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VALMONT INDUSTRIES INC - Quarter Report: 2012 March (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form 10-Q

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

For the quarterly period ended March 31, 2012
Or

 

 

 
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to                

Commission file number 1-31429



Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)

Delaware   47-0351813
(State or Other Jurisdiction of
Incorporation or Organization)
  (I.R.S. Employer
Identification No.)

One Valmont Plaza,
Omaha, Nebraska
(Address of Principal Executive Offices)

 

68154-5215
(Zip Code)

(402) 963-1000

(Registrant's telephone number, including area code)

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



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

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

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

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

26,547,150
Outstanding shares of common stock as of April 24, 2012


Table of Contents

VALMONT INDUSTRIES, INC.

INDEX TO FORM 10-Q

Page No.  

PART I. FINANCIAL INFORMATION

 

Item 1.

 

Financial Statements:

     

 

Condensed Consolidated Statements of Earnings for the thirteen weeks ended March 31, 2012 and March 26, 2011

    3  

 

Condensed Consolidated Statements of Comprehensive Income for the thirteen weeks ended March 31, 2012 and March 26, 2011

    4  

 

Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011

    5  

 

Condensed Consolidated Statements of Cash Flows for the thirteen weeks ended March 31, 2012 and March 26, 2011

    6  

 

Condensed Consolidated Statements of Shareholders' Equity for the thirteen weeks ended March 31, 2012 and March 26, 2011

    7  

 

Notes to Condensed Consolidated Financial Statements

    8  

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operation

    23  

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

    31  

Item 4.

 

Controls and Procedures

    31  

PART II. OTHER INFORMATION

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

    32  

Item 5.

 

Other Information

    32  

Item 6.

 

Exhibits

    33  

Signatures

    34  

2


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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(Unaudited)

 
  Thirteen Weeks Ended  
 
  March 31,
2012
  March 26,
2011
 

Product sales

  $ 641,987   $ 501,168  

Services sales

    75,363     66,781  
           

Net sales

    717,350     567,949  

Product cost of sales

    482,708     385,000  

Services cost of sales

    48,328     46,456  
           

Total cost of sales

    531,036     431,456  
           

Gross profit

    186,314     136,493  

Selling, general and administrative expenses

    103,496     91,192  
           

Operating income

    82,818     45,301  
           

Other income (expenses):

             

Interest expense

    (7,807 )   (8,271 )

Interest income

    2,078     1,787  

Other

    1,577     390  
           

    (4,152 )   (6,094 )
           

Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries

    78,666     39,207  
           

Income tax expense:

             

Current

    27,029     12,504  

Deferred

    737     784  
           

    27,766     13,288  
           

Earnings before equity in earnings of nonconsolidated subsidiaries

    50,900     25,919  

Equity in earnings of nonconsolidated subsidiaries

    1,688     954  
           

Net earnings

    52,588     26,873  

Less: Earnings attributable to noncontrolling interests

    (263 )   (1,264 )
           

Net earnings attributable to Valmont Industries, Inc. 

  $ 52,325   $ 25,609  
           

Earnings per share:

             

Basic

  $ 1.98   $ 0.98  

Diluted

  $ 1.96   $ 0.97  
           

Cash dividends declared per share

  $ 0.180   $ 0.165  
           

Weighted average number of shares of common stock outstanding—Basic (000 omitted)

    26,396     26,271  
           

Weighted average number of shares of common stock outstanding—Diluted (000 omitted)

    26,678     26,537  
           

   

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)

 
  Thirteen Weeks Ended  
 
  March 31,
2012
  March 26,
2011
 

Net earnings

  $ 52,588   $ 26,873  
           

Other comprehensive income, net of tax:

             

Foreign currency translation adjustments:

             

Unrealized translation gains

    29,562     22,071  

Actuarial gain in defined benefit pension plan

    1,871     1,411  

Amortization of loss on cash flow hedge

    100      
           

Other comprehensive income

    31,533     23,482  
           

Comprehensive income

    84,121     50,355  

Comprehensive income attributable to noncontrolling interests

    (5,014 )   (3,242 )
           

Comprehensive income attributable to Valmont Industries, Inc. 

  $ 79,107   $ 47,113  
           

   

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except shares and per share amounts)

(Unaudited)

 
  March 31,
2012
  December 31,
2011
 

ASSETS

             

Current assets:

             

Cash and cash equivalents

  $ 339,568   $ 362,894  

Receivables, net

    450,280     426,683  

Inventories

    440,600     393,782  

Prepaid expenses

    27,881     25,765  

Refundable and deferred income taxes

    42,263     43,819  
           

Total current assets

    1,300,592     1,252,943  
           

Property, plant and equipment, at cost

    945,457     911,642  

Less accumulated depreciation and amortization

    476,125     456,765  
           

Net property, plant and equipment

    469,332     454,877  
           

Goodwill

    320,617     314,662  

Other intangible assets

    168,259     168,083  

Other assets

    124,169     115,511  
           

Total assets

  $ 2,382,969   $ 2,306,076  
           

LIABILITIES AND SHAREHOLDERS' EQUITY

             

Current liabilities:

             

Current installments of long-term debt

  $ 264   $ 235  

Notes payable to banks

    12,293     11,403  

Accounts payable

    235,743     234,537  

Accrued employee compensation and benefits

    68,907     83,613  

Accrued expenses

    82,479     73,515  

Dividends payable

    4,778     4,767  
           

Total current liabilities

    404,464     408,070  
           

Deferred income taxes

    86,798     85,497  

Long-term debt, excluding current installments

    474,015     474,415  

Defined benefit pension liability

    60,577     68,024  

Deferred compensation

    33,348     30,741  

Other noncurrent liabilities

    42,764     41,418  

Shareholders' equity:

             

Preferred stock of $1 par value—

             

Authorized 500,000 shares; none issued

         

Common stock of $1 par value—

             

Authorized 75,000,000 shares; 27,900,000 issued

    27,900     27,900  

Retained earnings

    1,130,655     1,079,698  

Accumulated other comprehensive income

    90,834     64,052  

Treasury stock

    (23,918 )   (24,688 )
           

Total Valmont Industries, Inc. shareholders' equity

    1,225,471     1,146,962  
           

Noncontrolling interest in consolidated subsidiaries

    55,532     50,949  
           

Total shareholders' equity

    1,281,003     1,197,911  
           

Total liabilities and shareholders' equity

  $ 2,382,969   $ 2,306,076  
           

   

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

 
  Thirteen Weeks Ended  
 
  March 31,
2012
  March 26,
2011
 

Cash flows from operating activities:

             

Net earnings

  $ 52,588   $ 26,873  

Adjustments to reconcile net earnings to net cash flows from operations:

             

Depreciation and amortization

    17,340     17,165  

Stock-based compensation

    1,563     1,312  

Defined benefit pension plan expense

    1,021     1,497  

Contribution to defined benefit pension plan

    (10,750 )    

Loss (gain) on sale of property, plant and equipment

    (1 )   67  

Equity in earnings in nonconsolidated subsidiaries

    (1,688 )   (954 )

Deferred income taxes

    737     784  

Changes in assets and liabilities:

             

Receivables

    (22,702 )   (9,850 )

Inventories

    (41,032 )   (40,044 )

Prepaid expenses

    (1,052 )   (4,746 )

Accounts payable

    (5,445 )   22,952  

Accrued expenses

    (7,417 )   (11,451 )

Other noncurrent liabilities

    318     (1,490 )

Income taxes payable

    3,648     3,572  
           

Net cash flows from operating activities

    (12,872 )   5,687  
           

Cash flows from investing activities:

             

Purchase of property, plant and equipment

    (20,134 )   (12,609 )

Proceeds from sale of assets

    45     99  

Other, net

    2,673     999  
           

Net cash flows from investing activities

    (17,416 )   (11,511 )
           

Cash flows from financing activities:

             

Net borrowings under short-term agreements

    725     816  

Proceeds from long-term borrowings

    3,000     23,000  

Principal payments on long-term borrowings

    (3,035 )   (7,040 )

Dividends paid

    (4,767 )   (4,358 )

Dividends to noncontrolling interest

    (431 )    

Proceeds from exercises under stock plans

    8,230     15,993  

Excess tax benefits from stock option exercises

    2,134     2,659  

Purchase of treasury shares

        (4,802 )

Purchase of common treasury shares—stock plan exercises

    (7,747 )   (18,153 )
           

Net cash flows from financing activities

    (1,891 )   8,115  
           

Effect of exchange rate changes on cash and cash equivalents

    8,853     9,076  
           

Net change in cash and cash equivalents

    (23,326 )   11,367  

Cash and cash equivalents—beginning of year

    362,894     346,904  
           

Cash and cash equivalents—end of period

  $ 339,568   $ 358,271  
           

   

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Dollars in thousands)

(Unaudited)

 
  Common
stock
  Additional
paid-in
capital
  Retained
earnings
  Accumulated
other
comprehensive
income
(loss)
  Treasury
stock
  Noncontrolling
interest in
consolidated
subsidiaries
  Total
shareholders'
equity
 

Balance at December 25, 2010

  $ 27,900   $   $ 850,269   $ 63,645   $ (25,922 ) $ 94,235   $ 1,010,127  

Net earnings

            25,609             1,264     26,873  

Other comprehensive income

                21,504         1,978     23,482  

Cash dividends declared

            (4,358 )               (4,358 )

Purchase of 53,847 treasury shares

                    (4,802 )       (4,802 )

Stock plan exercises; 165,735 shares acquired

                    (18,153 )       (18,153 )

Stock options exercised; 253,133 shares issued

        (3,971 )   (3,124 )       23,088         15,993  

Tax benefit from stock option exercises

        2,659                       2,659  

Stock option expense

        1,252                       1,252  

Stock awards; 2,992 shares issued

        60             324         384  
                               

Balance at March 26, 2011

  $ 27,900   $   $ 868,396   $ 85,149   $ (25,465 ) $ 97,477   $ 1,053,457  
                               

Balance at December 31, 2011

  $ 27,900   $   $ 1,079,698   $ 64,052   $ (24,688 ) $ 50,949   $ 1,197,911  

Net earnings

            52,325             263     52,588  

Other comprehensive income

                26,782         4,751     31,533  

Cash dividends declared

            (4,778 )               (4,778 )

Dividends to noncontrolling interests

                        (431 )   (431 )

Stock plan exercises; 69,376 shares acquired

                    (7,747 )       (7,747 )

Stock options exercised; 133,510 shares issued

        (3,605 )   3,410         8,425         8,230  

Tax benefit from stock option exercises

        2,134                     2,134  

Stock option expense

        1,245                     1,245  

Stock awards; 402 shares issued

        226             92         318  
                               

Balance at March 31, 2012

  $ 27,900   $   $ 1,130,655   $ 90,834   $ (23,918 ) $ 55,532   $ 1,281,003  
                               

   

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies

    Condensed Consolidated Financial Statements

        The Condensed Consolidated Balance Sheet as of March 31, 2012, the Condensed Consolidated Statements of Earnings, Comprehensive Income, Cash Flows and Shareholders' Equity for the thirteen week periods ended March 31, 2012 and March 26, 2011 have been prepared by 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 31, 2012 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 31, 2011. The accounting policies and methods of computation followed in these interim financial statements are the same as those followed in the financial statements for the year ended December 31, 2011. The results of operations for the period ended March 31, 2012 are not necessarily indicative of the operating results for the full year.

    Inventories

        Approximately 37% and 40% of inventory is valued at the lower of cost, determined on the last-in, first-out (LIFO) method, or market as of March 31, 2012 and December 31, 2011, respectively. All other 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. The excess of replacement cost of inventories over the LIFO value is approximately $52,062 and $49,536 at March 31, 2012 and December 31, 2011, respectively.

        Inventories consisted of the following:

 
  March 31,
2012
  December 31,
2011
 

Raw materials and purchased parts

  $ 216,182   $ 202,953  

Work-in-process

    30,342     28,053  

Finished goods and manufactured goods

    246,138     212,312  
           

Subtotal

    492,662     443,318  

Less: LIFO reserve

    52,062     49,536  
           

  $ 440,600   $ 393,782  
           

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

    Income Taxes

        Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries for the thirteen week periods ended March 31, 2012 and March 26, 2011, were as follows:

 
  2012   2011  

United States

  $ 62,695   $ 26,117  

Foreign

    15,971     13,090  
           

  $ 78,666   $ 39,207  
           

    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, non-vested stock awards and bonuses of common stock. At March 31, 2012, 861,939 shares of common stock remained available for issuance under the plans. Shares and options issued and available are subject to changes in capitalization.

        Under the plans, the exercise price of each option equals the market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three to six years or on the fifth anniversary of the grant.

        Expiration of grants is from six to ten years from the date of grant. The Company's compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options for the thirteen week periods ended March 31, 2012 and March 26, 2011, were as follows:

 
  2012   2011  

Compensation expense

  $ 1,245   $ 1,252  

Income tax benefits

    479     482  

    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 refers broadly to the assumptions that market participants would use in pricing the asset or liability, including

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

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 represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification 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. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.

 
   
  Fair Value Measurement Using:  
 
  Carrying Value
March 31,
2012
  Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 

Assets:

                         

Trading Securities

  $ 21,491   $ 21,491   $   $  

 

 
   
  Fair Value Measurement Using:  
 
  Carrying Value
December 31,
2011
  Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
  Significant Other
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 

Assets:

                         

Trading Securities

  $ 19,152   $ 19,152   $   $  

    Comprehensive Income

        Comprehensive income includes net income, 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

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

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 31, 2012 and December 31, 2011:

 
  March 31,
2012
  December 31,
2011
 

Foreign currency translation adjustment

  $ 40,881   $ 16,070  

Actuarial gain in defined benefit pension plan

    53,188     51,317  

Loss on cash flow hedge

    (3,235 )   (3,335 )
           

  $ 90,834   $ 64,052  
           

2. Goodwill and Intangible Assets

    Amortized Intangible Assets

        The components of amortized intangible assets at March 31, 2012 and December 31, 2011 were as follows:

 
  March 31, 2012    
 
  Gross
Carrying
Amount
  Accumulated
Amortization
  Weighted
Average
Life

Customer Relationships

  $ 158,255   $ 53,668   13 years

Proprietary Software & Database

    3,130     2,739   6 years

Patents & Proprietary Technology

    9,707     4,323   8 years

Non-compete Agreements

    1,826     1,377   6 years
             

  $ 172,918   $ 62,107    
             

 

 
  December 31, 2011    
 
  Gross
Carrying
Amount
  Accumulated
Amortization
  Weighted
Average
Life

Customer Relationships

  $ 155,629   $ 50,107   13 years

Proprietary Software & Database

    3,116     2,711   6 years

Patents & Proprietary Technology

    9,489     3,863   8 years

Non-compete Agreements

    1,812     1,307   6 years
             

  $ 170,046   $ 57,988    
             

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

2. Goodwill and Intangible Assets (Continued)

        Amortization expense for intangible assets for the thirteen week periods ended March 31, 2012 and March 26, 2011 was $3,545 and $3,532, respectively. Estimated annual amortization expense related to finite-lived intangible assets is as follows:

 
  Estimated
Amortization
Expense
 

2012

  $ 14,243  

2013

    13,383  

2014

    12,957  

2015

    12,060  

2016

    11,479  

        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. The carrying values of trade names at and were as follows:

 
  March 31,
2012
  December 31,
2011
  Year
Acquired
 

Webforge

  $ 17,266   $ 16,659     2010  

Newmark

    11,111     11,111     2004  

Ingal EPS/Ingal Civil Products

    9,113     8,792     2010  

Donhad

    6,875     6,633     2010  

PiRod

    1,750     1,750     2001  

Industrial Galvanizers

    3,997     3,856     2010  

Other

    7,336     7,224        
                 

  $ 57,448   $ 56,025        
                 

        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 in the third quarter of 2011. The values of the trade names were determined using the relief-from-royalty method. The Company determined that the value of its trade names were not impaired, except for the PiRod and Industrial Galvanizers of

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

2. Goodwill and Intangible Assets (Continued)

America trade names. The evaluations of these trade names were completed in the fourth quarter of 2011, which resulted in a write down of $3,779.

    Goodwill

        The carrying amount of goodwill by segment as of March 31, 2012 and December 31, 2011 was as follows:

 
  Engineered
Infrastructure
Products
Segment
  Utility
Support
Structures
Segment
  Coatings
Segment
  Irrigation
Segment
  Other   Total  

Balance December 31, 2011

  $ 151,558   $ 77,141   $ 64,820   $ 2,576   $ 18,567   $ 314,662  

Foreign currency translation

    5,204         51     23     677     5,955  
                           

Balance March 31, 2012

  $ 156,762   $ 77,141   $ 64,871   $ 2,599   $ 19,244   $ 320,617  
                           

        The Company's goodwill was tested for impairment during the third quarter of 2011. As a result of that testing, the Company determined that it's goodwill was not impaired. The valuation of reporting units exceeded their respective carrying values by a substantial margin, except the Webforge reporting unit in the Engineered Infrastructures Products segment, which has goodwill of $64,500 and an excess of fair value over carrying value of $3.1 million. The Company continues to monitor changes in the global economy that could impact future operating results of its reporting units. If such conditions arise, the Company will test a given reporting unit for impairment prior to the annual test.

3. 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 week periods ended March 31, 2012 and March 26, 2011 were as follows:

 
  2012   2011  

Interest

  $ 367   $ 366  

Income taxes

    21,246     5,296  

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

4. Earnings Per Share

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

 
  Basic
EPS
  Dilutive
Effect of
Stock
Options
  Diluted
EPS
 

Thirteen weeks ended March 31, 2012:

                   

Net earnings attributable to Valmont Industries, Inc. 

  $ 52,325   $   $ 52,325  

Shares outstanding

    26,396     282     26,678  

Per share amount

  $ 1.98   $ (0.02 ) $ 1.96  

Thirteen weeks ended March 26, 2011:

                   

Net earnings attributable to Valmont Industries, Inc. 

  $ 25,609   $   $ 25,609  

Shares outstanding

    26,271     266     26,537  

Per share amount

  $ 0.98   $ (0.01 ) $ 0.97  

        At March 31, 2012, there were no outstanding stock options with exercise prices exceeding the market price of common stock. At March 26, 2011 there were 8,962 of outstanding stock options with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted earnings per share for the thirteen weeks ended March 26, 2011.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

5. Business Segments

        The Company aggregates its operating segments into four reportable segments. Aggregation is based on similarity of operating segments as to economic characteristics, products, production processes, types or classes of customer and the methods of distribution. Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts and sales dollars.

        Reportable segments are as follows:

        ENGINEERED INFRASTRUCTURE PRODUCTS:    This segment consists of the manufacture of engineered metal structures and components for the global lighting and traffic, wireless communication, roadway safety and access systems applications;

        UTILITY SUPPORT STRUCTURES:    This segment consists of the manufacture of engineered steel and concrete structures for the global utility industry;

        COATINGS:    This segment consists of galvanizing, anodizing and powder coating services on a global basis; and

        IRRIGATION:    This segment consists of the manufacture of agricultural irrigation equipment and related parts and services for the global agricultural industry.

        In addition to these four reportable segments, the Company has other businesses and activities that individually are not more than 10% of consolidated sales. These include the manufacture of forged steel grinding media for the mining industry, tubular products for industrial customers, the electrolytic manganese dioxide for disposable batteries and the distribution of industrial fasteners and are reported in the "Other" category.

        The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance of its business segments based upon operating income and invested capital. The Company does not allocate interest expense, non-operating income and deductions, or income taxes to its business segments.

Summary by Business Segment

 
  Thirteen Weeks Ended  
 
  March 31,
2012
  March 26,
2011
 

Sales:

             

Engineered Infrastructure Products segment:

             

Lighting, Traffic, and Roadway Products

  $ 133,297   $ 117,311  

Communication Products

    26,695     20,423  

Access Systems

    37,907     31,196  
           

Engineered Infrastructure Products segment

    197,899     168,930  

Utility Support Structures segment:

             

Steel

    166,964     109,898  

Concrete

    24,268     15,749  
           

Utility Support Structures segment

    191,232     125,647  

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

5. Business Segments (Continued)

 
  Thirteen Weeks Ended  
 
  March 31,
2012
  March 26,
2011
 

Coatings segment

    82,847     73,450  

Irrigation segment

    196,266     151,048  

Other

    86,063     73,986  
           

Total

    754,307     593,061  

Intersegment Sales:

             

Engineered Infrastructure Products

    12,392     5,944  

Utility Support Structures

    1,980     308  

Coatings

    12,697     11,505  

Irrigation

    425     3  

Other

    9,463     7,352  
           

Total

    36,957     25,112  

Net Sales:

             

Engineered Infrastructure Products segment

    185,507     162,986  

Utility Support Structures segment

    189,252     125,339  

Coatings segment

    70,150     61,945  

Irrigation segment

    195,841     151,045  

Other

    76,600     66,634  
           

Total

  $ 717,350   $ 567,949  
           

Operating Income:

             

Engineered Infrastructure Products

  $ 8,024   $ 2,203  

Utility Support Structures

    25,104     13,499  

Coatings

    16,512     10,292  

Irrigation

    38,408     23,894  

Other

    11,411     8,914  

Corporate

    (16,641 )   (13,501 )
           

Total

  $ 82,818   $ 45,301  
           

6. Guarantor/Non-Guarantor Financial Information

        The Company has $450,000 principal amount of senior unsecured notes outstanding at a coupon interest rate of 6.625% per annum. The notes are guaranteed, jointly, severally, fully and unconditionally by certain of the Company's current and future direct and indirect domestic and foreign subsidiaries (collectively the "Guarantors"), excluding its other current domestic and foreign subsidiaries which do not guarantee the debt (collectively referred to as the "Non-Guarantors"). All Guarantors are 100% owned by the parent company.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Guarantor/Non-Guarantor Financial Information (Continued)

        Consolidated financial information for the Company ("Parent"), the Guarantor subsidiaries and the Non-Guarantor subsidiaries is as follows:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
For the Thirteen Weeks ended March 31, 2012

 
  Parent   Guarantors   Non-
Guarantors
  Eliminations   Total  

Net sales

  $ 364,840   $ 128,712   $ 293,942   $ (70,144 ) $ 717,350  

Cost of sales

    267,512     103,642     229,923     (70,041 )   531,036  
                       

Gross profit

    97,328     25,070     64,019     (103 )   186,314  

Selling, general and administrative expenses

    43,272     13,788     46,436         103,496  
                       

Operating income

    54,056     11,282     17,583     (103 )   82,818  
                       

Other income (expense):

                               

Interest expense

    (7,682 )   (12,257 )   (125 )   12,257     (7,807 )

Interest income

    9     194     14,132     (12,257 )   2,078  

Other

    1,459     14     104         1,577  
                       

    (6,214 )   (12,049 )   14,111         (4,152 )
                       

Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries

    47,842     (767 )   31,694     (103 )   78,666  
                       

Income tax expense (benefit):

                               

Current

    17,185     (901 )   10,745         27,029  

Deferred

    194     1,170     (627 )       737  
                       

    17,379     269     10,118         27,766  
                       

Earnings before equity in earnings of nonconsolidated subsidiaries

    30,463     (1,036 )   21,576     (103 )   50,900  

Equity in earnings of nonconsolidated subsidiaries

    21,862     23,108     1,656     (44,938 )   1,688  
                       

Net earnings

    52,325     22,072     23,232     (45,041 )   52,588  

Other comprehensive income

    26,782     (16,367 )   47,800     (26,682 )   31,533  
                       

Comprehensive income

    79,107     5,705     71,032     (71,723 )   84,121  

Less: Comprehensive income attributable to noncontrolling interests

            (5,014 )       (5,014 )
                       

Comprehensive income attributable to Valmont Industries, Inc

  $ 79,107   $ 5,705   $ 66,018   $ (71,723 ) $ 79,107  
                       

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
For the Thirteen Weeks Ended March 26, 2011

 
  Parent   Guarantors   Non-Guarantors   Eliminations   Total  

Net sales

  $ 262,646   $ 73,841   $ 270,069   $ (38,607 ) $ 567,949  

Cost of sales

    198,303     58,306     213,385     (38,538 )   431,456  
                       

Gross profit

    64,343     15,535     56,684     (69 )   136,493  

Selling, general and administrative expenses

    37,109     10,751     43,332         91,192  
                       

Operating income

    27,234     4,784     13,352     (69 )   45,301  
                       

Other income (expense):

                               

Interest expense

    (8,189 )       (82 )       (8,271 )

Interest income

    5         1,782         1,787  

Other

    371     11     8         390  
                       

    (7,813 )   11     1,708         (6,094 )
                       

Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries

    19,421     4,795     15,060     (69 )   39,207  
                       

Income tax expense (benefit):

                               

Current

    6,489     2,104     3,911         12,504  

Deferred

    60     (261 )   985         784  
                       

    6,549     1,843     4,896         13,288  
                       

Earnings before equity in earnings of nonconsolidated subsidiaries

    12,872     2,952     10,164     (69 )   25,919  

Equity in earnings of nonconsolidated subsidiaries

    12,737     6,367     886     (19,036 )   954  
                       

Net earnings

    25,609     9,319     11,050     (19,105 )   26,873  

Other comprehensive income

    21,504         23,482     (21,504 )   23,482  
                       

Comprehensive income

    47,113     9,319     34,532     (40,609 )   50,355  

Less: Comprehensive income attributable to noncontrolling interests

            (3,242 )       (3,242 )
                       

Comprehensive income attributable to Valmont Industries, Inc. 

  $ 47,113   $ 9,319   $ 31,290   $ (40,609 ) $ 47,113  
                       

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2012

 
  Parent   Guarantors   Non-Guarantors   Eliminations   Total  

ASSETS

                               

Current assets:

                               

Cash and cash equivalents

  $ 24,482   $ 16,405   $ 298,681   $   $ 339,568  

Receivables, net

    139,551     59,989     250,740         450,280  

Inventories

    128,643     83,101     228,856         440,600  

Prepaid expenses

    1,966     945     24,970         27,881  

Refundable and deferred income taxes

    20,889     5,051     16,323         42,263  
                       

Total current assets

    315,531     165,491     819,570         1,300,592  
                       

Property, plant and equipment, at cost

    435,785     110,066     399,606         945,457  

Less accumulated depreciation and amortization

    287,559     56,418     132,148         476,125  
                       

Net property, plant and equipment

    148,226     53,648     267,458         469,332  
                       

Goodwill

    20,108     107,542     192,967         320,617  

Other intangible assets

    620     57,921     109,718         168,259  

Investment in subsidiaries and intercompany accounts

    1,401,488     1,256,907     612,826     (3,271,221 )    

Other assets

    32,349         91,820         124,169  
                       

Total assets

  $ 1,918,322   $ 1,641,509   $ 2,094,359   $ (3,271,221 ) $ 2,382,969  
                       

LIABILITIES AND SHAREHOLDERS' EQUITY

                               

Current liabilities:

                               

Current installments of long-term debt

  $ 187   $   $ 77   $   $ 264  

Notes payable to banks

            12,293         12,293  

Accounts payable

    87,990     21,299     126,454         235,743  

Accrued expenses

    73,720     8,996     68,670         151,386  

Dividends payable

    4,778                 4,778  
                       

Total current liabilities

    166,675     30,295     207,494         404,464  
                       

Deferred income taxes

    20,922     27,664     38,212         86,798  

Long-term debt, excluding current installments

    473,077     600,309     938     (600,309 )   474,015  

Other noncurrent liabilities

    32,177         104,512         136,689  

Commitments and contingencies

                               

Shareholders' equity:

                               

Common stock of $1 par value

    27,900     457,950     254,982     (712,932 )   27,900  

Additional paid-in capital

        150,286     893,884     (1,044,170 )    

Retained earnings

    1,130,655     392,330     430,646     (822,976 )   1,130,655  

Accumulated other comprehensive income

    90,834     (17,325 )   108,159     (90,834 )   90,834  

Treasury stock

    (23,918 )               (23,918 )
                       

Total Valmont Industries, Inc. shareholders' equity

    1,225,471     983,241     1,687,671     (2,670,912 )   1,225,471  
                       

Noncontrolling interest in consolidated subsidiaries

            55,532         55,532  
                       

Total shareholders' equity

    1,225,471     983,241     1,743,203     (2,670,912 )   1,281,003  
                       

Total liabilities and shareholders' equity

  $ 1,918,322   $ 1,641,509   $ 2,094,359   $ (3,271,221 ) $ 2,382,969  
                       

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2011

 
  Parent   Guarantors   Non-Guarantors   Eliminations   Total  

ASSETS

                               

Current assets:

                               

Cash and cash equivalents

  $ 27,545   $ 18,257   $ 317,092   $   $ 362,894  

Receivables, net

    122,409     53,567     250,707         426,683  

Inventories

    125,862     77,838     190,082         393,782  

Prepaid expenses

    3,448     1,009     21,308         25,765  

Refundable and deferred income taxes

    22,053     6,218     15,548         43,819  
                       

Total current assets

    301,317     156,889     794,737         1,252,943  
                       

Property, plant and equipment, at cost

    427,398     107,315     376,929         911,642  

Less accumulated depreciation and amortization

    283,786     54,740     118,239         456,765  
                       

Net property, plant and equipment

    143,612     52,575     258,690         454,877  
                       

Goodwill

    20,108     107,542     187,012         314,662  

Other intangible assets

    661     59,389     108,033         168,083  

Investment in subsidiaries and intercompany accounts

    1,338,299     695,745     596,301     (2,630,345 )    

Other assets

    30,192         85,319         115,511  
                       

Total assets

  $ 1,834,189   $ 1,072,140   $ 2,030,092   $ (2,630,345 ) $ 2,306,076  
                       

LIABILITIES AND SHAREHOLDERS' EQUITY

                               

Current liabilities:

                               

Current installments of long-term debt

  $ 187   $   $ 48   $   $ 235  

Notes payable to banks

            11,403         11,403  

Accounts payable

    85,974     21,428     127,135         234,537  

Accrued expenses

    72,341     14,259     70,528         157,128  

Dividends payable

    4,767                 4,767  
                       

Total current liabilities

    163,269     35,687     209,114         408,070  
                       

Deferred income taxes

    21,891     27,661     35,945         85,497  

Long-term debt, excluding current installments

    473,419         996         474,415  

Other noncurrent liabilities

    28,648         111,535         140,183  

Commitments and contingencies

                               

Shareholders' equity:

                               

Common stock of $1 par value

    27,900     457,950     254,982     (712,932 )   27,900  

Additional paid-in capital

        181,542     893,884     (1,075,426 )    

Retained earnings

    1,079,698     370,258     407,677     (777,935 )   1,079,698  

Accumulated other comprehensive income

    64,052     (958 )   65,010     (64,052 )   64,052  

Treasury stock

    (24,688 )               (24,688 )
                       

Total Valmont Industries, Inc. shareholders' equity

    1,146,962     1,008,792     1,621,553     (2,630,345 )   1,146,962  
                       

Noncontrolling interest in consolidated subsidiaries

            50,949         50,949  
                       

Total shareholders' equity

    1,146,962     1,008,792     1,672,502     (2,630,345 )   1,197,911  
                       

Total liabilities and shareholders' equity

  $ 1,834,189   $ 1,072,140   $ 2,030,092   $ (2,630,345 ) $ 2,306,076  
                       

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirteen Weeks Ended March 31, 2012

 
  Parent   Guarantors   Non-Guarantors   Eliminations   Total  

Cash flows from operating activities:

                               

Net earnings

  $ 52,325   $ 22,072   $ 23,232   $ (45,041 ) $ 52,588  

Adjustments to reconcile net earnings to net cash flows from operations:

                               

Depreciation and amortization

    4,595     3,171     9,574         17,340  

Stock-based compensation

    1,563                 1,563  

Defined benefit pension plan expense

            1,021         1,021  

Contribution to defined benefit pension plan

            (10,750 )       (10,750 )

Loss (gain) on sale of property, plant and equipment

    (9 )   7     1         (1 )

Equity in earnings of nonconsolidated subsidiaries

    (32 )       (1,656 )       (1,688 )

Deferred income taxes

    194     1,170     (627 )       737  

Changes in assets and liabilities:

                               

Receivables

    (17,142 )   (6,418 )   858         (22,702 )

Inventories

    (2,780 )   (5,263 )   (32,167 )   (822 )   (41,032 )

Prepaid expenses

    1,482     64     (2,598 )       (1,052 )

Accounts payable

    (1,667 )   (129 )   (3,649 )       (5,445 )

Accrued expenses

    1,379     (5,264 )   (3,532 )       (7,417 )

Other noncurrent liabilities

    1,190         (872 )       318  

Income taxes payable (refundable)

    3,684     10     (46 )         3,648  
                       

Net cash flows from operating activities

    44,782     9,420     (21,211 )   (45,863 )   (12,872 )
                       

Cash flows from investing activities:

                               

Purchase of property, plant and equipment

    (9,189 )   (2,784 )   (8,161 )       (20,134 )

Proceeds from sale of assets

    11     1     33         45  

Other, net

    (36,517 )   (8,934 )   2,261     45,863     2,673  
                       

Net cash flows from investing activities

    (45,695 )   (11,717 )   (5,867 )   45,863     (17,416 )
                       

Cash flows from financing activities:

                               

Net borrowings under short-term agreements

            725         725  

Proceeds from long-term borrowings

    3,000                 3,000  

Principal payments on long-term borrowings

    (3,000 )       (35 )       (3,035 )

Dividends paid

    (4,767 )               (4,767 )

Dividends to noncontrolling interest

            (431 )       (431 )

Proceeds from exercises under stock plans

    8,230                 8,230  

Excess tax benefits from stock option exercises

    2,134                 2,134  

Purchase of common treasury shares—stock plan exercises:

    (7,747 )               (7,747 )
                       

Net cash flows from financing activities

    (2,150 )       259         (1,891 )
                       

Effect of exchange rate changes on cash and cash equivalents

        445     8,408         8,853  
                       

Net change in cash and cash equivalents

    (3,063 )   (1,852 )   (18,411 )       (23,326 )

Cash and cash equivalents—beginning of year

    27,545     18,257     317,092         362,894  
                       

Cash and cash equivalents—end of period

  $ 24,482   $ 16,405   $ 298,681   $   $ 339,568  
                       

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirteen Weeks Ended March 26, 2011

 
  Parent   Guarantors   Non-Guarantors   Eliminations   Total  

Cash flows from operations:

                               

Net earnings

  $ 25,609   $ 9,319   $ 11,050   $ (19,105 ) $ 26,873  

Adjustments to reconcile net earnings to net cash flows from operations:

                               

Depreciation and amortization

    5,002     3,130     9,033         17,165  

Stock-based compensation

    1,312                 1,312  

Defined benefit pension plan expense

            1,497         1,497  

Loss (gain) on sale of property, plant and equipment

    (13 )   (13 )   93         67  

Equity in earnings of nonconsolidated subsidiaries

    (67 )       (887 )       (954 )

Deferred income taxes

    60     (261 )   985         784  

Changes in assets and liabilities:

                               

Receivables

    (23,752 )   13,939     (37 )       (9,850 )

Inventories

    (19,368 )   (5,276 )   (15,400 )       (40,044 )

Prepaid expenses

    (602 )   (89 )   (4,055 )       (4,746 )

Accounts payable

    11,238     216     11,498         22,952  

Accrued expenses

    4,418     229     (16,098 )       (11,451 )

Other noncurrent liabilities

    (1,063 )       (427 )       (1,490 )

Income taxes payable (refundable)

    15,143         (11,571 )         3,572  
                       

Net cash flows from operations

    17,917     21,194     (14,319 )   (19,105 )   5,687  
                       

Cash flows from investing activities:

                               

Purchase of property, plant and equipment

    (2,024 )   (4,133 )   (6,452 )       (12,609 )

Proceeds from sale of assets

    14     13     72         99  

Other, net

    (15,881 )   (16,512 )   14,287     19,105     999  
                       

Net cash flows from investing activities

    (17,891 )   (20,632 )   7,907     19,105     (11,511 )
                       

Cash flows from financing activities:

                               

Net borrowings under short-term agreements

            816         816  

Proceeds from long-term borrowings

    23,000                 23,000  

Principal payments on long-term borrowings

    (7,000 )       (40 )       (7,040 )

Dividends paid

    (4,358 )               (4,358 )

Proceeds from exercises under stock plans

    15,993                 15,993  

Excess tax benefits from stock option exercises

    2,659                 2,659  

Purchase of treasury shares

    (4,802 )               (4,802 )

Purchase of common treasury shares—stock plan exercises

    (18,153 )               (18,153 )
                       

Net cash flows from financing activities

    7,339         776         8,115  
                       

Effect of exchange rate changes on cash and cash equivalents

            9,076         9,076  
                       

Net change in cash and cash equivalents

    7,365     562     3,440         11,367  

Cash and cash equivalents—beginning of year

    8,015     619     338,270         346,904  
                       

Cash and cash equivalents—end of period

  $ 15,380   $ 1,181   $ 341,710   $   $ 358,271  
                       

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION

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

        Management's discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which the Company operates, as well as management's perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions. Many factors could affect the Company's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include, among other things, risk factors described from time to time in the Company's reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments.

        This discussion should be read in conjunction with the financial statements and notes thereto, and the management's discussion and analysis included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

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Results of Operations

        Dollars in millions, except per share amounts

 
  Thirteen Weeks Ended  
 
  March 31,
2012
  March 26,
2011
  % Incr.
(Decr.)
 

Consolidated

                   

Net sales

  $ 717.4   $ 567.9     26.3 %

Gross profit

    186.3     136.5     36.5 %

as a percent of sales

    26.0 %   24.0 %      

SG&A expense

    103.5     91.2     13.5 %

as a percent of sales

    14.4 %   16.1 %      

Operating income

    82.8     45.3     82.8 %

as a percent of sales

    11.5 %   8.0 %      

Net interest expense

    (5.7 )   (6.5 )   (12.3 )%

Effective tax rate

    35.3 %   33.9 %      

Net earnings

  $ 52.3   $ 25.6     104.3 %

Diluted earnings per share

  $ 1.96   $ 0.97     102.1 %

Engineered Infrastructure Products Segment

                   

Net sales

  $ 185.5   $ 163.0     13.8 %

Gross profit

    45.6     36.2     26.0 %

SG&A expense

    37.6     34.0     10.6 %

Operating income

    8.0     2.2     263.6 %

Utility Support Structures Segment

                   

Net sales

  $ 189.3   $ 125.3     51.1 %

Gross profit

    43.3     29.3     47.8 %

SG&A expense

    18.2     15.8     15.2 %

Operating income

    25.1     13.5     85.9 %

Coatings Segment

                   

Net sales

  $ 70.2   $ 62.0     13.2 %

Gross profit

    25.3     18.6     36.0 %

SG&A expense

    8.8     8.3     6.0 %

Operating income

    16.5     10.3     60.2 %

Irrigation Segment

                   

Net sales

  $ 195.8   $ 151.0     29.7 %

Gross profit

    56.0     38.4     45.8 %

SG&A expense

    17.6     14.5     21.4 %

Operating income

    38.4     23.9     60.7 %

Other

                   

Net sales

  $ 76.6   $ 66.6     15.0 %

Gross profit

    16.3     13.9     17.3 %

SG&A expense

    4.9     5.0     (2.0 )%

Operating income

    11.4     8.9     28.1 %

Net corporate expense

                   

Gross profit

    (0.2 )   0.1     (300.0 )%

SG&A expense

    16.4     13.6     20.6 %

Operating loss

    (16.6 )   (13.5 )   23.0 %

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Overview

        On a consolidated basis, the increase in net sales in fiscal 2012, as compared with 2011, reflected improved sales in all reportable segments. For the company as a whole, the increase in net sales in 2012, as compared with 2011, was due to the following factors:

    Unit sales volumes increased approximately $140 million. All reportable segments experienced improved net sales in fiscal 2012, as compared with 2011. The most significant sales increases were in the Irrigation and Utility Support Structures segments.

    Sales prices overall were up modestly in fiscal 2012, as compared with 2011. In the aggregate, the sales increase in 2012, as compared with 2011, due to price increases and sales mix changes was approximately $9 million.

        Foreign currency translation, in the aggregate, did not have a significant effect on 2012 sales and operating profit, as compared with 2011.

        The increase in gross profit margin (gross profit as a percent of sales) in fiscal 2012, as compared with 2011, was primarily due to moderating raw material costs in 2012 as compared with 2011. In general, steel prices in the first quarter of 2012 were comparable with the same period in 2011. Average zinc costs were somewhat lower in 2012, as compared with 2011. In addition, LIFO expense in the first quarter of 2012 was $7.9 million lower than the same period in 2011, contributing to comparatively higher gross profit margin in 2012, as compared with 2011.

        Selling, general and administrative (SG&A) spending in fiscal 2012, as compared with 2011, increased mainly due to the following factors:

    Increased employee incentive accruals of $3.6 million, due to improved operating results;

    Increased compensation expenses of $3.5 million, associated with increased employment levels and salary increases;

    Deferred compensation expense of $1.2 million associated with the increase in deferred compensation plan liabilities. The corresponding increase in deferred compensation plan assets was recorded as a decrease in "Other" expense; and,

    Australia stamp duty expense of $1.2 million related to the legal restructuring that was completed in fiscal 2011. This expense was non-recurring in nature

        The increase in operating income on a reportable segment basis in 2012, as compared with 2011, was due to improved operating performance in all reportable segments. The "Other" category also reported improved operating profit in 2012, as the grinding media and tubing operations were improved over 2011.

        The decrease in net interest expense in fiscal 2012, as compared with 2011, was attributable to interest savings realized from the refinancing of our $150 million of senior subordinated debt in June 2011 and a slight increase in interest income from our invested cash balances. Average borrowing levels in 2012 were comparable with 2011.

        The decrease in "Other" expenses in fiscal 2012, as compared with 2011, was mainly due to increased investment gains in the assets held in our deferred compensation plan of $1.2 million. The increase in the value of these assets was offset by a corresponding increase in our deferred compensation liabilities, which was reflected as an increase in SG&A expense. Accordingly, there was no effect on net earnings from these investment gains.

        Our effective income tax rate in fiscal 2012 was higher than 2011, mainly due to a higher percentage of our total pre-tax earnings realized from U.S. operations. Income tax rates in the U.S. are

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higher than in other countries where we operate. As our share of earnings before income taxes from U.S. operations increases, the effective income tax rate normally increases as well.

        Earnings attributable to noncontrolling interests was lower in 2012, as compared with 2011, mainly due to our purchase of the noncontrolling interest in our grinding media operation in June 2011. This operation was previously 40% owned by noncontrolling interests. Earnings in non-consolidated subsidiaries improved in 2012, as compared with 2011, as our 49% owned manganese materials operation experienced improved profitability.

        The improvement in net earnings and earnings per share in 2012, as compared with 2011, were mainly attributed to the improved operating income.

        Our cash flows used by operations were approximately $12.9 million in 2012, as compared with $5.7 million provided by operations in 2011. The slight decrease in operating cash flow resulted from increased working capital associated with higher sales levels and the annual contribution to the Delta Pension Plan being made in the first quarter of 2012 of $10.8 million (the 2011 contribution was made in the second quarter), offset somewhat by higher net earnings in 2012, as compared with 2011.

    Engineered Infrastructure Products (EIP) segment

        The increase in net sales in fiscal 2012 as compared with 2011 was due to improved sales volumes of approximately $20 million and $3 million of favorable pricing and sales mix changes. Global lighting sales were higher is fiscal 2012, as compared with 2011, mainly due to improved sales in North America. While North American order rates for lighting and traffic structures were stable as compared with 2011, sales volumes in 2012 were positively affected by generally mild weather conditions throughout much of the U.S. The transportation market for lighting and traffic structures continues to be challenging, as the lack of long-term highway funding legislation and state budget challenges we believe are limiting roadway project activity. Sales in other market channels such as sales to lighting fixture manufacturers and commercial construction projects were stronger in 2012, as compared with 2011. In Europe, sales in fiscal 2012 were comparable with 2011, as stronger sales in France, Scandinavia and the U.K. were offset by a decrease of $5.5 million in sales from our Turkish and Italian operations that were discontinued late in 2011 and weaker sales volumes in northern Europe.

        Communication product line sales in fiscal 2012 were improved over 2011. North America sales were $7.0 million higher in 2012, as compared with 2011. The increase in sales was attributable to improved market conditions, mild weather conditions in 2012 and the resolution of the proposed AT&T/T-Mobile merger, which we believe slowed sales activity for structures and components in 2011. In China, sales of wireless communication structures in 2012 were comparable with 2011.

        Sales in the access systems product line in 2012 were improved as compared with 2011, as industrial production investments in the mining and energy economic sectors are increasing in the Asia Pacific region.

        Sales of highway safety products in 2012 were higher as compared with 2011. Floods in parts of Australia affected infrastructure spending in the first quarter of 2011, as public spending priorities shifted from roadway development to supporting recovery from the floods. The improvement in 2012 reflects a more normal demand pattern for this product line.

        Operating income for the segment in fiscal 2012 was higher than 2011. Improved operating income resulted from higher sales volumes and moderating raw material costs (including $1.1 million of lower LIFO expense). The increase in SG&A spending mainly was attributable to higher compensation costs of $1.4 million and increased employee incentives of $0.7 million.

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    Utility Support Structures (Utility) segment

        In the Utility segment, the sales increase in fiscal 2012, as compared with 2011, was due to improved unit sales volumes in the U.S., offset to a degree by an unfavorable sales mix in the U.S. (approximately $5 million) and slightly lower sales volumes in international markets. In U.S. markets, electrical utility companies are increasing their investment in the electrical grid, as evidenced by a very high order rate throughout 2011 and record backlogs at December 31, 2011. Sales pricing on new orders is slowly improving but continues to be very competitive. In international markets, the sales decrease was mainly due to lower sales through our European operations, offset to a degree by higher sales in the Asia Pacific region.

        Operating income in fiscal 2012, as compared with 2011, increased due to the substantial increase in North America sales volume and associated operational leverage. Gross profit margins were negatively affected by the unfavorable sales mix in North America and increased outsourcing of manufactured products in light of the strong sales demand. The increase in SG&A expense for the segment in fiscal 2012 was higher than in 2011, mainly due to increased employee compensation ($0.9 million) and incentives ($0.6 million) associated with the increase in business levels and operating income.

    Coatings segment

        Net sales in the Coatings segment increased in fiscal 2012, as compared with 2011, and improved sales unit volumes in North America and Asia Pacific. In North America, we experienced improved demand from customers in the agriculture and energy economic sectors. Asia Pacific volumes in 2011 were negatively affected by severe weather events in Australia that hampered its economy. Unit pricing effects on sales for the segment were modestly favorable in 2012, as compared with 2011.

        The increase in segment operating income in fiscal 2012, as compared with 2011, was mainly due to improved productivity and operating leverage through volume increases and lower zinc costs. The effect of lower zinc costs on operating income for the segment was approximately $2.4 million. SG&A expenses for the segment in fiscal 2012 were higher than the comparable periods in 2011, mainly due to employee incentives associated with improved operating income.

    Irrigation segment

        The increase in Irrigation segment net sales in fiscal 2012, as compared with 2011, was mainly due to improved sales volumes of approximately $38 million, favorable pricing and sales mix of approximately $8 million, offset by a modest unfavorable currency translation effect. The pricing and sales mix effect was generally due to sales price increases that took effect after the first quarter of 2011 to recover higher material costs in early 2011. In global markets, the sales growth was due to very strong agricultural economies around the world. Farm commodity prices continue to be favorable, with a positive outlook for net farm income in most markets around the world. We believe that farm commodity prices have been favorable due to strong demand, including consumption in the production of ethanol and other fuels, and traditionally low inventories of major farm commodities. In addition, weather conditions in North America in 2012 were generally favorable, further enhancing delivery schedules for irrigation machines and demand for related service parts. In international markets, the sales improvement in fiscal 2012, as compared with 2011, was realized in most markets, especially Europe.

        Operating income for the segment improved in 2012 over 2011, due to improved sales unit volumes in North America and the associated operational leverage. Moderating raw material prices in light of higher selling prices (including $4.9 million in lower LIFO expenses) also contributed to improved operating income in 2012, as compared with 2011. The most significant reason for the increase in SG&A expense in 2012, as compared with 2011, was related to employee compensation

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costs to support the increase in sales activity ($1.5 million) and increased product development expenses of $0.6 million.

    Other

        This unit includes the grinding media, industrial tubing, electrolytic manganese and industrial fasteners operations. The increase in sales and operating income in fiscal 2012, as compared with 2011, was mainly due improved sales volumes in the tubing and grinding media operations. The tubing operation benefited from improved demand from steel service centers and agricultural equipment manufacturers and the grinding media operation realized increased demand from mining industry customers in Australia.

    Net corporate expense

        Net corporate expense in fiscal 2012 increased over 2011, due to higher employee incentives associated with improved net earnings and share price, which affected long-term incentive plans (approximately $2.1 million). Net corporate expense also increased due to higher deferred compensation expenses of $1.2 million and stamp duties incurred in Australia related to the 2011 Delta legal restructuring of $1.2 million. These increases were offset somewhat by lower expenses related to the Delta Pension Plan of $0.5 million.

Liquidity and Capital Resources

    Cash Flows

        Working Capital and Operating Cash Flows—Net working capital was $896.1 million at March 31, 2012, as compared with $844.9 million at December 31, 2011. The increase in net working capital in 2012 mainly resulted from increased receivables and inventories to support the increase in sales. Cash flow used by operations was $12.9 million in fiscal 2012, as compared with $5.7 million provided by operations in fiscal 2011. The decrease in operating cash flow in 2012 was the result of increased net working capital and the annual contribution of $10.8 million to the Delta Pension Plan (the 2011 contribution was made in the second quarter), offset to an extent by higher net earnings in fiscal 2012, as compared with 2011.

        Investing Cash Flows—Capital spending in the fiscal 2012 was $20.1 million, as compared with $12.6 million in 2011. The most significant capital spending projects in 2012 included certain capacity expansions in the Utility segment. We expect our capital spending for the 2012 fiscal year to be approximately $100 million. The increase in expected capital spending over 2011 is mainly due to capacity increases to meet the growing need for utility structures in the U.S. and additional manufacturing investment in the Irrigation segment.

        Financing Cash Flows—Our total interest-bearing debt increased slightly to $486.6 million at March 31, 2012 from $486.1 million at December 31, 2011. Financing cash flows overall were similar in 2012, as compared with 2011.

    Financing and Capital

        We have historically funded our growth, capital spending and acquisitions through a combination of operating cash flows and debt financing. We have an internal long-term objective to maintain long-term debt as a percent of invested capital at or below 40%. At March 31, 2012, our long-term debt to invested capital ratio was 25.6%, as compared with 26.8% at December 31, 2011. Subject to our level of acquisition activity and steel industry operating conditions (which could affect the levels of inventory we need to fulfill customer commitments), we plan to maintain this ratio below 40% in 2012.

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        Our debt financing at March 31, 2012 consisted primarily of long-term debt. We also maintain certain short-term bank lines of credit totaling $51.9 million, $48.6 million of which was unused at March 31, 2012. Our long-term debt principally consists of:

    $450 million face value ($464 million carrying value) of senior unsecured notes that bear interest at 6.625% per annum and are due in April 2020. We are allowed to repurchase the notes at specified prepayment premiums. These notes are guaranteed by certain of our subsidiaries.

    $280 million revolving credit agreement with a group of banks. We may increase the credit facility by up to an additional $100 million at any time, subject to participating banks increasing the amount of their lending commitments. The interest rate on our borrowings will be, at our option, either:

    (a)
    LIBOR (based on a 1, 2, 3 or 6 month interest period, as selected by us) plus 125 to 200 basis points (inclusive of facility fees), depending on our ratio of debt to earnings before taxes, interest, depreciation and amortization (EBITDA), or;

    (b)
    the higher of

      The higher of (a) the prime lending rate and (b) the Federal Funds rate plus 50 basis points plus in each case, 25 to 100 basis points (inclusive of facility fees), depending on our ratio of debt to EBITDA, or

      LIBOR (based on a 1 week interest period) plus 125 to 200 basis points (inclusive of facility fees), depending on our ratio of debt to EBITDA

        At March 31, 2012 and December 31, 2011, we had no outstanding borrowings under the revolving credit agreement. The revolving credit agreement has a termination date of October 16, 2013, and contains certain financial covenants that may limit our additional borrowing capability under the agreement. At March 31, 2012, we had the ability to borrow an additional $264.9 million under this facility.

        These debt agreements contain covenants that require us to maintain certain coverage ratios and may limit us with respect to certain business activities, including capital expenditures. Our key debt covenants are as follows:

    Interest-bearing debt is not to exceed 3.75x EBITDA of the prior four quarters;

    Senior interest-bearing debt is not to exceed 2.50x EBITDA over the prior four quarters; and,

    Our EBITDA over our prior four quarters must be at least 2.50x our interest expense over the same period.

        At March 31, 2012, we were in compliance with all covenants related to these debt agreements. The key covenant calculations at March 31, 2012 were as follows:

Interest-bearing debt

  $ 486,572  

EBITDA—last 12 months

    384,787  

Leverage ratio

    1.26  

Senior Interest-bearing debt

  $ 486,572  

EBITDA—last 12 months

    384,787  

Senior debt ratio

    1.26  

EBITDA—last 12 months

  $ 384,787  

Interest expense—last 12 months

    35,959  

Interest earned ratio

    10.70  

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        The calculation of EBITDA—last 12 months (March 26, 2011—March 31, 2012) is as follows:

Net cash flows from operations

  $ 131,112  

Interest expense

    35,959  

Income tax expense

    19,068  

Deferred income tax benefit

    85,009  

Noncontrolling interest

    (7,915 )

Equity in earnings of nonconsolidated subsidiaries

    8,793  

Stock-based compensation

    (6,182 )

Pension plan expense

    (4,973 )

Contribution to pension plan

    22,610  

Changes in assets and liabilities

    101,930  

Other

    (624 )
       

EBITDA

  $ 384,787  
       

Net earnings attributable to Valmont Industries, Inc. 

  $ 255,025  

Interest expense

    35,959  

Income tax expense

    19,068  

Depreciation and amortization expense

    74,735  
       

EBITDA

  $ 384,787  
       

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

        We have not made any provision for U.S. income taxes in our financial statements on approximately $531 million of undistributed earnings of our foreign subsidiaries, as we intend to reinvest those earnings. Of our cash balances at March 31, 2012, approximately $310 million is held in entities outside the United States. If we need to repatriate foreign cash balances to the United States to meet our cash needs, income taxes would be paid to the extent that those cash repatriations were undistributed earnings of our foreign subsidiaries. The income taxes that we would pay if cash were repatriated depends on the amounts to be repatriated and from which country. If all of our cash outside the United States were to be repatriated to the United States, we estimate that we would pay approximately $38.4 million in income taxes to repatriate that cash.

Financial Obligations and Financial Commitments

        There have been no material changes to our financial obligations and financial commitments as described on page 39 in our Form 10-K for the fiscal year ended December 31, 2011.

Off Balance Sheet Arrangements

        There have been no changes in our off balance sheet arrangements as described on page 39 in our Form 10-K for the fiscal year ended December 31, 2011.

Critical Accounting Policies

        There have been no changes in our critical accounting policies as described on pages 41-44 in our Form 10-K for the fiscal year ended December 31, 2011 during the quarter ended March 31, 2012.

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Item 3.    Quantitative and Qualitative Disclosure about Market Risk

        There were no material changes in the company's market risk during the quarter ended March 31. 2012. For additional information, refer to the section "Risk Management" on page 40 in our Form 10-K for the fiscal year ended December 31, 2011.

Item 4.    Controls and Procedures

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

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

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PART II. OTHER INFORMATION

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

Issuer Purchases of Equity Securities

 
  (a)
  (b)
  (c)
  (d)
 
Period
  Total
Number of
Shares
Purchased
  Average Price
paid
per share
  Total Number of
Shares
Purchased as
Part of
Publicly Announced
Plans or Programs
  Maximum
Number of
Shares that May
Yet Be Purchased
Under the
Plans or Programs
 

January 1, 2012 to January 28, 2012

                 

January 29, 2012 to March 3, 2012

    39,065   $ 110.23          

March 4, 2012 to March 31, 2012

    30,311     113.52          
                   

Total

    69,376   $ 111.67          
                   

        During the first quarter, the only shares reflected above were those delivered to the Company by employees as part of stock option exercises, either to cover the purchase price of the option or the related taxes payable by the employee as part of the option exercise. The price paid per share was the market price at the date of exercise.

Item 5.    Other Information

        Valmont's annual meeting of stockholders was held on April 24, 2012. The stockholders elected four directors to serve three-year terms, ratified the appointment of Deloitte & Touche LLP to audit the Company's financial statements for fiscal 2012 and approved, on an advisory basis, a resolution approving our named executive officer compensation. For the annual meeting there were 26,527,445 shares outstanding and eligible to vote of which 24,746,565 were present at the meeting in person or by proxy. The tabulation for each matter voted upon at the meeting was as follows:

        Election of Directors:

 
  For   Withheld   Broker Non-Votes  

Glen A. Barton

    23,137,826     58,490     1,550,249  

Daniel P. Neary

    22,855,900     340,416     1,550,249  

Kenneth E. Stinson

    23,037,660     158,656     1,550,249  

Catherine James Paglia

    23,031,706     164,610     1,550,249  

        Proposal to ratify the appointment of Deloitte & Touche LLP as independent auditors for fiscal 2012:

For

    24,219,742  

Against

    525,545  

Abstain

    1,278  

        Advisory vote on executive compensation:

For

    22,798,603  

Against

    341,067  

Abstain

    56,646  

Broker non-votes

    1,550,249  

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Item 6.    Exhibits

(a)
Exhibits

 
  Exhibit No.   Description
      31.1   Section 302 Certificate of Chief Executive Officer

 

 

 

31.2

 

Section 302 Certificate of Chief Financial Officer

 

 

 

32.1

 

Section 906 Certifications of Chief Executive Officer and Chief Financial Officer

 

 

 

101

 

The following financial information from Valmont's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders' Equity, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information.

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SIGNATURES

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

    VALMONT INDUSTRIES, INC.
(Registrant)

 

 

/s/ TERRY J. MCCLAIN

Terry J. McClain
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

Dated this 27th day of April, 2012.

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Index of Exhibits

 
  Exhibit No.   Description
      31.1   Section 302 Certificate of Chief Executive Officer

 

 

 

31.2

 

Section 302 Certificate of Chief Financial Officer

 

 

 

32.1

 

Section 906 Certifications of Chief Executive Officer and Chief Financial Officer

 

 

 

101

 

The following financial information from Valmont's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders' Equity, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information.

35