Valmont Report Higher Operating Income

OMAHA, Neb., Oct. 19, 2016 /PRNewswire/ — Valmont Industries, Inc. (NYSE: VMI), a leading global provider of engineered products and services for infrastructure development and mechanized irrigation equipment and services for agriculture, today reported third quarter results.
   —  Revenues were $610.2 million, down 3.5% year-over-year reflecting lower
       sales in the Utility Support Structures, Coatings and Energy and Mining
       segments
   —  Operating income on a GAAP basis was $53.2 million, up from $37.0
       million last year. Before restructuring charges and impairments,
       operating income was $58.3 million, a slight decrease from last year’s
       $61.0 million
       —  Improved profitability in the Energy and Mining, and Utility Support
           Structures segments was offset by lower profitability in the
           Coatings and Engineered Support Structures segments on an adjusted
           basis
       —  While steel prices declined during the quarter, largely erasing
           second quarter increases, Valmont’s third quarter average steel
           costs were slightly higher than last year. Aside from LIFO
           accounting effects, the increase did not have a significant impact
           on operating results
   —  Diluted EPS were $1.24 compared to $0.52 in 2015 (excluding
       restructuring expenses and impairments, diluted EPS were $1.48 and $1.39
       in 2016 and 2015, respectively)
   —  The Company incurred approximately $5.1 million of pre-tax restructuring
       expense this quarter, of which approximately $2.3 million was related to
       the previously announced $4.8 million 2016 Australia restructuring
       program. The remaining approximately $2.8 million expense was related to
       2015 restructuring efforts
   —  Year-to-date, savings recognized from the 2015 restructuring
       approximated $17 million
   —  During the quarter, the Company appointed Stephen G. Kaniewski as
       President and Chief Operating Officer, effective October 1
   —  The Company repurchased 139,000 shares for $18.0 million during the
       quarter; $139 million remains on the current authorization
   —  The Company is slightly lowering its annual guidance primarily to
       reflect recent weakness in the Coatings Segment. Adjusted diluted EPS
       are now expected to range between $6.23 and $6.35, (GAAP EPS $5.88 to
       $6.00). In response, coatings cost structure has been cut to better
       match current demand. The updated guidance meets the long-term earnings
       targets presented at the company’s February, 2016 investor day of
       achieving 10% adjusted EPS growth.
“The market environment continued to be challenging. Sales declines were largely driven by lower international volumes in Utility Support Structures and weaker Coatings demand in North America,” said Mogens C. Bay, Valmont’s Chairman and Chief Executive Officer. “Despite slightly lower overall sales, volatile steel prices and operational challenges in the Coatings Segment, we continue to benefit from the restructuring and operational actions undertaken over the last 18 months, delivering operating income at 8.7% of sales, or 9.6% of sales before charges.”