COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Mar. 26, 2022 | Apr. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 26, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-31429 | |
Entity Registrant Name | Valmont Industries, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-0351813 | |
Entity Address, Address Line One | 15000 Valmont Plaza, | |
Entity Address, City or Town | Omaha, | |
Entity Address, State or Province | NE | |
Entity Address, Postal Zip Code | 68154 | |
City Area Code | 402 | |
Local Phone Number | 963-1000 | |
Title of 12(b) Security | Common Stock $1.00 par value | |
Trading Symbol | VMI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 21,311,439 | |
Entity Central Index Key | 0000102729 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-25 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Net sales | $ 980,820 | $ 774,886 |
Total cost of sales | 731,634 | 570,332 |
Gross profit | 249,186 | 204,554 |
Selling, general and administrative expenses | 154,344 | 127,343 |
Operating income | 94,842 | 77,211 |
Other income (expenses): | ||
Interest expense | (11,263) | (9,999) |
Interest income | 227 | 311 |
Loss on investments (unrealized) | (1,063) | (109) |
Other | 3,642 | 3,449 |
Total other income (expenses) | (8,457) | (6,348) |
Earnings before income taxes | 86,385 | 70,863 |
Income tax expense: | ||
Current | 22,413 | 8,547 |
Deferred | 708 | 6,955 |
Total income tax expense (benefit) | 23,121 | 15,502 |
Earnings before equity in earnings of nonconsolidated subsidiaries | 63,264 | 55,361 |
Equity in loss of nonconsolidated subsidiaries | (358) | (360) |
Net earnings | 62,906 | 55,001 |
Less: (earnings)/loss attributable to noncontrolling interests | (595) | 13 |
Net earnings attributable to Valmont Industries, Inc. | $ 62,311 | $ 55,014 |
Earnings per share: | ||
Basic (in dollars per share) | $ 2.93 | $ 2.60 |
Diluted (in dollars per share) | $ 2.90 | $ 2.57 |
Product sales | ||
Net sales | $ 890,870 | $ 694,965 |
Total cost of sales | 673,170 | 518,634 |
Services sales | ||
Net sales | 89,950 | 79,921 |
Total cost of sales | $ 58,464 | $ 51,698 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 62,906 | $ 55,001 |
Foreign currency translation adjustments: | ||
Unrealized translation gain (loss) | 11,062 | (12,633) |
Gain (loss) on hedging activities: | ||
Cash flow hedges | 0 | 22 |
Amortization cost included in interest expense | (16) | (16) |
Commodity hedges | 20,560 | 9,946 |
Realized gain on commodity hedges recorded in earnings | (2,043) | 0 |
Cross currency swaps | 1,811 | 3,606 |
Total gain (loss) on hedging activities | 20,312 | 13,558 |
Actuarial gain on defined benefit pension plan | 686 | 832 |
Other comprehensive income | 32,060 | 1,757 |
Comprehensive income | 94,966 | 56,758 |
Comprehensive (income) loss attributable to noncontrolling interests | (1,688) | 486 |
Comprehensive income attributable to Valmont Industries, Inc. | $ 93,278 | $ 57,244 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 149,700 | $ 177,232 |
Receivables, net | 616,538 | 571,593 |
Inventories | 807,471 | 728,834 |
Contract assets | 161,633 | 142,643 |
Prepaid expenses and other assets | 105,233 | 83,646 |
Refundable income taxes | 0 | 8,815 |
Total current assets | 1,840,575 | 1,712,763 |
Property, plant and equipment, at cost | 1,451,044 | 1,422,101 |
Less accumulated depreciation and amortization | 840,826 | 823,496 |
Net property, plant and equipment | 610,218 | 598,605 |
Goodwill | 707,692 | 708,566 |
Other intangible assets, net | 169,424 | 175,364 |
Other assets | 253,574 | 251,951 |
Total assets | 3,581,483 | 3,447,249 |
Current liabilities: | ||
Current installments of long-term debt | 4,226 | 4,884 |
Notes payable to banks | 8,380 | 13,439 |
Accounts payable | 404,410 | 347,841 |
Accrued employee compensation and benefits | 96,547 | 144,559 |
Contract liabilities | 168,794 | 135,746 |
Other accrued expenses | 118,535 | 108,771 |
Income taxes payable | 6,074 | 0 |
Dividends payable | 11,721 | 10,616 |
Total current liabilities | 818,687 | 765,856 |
Deferred income taxes | 50,604 | 47,849 |
Long-term debt, excluding current installments | 963,065 | 947,072 |
Defined benefit pension liability | 0 | 536 |
Operating lease liabilities | 146,493 | 147,759 |
Deferred compensation | 36,469 | 35,373 |
Other noncurrent liabilities | 61,674 | 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 | 5,251 | 1,479 |
Retained earnings | 2,444,897 | 2,394,307 |
Accumulated other comprehensive loss | (232,160) | (263,127) |
Treasury stock | (769,835) | (773,712) |
Total Valmont Industries, Inc. shareholders’ equity | 1,476,053 | 1,386,847 |
Noncontrolling interest in consolidated subsidiaries | 28,438 | 26,750 |
Total shareholders’ equity | 1,504,491 | 1,413,597 |
Total liabilities and shareholders’ equity | $ 3,581,483 | $ 3,447,249 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 26, 2022 | Dec. 25, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, issued (in shares) | 27,900,000 | 27,900,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Cash flows from operating activities: | ||
Net earnings | $ 62,906 | $ 55,001 |
Adjustments to reconcile net earnings to net cash flows from operations: | ||
Depreciation and amortization | 23,884 | 21,031 |
Stock-based compensation | 9,463 | 4,671 |
Defined benefit pension plan benefit | (2,705) | (3,676) |
Contribution to defined benefit pension plan | 0 | (964) |
Gain on sale of property, plant and equipment | 4 | 60 |
Equity in loss in nonconsolidated subsidiaries | 358 | 360 |
Deferred income taxes | 708 | 6,955 |
Changes in assets and liabilities: | ||
Receivables | (36,643) | 16,044 |
Inventories | (68,236) | (67,386) |
Prepaid expenses and other assets (current and non-current) | (4,452) | (22,514) |
Contract assets | (19,486) | 5,118 |
Accounts payable | 49,006 | 24,605 |
Accrued expenses | (34,186) | (35,559) |
Contract liabilities | 4,308 | 20,051 |
Other noncurrent liabilities | 14 | 4,215 |
Income taxes payable/refundable | 17,760 | 5,141 |
Net cash flows from operating activities | 2,703 | 33,153 |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (27,095) | (27,565) |
Proceeds from sale of assets | 2 | 204 |
Other, net | (2,007) | (1,947) |
Net cash flows from investing activities | (29,100) | (29,308) |
Cash flows from financing activities: | ||
Proceeds from short-term borrowings | 0 | 14,734 |
Payments on short-term borrowings | (5,562) | (10,759) |
Proceeds from long-term borrowings | 97,000 | 4,181 |
Principal payments on long-term borrowings | (82,529) | (712) |
Dividends paid | (10,616) | (9,556) |
Purchase of treasury shares | 0 | (11,131) |
Proceeds from exercises under stock plans | 713 | 19,318 |
Purchase of common treasury shares—stock plan exercises | (2,527) | (16,725) |
Net cash flows from financing activities | (3,521) | (10,650) |
Effect of exchange rate changes on cash and cash equivalents | 2,386 | (2,463) |
Net change in cash and cash equivalents | (27,532) | (9,268) |
Cash and cash equivalents—beginning of year | 177,232 | 400,726 |
Cash and cash equivalents—end of period | $ 149,700 | $ 391,458 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock | Noncontrolling interest in consolidated subsidiaries |
Beginning balance at Dec. 26, 2020 | $ 1,207,836 | $ 27,900 | $ 335 | $ 2,245,035 | $ (309,786) | $ (781,422) | $ 25,774 |
Increase (Decrease) in Shareholders' Equity | |||||||
Net earnings | 55,001 | 55,014 | (13) | ||||
Other comprehensive income (loss) | 1,757 | 2,230 | (473) | ||||
Cash dividends declared | (10,625) | (10,625) | |||||
Purchase of treasury shares, shares acquired | (11,131) | (11,131) | |||||
Stock plan exercises, shares acquired | (16,725) | (16,725) | |||||
Stock options exercised | 19,318 | (4,600) | (7,069) | 30,987 | |||
Stock option expense | 648 | 648 | |||||
Stock awards | 4,023 | 3,617 | 406 | ||||
Ending balance at Mar. 27, 2021 | 1,250,102 | 27,900 | 0 | 2,282,355 | (307,556) | (777,885) | 25,288 |
Beginning balance at Dec. 25, 2021 | 1,413,597 | 27,900 | 1,479 | 2,394,307 | (263,127) | (773,712) | 26,750 |
Increase (Decrease) in Shareholders' Equity | |||||||
Net earnings | 62,906 | 62,311 | 595 | ||||
Other comprehensive income (loss) | 32,060 | 30,967 | 1,093 | ||||
Cash dividends declared | (11,721) | (11,721) | |||||
Stock plan exercises, shares acquired | (2,527) | (2,527) | |||||
Stock options exercised | 713 | (536) | 1,249 | ||||
Stock option expense | 716 | 716 | |||||
Stock awards | 8,747 | 3,592 | 5,155 | ||||
Ending balance at Mar. 26, 2022 | $ 1,504,491 | $ 27,900 | $ 5,251 | $ 2,444,897 | $ (232,160) | $ (769,835) | $ 28,438 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared per share (in dollars per share) | $ 0.55 | $ 0.50 |
Purchase of treasury shares, shares acquired (in shares) | 50,147 | |
Stock plan exercises; shares acquired (in shares) | 11,695 | 70,485 |
Stock options exercised; shares issued (in shares) | 5,616 | 142,878 |
Stock awards; shares issued (in shares) | 37,748 | 2,709 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Condensed Consolidated Financial Statements The Condensed Consolidated Balance Sheet as of March 26, 2022, the Condensed Consolidated Statements of Earnings, Comprehensive Income, Cash Flows, and Shareholders' Equity for the thirteen weeks ended March 26, 2022 and March 27, 2021, have been prepared by Valmont Industries Inc. (the Company), without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of March 26, 2022 and for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2021. The results of operations for the period ended March 26, 2022 are not necessarily indicative of the operating results for the full year. Change in Reportable Segments During the first quarter of 2022, the Company's Chief Executive Officer, as the chief operating decision maker ("CODM"), made changes to the Company’s management structure and began to manage the business, allocate resources, and evaluate performance under the new structure. As a result, the Company has realigned its reportable segment structure. All prior period segment information has been recast to reflect this change in reportable segments. Refer to Note 7 for additional information. Inventories Inventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods. Inventories consisted of the following: March 26, December 25, Raw materials and purchased parts $ 297,570 $ 278,107 Work-in-process 78,591 63,628 Finished goods and manufactured goods 431,310 387,099 Total Inventory $ 807,471 $ 728,834 Income Taxes Earnings bef ore income taxes for the thirteen weeks ended March 26, 2022 and March 27, 2021, were as follows: Thirteen weeks ended 2022 2021 United States $ 60,816 $ 51,155 Foreign 25,569 19,708 $ 86,385 $ 70,863 Pension Benefits The Company incurs expenses in connection with the Delta Pension Plan ("DPP"). The DPP was acquired as part of the Delta plc acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the 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 weeks ended March 26, 2022 and March 27, 2021 were as follows: Thirteen weeks ended Net periodic (benefit) expense: 2022 2021 Interest cost $ 3,365 $ 2,497 Expected return on plan assets (6,202) (7,005) Amortization of actuarial loss 132 832 Net periodic (benefit) expense $ (2,705) $ (3,676) Stock Plans The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. At March 26, 2022, 175,917 shares of common stock remained available for issuance under the plans. On April 26, 2022, Company shareholders approved the Valmont 2022 Stock Plan, in which the maximum number of shares of common stock that may be issued under the stock plan is 2,000,000 and no additional award grants may be made under any prior Company stock plan. Under the plans, the exercise price of each option equals the closing market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three years or on the grant's fifth anniversary. Expiration of grants is seven years to ten years from the date of grant. Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant. The Company's compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options and restricted stock for the thirteen weeks ended March 26, 2022 and March 27, 2021, respectively, were as follows: Thirteen weeks ended 2022 2021 Compensation expense $ 9,463 $ 4,671 Income tax benefits 2,366 1,168 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. ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value. Trading Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan at March 26, 2022 of $30,650 ($29,982 at December 25, 2021) represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification ("ASC") 320, Accounting for Certain Investments in Debt and Equity Securities , considering the employee's ability to change investment allocation of their deferred compensation at any time. The Company's ownership of shares in Delta EMD Pty. Ltd. (JSE:DTA) is also classified as trading securities. The shares are valued at $101 and $94 as of March 26, 2022 and December 25, 2021, respectively, which is the estimated fair value. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input. Derivative Financial Instruments: The fair value of foreign currency and commodity forward contracts, and cross currency contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate. Fair Value Measurement Using: Carrying Value March 26, 2022 Quoted Prices in Significant Other Significant Assets: Trading Securities $ 30,751 $ 30,751 $ — $ — Derivative financial instruments, net 17,633 — 17,633 — Fair Value Measurement Using: Carrying Value December 25, 2021 Quoted Prices in Significant Other Significant Assets (Liabilities): Trading Securities $ 30,076 $ 30,076 $ — $ — Derivative financial instruments, net (4,007) — (4,007) — Long-Lived Assets The Company's other non-financial assets include goodwill and other intangible assets, which are classified as Level 3 items. These assets are measured at fair value on a non-recurring basis as part of annual impairment testing. Note 3 to these condensed consolidated financial statements contain additional information related to the intangible asset impairments recognized in fiscal 2021. Leases The Company's operating leases are included in other assets and operating lease liabilities. Comprehensive Income (Loss) Comprehensive income (loss) includes net earnings, currency translation adjustments, certain derivative-related activity and changes in net actuarial gains/losses from a pension plan. Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. Accumulated other comprehensive income (loss) consisted of the following at March 26, 2022 and December 25, 2021: 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) 9,969 20,312 686 30,967 Balance at March 26, 2022 $ (233,381) $ 36,089 $ (34,868) $ (232,160) Revenue Recognition The Company determines the appropriate revenue recognition for our contracts by analyzing the type, terms and conditions of each contract or arrangement with a customer. Contracts with customers for all businesses are fixed-price with sales tax excluded from revenue, and do not include variable consideration. Discounts included in contracts with customers, typically early pay discounts, are recorded as a reduction of net sales in the period in which the sale is recognized. Contract revenues are classified as product when the performance obligation is related to the manufacturing of goods. Contract revenues are classified as service when the performance obligation is the performance of a service. Service revenue is primarily related to the Coatings and Technology Products and Services product lines. Customer acceptance provisions exist only in the design stage of our products and acceptance of the design by the customer is required before the project is manufactured and delivered to the customer. The Company is not entitled to any compensation solely based on design of the product and does not recognize revenue associated with the design stage. There is one performance obligation for revenue recognition. No general rights of return exist for customers once the product has been delivered and the Company establishes provisions for estimated warranties. The Company does not sell extended warranties for any of its products. Shipping and handling costs associated with sales are recorded as cost of goods sold. The Company elected to use the practical expedient of treating freight as a fulfillment obligation instead of a separate performance obligation and ratably recognize freight expense as the structure is being manufactured, when the revenue from the associated customer contract is being recognized over time. With the exception of the transmission, distribution, and substation structures ("TD&S") product line, the renewable energy product lines, and the telecommunication structures product line, the Company’s inventory is interchangeable for a variety of each segment’s customers. The Company has elected to not disclose the partially satisfied performance obligation at the end of the period when the contract has an original expected duration of one year or less. In addition, the Company does not adjust the amount of consideration to be received in a contract for any significant financing component if payment is expected within twelve months of transfer of control of goods or services. The Company's contract asset as of March 26, 2022 and December 25, 2021 was $161,633 and $142,643, respectively. While most of the Infrastructure segment customers are generally invoiced upon shipment or delivery of the goods to the customer's specified location, certain customers are also invoiced by advanced billings or progress billings. At March 26, 2022 and December 25, 2021, total contract liabilities were $221,348 and $213,203, respectively. At March 26, 2022, $168,794 was recorded as contract liabilities and $52,554 was recorded as other noncurrent liabilities on the condensed consolidated balance sheets. Additional details are as follows: • During the thirteen weeks ended March 26, 2022, the Company recognized $28,023 of revenue that was included in the total contract liability as of December 25, 2021; • In the thirteen weeks ended March 27, 2021 , the Company recognized $38,102 of revenue that was included in the liability as of December 26, 2020. The revenue recognized was due to applying advance payments received for performance obligations completed during the period; and • At March 26, 2022, the Company had $105,013 of remaining performance obligations on contracts with an original expected duration of one year or more and expects to complete the remaining performance obligations on these contracts within the next 12 to 24 months. Segment and Product Line Revenue Recognition Infrastructure Segment Steel and concrete utility structures within the TD&S product line are engineered to customer specifications resulting in limited ability to sell the structure to a different customer if an order is canceled after production commences. The continuous transfer of control to the customer is evidenced either by contractual termination clauses or by our rights to payment for work performed to-date plus a reasonable profit as the products do not have an alternative use to the Company. Since control is transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment. For our TD&S and telecommunication structure product lines, we generally recognize revenue on an inputs basis, using total production hours incurred to-date for each order as a percentage of total hours estimated to produce the order. The completion percentage is applied to the order’s total revenue and total estimated costs to determine reported revenue, cost of goods sold and gross profit. Production of an order, once started, is typically completed within three months. Depending on the product sold, revenue from renewable energy is recognized both upon shipment or delivery of goods to the customer depending on contract terms, or by using an inputs method, based on the ratio of costs incurred to-date to the total estimated costs at completion of the performance obligation. External sales agents are used in certain TD&S sales and the Company has chosen to expense estimated commissions owed to third parties by recognizing them proportionately as the goods are manufactured. For the structures sold for lighting and transportation and for the majority of telecommunication products, revenue is recognized upon shipment or delivery of goods to the customer depending on contract terms, which is the same point in time that the customer is billed. There are also large regional customers who have unique product specifications for telecommunication structures. When the customer contract includes a cancellation clause that would require them to pay for work completed plus a reasonable margin if an order was canceled, revenue is recognized over time based on hours worked as a percent of total estimated hours to complete production. The coatings 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 Segments and Related Revenue Information footnote (see note 7). Recently Issued Accounting Pronouncements (not yet adopted) In March 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP principles to contracts, hedging relationships, and other transactions that 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. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 26, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS On May 12, 2021, the Company acquired the outstanding shares of Prospera, an artificial intelligence company focused on machine learning and computer vision in agriculture, for $300,000 in cash (net of cash acquired). The acquisition of Prospera, located in Tel Aviv, Israel, was made to allow the Company to accelerate innovation with machine learning for agronomy and is reported in the Agriculture segment. In the purchase price allocation, goodwill of $273,453, developed technology of $32,900, trade name of $2,850, property, plant, and equipment of $1,063, and a deferred tax liability of $8,223 were recorded with the remainder to net working capital. Goodwill is not deductible for tax purposes, the trade name will be amortized over 7 years, and the developed technology asset will be amortized over 5 years. The amount allocated to goodwill was primarily attributable to anticipated synergies and other intangibles that do not qualify for separate recognition. The Company finalized the purchase price allocation in the fourth quarter of 2021. On April 20, 2021 the Company acquired the assets of PivoTrac for $12,500 in cash. The agreed upon purchase price was $14,000, with $1,500 being held back for seller representations and warranties that will be settled within 12 months of the acquisition date. The acquisition of PivoTrac, located in Texas, was made to allow the Company to advance its technology strategy and increase its number of connected agricultural devices and will be reported in the Agriculture segment. The preliminary fair values assigned were $10,800 for goodwill, $2,627 for customer relationships, and the remainder is net working capital. Goodwill is not deductible for tax purposes and the customer relationship will be amortized over 8 years. The Company expects the purchase price allocation to be finalized in the second quarter of 2022. Proforma disclosures were omitted for these acquisitions as the they do not have a significant impact on the Company's financial results. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Amortized Intangible Assets The components of amortized intangible assets at March 26, 2022 and December 25, 2021 were as follows: March 26, 2022 Gross Accumulated Weighted Customer Relationships $ 225,201 $ 164,130 13 years Patents & Proprietary Technology 58,657 15,978 9 years Trade Name 2,850 339 6 years Other 4,511 4,087 6 years $ 291,219 $ 184,534 December 25, 2021 Gross Accumulated Weighted 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 weeks ended March 26, 2022 and March 27, 2021, respectively was as follows: Thirteen weeks ended 2022 2021 Amortization expense $ 5,849 $ 4,232 Estimated annual amortization expense related to finite-lived intangible assets is as follows: Estimated 2022 $ 20,044 2023 17,783 2024 15,869 2025 14,435 2026 14,012 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. Non-amortized intangible assets Intangible assets with indefinite lives are not amortized and consist solely of trade names. The carrying value of trade names at March 26, 2022 and December 25, 2021 are as follows: March 26, December 25, Year Acquired Newmark $ 11,111 $ 11,111 2004 Convert Italia S.p.A 8,238 8,479 2018 Webforge 7,747 7,877 2010 Ingal EPS/Ingal Civil Products 7,511 7,637 2010 Valmont SM 5,904 6,082 2014 Shakespeare 4,000 4,000 2014 Walpar 3,500 3,500 2018 Other 14,729 14,721 Various $ 62,740 $ 63,407 In its determination of these intangible assets as indefinite-lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory, technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to maintain the value of the intangible asset. The Company expects that these intangible assets will maintain their value indefinitely. Accordingly, these assets are not amortized. The Company’s trade names were tested for impairment as of August 28, 2021. The values of each trade name were determined using the relief-from-royalty method. Based on this evaluation, no trade names were determined to be impaired. Goodwill The carrying amount of goodwill by segment as of March 26, 2022 and December 25, 2021 was as follows: Infrastructure Segment Agriculture 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 Foreign currency translation (1,584) 710 (874) Balance at March 26, 2022 $ 393,470 $ 314,222 $ 707,692 Infrastructure Segment Agriculture Segment Total Gross Balance March 26, 2022 $ 455,292 $ 314,222 $ 769,514 Accumulated impairment losses (61,822) — (61,822) Balance at March 26, 2022 $ 393,470 $ 314,222 $ 707,692 |
CASH FLOW SUPPLEMENTARY INFORMA
CASH FLOW SUPPLEMENTARY INFORMATION | 3 Months Ended |
Mar. 26, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
CASH FLOW SUPPLEMENTARY INFORMATION | CASH FLOW SUPPLEMENTARY INFORMATION The Company considers all highly liquid temporary cash investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash payments for interest and income taxes (net of refunds) for the thirteen weeks ended March 26, 2022 and March 27, 2021 were as follows: 2022 2021 Interest $ 1,613 $ 111 Income taxes 6,699 3,347 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table provides a reconciliation between Basic and Diluted earnings per share (EPS): Basic EPS Dilutive Diluted EPS 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 Thirteen weeks ended March 27, 2021: Net earnings attributable to Valmont Industries, Inc. $ 55,014 $ — $ 55,014 Weighted average shares outstanding (000's) 21,179 250 21,429 Per share amount $ 2.60 $ (0.03) $ 2.57 At March 26, 2022 and March 27, 2021, there were 47,223 and 0 outstanding stock options with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted earnings per share, respectively. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 26, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency denominated transactions and investments in foreign subsidiaries. Depending on the circumstances, the Company may manage these risks by utilizing derivative financial instruments. Some derivative financial instruments are marked to market and recorded in the Company's consolidated statements of earnings, while others may be accounted for as fair value, cash flow, or net investment hedges. Derivative financial instruments have credit and market risk. The Company manages these risks of derivative instruments by monitoring limits as to the types and degree of risk that can be taken, and by entering into transactions with counterparties who are recognized, stable multinational banks. Any gains or losses from net investment hedge activities remain in OCI until either the sale or substantially complete liquidation of the related subsidiaries. Fair value of derivative instruments at March 26, 2022 and December 25, 2021 are as follows: Derivatives designated as hedging instruments: Balance sheet location March 26, 2022 December 25, 2021 Commodity forward contracts Accrued expenses $ (52) $ (5,802) Foreign currency forward contracts Prepaid expenses and other assets 236 149 Foreign currency forward contracts Accrued expenses — (118) Cross currency swap contracts Prepaid expenses and other assets 17,449 1,764 $ 17,633 $ (4,007) Gains (losses) on derivatives recognized in the condensed consolidated statements of earnings for the thirteen weeks ended March 26, 2022 and March 27, 2021 are as follows: Thirteen weeks ended Statements of earnings location March 26, 2022 March 27, 2021 Commodity forward contracts Product cost of sales $ 2,043 $ — Foreign currency forward contracts Other income 151 (218) Foreign currency forward contracts Product sales — — Interest rate hedge amortization Interest expense (16) (16) Cross currency swap contracts Interest expense 774 711 $ 2,952 $ 477 Cash Flow Hedges During 2021, the Company entered into steel hot rolled coil (HRC) forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $93,498 for the total purchase of 86,100 short tons (30,500 short tons from May 2021 thru December 2021 and 55,600 short tons from January 2022 thru December 2022). As of March 26, 2022, the forward contracts had a notional amount of $51,331 for the total purchase of 43,600 short tons from April 2022 to December 2022. The gain/(loss) realized upon settlement will be recorded in product cost of sales in the condensed consolidated statements of earnings over average inventory turns. During the first quarter of 2022, a subsidiary with a Euro functional currency entered into a foreign currency forward contract to mitigate foreign currency risk related to a large customer order denominated in U.S. dollars. The forward contract, which qualifies as a fair value hedge, matures in August 2022 and has a notional amount to sell $1,800 in exchange for a stated amount of Euros. Net Investment Hedges In 2019, the Company entered into two fixed-for-fixed cross currency swaps (“CCS”), swapping U.S. dollar principal and interest payments on a portion of its 5.00% senior unsecured notes due 2044 for Danish krone (DKK) and Euro denominated payments. The CCS were entered into in order to mitigate foreign currency risk on the Company's Euro and DKK investments and to reduce interest expense. Interest is exchanged twice per year on April 1 and October 1. Key terms of the two CCS are as follows: Currency Notional Amount Termination Date Swapped Interest Rate Set Settlement Amount Danish Krone (DKK) $ 50,000 April 1, 2024 2.68% DKK 333,625 Euro $ 80,000 April 1, 2024 2.825% €71,550 The Company designated the full notional amount of the two CCS ($130,000) as a hedge of the net investment in certain Danish and European subsidiaries under the spot method, with all changes in the fair value of the CCS that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded as cumulative foreign currency translation within OCI. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS & RELATED REVENUE INFORMATION During the first quarter of 2022, the Company's CODM changed the Company's management structure and began to manage the business, allocate resources and evaluate performance based on the new structure. As a result, the Company has realigned to a two reportable segment structure organized by market dynamics (Infrastructure and Agriculture). Three operating segments resulted from the new management structure and two are aggregated into the Agriculture reportable segment. The Company considers gross profit margins, nature of products sold, nature of the production processes, type and class of customer, and methods used to distribute products when assessing aggregation of operating segments. The Infrastructure segment includes the previous reportable segments of Utility Structures, Engineered Support Structures, and Coatings. All prior period segment information has been recast to reflect this change in reportable segments. Both reportable segments are global in nature with a manager responsible for segment operational performance and the allocation of capital within the segment. Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts. Reportable segments are as follows: INFRASTRUCTURE: This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation, and telecommunications, and coatings services to preserve and protect metal products. AGRICULTURE: This segment consists of the manufacture of center pivot and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture. The Company evaluates the performance of its reportable segments based upon operating income and invested capital. The Company does not allocate interest expense, non-operating income (expense), or income taxes to its reportable segments. Summary by Business Thirteen weeks ended March 26, March 27, SALES: Infrastructure $ 680,726 $ 549,646 Agriculture 306,580 229,664 Total 987,306 779,310 INTERSEGMENT SALES: Infrastructure (3,101) (3,201) Agriculture (3,385) (1,223) Total (6,486) (4,424) NET SALES: Infrastructure 677,625 546,445 Agriculture 303,195 228,441 Total $ 980,820 $ 774,886 OPERATING INCOME: Infrastructure $ 77,507 $ 54,449 Agriculture 37,475 38,748 Corporate (20,140) (15,986) Total $ 94,842 $ 77,211 Thirteen weeks ended March 26, 2022 Infrastructure Agriculture Intersegment Sales Consolidated Geographical market: North America $ 505,980 $ 182,255 $ (6,486) $ 681,749 International 174,746 124,325 — 299,071 Total $ 680,726 $ 306,580 $ (6,486) $ 980,820 Product line: Transmission, Distribution and Substation $ 281,600 $ — $ — $ 281,600 Lighting and Transportation 212,767 — — 212,767 Coatings 81,976 — (3,101) 78,875 Telecommunications 61,396 — — 61,396 Renewable Energy 42,987 — — 42,987 Irrigation Equipment and Parts, excluding Technology — 278,034 (3,385) 274,649 Technology Products and Services — 28,546 — 28,546 Total $ 680,726 $ 306,580 $ (6,486) $ 980,820 Thirteen weeks ended March 27, 2021 Infrastructure Agriculture Intersegment Sales Consolidated Geographical market: North America $ 385,734 $ 122,751 $ (4,424) $ 504,061 International 163,912 106,913 — 270,825 Total $ 549,646 $ 229,664 $ (4,424) $ 774,886 Product line: Transmission, Distribution and Substation $ 208,444 $ — $ — $ 208,444 Lighting and Transportation 176,516 — — 176,516 Coatings 74,793 — (3,201) 71,592 Telecommunications 45,640 — — 45,640 Renewable Energy 44,253 — — 44,253 Irrigation Equipment and Parts, excluding Technology — 207,258 (1,223) 206,035 Technology Products and Services — 22,406 — 22,406 Total $ 549,646 $ 229,664 $ (4,424) $ 774,886 A breakdown by segment of revenue recognized over time and at a point in time for the thirteen weeks ended March 26, 2022 and March 27, 2021 is as follows: Point in Time Over Time Total Thirteen weeks ended March 26, 2022 Thirteen weeks ended March 26, 2022 Thirteen weeks ended March 26, 2022 Infrastructure $ 369,190 $ 308,435 $ 677,625 Agriculture 297,606 5,589 303,195 Total $ 666,796 $ 314,024 $ 980,820 Point in Time Over Time Total Thirteen weeks ended March 27, 2021 Thirteen weeks ended March 27, 2021 Thirteen weeks ended March 27, 2021 Infrastructure $ 291,731 $ 254,714 $ 546,445 Agriculture 224,637 3,804 228,441 Total $ 516,368 $ 258,518 $ 774,886 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 26, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTAcquisitionOn April 27, 2022, the Company signed an agreement to acquire the majority ownership interest in ConcealFab, for approximately $41 million, net of cash acquired. ConcealFab is an industry leader in 5G infrastructure and passive intermodulation mitigation solutions. The acquisition will be reported in the Infrastructure segment results from the closing date. The transaction is expected to close in the second quarter of 2022 and is subject to customary closing conditions. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
Condensed Consolidated Financial Statements | Condensed Consolidated Financial Statements The Condensed Consolidated Balance Sheet as of March 26, 2022, the Condensed Consolidated Statements of Earnings, Comprehensive Income, Cash Flows, and Shareholders' Equity for the thirteen weeks ended March 26, 2022 and March 27, 2021, have been prepared by Valmont Industries Inc. (the Company), without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of March 26, 2022 and for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2021. The results of operations for the period ended March 26, 2022 are not necessarily indicative of the operating results for the full year. |
Inventories | InventoriesInventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods. |
Pension Benefits | Pension Benefits The Company incurs expenses in connection with the Delta Pension Plan ("DPP"). The DPP was acquired as part of the Delta plc acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the |
Stock Plans | Stock Plans The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. At March 26, 2022, 175,917 shares of common stock remained available for issuance under the plans. On April 26, 2022, Company shareholders approved the Valmont 2022 Stock Plan, in which the maximum number of shares of common stock that may be issued under the stock plan is 2,000,000 and no additional award grants may be made under any prior Company stock plan. Under the plans, the exercise price of each option equals the closing market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three years or on the grant's fifth anniversary. Expiration of grants is seven years to ten years from the date of grant. Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant. |
Fair Value | 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. ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value. Trading Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan at March 26, 2022 of $30,650 ($29,982 at December 25, 2021) represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification ("ASC") 320, Accounting for Certain Investments in Debt and Equity Securities , considering the employee's ability to change investment allocation of their deferred compensation at any time. The Company's ownership of shares in Delta EMD Pty. Ltd. (JSE:DTA) is also classified as trading securities. The shares are valued at $101 and $94 as of March 26, 2022 and December 25, 2021, respectively, which is the estimated fair value. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input. Derivative Financial Instruments: The fair value of foreign currency and commodity forward contracts, and cross currency contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate. Fair Value Measurement Using: Carrying Value March 26, 2022 Quoted Prices in Significant Other Significant Assets: Trading Securities $ 30,751 $ 30,751 $ — $ — Derivative financial instruments, net 17,633 — 17,633 — Fair Value Measurement Using: Carrying Value December 25, 2021 Quoted Prices in Significant Other Significant Assets (Liabilities): Trading Securities $ 30,076 $ 30,076 $ — $ — Derivative financial instruments, net (4,007) — (4,007) — Long-Lived Assets The Company's other non-financial assets include goodwill and other intangible assets, which are classified as Level 3 items. These assets are measured at fair value on a non-recurring basis as part of annual impairment testing. Note 3 to these condensed consolidated financial statements contain additional information related to the intangible asset impairments recognized in fiscal 2021. |
Leases | Leases The Company's operating leases are included in other assets and operating lease liabilities. |
Comprehensive Income (Loss) | Comprehensive Income (Loss)Comprehensive income (loss) includes net earnings, currency translation adjustments, certain derivative-related activity and changes in net actuarial gains/losses from a pension plan. Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. |
Revenue Recognition | Revenue Recognition The Company determines the appropriate revenue recognition for our contracts by analyzing the type, terms and conditions of each contract or arrangement with a customer. Contracts with customers for all businesses are fixed-price with sales tax excluded from revenue, and do not include variable consideration. Discounts included in contracts with customers, typically early pay discounts, are recorded as a reduction of net sales in the period in which the sale is recognized. Contract revenues are classified as product when the performance obligation is related to the manufacturing of goods. Contract revenues are classified as service when the performance obligation is the performance of a service. Service revenue is primarily related to the Coatings and Technology Products and Services product lines. Customer acceptance provisions exist only in the design stage of our products and acceptance of the design by the customer is required before the project is manufactured and delivered to the customer. The Company is not entitled to any compensation solely based on design of the product and does not recognize revenue associated with the design stage. There is one performance obligation for revenue recognition. No general rights of return exist for customers once the product has been delivered and the Company establishes provisions for estimated warranties. The Company does not sell extended warranties for any of its products. Shipping and handling costs associated with sales are recorded as cost of goods sold. The Company elected to use the practical expedient of treating freight as a fulfillment obligation instead of a separate performance obligation and ratably recognize freight expense as the structure is being manufactured, when the revenue from the associated customer contract is being recognized over time. With the exception of the transmission, distribution, and substation structures ("TD&S") product line, the renewable energy product lines, and the telecommunication structures product line, the Company’s inventory is interchangeable for a variety of each segment’s customers. The Company has elected to not disclose the partially satisfied performance obligation at the end of the period when the contract has an original expected duration of one year or less. In addition, the Company does not adjust the amount of consideration to be received in a contract for any significant financing component if payment is expected within twelve months of transfer of control of goods or services. The Company's contract asset as of March 26, 2022 and December 25, 2021 was $161,633 and $142,643, respectively. While most of the Infrastructure segment customers are generally invoiced upon shipment or delivery of the goods to the customer's specified location, certain customers are also invoiced by advanced billings or progress billings. At March 26, 2022 and December 25, 2021, total contract liabilities were $221,348 and $213,203, respectively. At March 26, 2022, $168,794 was recorded as contract liabilities and $52,554 was recorded as other noncurrent liabilities on the condensed consolidated balance sheets. Additional details are as follows: • During the thirteen weeks ended March 26, 2022, the Company recognized $28,023 of revenue that was included in the total contract liability as of December 25, 2021; • In the thirteen weeks ended March 27, 2021 , the Company recognized $38,102 of revenue that was included in the liability as of December 26, 2020. The revenue recognized was due to applying advance payments received for performance obligations completed during the period; and • At March 26, 2022, the Company had $105,013 of remaining performance obligations on contracts with an original expected duration of one year or more and expects to complete the remaining performance obligations on these contracts within the next 12 to 24 months. Segment and Product Line Revenue Recognition Infrastructure Segment Steel and concrete utility structures within the TD&S product line are engineered to customer specifications resulting in limited ability to sell the structure to a different customer if an order is canceled after production commences. The continuous transfer of control to the customer is evidenced either by contractual termination clauses or by our rights to payment for work performed to-date plus a reasonable profit as the products do not have an alternative use to the Company. Since control is transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment. For our TD&S and telecommunication structure product lines, we generally recognize revenue on an inputs basis, using total production hours incurred to-date for each order as a percentage of total hours estimated to produce the order. The completion percentage is applied to the order’s total revenue and total estimated costs to determine reported revenue, cost of goods sold and gross profit. Production of an order, once started, is typically completed within three months. Depending on the product sold, revenue from renewable energy is recognized both upon shipment or delivery of goods to the customer depending on contract terms, or by using an inputs method, based on the ratio of costs incurred to-date to the total estimated costs at completion of the performance obligation. External sales agents are used in certain TD&S sales and the Company has chosen to expense estimated commissions owed to third parties by recognizing them proportionately as the goods are manufactured. For the structures sold for lighting and transportation and for the majority of telecommunication products, revenue is recognized upon shipment or delivery of goods to the customer depending on contract terms, which is the same point in time that the customer is billed. There are also large regional customers who have unique product specifications for telecommunication structures. When the customer contract includes a cancellation clause that would require them to pay for work completed plus a reasonable margin if an order was canceled, revenue is recognized over time based on hours worked as a percent of total estimated hours to complete production. The coatings 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 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements (not yet adopted) In March 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP principles to contracts, hedging relationships, and other transactions that 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. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Accounting Policies [Abstract] | |
Components of inventories | Inventories consisted of the following: March 26, December 25, Raw materials and purchased parts $ 297,570 $ 278,107 Work-in-process 78,591 63,628 Finished goods and manufactured goods 431,310 387,099 Total Inventory $ 807,471 $ 728,834 |
Earnings before income taxes | Earnings bef ore income taxes for the thirteen weeks ended March 26, 2022 and March 27, 2021, were as follows: Thirteen weeks ended 2022 2021 United States $ 60,816 $ 51,155 Foreign 25,569 19,708 $ 86,385 $ 70,863 |
Schedule of components of the net periodic pension (benefit) expense | The components of the net periodic pension (benefit) expense for the thirteen weeks ended March 26, 2022 and March 27, 2021 were as follows: Thirteen weeks ended Net periodic (benefit) expense: 2022 2021 Interest cost $ 3,365 $ 2,497 Expected return on plan assets (6,202) (7,005) Amortization of actuarial loss 132 832 Net periodic (benefit) expense $ (2,705) $ (3,676) |
Compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options | The Company's compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options and restricted stock for the thirteen weeks ended March 26, 2022 and March 27, 2021, respectively, were as follows: Thirteen weeks ended 2022 2021 Compensation expense $ 9,463 $ 4,671 Income tax benefits 2,366 1,168 |
Valuation methodologies used for assets and liabilities measured at fair value | Fair Value Measurement Using: Carrying Value March 26, 2022 Quoted Prices in Significant Other Significant Assets: Trading Securities $ 30,751 $ 30,751 $ — $ — Derivative financial instruments, net 17,633 — 17,633 — Fair Value Measurement Using: Carrying Value December 25, 2021 Quoted Prices in Significant Other Significant Assets (Liabilities): Trading Securities $ 30,076 $ 30,076 $ — $ — Derivative financial instruments, net (4,007) — (4,007) — |
Components of accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss) consisted of the following at March 26, 2022 and December 25, 2021: 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) 9,969 20,312 686 30,967 Balance at March 26, 2022 $ (233,381) $ 36,089 $ (34,868) $ (232,160) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of components of amortized intangible assets | The components of amortized intangible assets at March 26, 2022 and December 25, 2021 were as follows: March 26, 2022 Gross Accumulated Weighted Customer Relationships $ 225,201 $ 164,130 13 years Patents & Proprietary Technology 58,657 15,978 9 years Trade Name 2,850 339 6 years Other 4,511 4,087 6 years $ 291,219 $ 184,534 December 25, 2021 Gross Accumulated Weighted 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 |
Schedule of amortization expense for intangible assets | Amortization expense for intangible assets for the thirteen weeks ended March 26, 2022 and March 27, 2021, respectively was as follows: Thirteen weeks ended 2022 2021 Amortization expense $ 5,849 $ 4,232 |
Schedule of future estimated amortization expense | Estimated annual amortization expense related to finite-lived intangible assets is as follows: Estimated 2022 $ 20,044 2023 17,783 2024 15,869 2025 14,435 2026 14,012 |
Schedule of non-amortized intangible assets | The carrying value of trade names at March 26, 2022 and December 25, 2021 are as follows: March 26, December 25, Year Acquired Newmark $ 11,111 $ 11,111 2004 Convert Italia S.p.A 8,238 8,479 2018 Webforge 7,747 7,877 2010 Ingal EPS/Ingal Civil Products 7,511 7,637 2010 Valmont SM 5,904 6,082 2014 Shakespeare 4,000 4,000 2014 Walpar 3,500 3,500 2018 Other 14,729 14,721 Various $ 62,740 $ 63,407 |
Schedule of carrying amount of goodwill | The carrying amount of goodwill by segment as of March 26, 2022 and December 25, 2021 was as follows: Infrastructure Segment Agriculture 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 Foreign currency translation (1,584) 710 (874) Balance at March 26, 2022 $ 393,470 $ 314,222 $ 707,692 |
CASH FLOW SUPPLEMENTARY INFOR_2
CASH FLOW SUPPLEMENTARY INFORMATION (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash payments for interest and income taxes (net of refunds) | Cash payments for interest and income taxes (net of refunds) for the thirteen weeks ended March 26, 2022 and March 27, 2021 were as follows: 2022 2021 Interest $ 1,613 $ 111 Income taxes 6,699 3,347 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted earnings per share (EPS) | The following table provides a reconciliation between Basic and Diluted earnings per share (EPS): Basic EPS Dilutive Diluted EPS 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 Thirteen weeks ended March 27, 2021: Net earnings attributable to Valmont Industries, Inc. $ 55,014 $ — $ 55,014 Weighted average shares outstanding (000's) 21,179 250 21,429 Per share amount $ 2.60 $ (0.03) $ 2.57 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivative instruments | Fair value of derivative instruments at March 26, 2022 and December 25, 2021 are as follows: Derivatives designated as hedging instruments: Balance sheet location March 26, 2022 December 25, 2021 Commodity forward contracts Accrued expenses $ (52) $ (5,802) Foreign currency forward contracts Prepaid expenses and other assets 236 149 Foreign currency forward contracts Accrued expenses — (118) Cross currency swap contracts Prepaid expenses and other assets 17,449 1,764 $ 17,633 $ (4,007) |
Gains (losses) on derivatives recognized on statements of earnings | Gains (losses) on derivatives recognized in the condensed consolidated statements of earnings for the thirteen weeks ended March 26, 2022 and March 27, 2021 are as follows: Thirteen weeks ended Statements of earnings location March 26, 2022 March 27, 2021 Commodity forward contracts Product cost of sales $ 2,043 $ — Foreign currency forward contracts Other income 151 (218) Foreign currency forward contracts Product sales — — Interest rate hedge amortization Interest expense (16) (16) Cross currency swap contracts Interest expense 774 711 $ 2,952 $ 477 |
Schedule of notional amounts of outstanding derivative | 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 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Summary by Business Thirteen weeks ended March 26, March 27, SALES: Infrastructure $ 680,726 $ 549,646 Agriculture 306,580 229,664 Total 987,306 779,310 INTERSEGMENT SALES: Infrastructure (3,101) (3,201) Agriculture (3,385) (1,223) Total (6,486) (4,424) NET SALES: Infrastructure 677,625 546,445 Agriculture 303,195 228,441 Total $ 980,820 $ 774,886 OPERATING INCOME: Infrastructure $ 77,507 $ 54,449 Agriculture 37,475 38,748 Corporate (20,140) (15,986) Total $ 94,842 $ 77,211 Thirteen weeks ended March 26, 2022 Infrastructure Agriculture Intersegment Sales Consolidated Geographical market: North America $ 505,980 $ 182,255 $ (6,486) $ 681,749 International 174,746 124,325 — 299,071 Total $ 680,726 $ 306,580 $ (6,486) $ 980,820 Product line: Transmission, Distribution and Substation $ 281,600 $ — $ — $ 281,600 Lighting and Transportation 212,767 — — 212,767 Coatings 81,976 — (3,101) 78,875 Telecommunications 61,396 — — 61,396 Renewable Energy 42,987 — — 42,987 Irrigation Equipment and Parts, excluding Technology — 278,034 (3,385) 274,649 Technology Products and Services — 28,546 — 28,546 Total $ 680,726 $ 306,580 $ (6,486) $ 980,820 Thirteen weeks ended March 27, 2021 Infrastructure Agriculture Intersegment Sales Consolidated Geographical market: North America $ 385,734 $ 122,751 $ (4,424) $ 504,061 International 163,912 106,913 — 270,825 Total $ 549,646 $ 229,664 $ (4,424) $ 774,886 Product line: Transmission, Distribution and Substation $ 208,444 $ — $ — $ 208,444 Lighting and Transportation 176,516 — — 176,516 Coatings 74,793 — (3,201) 71,592 Telecommunications 45,640 — — 45,640 Renewable Energy 44,253 — — 44,253 Irrigation Equipment and Parts, excluding Technology — 207,258 (1,223) 206,035 Technology Products and Services — 22,406 — 22,406 Total $ 549,646 $ 229,664 $ (4,424) $ 774,886 A breakdown by segment of revenue recognized over time and at a point in time for the thirteen weeks ended March 26, 2022 and March 27, 2021 is as follows: Point in Time Over Time Total Thirteen weeks ended March 26, 2022 Thirteen weeks ended March 26, 2022 Thirteen weeks ended March 26, 2022 Infrastructure $ 369,190 $ 308,435 $ 677,625 Agriculture 297,606 5,589 303,195 Total $ 666,796 $ 314,024 $ 980,820 Point in Time Over Time Total Thirteen weeks ended March 27, 2021 Thirteen weeks ended March 27, 2021 Thirteen weeks ended March 27, 2021 Infrastructure $ 291,731 $ 254,714 $ 546,445 Agriculture 224,637 3,804 228,441 Total $ 516,368 $ 258,518 $ 774,886 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Inventory, Net [Abstract] | ||
Raw materials and purchased parts | $ 297,570 | $ 278,107 |
Work-in-process | 78,591 | 63,628 |
Finished goods and manufactured goods | 431,310 | 387,099 |
Total Inventory | $ 807,471 | $ 728,834 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Accounting Policies [Abstract] | ||
United States | $ 60,816 | $ 51,155 |
Foreign | 25,569 | 19,708 |
Earnings before income taxes | $ 86,385 | $ 70,863 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Pension Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Net periodic (benefit) expense: | ||
Interest cost | $ 3,365 | $ 2,497 |
Expected return on plan assets | (6,202) | (7,005) |
Amortization of actuarial loss | 132 | 832 |
Net periodic (benefit) expense | $ (2,705) | $ (3,676) |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock Plans (Details) - Stock Option Plans - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Shares of common stock available for issuance (in shares) | 175,917 | |
Award vesting period | 3 years | |
Compensation expense | $ 9,463 | $ 4,671 |
Income tax benefits | $ 2,366 | $ 1,168 |
Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expiration period for grant | 7 years | |
Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expiration period for grant | 10 years |
BASIS OF PRESENTATION AND SUM_8
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets recorded for the investments held | $ 30,650 | $ 29,982 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading Securities | 30,751 | 30,076 |
Derivative financial instruments, net | 0 | |
Derivative financial instruments, net | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading Securities | 0 | 0 |
Derivative financial instruments, net | 17,633 | |
Derivative financial instruments, net | (4,007) | |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading Securities | 0 | 0 |
Derivative financial instruments, net | 0 | |
Derivative financial instruments, net | 0 | |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading Securities | 30,751 | 30,076 |
Derivative financial instruments, net | 17,633 | |
Derivative financial instruments, net | (4,007) | |
Delta E M D Pty Ltd | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of remaining ownership | $ 101 | $ 94 |
BASIS OF PRESENTATION AND SUM_9
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Comprehensive Income (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance, beginning | $ 1,386,847 |
Balance, ending | 1,476,053 |
Foreign Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance, beginning | (243,350) |
Current-period comprehensive income (loss) | 9,969 |
Balance, ending | (233,381) |
Gain on Hedging Activities | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance, beginning | 15,777 |
Current-period comprehensive income (loss) | 20,312 |
Balance, ending | 36,089 |
Defined Benefit Pension Plan | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance, beginning | (35,554) |
Current-period comprehensive income (loss) | 686 |
Balance, ending | (34,868) |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance, beginning | (263,127) |
Current-period comprehensive income (loss) | 30,967 |
Balance, ending | $ (232,160) |
BASIS OF PRESENTATION AND SU_10
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Contract assets | $ 161,633 | $ 142,643 | |
Contract liabilities | 221,348 | 213,203 | |
Contract liabilities | 168,794 | $ 135,746 | |
Revenue recognized from contract liability | 28,023 | $ 38,102 | |
Remaining performance obligations | $ 105,013 | ||
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Remaining performance obligations, expected timing of satisfaction period | 12 months | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Remaining performance obligations, expected timing of satisfaction period | 24 months | ||
Contract Liabilities | |||
Disaggregation of Revenue [Line Items] | |||
Contract liabilities | $ 168,794 | ||
Other Noncurrent Liabilities | |||
Disaggregation of Revenue [Line Items] | |||
Contract liabilities, noncurrent | $ 52,554 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) | May 12, 2021 | Apr. 20, 2021 | Mar. 26, 2022 | Dec. 25, 2021 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 707,692,000 | $ 708,566,000 | ||
Prospera | ||||
Business Acquisition [Line Items] | ||||
Cash paid in acquisition | $ 300,000,000 | |||
Goodwill | 273,453,000 | |||
Property, plant, and equipment | 1,063,000 | |||
Deferred tax liability | 8,223,000 | |||
Goodwill expected to be tax deductible | 0 | |||
Prospera | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | 2,850,000 | |||
Prospera | Developed Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 32,900,000 | |||
Useful life | 5 years | |||
PivoTrac | ||||
Business Acquisition [Line Items] | ||||
Cash paid in acquisition | $ 12,500,000 | |||
Goodwill | 10,800,000 | |||
Goodwill expected to be tax deductible | 0 | |||
Consideration transferred | 14,000,000 | |||
Contingent consideration liability, current | 1,500,000 | |||
PivoTrac | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 2,627,000 | |||
Useful life | 8 years |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Amortized Intangible Assets - (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Components of amortized intangible assets | |||
Gross Carrying Amount | $ 291,219 | $ 290,680 | |
Accumulated Amortization | 184,534 | 178,723 | |
Amortization expense for intangible assets | 5,849 | $ 4,232 | |
Estimated amortization expense | |||
2022 | 20,044 | ||
2023 | 17,783 | ||
2024 | 15,869 | ||
2025 | 14,435 | ||
2026 | 14,012 | ||
Customer Relationships | |||
Components of amortized intangible assets | |||
Gross Carrying Amount | 225,201 | 224,597 | |
Accumulated Amortization | $ 164,130 | $ 160,626 | |
Weighted Average Life | 13 years | 13 years | |
Patents & Proprietary Technology | |||
Components of amortized intangible assets | |||
Gross Carrying Amount | $ 58,657 | $ 58,699 | |
Accumulated Amortization | $ 15,978 | $ 13,955 | |
Weighted Average Life | 9 years | 9 years | |
Other | |||
Components of amortized intangible assets | |||
Gross Carrying Amount | $ 4,511 | $ 4,534 | |
Accumulated Amortization | $ 4,087 | $ 3,959 | |
Weighted Average Life | 6 years | 6 years | |
Trade Names | |||
Components of amortized intangible assets | |||
Gross Carrying Amount | $ 2,850 | $ 2,850 | |
Accumulated Amortization | $ 339 | $ 183 | |
Weighted Average Life | 6 years | 7 years |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Carrying Values of Trade Names - (Details) - USD ($) | 3 Months Ended | |
Mar. 26, 2022 | Dec. 25, 2021 | |
Newmark | ||
Non-amortized intangible assets | ||
Carrying value of trade names | $ 11,111,000 | $ 11,111,000 |
Convert Italia S.p.A | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 8,238,000 | 8,479,000 |
Webforge | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 7,747,000 | 7,877,000 |
Ingal EPS/Ingal Civil Products | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 7,511,000 | 7,637,000 |
Valmont SM | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 5,904,000 | 6,082,000 |
Shakespeare | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 4,000,000 | 4,000,000 |
Walpar | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 3,500,000 | 3,500,000 |
Other | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 14,729,000 | 14,721,000 |
Trade Names | ||
Non-amortized intangible assets | ||
Carrying value of trade names | 62,740,000 | $ 63,407,000 |
Impairment indefinite-lived intangible assets | $ 0 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Carrying Amount of Goodwill by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Dec. 25, 2021 | |
Goodwill | ||
Gross balance, beginning | $ 770,388 | |
Accumulated impairment losses | (61,822) | |
Balance, ending | $ 707,692 | 708,566 |
Carrying amount of goodwill | ||
Balance at the beginning of the period | 708,566 | |
Foreign currency translation | (874) | |
Balance at the end of the period | 707,692 | |
Infrastructure | ||
Goodwill | ||
Gross balance, beginning | 456,876 | |
Accumulated impairment losses | (61,822) | |
Balance, ending | 393,470 | 395,054 |
Carrying amount of goodwill | ||
Balance at the beginning of the period | 395,054 | |
Foreign currency translation | (1,584) | |
Balance at the end of the period | 393,470 | |
Agriculture | ||
Goodwill | ||
Gross balance, beginning | 313,512 | |
Accumulated impairment losses | 0 | |
Balance, ending | 314,222 | $ 313,512 |
Carrying amount of goodwill | ||
Balance at the beginning of the period | 313,512 | |
Foreign currency translation | 710 | |
Balance at the end of the period | $ 314,222 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Goodwill Impairment (Details) | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill impairment loss | $ 0 |
CASH FLOW SUPPLEMENTARY INFOR_3
CASH FLOW SUPPLEMENTARY INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest | $ 1,613 | $ 111 |
Income taxes | $ 6,699 | $ 3,347 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Basic EPS | ||
Net earnings attributable to Valmont Industries, Inc. | $ 62,311 | $ 55,014 |
Weighted average shares outstanding (in shares) | 21,279,000 | 21,179,000 |
Per share amount basic (in dollars per share) | $ 2.93 | $ 2.60 |
Dilutive Effect of Stock Options | ||
Dilutive Effect of Stock Options | $ 0 | $ 0 |
Dilutive effect of stock options number of shares (in shares) | 213,000 | 250,000 |
Dilutive effect of stock options (in dollars per share) | $ (0.03) | $ (0.03) |
Diluted EPS | ||
Diluted EPS | $ 62,311 | $ 55,014 |
Shares outstanding dilutive (in shares) | 21,492,000 | 21,429,000 |
Per share amount diluted (in dollars per share) | $ 2.90 | $ 2.57 |
Antidilutive Securities | ||
Outstanding stock options with exercise prices exceeding the market price of common stock, excluded from the computation of diluted earnings per share (in shares) | 47,223 | 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Derivatives, Fair Value [Line Items] | ||
Derivative designated as hedging instruments | $ 17,633 | $ (4,007) |
Commodity forward contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative designated as hedging instruments | (52) | (5,802) |
Foreign currency forward contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative designated as hedging instruments | 236 | 149 |
Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative designated as hedging instruments | 0 | (118) |
Cross currency swap contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative designated as hedging instruments | $ 17,449 | $ 1,764 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Gain (Loss) on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in earnings | $ 2,952 | $ 477 |
Commodity forward contracts | Product cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in earnings | 2,043 | 0 |
Foreign currency forward contracts | Other income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in earnings | 151 | (218) |
Foreign currency forward contracts | Product sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in earnings | 0 | 0 |
Interest rate hedge amortization | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in earnings | (16) | (16) |
Cross currency swap contracts | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in earnings | $ 774 | $ 711 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022USD ($)derivativeT | Dec. 26, 2020derivative | |
Senior Unsecured Notes | Senior Unsecured Notes 5.00% Due 2044 | ||
Derivative [Line Items] | ||
Stated rate | 5.00% | |
Senior Unsecured Notes | Senior Unsecured Notes 5.00% Due 2044 | Cross currency swap contracts | ||
Derivative [Line Items] | ||
Number of fixed-for-fixed cross currency swaps | derivative | 2 | 2 |
Cash Flow Hedging | Designated as Hedging Instrument | Commodity forward contracts | Long | ||
Derivative [Line Items] | ||
Notional amount | $ 51,331 | |
Derivative, nonmonetary notional amount, mass | T | 43,600 | |
Fair Value Hedging | Euro Member Countries, Euro | Designated as Hedging Instrument | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 1,800 | |
Net Investment Hedging | Designated as Hedging Instrument | Cross currency swap contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 130,000 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Notional Amounts Outstanding (Details) - Designated as Hedging Instrument - Net Investment Hedging $ in Thousands | Mar. 26, 2022USD ($) | Mar. 26, 2022DKK (kr) | Mar. 26, 2022EUR (€) |
Denmark, Kroner | Cross Currency, Danish Kroner, Terminating April 2024 | |||
Derivative [Line Items] | |||
Notional amount | $ 50,000 | kr 333,625,000 | |
Swapped Interest Rate | 2.68% | 2.68% | 2.68% |
Euro Member Countries, Euro | Cross Currency, Euro, Terminating April 2024 | |||
Derivative [Line Items] | |||
Notional amount | $ 80,000 | € 71,550,000 | |
Swapped Interest Rate | 2.825% | 2.825% | 2.825% |
BUSINESS SEGMENTS - Additional
BUSINESS SEGMENTS - Additional Information (Details) | 3 Months Ended |
Mar. 26, 2022segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
BUSINESS SEGMENTS - Summary By
BUSINESS SEGMENTS - Summary By Business (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Business Segments | ||
Net sales | $ 980,820 | $ 774,886 |
Operating income | 94,842 | 77,211 |
Transmission, Distribution and Substation | ||
Business Segments | ||
Net sales | 281,600 | 208,444 |
Lighting and Transportation | ||
Business Segments | ||
Net sales | 212,767 | 176,516 |
Coatings | ||
Business Segments | ||
Net sales | 78,875 | 71,592 |
Telecommunications | ||
Business Segments | ||
Net sales | 61,396 | 45,640 |
Renewable Energy | ||
Business Segments | ||
Net sales | 42,987 | 44,253 |
Irrigation Equipment and Parts, excluding Technology | ||
Business Segments | ||
Net sales | 274,649 | 206,035 |
Technology Products and Services | ||
Business Segments | ||
Net sales | 28,546 | 22,406 |
North America | ||
Business Segments | ||
Net sales | 681,749 | 504,061 |
International | ||
Business Segments | ||
Net sales | 299,071 | 270,825 |
Infrastructure | ||
Business Segments | ||
Net sales | 677,625 | 546,445 |
Operating income | 77,507 | 54,449 |
Agriculture | ||
Business Segments | ||
Net sales | 303,195 | 228,441 |
Operating income | 37,475 | 38,748 |
Corporate | ||
Business Segments | ||
Operating income | (20,140) | (15,986) |
Operating Segment | ||
Business Segments | ||
Net sales | 987,306 | 779,310 |
Operating Segment | Infrastructure | ||
Business Segments | ||
Net sales | 680,726 | 549,646 |
Operating Segment | Infrastructure | Transmission, Distribution and Substation | ||
Business Segments | ||
Net sales | 281,600 | 208,444 |
Operating Segment | Infrastructure | Lighting and Transportation | ||
Business Segments | ||
Net sales | 212,767 | 176,516 |
Operating Segment | Infrastructure | Coatings | ||
Business Segments | ||
Net sales | 81,976 | 74,793 |
Operating Segment | Infrastructure | Telecommunications | ||
Business Segments | ||
Net sales | 61,396 | 45,640 |
Operating Segment | Infrastructure | Renewable Energy | ||
Business Segments | ||
Net sales | 42,987 | 44,253 |
Operating Segment | Infrastructure | Irrigation Equipment and Parts, excluding Technology | ||
Business Segments | ||
Net sales | 0 | 0 |
Operating Segment | Infrastructure | Technology Products and Services | ||
Business Segments | ||
Net sales | 0 | 0 |
Operating Segment | Infrastructure | North America | ||
Business Segments | ||
Net sales | 505,980 | 385,734 |
Operating Segment | Infrastructure | International | ||
Business Segments | ||
Net sales | 174,746 | 163,912 |
Operating Segment | Agriculture | ||
Business Segments | ||
Net sales | 306,580 | 229,664 |
Operating Segment | Agriculture | Transmission, Distribution and Substation | ||
Business Segments | ||
Net sales | 0 | 0 |
Operating Segment | Agriculture | Lighting and Transportation | ||
Business Segments | ||
Net sales | 0 | 0 |
Operating Segment | Agriculture | Coatings | ||
Business Segments | ||
Net sales | 0 | 0 |
Operating Segment | Agriculture | Telecommunications | ||
Business Segments | ||
Net sales | 0 | 0 |
Operating Segment | Agriculture | Renewable Energy | ||
Business Segments | ||
Net sales | 0 | 0 |
Operating Segment | Agriculture | Irrigation Equipment and Parts, excluding Technology | ||
Business Segments | ||
Net sales | 278,034 | 207,258 |
Operating Segment | Agriculture | Technology Products and Services | ||
Business Segments | ||
Net sales | 28,546 | 22,406 |
Operating Segment | Agriculture | North America | ||
Business Segments | ||
Net sales | 182,255 | 122,751 |
Operating Segment | Agriculture | International | ||
Business Segments | ||
Net sales | 124,325 | 106,913 |
Intersegment Sales | ||
Business Segments | ||
Net sales | (6,486) | (4,424) |
Intersegment Sales | Transmission, Distribution and Substation | ||
Business Segments | ||
Net sales | 0 | 0 |
Intersegment Sales | Lighting and Transportation | ||
Business Segments | ||
Net sales | 0 | 0 |
Intersegment Sales | Coatings | ||
Business Segments | ||
Net sales | (3,101) | (3,201) |
Intersegment Sales | Telecommunications | ||
Business Segments | ||
Net sales | 0 | 0 |
Intersegment Sales | Renewable Energy | ||
Business Segments | ||
Net sales | 0 | 0 |
Intersegment Sales | Irrigation Equipment and Parts, excluding Technology | ||
Business Segments | ||
Net sales | (3,385) | (1,223) |
Intersegment Sales | Technology Products and Services | ||
Business Segments | ||
Net sales | 0 | 0 |
Intersegment Sales | North America | ||
Business Segments | ||
Net sales | (6,486) | (4,424) |
Intersegment Sales | International | ||
Business Segments | ||
Net sales | 0 | 0 |
Intersegment Sales | Infrastructure | ||
Business Segments | ||
Net sales | (3,101) | (3,201) |
Intersegment Sales | Agriculture | ||
Business Segments | ||
Net sales | $ (3,385) | $ (1,223) |
BUSINESS SEGMENTS - Breakdown b
BUSINESS SEGMENTS - Breakdown by Segment of Revenue Recognized Over Time and At a Point In Time (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Business Segments | ||
Net sales | $ 980,820 | $ 774,886 |
Point in Time | ||
Business Segments | ||
Net sales | 666,796 | 516,368 |
Over Time | ||
Business Segments | ||
Net sales | 314,024 | 258,518 |
Infrastructure | ||
Business Segments | ||
Net sales | 677,625 | 546,445 |
Infrastructure | Point in Time | ||
Business Segments | ||
Net sales | 369,190 | 291,731 |
Infrastructure | Over Time | ||
Business Segments | ||
Net sales | 308,435 | 254,714 |
Agriculture | ||
Business Segments | ||
Net sales | 303,195 | 228,441 |
Agriculture | Point in Time | ||
Business Segments | ||
Net sales | 297,606 | 224,637 |
Agriculture | Over Time | ||
Business Segments | ||
Net sales | $ 5,589 | $ 3,804 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | Apr. 27, 2022USD ($) |
ConcealFab | Subsequent Event | |
Subsequent Event [Line Items] | |
Payments to acquire business, net of cash acquired | $ 41 |