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VMI Valmont Industries

Participants
Renee Campbell VP, IR & Corporate Communications
Stephen Kaniewski President, CEO & Director
Mark Jaksich EVP, CFO & Secretary
Nathan Jones Stifel, Nicolaus & Company
Christopher Moore CJS Securities
Brent Thielman D.A. Davidson & Co.
Brian Drab William Blair & Company
Jonathan Braatz Kansas City Capital Associates
Call transcript
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Renee Campbell

Good morning, everyone, and welcome to Valmont Industries Third Quarter 2019 Earnings Call. With me today are Steve Kaniewski President and Chief Executive Officer; Mark Jaksich, Executive Vice President and Chief financial Officer; and Tim Francis, Senior Vice President and Corporate Controller.

This morning, Steve will provide a summary of our third quarter results; and Mark will provide additional details on financial performance. A slide presentation will accompany today's discussion, and a link to access the document is located on the homepage of our website at valmont.com. Please download the slide deck to follow along with today's call.

our available it next press are is located be instructions days, release, will also accessing for included on replay for X the and which A website. in the call Please note forward-looking which the read to applies end subject be our discussion will full disclosure statements, and is today's in that on to of conference this at this call.

Officer, to turn our Chief Executive to the President over like Steve call now would I Kaniewski. and

Stephen Kaniewski

I thank Thank of despite to would year you, sales us. Good grew for Renee. revenue the portfolio. last which our impacts recap compared transportation sustained million communication a and X.X% across Net like and with and a agriculture Sales you X everyone, quarter. from pricing Slide market of start in $XXX.X to discipline strong joining unfavorable morning, in North provides third America wireless acquisitions of demand very and markets, currency were challenging environment X.X%. led by

Support with Moving to segment Engineered starting highlights the Structures and segment.

of and sales from favorable currency structure translation lead demand has Third quarter spending increased state government improve drove continued the industry and to across demand times excluding and growth. sales pricing year. This supported quarter. roads backlogs North local higher traffic and sales and America, $XXX.X last over our sales highways a In Lighting strong X.X%. environment, higher extended. impacts, When remain this were X.X% increased million

year-to-date grew and XX% communication components wireless XX% than higher of sales Globally, more basis. than and a this structures more quarter on are

approximately to in sales strong from America benefited particularly XX% last markets quarter grew very have this We compared North year. flow, where order

recent and from from preparation ongoing site growth, driving of Connect-It Camouflage As expected, and our Larson along are XG Wireless. with demand in sales investments XG revenue acquisitions robust

combination solutions. rising sales to year-to-date last challenge Access to and of by requirements than basis, The with position strengthened well due wireless integrated our our our carriers keep to Growth Sales strategy offerings, structural vast networks to our the currency pace cell our expansion and technology take and demand industry Xx cooperative being for decreased our communications business municipalities broadband to cell meeting unfavorable provide these customers. are small us with of large-scale solutions. knowledge solutions is Systems LTE increasing this small translation. needs. XG On more market higher in multiple provide densification than year, solutions a volumes supporting of lower quarter and of relationships

transmission last more Utility China from Support our market In in segment, regulatory increases that to than replace American $XXX facilities. pricing materials concrete. steel Favorable being of levels compared by acceleration Structures to the and lower aging across offset more can was infrastructure North production replace slightly pressure driven decreased lower project to in capacity year. sales with America and volumes and demand X.X% are in greater withstand structures wood effectively Rapid million by North like available less heat,

to the China also our we in led North in in demand. size project in receipt XXX year the from America additional our acceleration, capacity large meet access last constraints of a Further, has this project increase sudden increase the of factory quarter million market by market second our inability the transmission The our capacity for from alone, the $XX North demand facilities. evidenced increase announced American In quarter. approximately order a purchase estimate during impacted we to XX% KV ability to

first to only towards steps add immediate existing XXXX. quarter end America which taking capacity are to we facilities, our the North utilize we the expect mentioned, As to of of

smaller solar in the revenues project were business. offshore this markets tracker solutions quarter lower international wind lower in from and of sizes Sales

have our year recently solar pleased very the into are significant XXXX. of projects progress moved business, this some We with tracker although

Coatings to Turning the segment.

of external can acquisitions in Coatings late recent decreased lower and Third pricing of production indicator volumes in discipline, sales million X.X%, be quarter an industrial although from our sales know grew that business markets trends. overall sales by the led $XX quarter. We

monitoring any more these changes. for we're closely So markets

Turning sales of to million as million sales usual the higher market the North agricultural In slowdown. despite and market last X% Global and tubing trade challenging grew of Irrigation very to $XXX.X America, industrial well segment. as were X.X% year. sales compared $XX.X lower seasonal a environment

related of prices any weighing fall after-market Like the still and higher. impact and sales parts to harvest macro solutions we outcomes on farmer While could others, are commodity market that were of technology pivots, are changes the conditions sentiment, awaiting demand.

AgSense Record our team XX,XXX. devices during and quarter a over the customer. the are and remains strategically in by sales investing Global development, leadership sales of technology technology X% number solutions technology connected to and strengthening focus, the research total integrating grew our our primary of of global voice we

this in segment a Irrigation an research in development investing As the and we activities million reminder, additional year. $X are

revenues led volumes. below Middle Historical Irrigation International last Asia the offset demand Brazil Pacific in lowest conditions drought more Higher Australia region solid there project were in farm million sales by levels $XX.X X% to year. from than sales lower region. of income and substantially and the were since the lower net XXXX East in

muted from Zealand Softness uncertainty in in region. markets the and demand policy flooding spring that New

review. the turn to for call now Mark I financial the to like would over

Mark Jaksich

and third you, release. outlined press based Thank as of good adjusted the XXXX's Steve, My comparisons quarter comments on everyone. XXXX of in results are morning, the profitability on

Turning to Slide X.

prices drove income international operating Coatings or segment. income separately Reported than operating notably last from X.X% segment operating as and operating slightly ESS and presented the profit segment of were expense, raw LIFO was year of $XX.X million is quarter which profitability as portion of lower results. the in -- was last above sales of income lower X% Irrigation material most All lower, Utility Third the year. segment. year the the well this

over losses our the Systems Access suggested X.X% $X.XX earnings share diluted for would have Third projects, EPS quarter the increased of per XX.X%. $X.XX of the of Without XXXX quarter in diluted nonrecurring share increased $X.XX. earnings impact per

wireless $XX.X operating Access Support segment $X.X in XXXX. the and These operating poll traffic nonrecurring contributed and reported million Slide to undertook we profitability line American Structures income now year. operations performance continuing Turning of X% North lighting launched on the due was to positive quarter were communication anticipated. approximately poor XXXX trends line The offset the strong international in part operating were of projects. and comparisons the than X. segment at The These with segment X positive of originally restructuring that we projects large during results million over for year. outcomes balance to The actions last Systems were ESS in improved the sales to results associated costs third decreased Engineered in in from in product due XXXX, a end to installation part in product phase by project us higher new substantially last loss

no any additional have capital We market. exited, which exiting fixed write-offs orders have we last in cost very this not line communication volumes across product reductions incur mix the we wireless capacity discipline from the higher Overall, in from and pricing continued more Pacific will with favorable associated in year. savings pleased are with region this with Asia segment, along product the we

with meet Utility our actions help as by Improvements was segment were large from from third well to the to orders, Slide KV capacity inefficiencies sales of which operating impacted income we operational China available pricing X. this Turning producing quarter Moreover, demand. operations profitability. segment of somewhat muted Structures less Support XXXX. $XX.X XXX flat as started market million as was

which Florida, We facility also now expenses operation. in incurred our start-up in distribution is concrete in pole

in weighed profitability on developing Lower international income. operations our also operating

solutions, of improved in QX. to this mentioned QX quarter, market strong activity and profitability As the as last compared business we see solar for continue tracker to

sales planned line recognize synergies expect we improvement XXXX in into North We as markets. product begin profit expansion American the of and and manufacturing to this

the integration-related Slide that we throughout onetime $XX.X figures monitoring related with compared operating going demand more forward. North quarter were despite on lower to and the internal X, year. volumes volumes Pricing than to million, XXXX. offset In the balance, in possible external Segment higher the America mainly and production across continues on associated -- industrial U.S. Coatings United occurred business this the earlier decreased are Galvanizing lower that effects segment X.X% to trends income volumes, by discipline Coatings but well, and expenses acquisition On of perform

offset Turning international market to and with compared and by Irrigation pricing income X. than segment Operating volumes last lower emerging year. Slide increased an tubing development. in mix North XX.X% to SG&A volumes and the product million expenses associated and on market industrial markets unfavorable in of more were decreased sales America irrigation Higher $XX.X

year. advanced our commitment our leader which this earlier Prospera investments we and market expenses in the technology strategic quarter reflect R&D to higher solutions, Our announced this as partnership, make the including year-to-date

Turning and on Slide sheet balance to cash highlights X.

$XXX recognized year, this million we very cash expected, As strong $XXX flows in million quarter. the third of operating including

heightened Our including priority optimization working management in a meaningful be on team, continues for quarter. a focus the inventories to the this capital decrease

earnings. to been X.Xx larger drive which including make payments receivables, in is cash improvements net able contracts, year have down exceed also the flows to certain expected We negotiated helping on for

Year-to-date A Slide in million on is $XX $XX spending summary XX. up deployment XXXX. capital from capital was of million,

the capabilities facility United we investments expanding increase Poland, due at and of in As to spending million. facility million pole a $XXX mentioned is to concrete distribution of Arab Emirates. irrigation structures and Full the factory capital still $XX the our between in be most the in expected earlier, is utility year Florida

cash. $XX and the During of shareholders the of through share quarter, million ending dividends, we returned capital to repurchases quarter $XXX with million

the with was Our quarter for effective expectations. XX.X%, line tax rate in our

XXXX be Let lower outlook conditions for of adjusting our income than me were an strong to North we improved expectations, are the $X.XX. Utility the and drive XX segment, results, quarter, fourth to our between sales EPS operating America Structures our on turn and to and the third Based these and which segments XXXX. market now QX our should year on expectations over quarter update the and Support Slide in for ESS outlook. In $X.XX are

the our profitability earlier compared operational matters to the and segment capacity However, projections. mentioned improvements prior tempered as have our in

QX Access project per the recovered incurred poor losses performance be Systems in The line, QX. including will in share $X.XX product operating the not

Irrigation segment, had the slowdown experienced we far. expected In result a in In unfavorable as we're project as year comparisons expecting not to in so we expecting this mainly last will the to quarter the segment that this international QX late QX comparisons into to unfavorable repeat continue addition, XXXX, sales Coatings year. we is are

With now that, call Steve. to turn the I will over back

Stephen Kaniewski

you, Thank Mark.

anticipated of to recognized the in Turning year, third X and business; To lower infrastructure revisions in profitability that in summarize American our XXXX capacity segment impacts: driven and extending the outlook nonrecurring operational our being our sales Irrigation into for businesses quarter; the are the XX. expenses Coatings and volumes quarter; below by the sales primarily year. our are prior constraints balance are significant North expectations Slide to that the the inefficiencies fourth and

expect business levels. rate margins capacity weeks by in in raw stabilized we markets, now plus amount increased to in XX more North material as lead has America transformation In our be backlog Record Utility based million our have of been run ESS, our our higher as particularly manufacturing of strong to driven A than released on XXXX to facilities. meaningful costs. times operations already North current backlogs $XXX American the well benefits of demand,

said quarter-to-quarter. we've shift As projects before, can

confident in released the given any gaps However, we we can market that robust quickly work, are demand. fill

in the with to the business sales higher our are this Irrigation While third expectations year. pleased for quarter, below Irrigation continues globally, North we perform the American

growing a an do expect but we in end, the meaningful turnaround of are continued seeing sales. yet coming growth technology demand to season As is not

our next and industrial in demand trends additional general give updates market monitoring and are Coatings production will We business quarter.

As optimistic direction ahead to on business. look I'm XXXX, of our the we

volumes businesses can next of additions across difficult growth infrastructure assumes project be X% predict. total to capacity targeted to with related international all XXXX higher Irrigation expect levels, to We timings the revenue X% as expectation flat This segments. year and revenues from will pricing growth our in remain

improvements. to in America facilities markets. exceptionally both we As meet in we capacity North to alleviate mentioned, our And revenue further ESS add to margin and see expect particularly working strong in infrastructure as we capacity Utility, constraints, and are demand existing

We our our adjust structure have help recently serve meet steps demand additional best organizational to taken and customers. to this

availability, in-house expanding reduce and constraint increasing labor, current to of our efforts we the labor for adjusting recruitment are schedules skilled training work help programs address turnover. To

train we likely over X efforts. to as new continue such operational for As the we X will efficiencies to next and the workforce personnel, quarters have training

agile our to In our each segments, throughout streams, our organizing the elevating of methodology to key manufacturing drive flow of company. utilizing lines and by value are product our and with lean our business management we commitment around lean daily

raw committed serve. pricing segments in discipline prices in markets to As leadership have moderated, and we remain we all material the

capital generating We have financial will stated to And our company continue our flows. while goals perform term, allocation against good not long targets cash changed.

turn now call the back over will to I Renee.

Renee Campbell

Thank up time, open you the call questions. you, this may Steve. Donna, at for

Operator

[Operator Instructions].

is question today of Nathan first coming Our Jones Stifel. from

Nathan Jones

what clearly which mean, the at is out here, Slide result us, lack to capacity guess, in I demand. to of your has Can think a I with talked demand, this volume XX% get about I'm the Utility. of you is China. thing drop market up $XX.X mean, you but in bridge that serve volume for million here rest what happened the of million, capacity specifically of unavailable $XX that capacity this wasn't is coming built else of guidance a the wasn't ago? Why this Where first of, down a this a China? Clearly, be months looking why on drop volume lack in X And path your were year-over-year. I X quarter? known I down the to to not the constraints? into second bottom there ability here happened

Stephen Kaniewski

of Nathan, and the would half that half, as with in said mentioned had first significantly than start second we convert. we really that the particularly $X higher had only tracker Well, We solar where earlier, quarter sales. about I'll really Yes. shipped the and out third proved the be project million the

moving some actually earlier but just additional the next that into was the project received we year. We sales, have had word this Chile week, quarter fourth would from fourth quarter in anticipated

So that's the explanation. part of

And of more $X it. profitability million It's almost of in America's $XX last North the less about, year, You that get million we facility increased the revenue revenue. the really Hazleton million our of that's closure $X $XX million out China. $X if million you say, include in actually -- on to shipped

So the had intended it effect.

up. large the we didn't up were to issues some anticipate started of started we you we go up. order have and would inefficiencies a would plant Normally, the of We hours all to to to ramp such, you kind in have having those would facilities as of And we of how lot project, with, potential And that that of what assume. that ramp impacted be that of the operating as one would it had X X to our up. in facilities as started get production

getting you look track. the on the next what grow into that on year, demand basis, capacity we we a is you'll least If further over additions the backlog really sequential as we're third And quarter and based fourth anticipating at more on have. in continue quarter $XX see market to then million the overall back have more

Nathan Jones

the run you've pretty you inefficiencies that to driven demand why could efficiency? talk When unavailable. you at little you when that of to be bit system? looks this so maybe be you'll can was got China all about be will full here? here then full And of And when a capacity capacity back able will rate because serve you'll that state I full that and at these When robust, the mean, capacity be out operating the get market potential

Stephen Kaniewski

Sure.

simply trade off On U.S. coming products on now limits that environment we any environment, the many now kind discussed to well. those cannot are the one It's other is companies first part, utility political that of of the places sell based as have the China that

that logical panning there someone it out. to marketplace. that this will to are lead So beat times That's in to on want the assume the were out the market, in we not based constraints the that capacity optimistic be utilize

are our U.S. adjustments we to or now Mexico to production of to both production and move in par just North enhance the America, back combination So a that get be making and will

If fourth the operational in you the get take and that efficiencies, better take you quarter. we'll

The on of some board. the quarter first is other come capacity additions where

year, anything abate next will demand very that really QX, into Utility be see And go term. we the on a market market as figure in rate. that you the on we fine the run near the side in So end of QX should by you don't

more As reports analyst $XXX reports through. more is And to million we the now drivers we reported with the analyst strength, to continued projects all come that there compared plus hurricanes, weren't as you fires had see that we've renewables said, just probably and the these the has along. because see the

couple optimistic of additional of to years. just have very we're So some the meet next market the utility over capacity. this about We

Nathan Jones

the would so you're allowed in? it Just not to that Or that's just them just one. imported finally China, on them that -- you China bring feasible? make Is if on expensive tariffs not from

Stephen Kaniewski

still utilities No. competitive. from cost tagged are reluctant something can the be with that It's be buying It just there. to

we So do could it, but... still

Operator

Moore question Our from is Securities. CJS of next Chris coming

Christopher Moore

of bit. Just ramp on the stay for infrastructure little a kind

So are just scale the How across up. trying that many skilled that you you Is multiple in where risk And this to of for kind markets? are available people get they? process? How a need? feel in the

Stephen Kaniewski

to that Yes. U.S. easier fourth is the look It's in quarter I at putting quarter, we're of challenging and little that skilled these a reasons market. we one it It's into than ramp-up. a as the some the Mexico was trades during get more of in the realistic mean the expectations

supply, but that. robotic to in more imagine in can we're and some machine U.S. that in the You addition here automated welders more also are short additions are doing

So it's tamper we're a it. -- just trying to

you to train to off inefficiency that the get generally pull you through other contributes hire and to when the thing get also that have good of you other people some them, you The people, floor process.

are next of meet to confident we're market will in next It we quarter still is into we was which account and But couple year. the guidance very we wanted of we doesn't get properly. and one quarter in relatively looked second first to back, long-term our ability and saying in more things strong, that now that as take that again, the at the quarter feel drivers the the quarters, a up looked why in to So at this that quick, business. ramp

Christopher Moore

Got weeks. in you. you orders this time time? then XX losing And lead of at the talked Any point fear being about

Stephen Kaniewski

is landscape The competitive pretty similar.

anticipate would down. work So Obviously, that we don't that. like to we

we said our run And current XX this is our so prepared as comments, at rate weeks. in

within hoping been again before has industry we're even bring productivity So you frame capacity facilities, out a around bend existing go on But actually, peaked here as little down that the think, we bit. the I back and better through time our if XXXX curve to weeks. to XX and

demand. So the it just everybody's lot on better planning to meet takes a part

Operator

Our Thielman Davidson. from is next of question D.A. coming Brent

Brent Thielman

Steve, in maybe I business one on XXXX. on guess, project the views Irrigation, up earlier shape how for your might

Stephen Kaniewski

Those to going to The being we are to had break timing worked. volatility a dollar, the U.S. us they with we there them project of forward. on projects had, thought international the we've side, all year, that lose, it have capital enough move are to would this off. particularly and that and pay still does really Anytime currency the throw still you projects tend get and couple

And so occur, quarter second quarter. the in late we've particularly seen the third that into

still that we've break quarter the to Middle not long-term issue, year, talked with business. Africa, is -- in projects be Central this move we've forward. Asia, just that, do the the right there's real going will. There always And to are next any and previously It's that in specific a say still there's timing plans drivers going think places dealt which about that of now, there. to East we We, are but loose something course, any significant

Brent Thielman

presume, the curious we And out some then playing capacity of of that dynamics. these seen I'm might as environment And this constraints, manufacturers in pricing favor such sort margins Utility. in better I Okay. expect sort be of like shifting others is bid year pricing how terms ahead? back of back and well maybe can on yourself

Stephen Kaniewski

have better we $X North at we approximately $XX down coming parameters OP the would were next you expect, alliance mentioned, I to be that's a even up you And on is our as side. work as America, going normal supply-demand And year, million, bid the from would the environment. margins we had the were pricing of fixed, market. And but margins, bid we million now into simply definitely look though as that Absolutely. -- due

XXXX. think environment a So it's we we favorable as look into

Operator

Instructions]. [Operator

coming Drab question next Our Blair. from Brian William of is

Brian Drab

the on. the or Torrent those $XXX the not million you it's Engineering of big if that been is touched eventually just revenue traditional you've the in most have be at areas? could year I'm think whether is within pivot, could business Day in Irrigation, that I the the of wondering comment piece technology going? that last business. Analyst connected topics on business that How stated what's growth And the the

Stephen Kaniewski

call -- just the Yes. technology separate we've What I'll the I'll side, from management that seen on it side. water and

AgSense the side, accretive. very technology we grower, had business play record month a as margin value we is our On for business. the That low here, It's cancellation mentioned strong a rates. in obviously very

efforts is We to that. to our highway That one the continue and It's expect offerings that to to continue build a other connected do other become marketplace. have for primary then continue to technologies we that of to will grow.

our business. part the So we've year that XX% said per on target is of

most efficiency get turned a more a They and the had water the water. power does the into the side, it we're delivery we able made design to of you to good Torrent what and has with meet On really is strides. farm, efficient great of acquisition. pumps on water as and use most be that very a have of the scheduling, the efficient the management And both into quarter.

solutions. both had internationally, have they have project to real so particularly good a there. business business on you And bring And

goal traditional the that obviously of again, say we're that margin starting lot still $XXX to the million, business. parts path, on it to compared to as do get accretive But down have other we level. but So work the that's the to of I towards would our of some

Brian Drab

more one I for now. And guess, Okay. just

the the for able that through XXXX, more business what give and that's to rate, environment is tough line to a from they're Or XXXX. seeing that this you healthy confidence X%. early. Because growth hearing It be that? pretty And expectation do? you we're reflection of are mentioned persisting of for should Can other businesses? around X% the top into process just level of just feels each companies X% budgeting You X% this the to the is in a

Stephen Kaniewski

Yes.

So we're what that assumes, Irrigation, parts and the flat. biggest Brian, increase already say, backlog, have Where again, demand, is seeing having we XX-week know we the that, a in of Utility, backlog.

So that's And giving for us the we're pricing capacity additions that. confidence along you've there's gone higher putting remember, that with here. our as a where in backlog to on meet while

other group. it, telecom ESS don't year-over-year, the very to that XX% change. The growth the plus part of for expect entire substantial you is We saw

We to a go continue this see seeing. year accelerate that early as expect actually we're throughout our part it outlook we'd of and that start year. was to That's we in, for what the

that as so XXXX, into look continue. And will we

road very us, in showing in there's and out DoT construction. just guys road bridge aggregates demand there it's not and and are other other strong spending, Highway and markets also work

And so lines we well. those good feel as along

confidence. a market there and demands X% to out looking going call, utilizing good that that just the preliminary level X% that profile. so of And what through, budgeting process and is after relatively demand we at backup has sources This

to -- sorry, to We XX%. I'm side inefficiency our revenue expect the side. the clear then Utility really on accelerate business. it particularly up continue was issues, do the grow the to pretty helps And obviously of as solar other part that some substantially of north So was of we

Operator

Our City Kansas is next from Braatz coming question Jon Capital. of

Jonathan Braatz

us to Sort any acquired in how And the the a were you've with I quarter of issues, so ones demand acquisitions summary of acquisitions of months are there meeting the could in your last on? over terms you acquisitions, have XX aggregate, and give performed, this relative the in the guess, expectations?

Stephen Kaniewski

to can to balance, last jump had through I'll from Yes. quarter. more bit I not there's little I year. on acquisitions would the Convert view last in change the of this our next this always push way in. big million. we a -- a We synergies, of closer one ran say, in into a on Italia and where year. expect quarter of piece we But Mark a and start it. still matter is what portion that that cost moving synergies, now gaining some that have would $XX of we we're million, a of $XX know, of is just working operational that think balance,

in India, plant East, it has really plant almost the well. local well India servicing did relatively greenfield. component is the both acquisition It's a and and we for that earlier, a doing The galvanizing like Middle as

our there a very was pause Larson Camouflage expected mentioned We bit both a won't say It's gate cold, sign ramp terms business. I just one. is little was -- southeast a and there this of And The little are Connect-It -- bit we So off a tenders. that backlog year to equal year. in couple as our for earlier, particular one was was a sales well, doing The longer markets in the but that Walpar. next profitability. slower already road of for the in that and that gone have really had expectations I

accelerate we that look as So to really continue year. into next we that, think will

do about integration well. that's very the the galvanizers United well. New we the and quarter. talked you can Galvanizing, issues. U.S. And acquisition, Coatings that, doing one anytime charges Torrent, We Zealand very That of be related CSP was And largest doing there in some noted in in some the

better. had to some we look little into a seems it but as quarter, we we -- doing inefficiencies really fourth be So we're integrated, as

Mark Jaksich

Yes.

our is more with And we're all we galvanizing, we've which and Western come Pennsylvania, facility be doing in that I Coatings other to But than to own capability going that's the going The all, take in United think, next market had in where has is time. impact that's on Brenham. a point Brenham been being great to at lot early Jon in facility acquisition, of some able that's online year, opportunity, there's think United part where us. positive the we assets redeployed to the we have a for

Jonathan Braatz

Okay.

One Good. last Okay. question.

how seeing further months, down. you at pressures? XX this As you they've see Are coming been the like next you look do It deflationary time? seems any forward steel prices over

Stephen Kaniewski

has will come -- down. overall The been that has significance. car don't substantial we to -- if sliding steel get of look right industrial is you're but see be to obviously, based mills -- mean manufacturing prices, quickly. also up of but back anything level an at the be slower be Well, price There's down. to likely, market that you response impetus abate some drive We hot see would we dropped that on there, supply-demand to plate I more very up see much kind out rolled There's kind at production, anything it than nothing now. any the some that has of down. would try right increases now or more don't a to

Operator

D.A. Our is of from next coming Brent question Thielman Davidson.

Brent Thielman

any of to Mark, kind or how maybe business, much point the getting Steve where drag was a a comments on Are we that this wind quarter? offshore negligible? that's of

Mark Jaksich

is the year, Yes. charge the one. Brent, I'll goodwill. on know, take you impairment Mark. as Last took we that This

solar, about, be able market and in that the which international we weaken really see But year third SG&A America of of putting in that volumes, what North So of I we fourth was much accepting business to larger because was talked really on drag not and develop some it during that, the to that issue development quarters business Steve as business the a to a to that. bit. the when as combination for much side started year-over-year is grow are think last which and

outlook Steve So basis, a that, feel at a bit mentioned, still long-term for a was on about. good least of again, we quite drag. it as But quarterly the

Stephen Kaniewski

do Mark's that believe closer next comments, It'll be perspective, from probably follow the backlog be to quarter lays the And we on a year. should just we out, have but picking on in breakeven see there. is there way excuse And business. to second the earlier, you'll as X Europe or players Again, should -- we've in in me, gone reversal mentioned of we up. northern out demand a had that based

and poles, are in large currently. there's very bidding We we of some some diligently a on orders that are are out, working Utility orders more tenders plus real that to there couple in on seeing round straight get that we're going

better and will feel out tough business. way. that know we this about be a the proved year, it So We

Brent Thielman

a a for great be should cash then And flow. Okay. year follow-up. It

of next kind of, may about think that As where about needs you sort of your presumably, capital think and ramp-up that how we land? business, year working might

Mark Jaksich

that, some of Yes. But Utility a tailwind helped. year. indication of some on side that that Brent, to certainly, to are there around payments that, next contracts still are project but on we work we with get be give that even the less negotiation suppliers even have good. and there's customers from well plays supply we're the We maybe how project we thing provide advance some we can cash some But as closer got do working have and renegotiate sure. prepayments from we our payment to Mark. is it, -- to type when you going accepting we doing better get year. a this next to be into better is that's things on matter a to be with we're as color flows characteristic terms out. little expect trying on able cash flow as of that to some with little we'll see The chain do to that which receivable for the some done -- into But bit But one benefited to bit things even

Operator

Nathan is of Our from next question Jones coming Stifel.

Nathan Jones

million. over I think, USS backlog, that? talk You about still a where disclosed is you growing, backlog, that's ESS the bit the Could little if that $XXX

Stephen Kaniewski

Yes.

shipping as on lead think, dealing we're we the we revenue bit in and was we well. this what grown over million. of and backlog $XXX it's a as we still about talked it, are it America extended think time not still the last very has little the North Obviously, space more, particular And evidenced also was by that some but the rate. that at of there. healthy, us, times, competitors side I just it But said one, I said increase in that same with not

Nathan Jones

on really ESS that getting XX%. margins out to good then you margins, if the close take And at charge, were

expand be should prices next do those that your we price see How core to from price discipline, of level talk here, year? go into declining about as about continue able levels the high Given thinking -- to demand being you XX% maintaining margins and that? declining we input

Stephen Kaniewski

some then Europe look there Australia, they margin as the some to as in the grow, plan. more at were, and a strategically that had telecom be we as in still Yes, that's bit won't sales on ESS the least into in of accretive first be And And we as next particularly year. little year, of tend to a businesses half whole. us, exited drag some that

So we the orders, evidenced, can Systems been to other on are get a issue have margin hard front. would asked, the been our there. than pushing And had XX% we as And we with Access business. we this very

so But lot that has business to push, we factory We in needs ESS. to the be bullish and on of And work addition pricing be that management, to where to be. remain to cost did going continue it'll a to this we're there. now performance it get

Operator

of session. I end call Campbell the the comments. Renee reached turn back have the We to over question-and-answer And closing for will

Renee Campbell

for everyone, you, joining Thank us today.

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

Operator

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

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

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

This concludes today's teleconference.

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