, net of cash acquired (39,297) (312,500)
Other, net 1,117 (1,669)
Net cash flows from investing activities (87,811) (361,398)
Cash flows from financing activities:
Proceeds from short-term borrowings — 11,972
Payments on short-term borrowings (9,155) (17,021)
Proceeds from long-term borrowings 201,462 149,342
Principal payments on long-term borrowings (156,973) (15,421)
Dividends paid (22,337) (20,181)
Purchase of noncontrolling interest (4,292) —
Purchase of treasury shares (9,776) (21,600)
Proceeds from exercises under stock plans 5,846 19,891
Purchase of common treasury shares—stock plan exercises (4,205) (16,922)
Net cash flows from financing activities 570 90,060
Effect of exchange rate changes on cash and cash equivalents (3,431) (288)
Net change in cash and cash equivalents (22,653) (201,441)
Cash and cash equivalents—beginning of year 177,232 400,726
Cash and cash equivalents—end of period $ 154,579 $ 199,285


	Thirteen weeks ended
	April 1,		March 26,
	2023		2022
Cash flows from operating activities:
Net earnings	$	72,345	$	62,906
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization		24,558		23,884
Contribution to defined benefit pension plan		(15,259)		—
Stock-based compensation		8,689		9,463
Defined benefit pension plan expense (benefit)		61		(2,705)
Loss on sale of property, plant, and equipment		51		4
Equity in loss in nonconsolidated subsidiaries		821		358
Deferred income taxes		7,487		708
Changes in assets and liabilities:
Receivables		(42,175)		(36,643)
Inventories		9,052		(68,236)
Prepaid expenses and other assets (current and non-current)		(25,153)		(4,452)
Contract assets		14,695		(19,486)
Accounts payable		4,127		49,006
Accrued expenses		(36,551)		(34,186)
Contract liabilities		(22,559)		4,308
Other noncurrent liabilities		5,652		14
Income taxes payable / refundable		15,358		17,760
Net cash flows provided by operating activities		21,199		2,703
Cash flows from investing activities:
Purchase of property, plant, and equipment		(22,361)		(27,095)
Proceeds from sale of assets		1,021		2
Other, net		(449)		(2,007)
Net cash flows used in investing activities		(21,789)		(29,100)
Cash flows from financing activities:
Proceeds from short-term borrowings		11,090		—
Payments on short-term borrowings		(5,788)		(5,562)
Proceeds from long-term borrowings		125,000		97,000
Principal payments on long-term borrowings		(10,796)		(82,529)
Dividends paid		(11,742)		(10,616)
Dividends to noncontrolling interest		(654)		—
Purchase of treasury shares		(111,115)		—
Proceeds from exercises under stock plans		5,018		713
Purchase of common treasury shares—stock plan exercises		(14,022)		(2,527)
Net cash flows used in financing activities		(13,009)		(3,521)
Effect of exchange rate changes on cash and cash equivalents		1,141		2,386
Net change in cash and cash equivalents		(12,458)		(27,532)
Cash and cash equivalents—beginning of year		185,406		177,232
Cash and cash equivalents—end of period	$	172,948	$	149,700

See accompanying notes to condensed consolidated financial ~~statements~~statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)


							Accumulated				Noncontrolling
			Additional				other				interest in		Total
	Common		paid-in		Retained		comprehensive		Treasury		consolidated		shareholders’
	stock		capital		earnings		income (loss)		stock		subsidiaries		equity
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
Balance at December 31, 2022	$	27,900	$	—	$	2,593,039	$	(274,909)	$	(765,183)	$	60,865		1,641,712
Net earnings (loss)		—		—		74,540		—		—		(2,195)		72,345
Other comprehensive income		—		—		—		8,776		—		293		9,069
Cash dividends declared ($0.60 per share)		—		—		(12,634)		—		—		—		(12,634)
Dividends to noncontrolling interests		—		—		—		—		—		(662)		(662)
Purchase of treasury shares; 356,887 shares acquired		—		—		—		—		(111,115)		—		(111,115)
Stock plan exercises; 44,908 shares acquired		—		—		—		—		(14,022)		—		(14,022)
Stock options exercised; 31,602 shares issued		—		971		(19,317)		—		23,364		—		5,018
Stock option expense		—		855		—		—		—		—		855
Stock awards; 76,731 shares issued		—		(1,826)		—		—		9,660		—		7,834
Balance at April 1, 2023	$	27,900	$	—	$	2,635,628	$	(266,133)	$	(857,296)	$	58,301	$	1,598,400

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

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.~~

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(Unaudited)~~

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

Condensed Consolidated Financial Statements

The Condensed Consolidated Balance Sheet ~~as of June 25, 2022,~~at April 1, 2023, the Condensed Consolidated Statements of Earnings, Comprehensive Income, Cash Flows, and ~~Shareholders'~~Shareholders’ Equity for the thirteen ~~and twenty-six~~ weeks ended ~~June 25,~~April 1, 2023 and March 26, 2022 ~~and 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)~~“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 June 25, 2022~~at April 1, 2023 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~~Company’s Annual Report on Form 10-K for the fiscal year ended December ~~25, 2021.~~31, 2022. The results of operations for the period ended ~~June 25, 2022~~April 1, 2023 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.~~net realizable value. 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:


	April 1,		December 31,
	2023		2022
Raw materials and purchased parts	$	258,300	$	258,814
Work-in-process		46,250		44,453
Finished goods and manufactured goods		420,810		425,495
	$	725,360	$	728,762

June 25,
2022 December 25,
2021
Raw materials and purchased parts $ 309,372 $ 278,107
Work-in-process 72,632 63,628
Finished goods and manufactured goods 404,596 387,099
Total Inventory $ 786,600 $ 728,834

Income Taxes

Earnings ~~before~~before income taxes and equity in loss of nonconsolidated subsidiaries for the thirteen ~~and twenty-six~~ weeks ended ~~June 25,~~April 1, 2023 and March 26, 2022 ~~and June 26, 2021,~~ were as follows:


	Thirteen weeks ended
	2023		2022
United States	$	31,858	$	60,816
Foreign		73,151		25,569
	$	105,009	$	86,385

Thirteen weeks ended Twenty-six weeks ended
2022 2021 2022 2021
United States $ 62,214 $ 57,090 $ 123,031 $ 108,245
Foreign 45,135 20,666 70,703 40,374
$ 107,349 $ 77,756 $ 193,734 $ 148,619

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(Unaudited)~~

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

Pension Benefits

The Company incurs expenses in connection with the Delta Pension Plan ~~("DPP"~~(“DPP”). The DPP was acquired as part of the Delta ~~plc~~PLC acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the 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 ~~June 25,~~April 1, 2023 and March 26, 2022 ~~and June 26, 2021~~ were as follows:

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)


	Thirteen weeks ended
	2023		2022
Interest cost	$	5,256	$	3,365
Expected return on plan assets		(5,317)		(6,202)
Amortization of prior service cost		122		132
Net periodic (benefit) expense	$	61	$	(2,705)

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 ~~June 25, 2022,1,892,141~~April 1, 2023, 1,647,157 shares of common stock remained available for issuance under the plans.

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 date in equal amounts over three years or on the ~~grant's~~grant’s fifth ~~anniversary.~~anniversary date. 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~~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 ~~June 25,~~April 1, 2023 and March 26, 2022, ~~and June 26, 2021,~~ respectively, were as follows:

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


	Thirteen weeks ended
	2023		2022
Compensation expense	$	8,689	$	9,463
Income tax benefits		2,172		2,366

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.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(Unaudited)~~

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

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.

~~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~~majority of the Company’s trading securities represent the investments held in the Valmont Deferred Compensation Plan (the “DCP”). The assets of the DCP at ~~June 25, 2022~~April 1, 2023 of ~~$28,383~~$28,452 ($~~29,982~~25,008 at December ~~25, 2021)~~31, 2022) 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 (“ASC 320”), considering the ~~employee's~~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 $93 and $94 as of 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.

Mutual Funds: The Company has short-term investments in various mutual funds.

Marketable Securities: The Company's marketable securities consist of short-term investments in certificates of deposit.

Fair Value Measurement Using:
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:
Trading Securities $ 28,476 $ 28,476 $ — $ —
Derivative financial instruments, net 3,432 — 3,432 —


			Fair Value Measurement Using:
			Quoted Prices in		Significant Other		Significant
			Active Markets		Observable		Unobservable
	Carrying Value		for Identical		Inputs		Inputs
	April 1, 2023		Assets (Level 1)		(Level 2)		(Level 3)
Assets:
Trading securities	$	28,452	$	28,452	$	—	$	—
Derivative financial instruments, net		2,793		—		2,793		—
Cash and cash equivalents - mutual funds		1,534		1,534		—		—
Cash and cash equivalents - marketable securities		142		—		142		—

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) —

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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 – CONTINUED


			Fair Value Measurement Using:
			Quoted Prices in		Significant Other		Significant
	Carrying Value		Active Markets		Observable		Unobservable
	December 31,		for Identical		Inputs		Inputs
	2022		Assets (Level 1)		(Level 2)		(Level 3)
Assets:
Trading securities	$	25,008	$	25,008	$	—	$	—
Derivative financial instruments, net		1,404		—		1,404		—
Cash and cash equivalents - mutual funds		7,205		7,205		—		—
Cash and cash equivalents - marketable securities		136		—		136		—

Long-Lived Assets

The ~~Company's~~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.

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

Leases

The ~~Company's~~Company’s operating leases right-of-use assets and corresponding lease obligations are included in ~~other assets~~“Other assets” and ~~operating~~“Operating lease ~~liabilities.~~

liabilities”, respectively, in the Condensed Consolidated Balance Sheets.

Comprehensive Income ~~(Loss)~~

Comprehensive income ~~(loss)~~ includes net earnings, currency translation adjustments, certain derivative-related activity, and changes in prior service cost and net actuarial ~~gains/losses~~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 ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021:~~31, 2022:


	Foreign						Accumulated
	Currency				Defined		Other
	Translation		Hedging		Benefit		Comprehensive
	Adjustments		Activities		Pension Plan		Income (Loss)
Balance at December 31, 2022	$	(260,799)	$	20,099	$	(34,209)	$	(274,909)
Current period comprehensive income		7,896		789		91		8,776
Balance at April 1, 2023	$	(252,903)	$	20,888	$	(34,118)	$	(266,133)

Foreign Currency Translation Adjustments Gain on Hedging Activities Defined Benefit Pension Plan Accumulated Other Comprehensive Loss
Balance at December 25, 2021 $ (243,350) $ 15,777 $ (35,554) $ (263,127)
Current-period comprehensive income (loss) (31,112) 5,799 256 (25,057)
Balance at June 25, 2022 $ (274,462) $ 21,576 $ (35,298) $ (288,184)

Revenue Recognition

The Company determines the appropriate revenue recognition model 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 sales when the performance obligation is related to the manufacturing and sale of goods. Contract revenues are classified as service sales when the performance obligation is the performance of a service. Service revenue is primarily related to the ~~Coatings~~coatings and ~~Technology Products~~technology products and ~~Services~~services product lines.

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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 – CONTINUED

Customer acceptance provisions exist only in the design stage of our products (on a limited basis, the Company may agree to other acceptance terms), 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 is recognized with the design stage. 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~~solar product ~~lines,~~line, 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.

The ~~Company's~~Company’s contract ~~asset as of June 25, 2022~~assets at April 1, 2023 and December ~~25, 2021 was $200,522~~31, 2022 totaled $159,785 and ~~$142,643,~~ $174,539, respectively.

While most of the Infrastructure segment customers are generally invoiced upon shipment or delivery of the goods to the ~~customer's~~customer’s specified location, certain customers are also invoiced by advanced billings or progress billings.

At ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021,~~31, 2022, total contract liabilities were ~~$217,698~~$156,483 and ~~$213,203,~~$178,531, respectively. At ~~June 25, 2022, $175,814~~April 1, 2023, $156,333 was recorded as ~~contract liabilities~~“Contract liabilities” and ~~$41,884~~$150 was recorded as ~~other~~“Other noncurrent ~~liabilities~~liabilities” on the ~~condensed consolidated balance sheets.~~Condensed Consolidated Balance Sheets. Additional details are as follows:

●

During the thirteen weeks ended April 1, 2023, and March 26, 2022, the Company recognized $58,939 and $28,023 of revenue that was included in the total contract liability at December 31, 2022 and December 25, 2021, respectively. The revenue recognized was due to applying advance payments received for performance obligations completed during the period.

●

At April 1, 2023, the Company had $150 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.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(Unaudited)~~

•During the thirteen and twenty-six weeks ended June 25, 2022, the Company recognized $31,149 and $59,171 of revenue that was included in the total contract liability as of December 25, 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 June 26,~~ ~~2021~~, the Company recognized $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 June 25, 2022, the Company had $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.

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

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~~the TD&S and telecommunication structure product lines, wethe Company generally ~~recognize~~recognizes revenue on an ~~inputs~~input 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~~the solar product line 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 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~~“Business Segments ~~and~~& Related Revenue ~~Information footnote (see note 7).~~Information” footnote.

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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 – CONTINUED

Recently ~~Issued~~Adopted Accounting Pronouncements ~~(not yet adopted)~~

In ~~March 2020,~~September 2022, the FASB issued Accounting Standards Update No. ~~2020-04 (ASU 2020-04)~~2022-04, Liabilities - Supplier Finance Programs (Topic 450-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”), ~~Reference Rate Reform (Topic 848): Facilitation~~which requires all buyers that use supplier finance programs to enhance the transparency of such programs to allow financial statement users to understand the effect on working capital, liquidity, and cash flows. The new guidance requires disclosure of key terms of the ~~Effects~~program, including a description of ~~Reference Rate Reform~~the payment terms, payment timing, and assets pledged as security or other forms of guarantees provided to the finance provider or intermediary. Other requirements include the disclosure of the amount that remains unpaid as of the end of the reporting period, a description of where these obligations are presented in the balance sheet, and a rollforward of the obligation during the annual period. The guidance is effective in the first quarter of 2023, except for the rollforward, which is effective in 2024. The Company adopted the new standard in the first quarter of 2023, as well as early adopted the amendment on ~~Financial Reporting~~,rollforward information. The new guidance had no effect on the Company’s results of operations as the changes are primarily disclosure related, as shown below.

During 2019, the Company entered into an agreement with a third-party financial institution to facilitate a supplier finance program which ~~provides optional expedients~~allows qualifying suppliers to sell their receivables from the Company to the financial institution. These participating suppliers negotiate their outstanding receivable arrangements directly with the financial institution and ~~exceptions~~the Company’s rights and obligations to suppliers are not impacted. The Company has no economic interest in a supplier’s decision to enter into these agreements. Once a qualifying supplier elects to participate in the supplier finance program and reaches an agreement with a financial institution, they elect which individual Company invoices they sell to the financial institution. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers to the financial institution on the invoice due date, regardless of whether the individual invoice is sold by the supplier to the financial institution. The financial institution pays the supplier on the invoice due date for ~~applying GAAP principles~~any invoices that were not previously sold under the supplier finance program. The invoice amounts and scheduled payment terms are not impacted by the suppliers’ decisions to ~~contracts, hedging relationships,~~sell amounts under these arrangements. The payment of these obligations is included in cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows. Included in Accounts Payable in the Condensed Consolidated Balance Sheets at April 1, 2023 and ~~other transactions~~December 31, 2022 were $58,134 and $48,880 of outstanding payment obligations, respectively, that were sold to the financial institution under the Company’s supplier finance program.


Confirmed obligations outstanding at December 31, 2022	$	48,880
Invoices confirmed during the period		74,781
Confirmed invoices paid during the period		(65,527)
Confirmed obligations outstanding at April 1, 2023	$	58,134

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(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~~$39,287 in cash (net of cash acquired) and subject to working capital adjustments. Approximately $1,850 of the purchase price iswas 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. 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~~first quarter of ~~2021.~~

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

2023.

The following table summarizes the fair values of the assets acquired and liabilities assumed of ~~Prospera as of~~ConcealFab at 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. 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 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 finalized the purchase price allocation in the second quarter of 2022.


	As of June 1,
	2022
Current assets	$	21,133
Customer relationships		26,200
Trade name		5,000
Property, plant, and equipment		3,813
Other assets		9,108
Goodwill		42,465
Total fair value of assets acquired	$	107,719
Current liabilities		6,658
Long-term debt		2,038
Operating lease liabilities		7,812
Deferred income taxes		5,464
Other noncurrent liabilities		12
Total fair value of liabilities assumed	$	21,984
Noncontrolling interest in consolidated subsidiaries		41,693
Net assets acquired	$	44,042

Proforma disclosures were omitted for ~~these acquisitions~~this acquisition as ~~the they do~~it does not have a significant impact on the ~~Company's~~Company’s financial results.

~~Acquisition~~

Acquisition-related costs incurred for the above acquisition were insignificant for all years presented.

Acquisitions of Noncontrolling Interests

On August 10, 2022, the Company acquired the remaining 9% of Convert Italy S.p.A. for $3,046. 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 Condensed Consolidated Statements of Cash Flows.

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'~~shareholders’ equity and as a financing cash flow in the Condensed Consolidated Statements of Cash Flows.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(Unaudited)~~

(3) DIVESTITURES

On November 30, 2022, the Company completed the sale of Valmont SM, the offshore wind energy structures business in Denmark, reported in the Other segment. The business was sold because it did not align with the long-term strategic plans for the Company. The offshore wind energy structures business’ historical annual sales, operating profit, and net assets are not significant for discontinued operations presentation. The offshore wind energy structures business had an operating loss of $809 for the thirteen weeks ended March 26, 2022.

At closing, in the fourth quarter of 2022, the Company received Danish Krone 90,000 (U.S. $12,570) with an additional Danish Krone 28,000 (U.S. $4,027) held in an escrow account subject to normal closing conditions before it will be released to the Company.

~~(3)~~The pre-tax loss recorded during the fourth quarter of 2022 from the divestiture was reported in “Other income (expenses)” in the Consolidated Statements of Earnings on the Form 10-K. The loss was comprised of the proceeds and an asset recognized for the escrow funds not yet released from buyer, less deal-related costs and the net assets of the business.

(4) GOODWILL AND INTANGIBLE ASSETS

Amortized Intangible Assets

The components of amortized intangible assets at ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021~~31, 2022 were as follows:


	April 1, 2023
	Gross				Weighted
	Carrying		Accumulated		Average
	Amount		Amortization		Life
Customer Relationships	$	223,388	$	149,136	13 years
Patents & Proprietary Technology		58,687		23,350	9 years
Trade Name		2,850		746	7 years
Other		2,647		2,289	5 years
	$	287,572	$	175,521


	December 31, 2022
	Gross				Weighted
	Carrying		Accumulated		Average
	Amount		Amortization		Life
Customer Relationships	$	222,716	$	145,502	13 years
Patents & Proprietary Technology		58,404		21,291	9 years
Trade Name		2,850		645	7 years
Other		2,462		2,164	5 years
	$	286,432	$	169,602

June 25, 2022
Gross
Carrying
Amount Accumulated
Amortization Weighted
Average
Life
Customer Relationships $ 246,965 $ 163,494 13 years
Patents & Proprietary Technology 58,188 17,861 9 years
Trade Name 2,850 441 7 years
Other 4,476 4,113 6 years
$ 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 ~~June 25,~~April 1, 2023 and March 26, 2022, ~~and June 26, 2021,~~ respectively, was as follows:

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

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

(4) GOODWILL AND INTANGIBLE ASSETS – CONTINUED

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


	Estimated
	Amortization
	Expense
Remainder of 2023	$	15,804
2024		19,028
2025		17,348
2026		12,834
2027		9,653
2028		8,837

Estimated
Amortization
Expense
2022 $ 21,425
2023 19,588
2024 17,675
2025 16,241
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.

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

~~Non-amortized intangible assets~~

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 ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021~~31, 2022 are as follows:

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


	April 1,		December 31,		Year
	2023		2022		Acquired
Newmark	$	11,111	$	11,111	2004
Convert Italia S.p.A.		8,131		8,024	2018
Webforge		7,248		7,107	2010
Ingal EPS / Ingal Civil Products		7,027		6,891	2010
ConcealFab		5,000		5,000	2022
Shakespeare		4,000		4,000	2014
Walpar		3,500		3,500	2018
Other		14,232		14,152	Various
	$	60,249	$	59,785

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~~at August ~~28, 2021.~~27, 2022. 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~~

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

(4) GOODWILL AND INTANGIBLE ASSETS – CONTINUED

Goodwill

The carrying amount of goodwill by segment ~~as of June 25, 2022~~at April 1, 2023 and December ~~25, 2021~~31, 2022 was as follows:


	Infrastructure		Agriculture
	Segment		Segment		Total
Gross Balance December 31, 2022	$	473,551	$	313,777	$	787,328
Accumulated impairment losses		(47,467)		—		(47,467)
Balance at December 31, 2022		426,084		313,777		739,861
Foreign currency translation		1,704		170		1,874
Balance at April 1, 2023	$	427,788	$	313,947	$	741,735

Infrastructure Segment Agriculture
Segment Total
Gross Balance December 25, 2021 $ 456,876 $ 313,512 $ 770,388
Accumulated impairment losses (61,822) — (61,822)
Balance at December 25, 2021 395,054 313,512 708,566
Acquisitions 42,640 — 42,640
Foreign currency translation (9,759) 296 (9,463)
Balance at June 25, 2022 $ 427,935 $ 313,808 $ 741,743


	Infrastructure		Agriculture
	Segment		Segment		Total
Gross Balance April 1, 2023	$	475,255	$	313,947	$	789,202
Accumulated impairment losses		(47,467)		—		(47,467)
Balance at April 1, 2023	$	427,788	$	313,947	$	741,735

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

~~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~~at August ~~28, 2021,~~27, 2022, 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,~~2023, no goodwill impairments have been recorded.

~~(4)~~

(5) 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 ~~June 25,~~April 1, 2023 and March 26, 2022 ~~and June 26, 2021~~ were as follows:

2022 2021
Interest $ 22,221 $ 19,657
Income taxes 29,921 11,317


	Thirteen weeks ended
	2023		2022
Interest	$	3,331	$	1,613
Income taxes		7,838		6,699

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

~~(5)~~

(6) EARNINGS PER SHARE

The following table provides a reconciliation between ~~Basic~~basic and ~~Diluted~~diluted earnings per share ~~(EPS)~~(“EPS”):


			Dilutive
			Effect of
			Various Stock		Diluted
	Basic EPS		Awards		EPS
Thirteen weeks ended April 1, 2023:
Net earnings attributable to Valmont Industries, Inc.	$	74,540	$	—	$	74,540
Weighted average shares outstanding (000’s)		21,269		243		21,512
Per share amount	$	3.50	$	(0.03)	$	3.47
Thirteen weeks ended March 26, 2022:
Net earnings attributable to Valmont Industries, Inc.	$	62,311	$	—	$	62,311
Weighted average shares outstanding (000’s)		21,279		213		21,492
Per share amount	$	2.93	$	(0.03)	$	2.90

Basic EPS Dilutive
Effect of
Stock
Options Diluted EPS
Thirteen weeks ended June 25, 2022:
Net earnings attributable to Valmont Industries, Inc. $ 76,108 $ — $ 76,108
Weighted average shares outstanding (000's) 21,313 228 21,541
Per share amount $ 3.57 $ (0.04) $ 3.53
Thirteen weeks ended June 26, 2021:
Net earnings attributable to Valmont Industries, Inc. $ 62,110 $ — $ 62,110
Weighted average shares outstanding (000's) 21,193 276 21,469
Per share amount $ 2.93 $ (0.04) $ 2.89
Twenty-six weeks ended June 25, 2022
Net earnings attributable to Valmont Industries, Inc. $ 138,419 $ — $ 138,419
Weighted average shares outstanding (000's) 21,296 220 21,516
Per share amount $ 6.50 $ (0.07) $ 6.43
Twenty-six weeks ended June 26, 2021:
Net earnings attributable to Valmont Industries, Inc. $ 117,124 $ — $ 117,124
Weighted average shares outstanding (000's) 21,186 263 21,449
Per share amount $ 5.53 $ (0.07) $ 5.46

At ~~June 25,~~April 1, 2023 and March 26, 2022, ~~and June 26, 2021,~~ there were ~~47,223~~40,564 and 047,223 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.

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~(Unaudited)~~

~~(6)~~

(7) 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~~Company’s Condensed Consolidated Statements of ~~earnings,~~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 accumulated other comprehensive income ~~("OCI"~~(“AOCI”) until either the sale or substantially complete liquidation of the related subsidiaries.

Fair value of derivative instruments at ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021~~31, 2022 are as follows:


		April 1,		December 31,
Derivatives designated as hedging instruments:	Balance sheet location	2023		2022
Commodity forward contracts	Other accrued expenses	$	(1,971)	$	(3,854)
Foreign currency forward contracts	Prepaid expenses and other assets		142		83
Cross currency swap contracts	Prepaid expenses and other assets		4,747		5,385
Cross currency swap contracts	Other accrued expenses		(125)		(210)
		$	2,793	$	1,404

Derivatives designated as hedging instruments: Balance sheet location June 25, 2022 December 25, 2021
Commodity forward contracts Accrued expenses $ (5,252) $ (5,802)
Foreign currency forward contracts Prepaid expenses and other assets 64 149
Foreign currency forward contracts Accrued expenses — (118)
Cross currency swap contracts Prepaid expenses and other assets 8,724 1,764
Cross currency swap contracts Accrued expenses (104) —
$ 3,432 $ (4,007)

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

(7) DERIVATIVE FINANCIAL INSTRUMENTS – CONTINUED

Gains (losses) on derivatives recognized in the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~earnings~~Earnings for the thirteen ~~and twenty-six~~ weeks ended ~~June 25,~~April 1, 2023 and March 26, 2022 ~~and June 26, 2021~~ are as follows:

Thirteen weeks ended Twenty-six weeks ended
Statements of earnings location June 25, 2022 June 26, 2021 June 25, 2022 June 26, 2021
Commodity forward contracts Product cost of sales $ (1,545) $ 270 $ 498 $ 270
Foreign currency forward contracts Other income (234) 154 (85) (64)
Interest rate hedge amortization Interest expense (16) (16) (32) (32)
Cross currency swap contracts Interest expense 733 658 1,507 1,368
$ (1,062) $ 1,066 $ 1,888 $ 1,542


		Thirteen weeks ended
		April 1,		March 26,
Derivatives designated as hedging instruments:	Statement of earnings location	2023		2022
Commodity forward contracts	Product cost of sales	$	(3,985)	$	2,043
Foreign currency forward contracts	Other income		97		151
Interest rate hedge amortization	Interest expense		(16)		(16)
Cross currency swap contracts	Interest expense		446		774
		$	(3,458)	$	2,952

Cash Flow Hedges

~~During 2021, the~~

The Company ~~entered~~enters into steel hot rolled coil ~~(HRC)~~(“HRC”) commodity 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.~~ During the ~~second~~first quarter of ~~2022,~~2023, 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~~$15,760 for the total purchase of ~~15,000~~18,500 short tons. ~~As of June 25, 2022,~~At April 1, 2023, the forward contracts had a notional amount of ~~$43,589~~$15,760 for the total purchase of ~~42,400~~18,500 short tons from ~~July 2022~~September 2023 to March ~~2023.~~2024. The ~~gain/~~gain (loss) realized upon settlement will be recorded in ~~product~~“Product cost of ~~sales~~sales” in the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~earnings~~Earnings over average inventory turns.

The Company enters into natural gas commodity forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future natural gas purchases. During the first quarter of ~~2022,~~2023, the Company entered into additional natural gas commodity forward contracts that also qualify as a cash flow hedge. The forward contracts had a notional amount of $1,206 for the total purchase of 299,000 mmBtu from July 2023 to March 2025. At April 1, 2023, the forward contracts had a notional amount of $5,772 for the total purchase of 1,179,000 mmBtu from April 2023 to March 2025. The gain (loss) realized upon settlement will be recorded in “Product cost of sales” in the Condensed Consolidated Statements of Earnings in the period consumed.

During the first quarter of 2023, the Company entered into diesel fuel commodity forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future diesel fuel purchases. The forward contracts had a notional amount of $755 for the total purchase of 1,890,000 gallons from July 2023 to March 2024. The gain (loss) realized upon settlement will be recorded in “Product cost of sales” in the Condensed Consolidated Statements of Earnings in the period consumed.

During the first quarter of 2023, 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

~~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~~April 2023 and has a notional amount to sell $1,800 in exchange for a stated amount of Euros.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

(7) DERIVATIVE FINANCIAL INSTRUMENTS – CONTINUED

Net Investment Hedges

In 2019, the Company entered into 2two 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 in 2044 for Danish krone ~~(DKK)~~(“DKK”) and Euro denominated payments. The CCS were entered into in order to mitigate foreign currency risk on the ~~Company's~~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 initial full notional amount of the 2two CCS ($~~130,000)~~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.~~AOCI. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS.

~~(7)~~

During the second half of 2022, the Company settled the DKK CCS and received proceeds of $3,532. Due to the sale of the offshore wind energy structures business in the fourth quarter of 2022, the Company reclassified the cumulative net investment hedge gain of $4,827 ($3,620 after tax) from OCI to “Loss from divestiture of offshore wind energy structures business” in the Consolidated Statements of Earnings at December 31, 2022 in the Form 10-K.

Key terms of the Euro CCS are as follows:


	Notional			Swapped	Set Settlement
Currency	Amount		Termination Date	Interest Rate	Amount
Euro	$	80,000	April 1, 2024	2.825%	€	71,550

(8) 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~~

The Company has two reportable segments based on ~~the new~~its management structure. ~~As a result, the Company has realigned to a 2 reportable~~Each 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~~is 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.~~

headcounts and sales dollars.

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,~~solar, lighting and transportation, and telecommunications, and coatings services to preserve ~~and protect~~ metal products.

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

In addition to these two reportable segments, the Company had a business and related activities in 2022 that are not more than 10% of consolidated sales, operating income, or assets. This comprised the offshore wind energy structures business and was reported in the Other segment until its divestiture in fourth quarter 2022.

The Company evaluates the performance of its reportable segments based upon operating income and return on invested capital. The ~~Company does not allocate~~Company’s operating income for segment purposes excludes unallocated corporate general and administrative expenses, interest expense, non-operating income ~~(expense),~~and deductions, or income ~~taxes to its reportable segments.~~taxes.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(Unaudited)~~

(8) BUSINESS SEGMENTS & RELATED REVENUE INFORMATION

Summary by Business

Thirteen weeks ended Twenty-six weeks ended
June 25,
2022 June 26,
2021 June 25,
2022 June 26,
2021
SALES:
Infrastructure $ 764,950 $ 617,604 $ 1,445,676 $ 1,167,250
Agriculture 377,765 281,965 684,345 511,629
Total 1,142,715 899,569 2,130,021 1,678,879
INTERSEGMENT SALES:
Infrastructure (4,200) (2,796) (7,301) (5,997)
Agriculture (2,983) (2,144) (6,368) (3,367)
Total (7,183) (4,940) (13,669) (9,364)
NET SALES:
Infrastructure 760,750 614,808 1,438,375 1,161,253
Agriculture 374,782 279,821 677,977 508,262
Total $ 1,135,532 $ 894,629 $ 2,116,352 $ 1,669,515
OPERATING INCOME:
Infrastructure $ 84,643 $ 61,550 $ 162,150 $ 115,999
Agriculture 58,046 41,984 95,521 80,732
Corporate (23,970) (20,909) (44,110) (36,895)
Total $ 118,719 $ 82,625 $ 213,561 $ 159,836

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


	Thirteen weeks ended
	April 1,		March 26,
	2023		2022
SALES:
Infrastructure	$	736,106	$	662,072
Agriculture		332,163		306,580
Other		—		18,654
Total		1,068,269		987,306
INTERSEGMENT SALES:
Infrastructure		(3,966)		(3,101)
Agriculture		(1,822)		(3,385)
Total		(5,788)		(6,486)
NET SALES:
Infrastructure		732,140		658,971
Agriculture		330,341		303,195
Other		—		18,654
Total	$	1,062,481	$	980,820

OPERATING INCOME (LOSS):
Infrastructure	$	94,352	$	78,316
Agriculture		53,323		37,475
Other		—		(809)
Corporate		(29,209)		(20,140)
Total	$	118,466	$	94,842

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(Unaudited)~~

(8) BUSINESS SEGMENTS & RELATED REVENUE INFORMATION – CONTINUED


	Thirteen weeks ended April 1, 2023
	Infrastructure		Agriculture		Other		Intersegment Sales		Consolidated
Geographical market:
North America	$	584,083	$	182,869	$	—	$	(5,374)	$	761,578
International		152,023		149,294		—		(414)		300,903
Total	$	736,106	$	332,163	$	—	$	(5,788)	$	1,062,481

Product line:
Transmission, Distribution, and Substation	$	314,820	$	—	$	—	$	—	$	314,820
Lighting and Transportation		229,136		—		—		—		229,136
Coatings		90,114		—		—		(3,552)		86,562
Telecommunications		68,137		—		—		—		68,137
Solar		33,899		—		—		(414)		33,485
Irrigation Equipment and Parts, excluding Technology		—		299,181		—		(1,822)		297,359
Technology Products and Services		—		32,982		—		—		32,982
Total	$	736,106	$	332,163	$	—	$	(5,788)	$	1,062,481


	Thirteen weeks ended March 26, 2022
	Infrastructure		Agriculture		Other		Intersegment Sales		Consolidated
Geographical market:
North America	$	505,980	$	182,255	$	—	$	(6,486)	$	681,749
International		156,092		124,325		18,654		—		299,071
Total	$	662,072	$	306,580	$	18,654	$	(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
Solar		24,333		—		18,654		—		42,987
Irrigation Equipment and Parts, excluding Technology		—		278,034		—		(3,385)		274,649
Technology Products and Services		—		28,546		—		—		28,546
Total	$	662,072	$	306,580	$	18,654	$	(6,486)	$	980,820

Twenty-six weeks ended June 25, 2022
Infrastructure Agriculture Intersegment Sales Consolidated
Geographical market:
North America $ 1,065,844 $ 385,743 $ (13,202) $ 1,438,385
International 379,832 298,602 (467) 677,967
Total $ 1,445,676 $ 684,345 $ (13,669) $ 2,116,352
Product line:
Transmission, Distribution and Substation $ 577,435 $ — $ — $ 577,435
Lighting and Transportation 459,419 — — 459,419
Coatings 172,297 — (7,301) 164,996
Telecommunications 139,935 — — 139,935
Renewable Energy 96,590 — — 96,590
Irrigation Equipment and Parts, excluding Technology — 625,619 (6,368) 619,251
Technology Products and Services — 58,726 — 58,726
Total $ 1,445,676 $ 684,345 $ (13,669) $ 2,116,352

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

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~(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

(8) BUSINESS SEGMENTS & RELATED REVENUE INFORMATION – CONTINUED

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,~~April 1, 2023 and March 26, 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


	Point in Time		Over Time		Total
	Thirteen		Thirteen		Thirteen
	weeks ended		weeks ended		weeks ended
	April 1, 2023		April 1, 2023		April 1, 2023
Infrastructure	$	411,217	$	320,923	$	732,140
Agriculture		324,206		6,135		330,341
Total	$	735,423	$	327,058	$	1,062,481


	Point in Time		Over Time		Total
	Thirteen		Thirteen		Thirteen
	weeks ended		weeks ended		weeks ended
	March 26, 2022		March 26, 2022		March 26, 2022
Infrastructure	$	369,190	$	289,781	$	658,971
Agriculture		297,606		5,589		303,195
Other		—		18,654		18,654
Total	$	666,796	$	314,024	$	980,820

~~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

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

Table of Contents

Item 2. ~~Management's~~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~~management’s discussion and analysis included in the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended December ~~25, 2021.~~31, 2022. Segment net sales in the table below and elsewhere are presented net of intersegment sales. See Note 78 of our ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements for additional information on segment ~~realignment, segment~~ sales and intersegment sales.

Table of Contents

Results of Operations

(Dollars in millions, except per share amounts)


	Thirteen weeks ended
	April 1, 2023			March 26, 2022			% Incr. (Decr.)
Consolidated
Net sales	$	1,062.5		$	980.8		8.3	%
Gross profit		308.6			249.1		23.8	%
as a percent of sales		29.0	%		25.4	%
SG&A expense		190.1			154.3		23.2	%
as a percent of sales		17.9	%		15.7	%
Operating income		118.5			94.8		24.9	%
as a percent of sales		11.1	%		9.7	%
Net interest expense		12.3			11.0		11.2	%
Effective tax rate		30.3	%		26.8	%
Net earnings		74.5			62.3		19.6	%
Diluted earnings per share	$	3.47		$	2.90		19.7	%
Infrastructure
Net sales	$	732.2		$	658.9		11.1	%
Gross profit		200.5			166.0		20.8	%
SG&A expense		106.1			87.7		21.0	%
Operating income		94.4			78.3		20.5	%
Agriculture
Net sales	$	330.3		$	303.2		9.0	%
Gross profit		108.1			82.3		31.3	%
SG&A expense		54.8			44.9		22.0	%
Operating income		53.3			37.4		42.3	%
Other
Net sales	$	—		$	18.7		NM
Gross profit		—			0.8		NM
SG&A expense		—			1.6		NM
Operating loss		—			(0.8)		NM
Corporate
SG&A expense	$	29.2		$	20.1		45.3	%
Operating loss		(29.2)			(20.1)		45.0	%

Thirteen weeks ended Twenty-six weeks ended
June 25, 2022 June 26, 2021 % Incr. (Decr.) June 25, 2022 June 26, 2021 % Incr. (Decr.)
Consolidated
Net sales $ 1,135.5 $ 894.6 26.9 % $ 2,116.4 $ 1,669.5 26.8 %
Gross profit 292.6 229.6 27.4 % 541.8 434.2 24.8 %
as a percent of sales
25.8 % 25.7 % 25.6 % 26.0 %
SG&A expense 173.9 147.0 18.3 % 328.2 $ 274.4 19.6 %
as a percent of sales
15.3 % 16.4 % 15.5 % 16.4 %
Operating income 118.7 82.6 43.7 % 213.6 159.8 33.7 %
as a percent of sales
10.5 % 9.2 % 10.1 % 9.6 %
Net interest expense 11.1 10.3 7.8 % 22.1 19.9 11.1 %
Effective tax rate 27.4 % 19.0 % 27.1 % 20.3 %
Net earnings $ 76.1 $ 62.1 22.5 % $ 138.4 $ 117.1 18.2 %
Diluted earnings per share $ 3.53 $ 2.89 22.1 % $ 6.43 $ 5.46 17.8 %
Infrastructure
Net sales $ 760.8 $ 614.8 23.7 % $ 1,438.4 $ 1,161.3 23.9 %
Gross profit 182.1 148.1 23.0 % 349.0 283.7 23.0 %
SG&A expense 97.5 86.5 12.7 % 186.8 167.7 11.4 %
Operating income 84.6 61.6 37.3 % 162.2 116.0 39.8 %
Agriculture
Net sales $ 374.8 $ 279.8 34.0 % $ 678.0 $ 508.3 33.4 %
Gross profit 110.5 81.3 35.9 % 192.8 150.2 28.4 %
SG&A expense 52.4 39.3 33.3 % 97.3 69.5 40.0 %
Operating income 58.0 42.0 38.1 % 95.5 80.7 18.3 %
Net corporate expense
Gross profit $ — 0.3 NM $ — $ 0.3 NM
SG&A 24.0 21.2 13.2 % 44.1 37.2 18.5 %
Operating loss (24.0) (20.9) (14.8) % (44.1) (36.9) (19.5) %

Table of Contents

Overview, Including Items Impacting Comparability

On a consolidated basis, net sales were higher in the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared to the ~~same periods~~first quarter of ~~2021,~~2022, with higher sales in both reporting segments.

~~Average steel~~

Steel prices for both hot rolled coil and plate were ~~higher,~~volatile over the past two years, especially in North ~~America,~~America. An increase in the average cost of consumed steel drove higher consolidated net sales and ~~have stayed at elevated levels resulting in higher~~ cost of sales ~~and net sales~~in the first quarter of 2023, as compared to the first quarter of 2022. Gross profit margin improved in the first quarter of 2023, as compared to the first quarter of 2022, as customer pricing mechanisms and product selling price practices allowed for the recovery of ~~that~~cost of material inflation for both the Infrastructure and Agriculture 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~~which is included in the ~~second~~Infrastructure segment.

The Company divested of its offshore wind energy structures business in the fourth quarter of ~~2021, an agricultural technology company that offers solutions focused on remote monitoring~~2022, which resulted in a pre-tax loss of ~~center pivot irrigation machines (Agriculture).~~

•~~Prospera~~approximately $33.3 million. The offshore wind energy structures business is included in the ~~second quarter~~Other segment until its divestiture in 2022 and the loss was recorded in “Other income (expenses)” in the Consolidated Statements of ~~2021, a privately-held Israeli-based artificial intelligence company, focused on machine learning and computer vision in agriculture (Agriculture).~~

~~Items~~Earnings at December 31, 2022.

Non-cash items of note impacting the comparability of results from net earnings for the first quarter of 2023 included amortization of identified intangible assets of $1.6 million ($1.3 million after-tax) and stock-based compensation expense of $2.0 million ($1.8 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).

Non-cash items of note impacting the comparability of results from net earnings for the first 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.

~~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 inflationary cost pressures, supply chain disruptions, changes in foreign currency exchange rates against the U.S. dollar, rising interest rates, the ongoing Russia-Ukraine conflict, 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-19 and the related actions of governments and other authorities to contain COVID-19 affected and continue to affect the company’s operations, results, and cash flows. Our significant manufacturing facilities were open and fully operational as of June 25, 2022.

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

Reportable Segments

In addition 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,~~two reportable segments, the Company ~~has realigned~~had a business and related activities in 2022 that are not more than 10% of consolidated sales, operating income, or assets. This comprised the offshore wind energy structures business and was reported in the Other segment until 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).divestiture in fourth quarter 2022. All prior period information has been recast to reflect this change in reportable segments. See Note 78 to our Condensed Consolidated Financial Statements for additional information.

Backlog

The consolidated backlog of unshipped orders at ~~June 25, 2022~~April 1, 2023 was approximately ~~$2.0~~$1.6 billion compared with approximately ~~$1.6~~$1.7 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. Both of these projects are within the Infrastructure reporting segment. We expect approximately $1.7 billion of the backlog to be fulfilled within the subsequent 12 months.

31, 2022.

Currency Translation

In the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, we realized an increase in operating income, as compared with ~~2021, with~~2022, despite negative currency translation ~~effects relatively flat.~~effects. The breakdown of this effect by segment was as follows:


	Total		Infrastructure		Agriculture		Corporate
First quarter	$	(0.7)	$	(0.5)	$	(0.3)	$	0.1

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

Table of Contents

Gross Profit, SG&A, and Operating Income

At a consolidated level, gross profit as a percent of sales was ~~relatively flat~~higher in the ~~second~~first quarter of 2023, as compared with the first quarter of 2022, and ~~decreased slightly in the first half of 2022, as compared with the same 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 half of 2022~~ SG&A expense ~~over~~in the ~~same periods~~first quarter of ~~2021~~2023, as compared to the first quarter of 2022, was due to the incremental SG&A of $3.2 million from the ~~May 2021~~June 2022 acquisition of ~~Prospera (including intangible asset amortization, stock-based compensation, and research and development costs),~~ConcealFab, as well as higher salaries as a result of merit increases, incentives ~~due~~attributed to improved ~~operations,~~financial results, and ~~salary merit increases.~~

higher travel costs. In addition, the Company incurred a bad debt reserve charge of approximately $2.7 million related to a telecommunications customer that became insolvent.

The increase in consolidated operating income in the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared to the ~~same periods~~first quarter of ~~2021, is~~2022, was 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~~period over ~~year.~~

period.

Net Interest Expense

Interest expense increased in the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared to the ~~same periods in 2021,~~first quarter of 2022, due to increased borrowing on the revolving line of credit.

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

The change in other income/expenses in the ~~second~~first quarter of ~~2022,~~2023, as compared to ~~2021,~~the first quarter of 2022, was primarily due to a ~~lower~~pension expense of $0.1 million in the first quarter of 2023, as opposed to a pension benefit of ~~$1.2~~$2.7 million ~~and~~in the first quarter of 2022. These changes were partially offset by the change in the valuation of deferred compensation assets, shown as "Gain (loss) on investments - unrealized" on the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~earnings,~~Earnings, which resulted in ~~lower~~higher other 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$2.3 million. The change related to deferred compensation assets ~~are~~is offset by an ~~opposite change~~expense of the same amount in SG&A expense.

Income Tax Expense

Our effective income tax rate in the ~~second~~first quarter ~~and first half~~ of ~~2022~~2023 was ~~27.6% and 27.2%~~30.3% compared to ~~19.0% and 20.3%~~26.8% in the ~~second~~first quarter ~~and first half~~ of ~~2021.~~2022. 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 during 2022. In addition, there was an incremental tax benefit in 2021 driven by a change in the United Kingdom tax rate which did not recur in 2022.

~~Earnings~~earnings.

Loss (Earnings) Attributable to Noncontrolling Interests

~~Earnings~~

Loss (earnings) attributable to noncontrolling interests were ~~higher~~lower in the ~~second~~first quarter ~~and first half~~ of ~~2022~~2023, as compared to ~~2021~~the first quarter of 2022, due to ~~higher~~lower net earnings of the subsidiaries ~~Valmont~~the Company does not own 100%.

Cash Flows from Operations

Our cash flows provided by operations were ~~$68.0~~$21.2 million in the first ~~half~~quarter of ~~fiscal 2022,~~2023, as compared with ~~$70.2~~$2.7 million provided by operations in the first ~~half~~quarter of ~~2021.~~2022. The ~~operating cash flows~~increase was primarily the result of the increase in ~~the first half of 2022, as compared with 2021, were comparable as~~net earnings and continued focus on overall working capital levels, partially offset by a significant increase in the contribution to the defined benefit pension plan of approximately ~~$17 million and overall working capital changes were offset by the increase in net earnings.~~$15 million.

Table of Contents

Infrastructure ~~segment~~

Segment


	Thirteen weeks ended
					Dollar
Infrastructure	Q1 2023		Q1 2022		Change		% Change
Sales, gross of intercompany eliminations:
Transmission, Distribution, and Substation	$	314.9	$	281.6	$	33.3	11.8	%
Lighting & Transportation		229.1		212.8		16.3	7.7	%
Coatings		90.1		82.0		8.1	9.9	%
Telecommunications		68.1		61.4		6.7	11.0	%
Solar		33.9		24.3		9.6	39.3	%
Total	$	736.1	$	662.1	$	74.0	11.2	%

Operating Income	$	94.4	$	78.3	$	16.1	20.5	%

Thirteen weeks ended
Infrastructure Q2 2022 Q2 2021 Dollar Change % Change
Sales, gross of intercompany eliminations:
Transmission, Distribution and Substation 295.8 220.5 75.3 34.1 %
Lighting & Transportation 246.7 215.2 31.5 14.6 %
Coatings 90.3 80.3 10.0 12.5 %
Telecommunications 78.5 54.1 24.4 45.1 %
Renewable Energy 53.6 47.5 6.1 12.8 %
Total $ 764.9 $ 617.6 $ 147.3 23.9 %
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~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared to ~~2021,~~the first quarter of 2022, increased ~~for this segment~~ across all of the product lines, primarily due to higher average selling prices, partially offset by ~~$15.7~~$10.8 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~~We expect continued increases in sales in ~~2022, versus 2021, is partially attributed to~~North America in line with the ~~appreciation~~expansion of infrastructure spending as the rollout of the ~~U.S. dollar.~~

Infrastructure Investment and Jobs Act and the Inflation Reduction Act of 2022 continue.

Transmission, distribution, and substation sales increased in the ~~second~~first quarter ~~and first half~~ of ~~2022~~2023, as compared ~~with 2021,~~to the first quarter of 2022, primarily due to ~~substantially~~meaningfully higher average selling ~~prices.~~prices and slightly higher sales volumes. This increase in average selling prices is due to a number of our sales contracts in North America containing ~~mechanisms~~price escalation clauses that tie the sales price to published steel index

pricing at the time our ~~customer issues~~customers issue 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~~first quarter ~~and first half~~ of ~~2022,~~2023, 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. Sales volumes increased in North America for both the secondfirst quarter ~~and first half of 2022 while volumes decreased within international markets during the first half of 2022. Reported international sales also decreased in the second quarter and first half~~ of 2022, due to ~~unfavorable foreign currency translation effects.~~

an increase in sales volume, primarily in North America. Higher average selling prices also drove higher sales in the first quarter of 2023.

Telecommunication sales increased in the ~~second~~first quarter of 2023, as compared with first quarter of 2022, ~~as compared with the same periods in 2021,~~ due primarily to ~~considerably higher~~approximately $8 million of sales from the second quarter 2022 acquisition of ConcealFab. Sales volumes were slightly lower in North America and average selling ~~prices. Sales volumes increased~~prices were generally consistent in 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 higher in the first half of 2022,~~quarter 2023, as compared to ~~2021.~~

the first quarter 2022.

Coatings sales increased in the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared towith the ~~same periods in 2021,~~first quarter of 2022, due to higher average selling prices. ~~Renewable energy~~

Solar sales increased in the ~~second~~first quarter ~~and~~of 2023, as compared with the first ~~half~~quarter of 2022, due to increased sales volumes.

Gross profit and gross profit margin were higher in the first quarter of 2023, as compared to ~~2021, due to improved sales volumes partially offset by unfavorable foreign currency translation effects.~~

~~Gross profit was higher in~~ the ~~second~~first quarter ~~and first half~~ of ~~2022, as compared to 2021.~~2022. The customer contractual pricing mechanisms and selling price management initiatives led to ~~a large~~an increase in average selling prices ~~while maintaining gross profit margins~~above the rate of inflation. SG&A was higher in the first quarter of 2023, as compared to the first quarter of 2022, primarily due to higher employment costs mostly attributed to inflationary wage increases, incremental SG&A of $3.2 million from the June 2022 acquisition of ConcealFab, and a ~~highly inflationary environment.~~bad debt reserve charge of approximately $2.7 million related to a telecommunications customer that became insolvent. The increase in operating income for the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared with ~~2021,~~the first quarter of 2022, is also due to ~~a 23%~~the increase in ~~gross profit versus an approximately 12%~~average selling prices and profits from the increase in ~~SG&A.~~sales volumes. The operating income margin increased to ~~11%~~12.9% in the ~~second~~first quarter of ~~2022,~~2023, from ~~10%~~11.9% in ~~second~~the first quarter of ~~2021,~~2022, due to better leverage of fixed costs, including SG&A, in ~~2022.~~

~~Agriculture segment~~

Thirteen weeks ended
Agriculture Q2 2022 Q2 2021 Dollar Change % Change
Sales, gross of intercompany eliminations:
North America 203.5 156.0 47.5 30.4 %
International 174.3 125.9 48.4 38.4 %
Total $ 377.8 $ 281.9 $ 95.9 34.0 %
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 %
the first quarter of 2023.

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Agriculture Segment


	Thirteen weeks ended
					Dollar
Agriculture	Q1 2023		Q1 2022		Change		% Change
Sales, gross of intercompany eliminations:
North America	$	182.9	$	182.3	$	0.6	0.3	%
International		149.3		124.3		25.0	20.1	%
Total	$	332.2	$	306.6	$	25.6	8.3	%

Operating Income	$	53.3	$	37.5	$	15.8	42.3	%

The increase in Agriculture segment net sales in the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared to ~~2021, is~~first quarter of 2022, was primarily due to much higher average selling prices of irrigation equipment globally. In North America, ~~higher~~lower sales volumes for irrigation systems and parts in ~~2022,~~the first quarter of 2023, as compared to ~~2021,~~the first quarter of 2022, were driven by ~~improved agricultural commodity prices.~~general economic uncertainty due to a number of macroeconomic factors including higher interest rates, continued inflationary pressures, and recessionary fears. International sales volumes increased in the ~~second~~first quarter of 2023, as compared to first quarter of 2022, ~~versus 2021~~ due primarily to ~~robust demand for irrigation equipment and agriculture solar products~~improved sales volumes in Brazil. ~~Overall lower project sales for the first half~~The strength of ~~2022 versus 2021~~our international irrigation businesses more than offset ~~the sales growth~~lower volumes experienced in ~~the second quarter of 2022 resulting in slightly lower sales volume for international irrigation product line.~~North America. Sales of technology-related products and services continue to increase, as growers continued their adoption of technology to reduce costs and enhance profitability.

The increase in gross profit in ~~2022,~~the first quarter of 2023, as compared to ~~2021, is~~the first quarter of 2022, was 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~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared to ~~2021,~~the first quarter of 2022, primarily due to ~~the SG&A from the Prospera subsidiary acquired in the second quarter of 2021, including the amortization of identified intangible assets and stock-based compensation expense.~~higher employment costs, mostly attributed to inflationary wage increases. Operating income for the segment was higher in the first quarter of 2023, as compared to the first quarter of 2022, ~~versus 2021,~~ due primarily to anthe 5.6% increase in gross profit margin ~~partially offset by~~mostly attributed to higher average selling prices.

Other

In November 2022, the ~~higher SG&A.~~

Company completed the sale of Valmont SM, an offshore wind energy structures business with operations in Denmark.

Corporate

~~Net corporate expense~~

Corporate SG&A expense was higher in the ~~second~~first quarter ~~and first half~~ of ~~2022,~~2023, as compared to the ~~same periods in 2021,~~first quarter of 2022. The increase is primarily due to ~~higher incentive accruals related to business performance, an increase in rent expense, and higher compensation expense due to salary merit increases, partially offset by $3.5~~$2.3 million of ~~lower~~incremental expense from the ~~change in~~ valuation of the deferred compensation plan ~~assets.~~

assets, higher incentive accruals attributed to improved business performance, and increased expense from our trade accounts receivable sale program attributed to higher interest rates. The change related to deferred compensation assets are offset by a change of the same amount in Other income.

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/~~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.

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

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

•~~acquisitions; and~~

•~~return of capital to shareholders through share repurchases.~~

We ~~also announced our intention~~intend to manage our capital structure to maintain our investment grade debt rating. Our most recent ratings were Baa3 by ~~Moody's~~Moody’s Investors Services, Inc., BBB- by Fitch Ratings, and BBB+ by Standard and ~~Poor's~~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~~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.~~2018, and authorized an additional $400 million of share repurchases in February 2023. These authorizations have no expiration date. 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 June 25, 2022,~~At April 1, 2023, we have acquired approximately ~~6.5~~7.0 million shares for approximately ~~$878.0~~$1,029.7 million under this share repurchase program.

On February ~~22, 2022,~~28, 2023, the Company announced that the Board of Directors approved an increase to the quarterly cash dividend on the common stock to ~~$0.55~~$0.60 per share, or a rate of ~~$2.20~~$2.40 per share on an annualized basis, an increase of ~~10%~~9% from the prior quarterly cash dividend of ~~$0.50~~$0.55 per share.

Supplier Finance Program

We have a supplier finance program agreement with a financial institution which allows qualifying suppliers, at their election and on terms they negotiate directly with the financial institution, to sell their receivables from the Company. A supplier’s voluntary participation in the program does not change our payment terms, amounts paid, payment timing, or impact our liquidity, and we have no economic interest in a supplier’s decision to participate. At April 1, 2023 and December 31, 2022, our accounts payable on our balance sheet included $58.1 million and $48.9 million, respectively, of our payment obligations under this program.

Sources of Financing

Our debt financing at ~~June 25, 2022~~April 1, 2023 consisted primarily of long‑term debt and borrowings on our revolving credit facility. Our long‑term debt ~~as of June 25, 2022,~~at April 1, 2023, principally consisted of:

●

$450 million face value ($433.2 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 ($295.0 million carrying value) of senior unsecured notes that bear interest at 5.25% per annum and are due in October 2054.

•~~$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.;

~~(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~~

Table 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.;~~Contents

~~(b)~~

(b)

the higher of

●

the prime lending rate,

●

the overnight bank rate plus 50 basis points, and

●

term SOFR (based on a one-month interest period) plus 100 basis points,

•~~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~~Poor’s Rating Services and ~~Moody's~~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.

(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~~Poor’s Rating Services and ~~Moody's~~Moody’s Investor Services, Inc., on the average daily unused portion of the commitments under the revolving credit agreement.

At ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021,~~31, 2022, we had outstanding borrowings of ~~$265.6~~$255.7 million and ~~$218.9~~$140.5 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 ~~June 25, 2022,~~April 1, 2023, we had the ability to borrow ~~$534.4~~$544.1 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~~$38.2 million; ~~$133.8~~$26.7 million of which was unused at ~~June 25, 2022.~~

April 1, 2023.

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 ~~June 25, 2022,~~April 1, 2023, we were in compliance with all covenants related to these debt agreements.

The calculation of Adjusted ~~EBITDA-last~~EBITDA for the last four quarters and the ~~Leverage~~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

Table of Contents

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 ~~$154.6~~$172.9 million at ~~June 25, 2022,~~April 1, 2023 and approximately ~~$119.7~~$132.8 million is held in our non-U.S. subsidiaries. If we distributed our foreign cash balances, certain taxes would be applicable. At ~~June 25, 2022,~~April 1, 2023, we have a liability for foreign withholding taxes and U.S. state income taxes of ~~$3.4~~$2.2 million and ~~$0.7~~$0.9 million, respectively.

Cash Flows

The following table includes a summary of our cash flow information for the ~~twenty-six~~thirteen weeks ended ~~June 25, 2022~~April 1, 2023 and ~~June~~March 26, ~~2021:~~

Dollars in thousands 2022 2021
Cash flow data:
Net cash flows from operating activities $ 68,019 $ 70,185
Net cash flows from investing activities (87,811) (361,398)
Net cash flows from financing activities 570 90,060

2022:


	Thirteen weeks ended
Dollars in thousands	2023		2022
Cash flow data:
Net cash flows provided by operating activities	$	21,199	$	2,703
Net cash flows used in investing activities		(21,789)		(29,100)
Net cash flows used in financing activities		(13,009)		(3,521)

~~Working Capital and~~

Operating Cash Flows-Net working capital was $1,025.9 million at 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.~~Working Capital – Cash ~~flow~~ provided by ~~operations was $68.0~~operating activities totaled $21.2 million in the first ~~half~~quarter of ~~2022,~~2023, as compared with ~~$70.2~~$2.7 million in the

first ~~half~~quarter of ~~2021.~~2022. The increase in operating cash flows in the first ~~half~~quarter of ~~2022,~~2023, as compared with ~~2021, were comparable as~~the first quarter of 2022, was primarily the result of the increase in net earnings partially offset by a significant increase in the contribution to the defined benefit pension ~~plan and overall~~plan. Net working capital ~~changes were offset by the~~was $1,034.2 million at April 1, 2023, as compared to $976.6 million at December 31, 2022. The increase in net ~~earnings.~~

working capital in the first quarter of 2023, is attributed to an increase in accounts receivables and prepaid expenses and other assets, partially offset by an increase in accounts payable and other accrued expenses.

Investing Cash Flows-– Cash used in investing activities totaled ~~$87.8~~$21.8 million in the first ~~half~~quarter of ~~2022,~~2023, as compared to ~~$361.4~~$29.1 million in the first ~~half~~quarter of ~~2021.~~2022. Investing activities in ~~2022~~the first quarter of 2023 primarily included capital spending of ~~$49.7 million and the acquisition of ConcealFab for $39.3~~$22.4 million. For the first ~~half~~quarter of ~~2021,~~2022, investing activities primarily included capital spending of ~~$48.8 million and the acquisition of two businesses for $312.5~~$27.1 million. We expect our capital expenditures to be in the range of ~~$110~~$105 million to ~~$120~~$125 million for fiscal ~~2022.~~

2023.

Financing Cash Flows-– Cash used in financing activities totaled $13.1 million in the first quarter of 2023, compared to $3.5 million in the first quarter of 2022. Our total interest-bearing debt was ~~$1,003.1~~$998.2 million at ~~June 25, 2022~~April 1, 2023 and ~~$965.4~~$878.0 million at December ~~25, 2021. Cash provided in financing activities totaled $0.6 million in 2022, compared to $90.1 million in 2021.~~

31, 2022. The financing cash ~~provided~~used in the first ~~half~~quarter of 2023 was primarily the result of borrowings on the revolving credit agreement and short-term notes of $136.1 million, offset by principal payments on our long-term debt and short-term borrowings of $16.6 million, dividends paid of $11.7 million, the purchase of treasury shares of $111.1 million, and the net activity resulting from shares purchased for award exercises related to our stock plan of $9.0 million. The financing cash used in the first quarter of 2022 was primarily the result of borrowings on the revolving credit agreement of ~~$201.5 million; mostly offset by~~$97.0 million, principal payments on our long-term debt and short-term borrowings of ~~$166.1~~$88.1 million, and dividends paid of ~~$22.3 million, the purchase of treasury shares of $9.8 million, and the purchase of a non-controlling interest of $4.3~~$10.6 million. The financing cash provided for the first half of 2021 was primarily due 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 $32.4 million, dividends paid of $20.2 million, and the purchase of treasury shares of $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'~~Guarantors’ amounts due from, amounts due to, and transactions with non-guarantor subsidiaries are separately disclosed.

Table of Contents

Combined financial information is as follows:

Supplemental Combined Parent and Guarantors Financial Information

For the thirteen ~~and twenty-six~~ weeks ended ~~June 25,~~April 1, 2023 and March 26, 2022 ~~and June 26, 2021~~


	Thirteen weeks ended
Dollars in thousands	April 1, 2023		March 26, 2022
Net sales	$	715,471	$	661,749
Gross profit		191,495		164,359
Operating income		71,832		69,093
Net earnings		20,211		41,808
Net earnings attributable to Valmont Industries, Inc.		20,043		41,816

Thirteen weeks ended Twenty-six weeks ended
Dollars in thousands June 25, 2022 June 26, 2021 June 25, 2022 June 26, 2021
Net sales $ 734,500 $ 563,833 $ 1,396,249 $ 1,031,513
Gross Profit 180,909 147,208 345,268 282,443
Operating income 73,044 51,695 142,137 110,829
Net earnings 46,029 29,750 88,337 66,075
Net earnings attributable to Valmont Industries, Inc. 46,582 29,668 90,525 65,993

Supplemental Combined Parent and Guarantors Financial Information

~~June 25, 2022~~

April 1, 2023 and December ~~25, 2021~~

Dollars in thousands June 25, 2022 December 25, 2021
Current assets $ 848,769 $ 801,797
Noncurrent assets 888,944 807,294
Current liabilities 408,971 383,394
Noncurrent liabilities 1,326,515 1,305,756
Noncontrolling interest in consolidated subsidiaries 1,783 1,844

31, 2022


Dollars in thousands	April 1, 2023		December 31, 2022
Current assets	$	772,693	$	769,263
Noncurrent assets		899,133		925,088
Current liabilities		406,542		459,961
Noncurrent liabilities		1,294,484		1,189,548
Noncontrolling interest in consolidated subsidiaries		1,780		1,612

Included in noncurrent assets is a due from non-guarantor subsidiaries receivable of ~~$154,905~~$180,604 and ~~$93,613~~$205,424 at ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021.~~31, 2022. Included in noncurrent liabilities is a due to non-guarantor subsidiaries payable of ~~$195,142~~$177,268 and ~~$236,577~~$200,522 at ~~June 25, 2022~~April 1, 2023 and December ~~25, 2021.~~31, 2022.

Table of Contents

Selected Financial Measures

We are including the following financial measures for the ~~company.~~

Company.

Adjusted ~~EBITDA.~~ EBITDA – Earnings before Interest, Taxes, Depreciation, and Amortization ~~(Adjusted EBITDA)~~(“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 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 Adjusted ~~EBITDA-last~~EBITDA for the last four quarters ~~(June 26, 2021~~(March 27, 2022 to ~~June 25, 2022)~~April 1, 2023) is as follows:


	Last Four Quarters
Dollars in thousands	Q1 2023
Net cash flows from operations	$	344,761
Interest expense		49,376
Income tax expense		117,409
Loss on divestiture of offshore wind energy structures business		(33,273)
Deferred income tax (expense) benefit		(5,554)
Noncontrolling interest		(598)
Pension plan expense		7,321
Contribution to pension plan		32,414
Changes in assets and liabilities, net of acquisitions		58,634
Other		(1,696)
EBITDA	$	568,794
Loss on divestiture of offshore wind energy structures business		33,273
Adjusted EBITDA	$	602,067


	Last Four Quarters
	Q1 2023
Net earnings attributable to Valmont Industries, Inc.	$	263,092
Interest expense		49,376
Income tax expense		117,409
Stock based compensation		41,076
Depreciation and amortization expense		97,841
EBITDA	$	568,794
Loss on divestiture of offshore wind energy structures business		33,273
Adjusted EBITDA	$	602,067


~~Dollars in thousands~~	~~2022~~
~~Net cash flows from operations~~	$	~~63,772~~
~~Interest expense~~	~~44,826~~
~~Income tax expense~~	~~83,880~~

~~Impairment of long-lived assets~~	~~(27,911)~~


~~Deferred income tax (expense) benefit~~	~~(6,465)~~
~~Noncontrolling interest~~	~~(3,255)~~
~~Pension plan benefit~~	~~12,409~~
~~Contribution to pension plan~~	~~18,109~~
~~Changes in assets and liabilities, net of acquisitions~~	~~298,390~~
~~Other~~	~~(2,242)~~
~~EBITDA~~	$	~~481,513~~
~~Impairment of long-lived assets~~	~~27,911~~




~~Adjusted EBITDA~~	$	~~509,424~~


	~~2022~~
~~Net earnings attributable to Valmont Industries, Inc.~~	$	~~216,925~~
~~Interest expense~~	~~44,826~~
~~Income tax expense~~	~~83,880~~
~~Stock based compensation~~	~~39,355~~
~~Depreciation and amortization expense~~	~~96,527~~
~~EBITDA~~	$	~~481,513~~
~~Impairment of long-lived assets~~	~~27,911~~




~~Adjusted EBITDA~~	$	~~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~~.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.

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The calculation of this ratio at ~~June 25, 2022~~April 1, 2023 is as follows:


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


Dollars in thousands	2023
Interest-bearing debt, excluding origination fees and discounts of $26,818	$	1,025,055
Less: Cash and cash equivalents in excess of $50 million		122,948
Net indebtedness	$	902,107
Adjusted EBITDA		602,067
Leverage Ratio		1.50

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 2933 in our Form 10-K for the fiscal year ended December ~~25, 2021.~~

31, 2022.

Critical Accounting Policies

There were no changes in our critical accounting policies as described on pages ~~34-37~~38 to 41 in our Form 10-K for the fiscal year ended December ~~25, 2021~~31, 2022 during the ~~three months~~thirteen weeks ended ~~June 25, 2022.~~

April 1, 2023.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in the ~~company's~~Company’s market risk during the quarter ended ~~June 25, 2022.~~April 1, 2023. For additional information, refer to the section "Risk Management" in our Form 10-K for the fiscal year ended December ~~25, 2021.~~

31, 2022.

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~~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~~Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

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.~~

31, 2022.

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

Issuer Purchases of Equity Securities


				Total Number of
				Shares Purchased	Approximate Dollar
				as Part of	Value of Maximum
	Total Number			Publicly	Number of
	of			Announced Plans	Shares that may yet
	Shares	Average Price		or	be Purchased under the
Period	Purchased	paid per share		Programs	Program ⁽¹⁾
January 1, 2023 to January 28, 2023	—	$	—	—	$	481,419,000
January 29, 2023 to March 4, 2023	157,878		318.49	157,878		431,137,000
March 5, 2023 to April 1, 2023	199,009		305.68	199,009		370,304,000
Total	356,887	$	311.35	356,887	$	370,304,000

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 covered both the quarterly dividend rate as well as a share repurchase program. The Board of Directors at that time 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. On February 27, 2023, the Board of Directors increased the amount remaining under the program by an additional $400 million, with no stated expiration date, bringing total authorization to $1.4 billion. At April 1, 2023, we have acquired 6,969,905 shares for approximately $1,029.7 million under this share repurchase program.

~~(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 June 25, 2022, we have acquired 6,514,210 shares for approximately $887.9 million under this share repurchase program.

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Item 5. Other Information

~~Amendment~~

Submission of Matters to ~~Bylaws~~

a Vote of Security Holders

Valmont’s annual meeting of stockholders was held on April 24, 2023. The stockholders elected three directors to serve three-terms, approved, on an advisory basis, a resolution approving Valmont’s named executive officer compensation, voted, on an advisory basis, on the frequency of future advisory votes on executive compensation, and ratified the appointment of Deloitte & Touche LLP as independent auditors for fiscal 2023. For the annual meeting there were 21,350,819 shares outstanding and eligible to vote of which 19,753,749 were present at the meeting in person or by proxy. The tabulation for each matter voted upon at the meeting was as follows:

Election of Directors:


	For	Withheld	Broker Non-Votes
Mogens C. Bay	17,151,468	1,375,171	1,227,110
Ritu Favre	17,745,563	781,076	1,227,110
Richard A. Lanoha	16,900,239	1,626,400	1,227,110

~~On July 26, 2022, the~~

Advisory vote on executive compensation:

Advisory vote on frequency of future advisory votes on executive compensation:

The Board of Directors has determined that Valmont will hold advisory votes on executive compensation on a one-year basis.

Proposal to ratify the appointment of ~~Valmont approved amendments to Article II, Section 7 of Valmont’s bylaws. The bylaw amendment affirms electronic transmission by members of the Board of Directors pursuant to Delaware law.~~Deloitte & Touche LLP as independent auditors for fiscal 2023:

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Item 6. Exhibits

~~(a) Exhibits~~

(a)

Exhibits

Exhibit No.			Description
~~Exhibit No.~~ 22.1	~~Description~~
~~3.1~~		~~The Company's By-Laws, as amended.~~
~~22.1~~		List of Issuer and Guarantor Subsidiaries. This document was filed as Exhibit 22.1 to the ~~Company's~~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~~* 31.1*	Section 302 Certificate of Chief Executive Officer
~~31.2~~* 31.2*	Section 302 Certificate of Chief Financial Officer
~~32.1~~* 32.1*	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer
101	The following financial information from ~~Valmont's~~Valmont’s Quarterly Report on Form 10-Q for the quarter ended ~~June 25, 2022,~~April 1, 2023, 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'~~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

* Filed herewith

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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)~~
	(Registrant)

	/s/ AVNER M. APPLBAUM
	Avner M. Applbaum
	Executive Vice President and Chief Financial Officer

Dated the ~~27th~~26th day of ~~July, 2022.~~

April, 2023


	Thirteen weeks ended				Twenty-six weeks ended
	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Product sales	$	1,036,289	$	805,801	$	1,927,159	$	1,500,766
Services sales	99,243		88,828		189,193		168,749
Net sales	1,135,532		894,629		2,116,352		1,669,515
Product cost of sales	781,323		608,101		1,454,493		1,126,735
Services cost of sales	61,608		56,881		120,072		108,579
Total cost of sales	842,931		664,982		1,574,565		1,235,314
Gross profit	292,601		229,647		541,787		434,201
Selling, general and administrative expenses	173,882		147,022		328,226		274,365

Operating income	118,719		82,625		213,561		159,836
Other income (expenses):
Interest expense	(11,386)		(10,436)		(22,649)		(20,435)
Interest income	285		186		512		497
Gain (loss) on investments - unrealized	(2,342)		1,177		(3,405)		1,068


Other	2,073		4,204		5,715		7,653
	(11,370)		(4,869)		(19,827)		(11,217)
Earnings before income taxes	107,349		77,756		193,734		148,619
Income tax expense:
Current	27,620		25,413		50,033		33,960
Deferred	1,967		(10,673)		2,675		(3,718)
	29,587		14,740		52,708		30,242
Earnings before equity in earnings of nonconsolidated subsidiaries	77,762		63,016		141,026		118,377
Equity in loss of nonconsolidated subsidiaries	(555)		(359)		(913)		(719)
Net earnings	77,207		62,657		140,113		117,658
Less: earnings attributable to noncontrolling interests	(1,099)		(547)		(1,694)		(534)
Net earnings attributable to Valmont Industries, Inc.	$	76,108	$	62,110	$	138,419	$	117,124
Earnings per share:
Basic	$	3.57	$	2.93	$	6.50	$	5.53
Diluted	$	3.53	$	2.89	$	6.43	$	5.46


	June 25, 2022		December 25, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	154,579	$	177,232
Receivables, net	627,876		571,593
Inventories	786,600		728,834
Contract assets	200,522		142,643
Prepaid expenses and other assets	87,070		83,646
Refundable income taxes	—		8,815
Total current assets	1,856,647		1,712,763
Property, plant and equipment, at cost	1,452,413		1,422,101
Less accumulated depreciation and amortization	844,850		823,496
Net property, plant and equipment	607,563		598,605
Goodwill	741,743		708,566
Other intangible assets, net	192,333		175,364
Other assets	276,466		251,951
Total assets	$	3,674,752	$	3,447,249

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

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


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


	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


	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)


			Fair Value Measurement Using:
	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:
Trading Securities	$	28,476	$	28,476	$	—	$	—
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)		—


	Foreign Currency Translation Adjustments		Gain on Hedging Activities		Defined Benefit Pension Plan		Accumulated Other Comprehensive Loss
Balance at December 25, 2021	$	(243,350)	$	15,777	$	(35,554)	$	(263,127)
Current-period comprehensive income (loss)	(31,112)		5,799		256		(25,057)
Balance at June 25, 2022	$	(274,462)	$	21,576	$	(35,298)	$	(288,184)


	June 25, 2022
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	246,965	$	163,494	13 years

Patents & Proprietary Technology	58,188		17,861		9 years
Trade Name	2,850		441		7 years
Other	4,476		4,113		6 years
	$	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


	Estimated Amortization Expense
2022	$	21,425
2023	19,588
2024	17,675
2025	16,241
2026	15,823


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


	Infrastructure Segment		Agriculture Segment		Total
Gross Balance December 25, 2021	$	456,876	$	313,512	$	770,388
Accumulated impairment losses	(61,822)		—		(61,822)
Balance at December 25, 2021	395,054		313,512		708,566
Acquisitions	42,640		—		42,640


Foreign currency translation	(9,759)		296		(9,463)
Balance at June 25, 2022	$	427,935	$	313,808	$	741,743


	Basic EPS		Dilutive Effect of Stock Options		Diluted EPS
Thirteen weeks ended June 25, 2022:
Net earnings attributable to Valmont Industries, Inc.	$	76,108	$	—	$	76,108
Weighted average shares outstanding (000's)	21,313		228		21,541
Per share amount	$	3.57	$	(0.04)	$	3.53
Thirteen weeks ended June 26, 2021:
Net earnings attributable to Valmont Industries, Inc.	$	62,110	$	—	$	62,110
Weighted average shares outstanding (000's)	21,193		276		21,469
Per share amount	$	2.93	$	(0.04)	$	2.89
Twenty-six weeks ended June 25, 2022
Net earnings attributable to Valmont Industries, Inc.	$	138,419	$	—	$	138,419
Weighted average shares outstanding (000's)	21,296		220		21,516
Per share amount	$	6.50	$	(0.07)	$	6.43
Twenty-six weeks ended June 26, 2021:
Net earnings attributable to Valmont Industries, Inc.	$	117,124	$	—	$	117,124
Weighted average shares outstanding (000's)	21,186		263		21,449
Per share amount	$	5.53	$	(0.07)	$	5.46


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

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


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

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


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


	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


	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


	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


	Thirteen weeks ended
Infrastructure	Q2 2022		Q2 2021		Dollar Change		% Change
Sales, gross of intercompany eliminations:
Transmission, Distribution and Substation	295.8		220.5		75.3		34.1	%
Lighting & Transportation	246.7		215.2		31.5		14.6	%
Coatings	90.3		80.3		10.0		12.5	%
Telecommunications	78.5		54.1		24.4		45.1	%
Renewable Energy	53.6		47.5		6.1		12.8	%
Total	$	764.9	$	617.6	$	147.3	23.9	%

Operating Income	$	84.6	$	61.6	$	23.0	37.3	%


Dollars in thousands	2022		2021
Cash flow data:
Net cash flows from operating activities	$	68,019	$	70,185
Net cash flows from investing activities	(87,811)		(361,398)
Net cash flows from financing activities	570		90,060


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

Thirteen weeks ended

Amortization expense