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VMI Valmont Industries

Participants
Renee Campbell Valmont Industries, Inc.
Stephen G. Kaniewski Valmont Industries, Inc.
Mark C. Jaksich Valmont Industries, Inc.
Nathan Hardie Jones Stifel, Nicolaus & Co., Inc.
Craig Bibb CJS Securities, Inc.
Brian P. Drab William Blair & Co. LLC
Brent Edward Thielman D.A. Davidson & Co.
Jon Braatz Kansas City Capital Associates
Call transcript
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Operator

Greetings, and welcome to the Valmont Industries, Inc.

Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. pleasure & your Corporate my Director, Renee now Relations Investor Communications. is to host, introduce Campbell, It Thank you.

You may begin.

Renee Campbell

business. today conference Thank you, Industries' With third Mark and earnings morning, Valmont Chief Officer; President and Mark Officer; and Steve to the welcome then and overview will quarter our performance This Kaniewski, Jaksich, of strategic financial me and Chief for Controller. call detailed call. Executive Corporate of Executive Christine. Good then President a third and morning, highlights our quarter Tim and will Vice give our are open review a President provide discuss Steve Q&A. we of and Vice will the Financial XXXX results, Francis, operating

was available close slide market seven release the press press valmont.com. and on Investors release. after be yesterday can days, presentation instructions are archive accessing page issued will for our supplemental An call the the in at found replay be for included next and today's a of Our

we end would turn conference call read subject Kaniewski. full on over the our our disclosure Chief will call. this applies call statements to discussion in this begin, which please to forward-looking be to and President Executive at is now today's Before like I of note and Steve to the Officer,

Stephen G. Kaniewski

you us. joining and for Thank thank you, everyone, Good Renee. morning,

I begin, I want Before highlights. few to a quarter mention third

Engineering our improve points achieving commitment Support on improvement. XXX delivered to of margins we Structures basis First, over by

grew to XX% last compared year. Second, in North Irrigation sales America,

few repurchases that, to and end to complete continued speak capital which totaling acquisitions of operations will the a and announced be minutes about million, by begin to We XXXX. transformation fourth. we our a completed three With taking remarks like also share strategy We management. today's I'd completed execute by on $XX

of three and acquisitions repurchases of $XXX part, totaling we million. third capital, nearly $XX share million the During million $XXX quarter, in deployed to fund

is presentation, the shareholders growth total and we this of and in $XXX million XX these and Balanced slide on meaningful our year. meeting we of accountable board capital in our a our have shown to As a deployed part of priorities. ourselves use hold strategy, strategic

the the utility margins serve for global We realized. across building efficiencies utility I'm structure that details The completed facility services, share few in as market. more provide Also a XX% with already markets, to our the into world. shipped the manufacturing complete uniquely chain customer we lattice more with capacity Rome, track provides us Convert utility Eventually, now margins factory our both to with fulfilling as known we factory, to single-axis a acquisitions, first tracker structure partnership the our to and structures designs segment, type TRJ, headquartered in only every assets in Utility offering we and rays, our a Italia, integrated XX% Infrastructure, Convert achieve lattice cost. expect three engineered solar solution base XXXX enter the we Utility highly synergies. XX% the for Utility for which into over in team structures single-axis a to head we to positioning tracking the energy patented the the we capabilities additional purchased supply can and tracker orders. the quarter. including galvanizing about to electrical margins in as and Italy. are state-of-the-art, technology classes, XX,XXX-metric-ton greater business excited with industry. of in Vadodara, In be this we backlog panels of our Turning in purchased have be voltage within of wireless their Derit The once slightly provide our lattice solutions line custom India. Derit is our in first commitment all the market, approximately stake margins anticipate an producing located communication approvals than utility includes We're supply sun's grid to segment, Combining majority structures. all customers solar about Convert customers a with and segment positions segment

XXXX. that independent digits and expected to are components is As tracker low- and market by mid-double identified exceed in to we leveraging the market this the evidenced industry the acquisition, Irrigation by One solar participate $X well-positioned we have to make footprint grow at trackers year panels. the data, With to this billion growth. synergy now global manufacturing support structural is our the

commitment complete imagine, might items solar of the a and Irrigation assets explore the that In Structures to capability market. package on-field signs well. growing other Alabama, Support as an in Birmingham, products in this we our you pumps Engineered pivots, Walpar, our of using opportunities acquired global sign segment the strengthening offer opens manufacturer solutions structures structures to business to includes As industry-leading

vehicles, the margins With and transportation growth we the North build city higher we smart general roads driverless highways, advancement rates American expect margins as to that be We're than excited this current market. annualized on and participation of expand expect are and our market to synergies. development, intelligent segment in higher than

expanding at segment Day. we expect four to XX, our on positions New our agreement during to a October definitive acquisitions, Systems, CSP the strengthening The we quarter, of footprint geographic advance All market. three margins. during margins these Zealand closed transactions to further quarter transaction with entered line Coatings in the into be addition fourth our strategy that In acquire or we the in Investor market entering and outlined adjacent

were of slightly look track on me Net providing million teams down we our page forward calls. a prior a slide standard results. reviews of process As we playbook management integration. that, board M&A referenced future $XXX.X our let year. with be and including to have Regular to now progress, formalized on implemented XX updates quarter With deck, the and to from turn third sales work held for will

quarter by million, Adjusted last increased per year. X.X% year's divested last sales an Excluding adjusted $X.XX, media $XX.X earnings grinding third business, the income year, of over grew was share increase XX.X% operating to this which from revenue earlier was X.X%. and

Foreign Latin operations. unfavorably quarter by third translation our impacted from America currency primarily EPS $X.XX,

to our U.S. volumes starting Turning Engineered with segment and In the transportation Structure to a states North by grew strong higher, economy over enacting Support year. highlights last product driven X% funding. segment. than America, Revenues transportation and legislation increase more were

we the quarter, over FCC paused are fuel temporarily to preparations. clarity who from And demand site to as may show this has taxes year commercial we lower pricing in provide the also signs the actions to of recent the new lighting suspended contributed have XG We sales to by to led outlook. this region, provide encouraged the volumes of initiatives will sales were ruling by products remained Europe, to we increased over earlier fact, believe levels continue past sales and The on Pricing year taken growth. recovery. supported the In carriers price and Wireless year. our few continued improvement, should infrastructure market to Sales and steady, market actions that also states In by fee highway to focus earlier project have XX higher, grew service carriers Pacific regulations of years, governments taken in decisions In investment. streamline support Asia infrastructure communications have to were this on compared support prior region. customers. safety strong small safe cell spending. spending road benefiting sales

China, see completed continue We in third Asia to Tower, significantly quarter. IPO the customer their the during China Pacific largest lower region. in volumes our

We be be muted bidding expect this we to clarity can their gain market on that programs until will forthcoming. more

$XXX.X were lower product demand In Structures North was by to less X.X% higher last Utility Sales pricing segment. caused mix offset of the continued structures to America, recover for year. in structures. than were steel Europe by million offshore a partially favorable cost year. compared of Moving smaller Sales Support to market Northern wind increases last

the significantly continued industrial segment, split In increased million of price demand China over led we region. stated all quarter, price across from Coatings a the volume As last grew to regions. challenging evenly sales about year, from environment and competition more last strong in between has X.X% $XX.X

Pacific end demand. market perform Asia to improved operations well continued from Our

the to below million of X.X% Global sales $XXX.X were business. year. Turning Irrigation last

levels While XX%. than uncertainty farm to of cloud in tariffs income outlook, and continue more the North third net quarter sales trade policy pressure and by on grew America

market While independent the we project market, to market were volumes exist XX% sales translation. North XXXX unfavorable for International we share share. confident due analysis America lower currency to are short-term compared gain lower and does that not

and be extended uncertainty order delayed Sales presidential impacts from in Brazil election. approvals were government-sponsored finance the of currency, programs continued down were from also releases impact XX%. to due to the sales regarding lower, as Excluding

to representatives irrigation the and as drip the government we hosted ag markets on consistently management. the from company, agriculture at Irrigation and critical trade. policymakers, as week, global in are will water Israeli spoke of showcased the business and a Israeli which AgTech campus and solutions and highlighted, As sustainability Summit Valley, total we Nebraska U.S. first-of-its-kind how future importance have global long-term come technology Last advanced our growth crop well Netafim, technology. international of

technology. are of nine companies Valley Israeli scale. agtech how global leading addition, are a example This businesses use summit one their on advancements and In in technology the global expanding how Irrigation irrigation of presented is Valmont

we the at summit, the North from software strategy advance market believe of our technology market. benefit continue Valley during even growers by attendance challenging Last our Scheduling month, We solutions we release evidenced delivering market. offerings the to As of to to integrated America conditions. the the expanded these

solution countries utilized how We has growers, more field-proven this in to to water. decisions refined innovative different more when, make over been past on are million them than the XX excited X on crop where, and crops. data-driven acres real-time, technology management XX offer This years and is fully being even XX total and enabling to much to

our of to operations side Moving business. the

global actions Additional Systems the in completed the optimize a efficiencies of location consolidation our China taken We Access in were and chain three to province. our footprint. in single into the during improve Shanghai supply facilities quarter

have by cash million $XX call the new Engineered of combined our restructuring in will XXXX. expense. $XX market costs manufacturing the Ongoing We anticipated growth operational strategies update. over market is our like also increase actions the pre-tax $XX million, facility conditions, local turn an full-year in throughout Mark for to of I closure, We Support with with to province. stated that of footprint an these now taken believe which the million others the facility financial estimate end year in additional resulted would the align strategic from evaluations closed the a to of Structures expenses from Shandong Shandong plus

Mark C. Jaksich

Thank you, Steve, and good morning everyone.

significant more financials. non-recurring the the affecting for I Before like our to quarter, touch QX events the financial cover would results I on

First, we share. retiring completed million after-tax, million our $X.XX XXXX equivalent debt or $XX due X.XXX% a our in bonds expense by incurring per $XX.X refinancing make-whole to

the extended As debt mentioned attractive existing fixed maturities debt last our to XXXX. at rates quarter, and XXXX refinanced and we

Second, This mainly we footprint. charges $X.X continue of the future desired in included to China reducing segment. the refine our restructuring manufacturing our recorded capacity quarter million as ESS of state this we costs

Third, in led a business tariffs structures million to Significant a goodwill pricing we assets extremely in had non-cash offshore challenges and of environment. impairment protective other competitive and recorded wind of in that adverse $XX.X Northern energy intangible region market Europe. the an in lack our

The on annual three we million which are the as transaction testing, impairment financial our to on the costs acquisitions projections resulting impairment closed included quarter. led As lower near-term Fourth, charge. QX expensed results this incurred. $X.X of completed we impact goodwill

As realized net and the in the outlined while unfavorable favorable had the release in were were and G page with results to quarterly third adjusted disclosure Reg press an in a currency the divestitures quarter, X.X%, and improved X.X%, slide financial international recovering Sales XXXX. America the in volume refer our line please into top over decreases comparable X.X% negligible pricing material year the higher operations Acquisitions margins with primarily we pricing deck. translation Irrigation Each in cost. and both sales higher the basis, were were X.X% than while raw But from basis QX of last North continuing points adjusted segment profit segments compared mix the of the volumes In move XXXX. for down XX as sales X increased helped operating segments. increased down results, was a by On ESS in and impact XXXX. on and four was operating were X%. segments, quarter. sales

on effects are We compared had pricing chain, a million we despite that per operating translation inflationary through or environment, impact pleased as XXXX. well manage negative $X.X an income effective cost operational FX this share actions. and to $X.XX supply

quarter improved credits taxes lower and lower $X.XX was a an effects an adjusted the QX Our activities basis from $X.XX, related of U.S. development income share due XX.X% on was adjusted of combination per year. XX.X% the to research in XXXX than tax and XXXX for increase rate earnings to income XXXX. this of QX tax

segment with basis than to XX% income XXX adjusted Engineered In operating Structures XXXX income operating now Turning segment, higher the increased from points with last – margins Support year. operating results.

segment, solid was Aside actions, conditions Coatings in operating demand on particularly by America, operating a the this XX% was basis. favorable offshore despite China the product were and sales mix market. realization flat in reflected restructuring income the and In last market from with most pricing year, extremely Structure income weak business. and segment, order actions less Segment the in a challenging QX year Utility in the of In sequential markets, line North a XXXX. from impacted Support benefits results taken down from negatively

initiatives point Irrigation material prices. with the the sales in of XXXX margin supply in through growth is to operating Operating margin low and North raw chain was market quarter operational along management considering very demand North income for Turning actions Segment of increased XX.X%, pricing the solid QX segment. higher seasonal America strength America. light the XX% on from

compared XXXX nine last flows. $XX.X with cash $XX.X cash to compared XXXX. to Turning $XX.X months Operating in Capital million million the million, spending flows was first million of year. $XXX.X were with

were the to delays and as project a a degree, cash such a the make-whole events an the these These U.S. we have to bond on impact in flows. lower redemption, order lesser higher inventory, evidenced related goods had year cash as finished due In expenses specific flows the than this operating to due timing short-term have of and shipment delays normal Our hurricanes amount increased factors by to seen segments, ESS. weather

are we While our shipping to when customers job are schedules their ensure delivered sites to fluid, gets product remaining close to needed.

actions improve to material capital to material without Going our performance taking fixing forward, certain financing are prices necessary. earlier chain raw taking and contractually supply working than protect on we programs margins certain including

Moving the to sheet. balance

XXXX. our maturities As X.XXX% million million in long-term mentioned in XXXX redeemed earlier, this quarter, due Senior $XXX XXXX our debt Notes cash, of with we reducing for $XXX to and

lower providing pleased are attractive completed long-term our long-dated refinancing very are at We have that to averages, rates than profile. a debt historical

cross-currency million swaps going before expect $X to with during completed we along result, interest annual annual our our the a As or less QX, interest forward expense be expense refinancing. $XX than around million

to summary the XX on Turning this presentation. deployment, are capital of of slide accomplishments year our

continue assets. investments of current working to through We goals businesses stated fixed in our on our supporting capital with execute

planned of four, cash in through million irrigation $XX that cost over And opportunities market to compared executing the on acquisitions Emirates returns align be our Capital million our strategic spending dividends. in expansion Secondly, share XXXX. Three, shareholder United investments in will this $XX and and exceed This our value that goals ESS opportunistic Poland Arab of segment with support drive capital year the returning growth shareholders both time. to repurchases. through to in an regions. million in $XX facility includes our to

provided part cash As second business our fund we to cash of $XXX acquisitions to and overall media the and in this for previously this grinding these quarter, quarter, capital year. allocation mentioned, in of acquisitions in non-core deployed divestiture the addition three help actions strategy as million our

current as XXX,XXX stock the end of At mentioned authorization shares during on average million As per quarter $XX page of on million an at $XXX.XX in his remained of company repurchased the XX for shown approximately slide the remarks, QX, the deck. Steve share. we price $XX.X of

to deploy able additional been capital these have incurring of this We in effectively each areas debt. without year

ESS North the expect of now market balance year Utility XXXX. turn environment much to to as segment, difficult for Support sales, very In segment, in to than In the due in project The impacts to the results by of year. are in and unfavorable low generated muted economic last and U.S. to business, to our continuing expected competitive mix range good similar In billion. expected me from Let mainly the segment, the are continue growth we In be a for is XXXX international and outlook billion momentum the of the to the be less market comparisons solid America. balance somewhat is third seasonal in offshore quarter. net commodity structures, impacted always, favorable result sales we demand expected be sales will the and income Coatings to for American comparisons in the farm timing. $X.X the and normal can the a in be Sales positive expected to year $X.XX have prices in QX. in global with Irrigation Structures North

expect freight, free our elevated earnings on return to invested the We to including run. remain but capital we flow raw relatively XX% year, stable in year to short for of after-tax cash And XX% approximately full XX%. on materials, exceed and expect net the to

effect grinding of range of This $X.XX M&A-related of actions, be We impacts from translation. trends impacts from inventory have as as for EPS anticipated income costs. in refinancing, media from material well to adjusted one-time range $X.XX. from revised currency sale expect other the the $X.XX the LIFO We of full effects our $X.XX and to reflect adjusted from inventory expense per XXXX previous year business, inflation cost the restructuring now resulting levels share, excludes raw guidance the EPS of incremental updated to and to bond the net

over allocation committed will investment-grade that, turn to credit With I now back remarks. on to a Steve remaining for while to capital an the execute closing call rating. to continue We approach balanced

Stephen G. Kaniewski

Mark. you, Thank

XXXX a revenue to billion quarter $X.XX updating billion be fourth full line and last with year. revenues $X.X our We guidance year range are to expect to of in

of most Supply and reflects impact are imported recently other alternatives already the being minimal. forecasted certain steel, enacted raw Our the implemented current imports materials guidance aluminum purchases. U.S. of as for these tariffs on items are

We updates continue the and monitor provide needed. to closely are very tariff if they will impacts

year, look to revenue XXXX. X% approximately to growth expect of next we in As we ahead X%

opportunities. offerings While our are to demand international and year, challenges strong. project North provide be will end growth this similar market remains technology irrigation likely markets and American activity to And

plan As begin we as in in look the segment categories: technology to global technology align XXXX, of we sales strategy, Irrigation international, revenues with reporting three our with to growth structure our management domestic, a and sales. subset

Our Structures completed benefit efforts is business from the firm we Engineered Support this supported restructuring pricing markets, by year. and and will

Our environment business in ongoing will supported will demand, America reasons wind Connector. we strong Coatings Coatings Performance market in we by continued the strong Europe for challenged from Utility remains and and in benefit The benefit from Northern North stated industrial Valmont our derive earlier. business demand acquisitions. and be the GalvTrac

this financial and In of undergoing additional to we next review operational quarter, addition business the a will this and goodwill impairment are quarter. updates provide significant

and drivers Continued remains infrastructure by encouraged growth and all we are agriculture our long-term strong, for growth segments. across opportunities

to our strategies. funnel robust, are be continues aligned initiate our growth with We and continuing acquisition growth to pathways new to

operations, opportunities chain continue we turn to we within As execute deployment. to call our will I our the confident back and now on good over capital cash smart and are flow that Renee. will free we generate transformational supply

Renee Campbell

please this ahead. go At time, Steve. your questions. are you, ready take we Christine, Thank to

Operator

Thank you.

question-and-answer one a ask conducting that all limit and callers one be question to We now session. themselves follow-up. will We

addressed Thank One If re-queue poll questions for and have may those questions. we permitting. moment additional while questions, will please you you. be time you

question. of Jones proceed comes Please question first with Our Nathan your with Stifel. the line from

Nathan Hardie Jones

Good morning, everyone.

Stephen G. Kaniewski

Good morning, Nathan.

Mark C. Jaksich

Nathan. Hi,

Nathan Hardie Jones

working timing capital, Obviously, first net income? primary far of so the inventory, led to that different I of of then, talk cut What debt $XX And Can back up? we net flow? that? here another million, all XX% headwinds $XX year? expenses, then, consumed $XX year. prepaid cash looks lot about this just out? free on payables, you XX% million the receivables, than on far Could that capital the (XX:XX:XX) a so the Can clarify million, this cash, pieces rather this there you've getting to or that on specifically, got adjusted consumed think, income the out What's come year. start it driving and (XX:XX:XX). you on And expenses, of like – consumption And what's working is a the prepaid the about that of cash cash GAAP

Mark C. Jaksich

in Okay. be me $XX would that in everything. if Nathan, this XX% million. terms, that let XX%, million in you try about to of one, is Mark. think dollar neighborhood There's The address it it to questions but to $XX several

net to So, between that earnings adjusted and way, get so forth. GAAP and we don't have

first time. consistent costs some pieces course Now, – level. turns Since respect some of on we've (XX:XX:XX). me inventory historically, drive with of to to through inventory Receivable been and other the increase what's With us, happening over of of well. big inventories, step no materials there's unit with shift let inflationary individual all, there's are that so basis, the the where in of going impact that's the an real that in a level are raw as very up

same based excess on costs drives it gross than And of we're and forecast expenses completion shipments. has related billings percentage happening would Just to normally is what's which the that's but prepaid a really recognizing revenue on the flows. challenging the seeing we changed, are that, cycle to things and not is a see making we're earnings up profit respect delays of cash the lot if really and you with shipments to that because the we the more see number. conversion cash on in in picking that up the hand, the basis, the have inflation we Really

right up. actually the actual the a daily, We're what basis. regular really where – our is support what as So, are weekly timing that would really items. for we're – of say, now, our numbers impacting determine as projected course, items, turn And cash watching shipments of seeing projection flow the that going the but major I to is, shipments are on quarter those fourth the far the

Nathan Hardie Jones

conversion? Do be that you drag looks could that cash it get where you in of target think that XXXX you can XXX% to Are delays outlook? else that continued year continue conversions or on a anything like expecting back to there

Mark C. Jaksich

I Yes, wholeheartedly. so believe

over regarding timing I Plus, material course time, of some the taking we're finance think of doesn't out supply on. of material level shipments. just hedging some some the these price and items work starting around around programs things raw that involve will chain

three I against to all things cash earnings, think will net better together contribute those flows no in measured XXXX as doubt.

Nathan Hardie Jones

Okay. And on for then, outlook thanks the Steve, my initial XXXX. follow-up,

You might if I'm can price that versus revenue said X% us for any any growth. either the expected on willing volume give to you be to on what's the X% wondering what share or you color out, to of ranges any be segments. breaks color are how

Stephen G. Kaniewski

of well. actions, a of Most efforts the combination number through being the of as this actions, heavy particularly say into of of first and pricing were baked It's and that pricing pricing, volume the XXXX really all acquisitions in or the just commercial let's lifting quarter efforts, in whether the second is growth, taken that year. the

as but opportunities. see So, extent. not be volume more nearly and And it's some the at growth pricing really, what XXXX you'll see still we to where acquisition based and the actions will look you

Nathan Hardie Jones

us know give what organic to so number guys number Do we just the you want that's is? acquisitions from the

Stephen G. Kaniewski

probably we this a was our the are that – you Derit the have we around range, this that year tell is is Walpar we're Not overall, say, the But and I those business between because what million year $XX but announced the again, they acquisitions the let's almost acquisitions. in Convert, of couple you two – specifically, ,basically buying two assets. negligible, at if them The nothing again, somewhere Nathan. between look – in for – for – will not revenue probably of of I XXXX,

growth CAGRs that it we then be would point. So, the rates and that announced at normal

gives clarity. hopefully, So, a little bit that more

Nathan Hardie Jones

pass Okay. Thanks. on. I'll it

Operator

Bibb with Please comes next proceed line Craig with from your Securities. of CJS the question. Our question

Craig Bibb

Hi.

Just that clarifications. same volume a ESS? two of for was in then much and North quick year-over-year, The how up America USS kind question

Stephen G. Kaniewski

against started me offshore for up so, were the quarter – sales let the get wind. in that back USS, the segment, for in ESS it. American offshore up to So, more the North fourth with total to that comparisons some sorry, third – would or was quarter. was volume We and that in Craig, wind unfavorability said you X.X% unfavorable be related There's – the

the dollars off as grid production. at overall. higher voltage is look of classes And of classes so, that be And perspective the pure at number point. same was opposed lower on, in again from the that smaller at load of lot getting hours you a just typically at same dollars revenue would expending a done or going of volume it of that we're but not is, as lower that's voltage the It's so production and/or kind OP structures, roughly that hardening to kinds growth which

Craig Bibb

sorry. Okay. I'm I'm...

Stephen G. Kaniewski

– in then sorry. And

Craig Bibb

ahead. Go

Stephen G. Kaniewski

and at China. ESS, volume point. then offset And kind growth American being Australia market, the of and And the good in by you in look we with North of that flat it, particularly India the at in saw North America, way a in kind would that's decline

of So, their and out we've North America, China, China some seeing IPO. at they remained of low the went while telecom growth. stepped that. level business a business has again, itself through

Craig Bibb

the that...? sounds hurting like mid-single in but is Well, both somewhere is mix volume just to in digits, there, Okay. segments, kind of trying North underlying your at America USS, it it's growth get I'm again, for

Stephen G. Kaniewski

correct. be would That

Craig Bibb

in mean customer, the then, is your in in IPO And Okay. in the China, China? largest does end that with sight wireless for weakness

Stephen G. Kaniewski

bidding how to in programs factor XG waiting see Well, we're into the still that.

but back work bidding will when we're and clarity until sites a very smaller that work, not a XG As it's some is small just around on the to seeing lot of extent still we're sites. the strong you're still get we come aware, building And hard exactly know be in. But their – capability CapEx sites. to we're But pre-IPO. spending, delivering they of tend to

So, more to come.

Craig Bibb

in obviously, then, offshore And wind, extremely Okay. Europe, again. weak

more business towards can an you EU? European of already the and onshore evolving in us update rest give the on ESS, maybe your You're USS

Stephen G. Kaniewski

Yeah.

wind to be comes management the a That we it would when construction. have is at really like business, energy So, now for looking alternative opportunities that things just structure woodchip plant. a

require have of We utility well. that structures. And the wind kind as turbines that we're series business business structures, a of itself, next-generation approaching from of markets that then, there will is round some out new

We're As really then. the There's actually it's actions a going not prognosticate, and/or looking We're us back including see is for to a looks than rebound. in to more to until sold. you into half XXXX markets take of when restructuring a are market companies filing to start it to like be XXXX going number of much position that start now. acute wait competitive

When a and year. positive a where market that trend a to in it's business it – contracting And years, low-single kind we It outlook. been as but it's it'll still we've we've increase a will think compared digits for forward, continue. number a to we of has of look won't Europe Europe, be it challenging just over and sustainable seen lighting last modest seen we it's comes year, throughout our So, the traffic overall. believe been be

Craig Bibb

Great. All much. you right. Thank very

Operator

your Blair. line Brian from with comes question. of next Drab Our with Please question William proceed

Brian P. Drab

questions. Hi. my Good morning. Thanks for taking

irrigation you up do why And regions the think near-term? are First in you picked particular And that? what's in market your you're in where you share North think some competitors America any outperforming recently? that the one, there that driving

Stephen G. Kaniewski

Yeah.

in there related have other quarter-by-quarter, those competitors. repeatedly, fluctuations see to stronger markets where And strength are than a particular markets. said, kind position tend we've can you we of As to the

and overall So, believe market was that really parts we sales the look at for increase. the of much were down, that unit the drove we when it actually quarter,

good net help it mix we solid from administer situation it strength solutions. cost technology will areas If have forward. a a the think always of to maintain to was farm make we being in coming believe And pivots driven it income. always The entirety quality a in that payback. can a those will traditional stressed that in now, when from to just from apply market the solutions to perspective, the see a cost is just we that and somewhat people they and by technology its more helping move has people decisions also a the pivot our great payback, with those So, comes are real to life

what so, attribute this the to quarter. increase much And that's we of

Brian P. Drab

put point areas willing you're in be Would strength to to? finer you the referring a that

Stephen G. Kaniewski

our just traditional areas, Brian. It's

per So, break out region particular wouldn't any we se, but...

Brian P. Drab

All right.

Stephen G. Kaniewski

We they strengths and have our have – have their strengths. others

Brian P. Drab

Yeah.

to now, And what Italia use for hope on hearing think for was systems, there's maybe Can pumps guess. is the I that that I maybe you irrigation I Okay. solar the growers just synergy power and and is you Convert one then, of between Irrigation? the the power to potentially opportunity that more elaborate play? part

Stephen G. Kaniewski

are. is that thing pivots Yeah. it's same that supply near punched this is term, exact and In to Because chain. utilize angle and the the pressed gearboxes,

tracking a of So, but the solar are a and solution in pivot same just different utilized ilk way.

markets, from the can farm centers, mills, we time. and and the lead us allow in and of footprint other give So, the things quote power over right that the buy build regions, equipment. all they now, remoteness opposed should chain more working And will power power supply people to it way we will over pumps, to as as want utilize those In utilize we're over directly a growing intermediate all because service particularly know developing that us globe. to globe And on solar strong to synergies. aggressively really term, will to Irrigation the pivots to (XX:XX:XX)

in small fact growing microgrid of in support And a area. to just as projects, running that of the in kind regions, kilometers put already that hundreds instead or low-megawatts farming large growers kind on may of particularly of government-supported the believe large-scale lines utility the that grids areas Convert so, the we well as works

things are from to that And very so, those intermediate term. perspective bring to a the we're that we'll the be able again, excited from, over market, offering product

Brian P. Drab

Okay. Got it. Thank you.

Operator

the D.A. from of comes your question next with line proceed Thielman Brent Please with Our Davidson. question.

Brent Edward Thielman

America to headwind margins known to do? North business in get Utility And the to what's projects of in is you or normalize be Great. segment Thanks. XX% Should large on return you then, back XX% now? Steve, that back, sustained it's year the next that headwind been get but to the or can kind the project on the business, visibility wind a business assuming large going in XXXX? the

Stephen G. Kaniewski

(XX:XX:XX) So, suggests in we fairly way. robust into XXXX the will visibility continue project have work going a that the

are on backlogs good, it actually but Our will the remain side. pretty small

commercial we're business, margin what on to going really, at that being So, to When into we the with look of manufacturing planning, we've on do market more efficiencies, obviously the consolidation to working environment small I XXXX, especially on on that already And all the been year, the costs comes the assume opportunities. extent next it in capitalize with wind have that focus is it even something we venture would associated year, and you're to may more – to out additional is the then operational for non-traditional which we're side, to to have wind to get competitive the believe to XXXX. effectively players is as again, the of this capability, more some should us and – aggressively to But going this business will to but, bear some on margins in structures. kinds the see improve able weak develops the business. the have going to help in that market, an fruit the

in through – right should still can that year. we upfront to there. margins we the be we kind of But built we believe as to get to move It's So, probably quarters, the the overall won't see It seen. going back improved work be we've margins really over we QX.

Brent Edward Thielman

you're the uplift doesn't sound incorporating Brazil then, of And material rest in through it this like Great. year. any Okay. really

some activity. be You've unlock on hear back customers? seems from holding or to in mentioned just start Does what election XXXX that the your to based you holding maybe

Stephen G. Kaniewski

Yeah.

we agricultural Brazil the quarter, in the fourth is of But supportive So, back agriculture sentiment the don't be get steamed up again. it seated elected economy. frontrunner anticipate there for he any prospects will and your there. January, good. in are and while kind believe we the take to to of a It just confirm If kind to will is still rebound, strong very point

year-over-year positive Brazilian so, And should market. the see comparisons in believe we we

Brent Edward Thielman

you. Thank

Stephen G. Kaniewski

Brent. Thanks,

Operator

comes next Please Capital. proceed the with your City Kansas Braatz with line from Our of Jon question. question

Jon Braatz

Good morning, Steve and Mark.

Stephen G. Kaniewski

Good morning, Jon.

Mark C. Jaksich

Jon. morning, Good

Jon Braatz

margins and talked the in that acquisitions you companies your you acquired. commentary, Steve, – just the just that about you for expectations the

a a than give you're little a for? expected you to Can bit years? can two-year, may Are shooting where me Some little levels a the can where your others, longer that timeframe the on – a color us three think take you year, you us but they can little get – margins you give give that?

Stephen G. Kaniewski

Sure.

approvals and/or you take Derit, it's if matter we a of need. obtaining weld So, and really building that backlog customer

to year. get the Utility-type So, over to, let's margins, say, say course next building I would of that

year, So, of end of at the kinds by margins. be those the should we

year, are you to our if there. So, (XX:XX:XX) were In fourth already should be we margins go quarter Convert Italia, margins. next par at current about with those

margins probably the And structures The synergies a to chain, than be sign the along higher able a that in should that than slightly we that ESS margins. level something at in in current business. be so, supply business is realize building, particularly typical also also our is about Walpar should year better

with the to about so, it expect margin that improve there. we within one, a year also profile would And

multi-year of So, they're synergy kinds cases. are these – none of

of lot obtain On synergy. is of usually to market easier have than it's the the really, commercial pretty already. side, just an which they to channels we And because easily fit a synergy in commercial a operational kind

pretty feel good we they'll that build quickly. So,

Jon Braatz

or The thinking I project startup, in India, a basically Okay. was company, that correctly? of acquisition that the am lattice greenfield lattice the

Stephen G. Kaniewski

But backlog – of. speak Yeah. had about through didn't for have bankruptcy, of five plant much in It's gone a really a years. it had that been with operation because a to

getting perspective commercial the it into back a we as And view market. so, them greenfield from of a

backlog. orders, already already. we're didn't build there capitalize in. what to is, fact and factory. on the able have building to We put We're machinery already the the Now, shipping We didn't we're to was have

And we This and why greenfields business take confident so, a of now well getting kind already the place that's book in longer. little there. maybe feel of it's one's just in that

Jon Braatz

Okay.

tailwinds, of the in timeframe a February we begin high favorably come zinc and if in seeing want margins – segment? from Coatings the in prices prices sort have impacting back some call you to impacting Secondly, zinc business, hit lower Coatings it, down significantly. Should the

Stephen G. Kaniewski

And you'll for so that. it hope customers push as that very look does the how get before. work balancing significantly average would people been slowly price down ahead this they've as from We're down will We with on then price off very down. act very most credit inventory I'll and is usually team, the of the with of able moderately, comes zinc But come back If comes much either. to increases. to the hang always, well. on pretty it the some we're we to and first give price and out quickly, focused not going If be to lower going to our

Jon Braatz

down too you keep not quick prices come allow $X.XX. too have $X.XX from, them? much Well, – to that to Is like, to

Stephen G. Kaniewski

So, slightly moderated that recently. it's –

We all have give But work back. to we it gotten don't some pressure.

at piece overall equation like pretty for in look it, impacts a more had zinc is tariffs purchasing you've the which focus of to And things a getting steel. of as the projects. small be people's tend is prices steel guess realm I luckily, the So, and is and more the still focus their of on than

Jon Braatz

All you. right. Thank Okay.

Stephen G. Kaniewski

Thanks, Jon.

Operator

question. a is Brent with question Thielman follow-up next question Davidson. Please Our from proceed your D.A. with

Brent Edward Thielman

North flesh Thanks. in On I organic the trying particular of could to an core did you Engineering? what, understand America, the on Just business out contributions guess, Irrigation, Torrent basis?

Stephen G. Kaniewski

Yeah.

out XX%, contributed of the Torrent, about So, probably X%.

were business. we up So, base the on still about XX%

Brent Edward Thielman

had. Okay. all you. Great. Thank That's I

Stephen G. Kaniewski

Did I answer it?

Brent Edward Thielman

Yes.

Stephen G. Kaniewski

right. All Brent. Thanks,

Operator

you. Thank

for questions turn the comments. like closing Ms. to no have floor now to further this I Campbell, time. would at back you over We

Renee Campbell

us We call. Christine. This thank our you you, concludes joining for today. Thank

day. for next with quarter. again website mentioned, call forward phone by be good to days. speaking As playback on for you today's our next a will the available or We look Have seven

Operator

to the discussion circumstances. industries the Valmont in future in the the factors within in this operates expected current of appropriate management's and trends, These of experience perceptions well which other historical believed conditions, as be under management forward-looking of as developments, XXXX. based has Reform are meaning on Private forward-looking are Act made in light of statements Included assumptions Litigation statements that Securities

uncertainties, As control of understand statements to are They some involve are you consider or guarantees you results. Valmont's these comments, beyond that and listen and should of these performance risks, not which assumptions.

time-to-time be the domestic believes circumstances, any market anticipated affect products, among based availability operating and and environments, competitive financial international and differ changes concludes forward-looking The statement are material, new that included include, statements. statements from Valmont's of the These materially that other governments. market availability This and domestic as of and actions Commission, in factors industry conditions, economic described reasonable you things, and company Exchange as could and the risk many reports from aware should results in assumptions, them forward-looking of of does forward-looking today's made undertake foreign this management update is company those company that and Securities in not financial future discussion, day well factors forward-looking to cause to policy Although pricing, these on and factors cautions as Valmont's performance and price the this efficiencies, any to raw statements. product and acceptance results, discussion teleconference. of actual

now for disconnect your your participation. time. this you may Thank lines You at