Conserving Resources. Improving Life.
A n n u a l R e p o r t 2 0 0 2
Throughout the World, Our
Products Conserve Resources
and Improve Life.
1 Financial Highlights
2 Letter to Shareholders
6 At a Glance
8 Poles: Lighting and Traffic
12 Poles: Utility Poles and Structures
14 Wireless Communication
16 Coatings
18 Irrigation
22 Tubing
24 Global Presence
26 Board of Directors
28 Conserving Resources. Improving Life.
29 Financial and Corporate Information
30 11-Year Financial Summary
32 Financial Objectives
33 Total Value Impact
34 Segment Summary
35 International Contact Information
39 Officers and Management
40 Corporate and Stock Information
Cover:
Valmont’s decorative light poles help beautify
public areas near the Acropolis in Athens, Greece.
2002 Financi al
Hi ghlig ht s
Net
Sales
Operating
Income
Diluted Earnings
Per Share
1
(Dollars in millions, except per share amounts)
2002 2001 2000
Operating Results
Net sales $ 854.9 $ 872.4 $ 846.1
Operating income 70.3 65.0 67.3
Net earnings 33.6 26.7 30.4
Diluted earnings per share 1.37 1.09 1.28
Dividends per share 0.29 0.26 0.26
Financial Position
Shareholders’ equity $ 242.0 $ 225.8 $ 191.9
Shareholders’ equity per share 10.13 9.23 8.23
Long-term debt as a % of invested capital 36.8% 41.9% 42.8%
Operating Ratios
Gross profit as a % of net sales 27.1% 24.9% 25.0%
Operating income as a % of net sales 8.2% 7.5% 7.9%
Net earnings as a % of net sales 3.9% 3.1% 3.6%
Return on beginning equity 14.9% 13.9% 17.8%
Return on invested capital 9.7% 8.6% 10.9%
Year-End Data
Shares outstanding (000) 23,883 24,477 23,320
Approximate number of shareholders 5,500 5,500 5,500
Number of employees 5,234 5,342 5,503
Le tter To Fellow S har e holde r s
“Our Market Drivers Are Compe lli ng,
Global And
En duri ng”
2
2
VValmont performed well in 2002 with record operating income and record
U
earnings per share.
This performance was achieved despite slightly lower revenues and
a global operating environment of economic and political uncertainty.
I salute our business units for managing their businesses well and reacting
quickly to both opportunities and challenges in the external environment.
2
U
Since we are in cyclical businesses with limited control over the short-term drivers of our
markets, we must constantly strive for improvements in those areas of our businesses we
do control. Our 2002 results reflected good efforts in the areas of pricing discipline, cost
control, productivity improvement and working capital management.
Our pole business posted another record year in 2002. Continued strength in the
lighting and traffic markets, together with progress in our international businesses,
offset an emerging weakness in the North American utility market.
The irrigation business also had a strong year. In North America we benefited from
improving commodity prices, the new U.S. farm bill and dry growing conditions.
Internationally we had record sales and earnings as a result of our long-term com-
mitment to developing new markets and supporting them with local manufacturing
and distribution.
Our wireless communication business faced further reductions in capital spending
by our customers. We lowered our cost structure and consolidated product lines and
facilities. While we do not know if we have seen the bottom of this market, we have
a broad product line and a strong organization ready to capitalize on the eventual
recovery. Meanwhile, we are applying our substantial engineering talent and excellent
manufacturing facilities to develop and manufacture innovative products for
distribution by other Valmont divisions.
Our coatings business reflected the weakness in the industrial economy. We responded
by further cutting costs while maintaining the high service levels our customers have
come to expect.
Our tubing business performed well. We met the dual challenges of volatile steel
prices and a weak economy, and ended the year with higher sales and profits.
There are a number of reasons we like the industries we serve:
Our m arket driv er s are co mp elling , g lo b al a nd e ndur ing .
The single biggest challenge facing global agriculture is the need for ever more efficient
use of limited fresh water resources as industrial and urban demand for water continues
to increase.
The broad product lines and services of our infrastructure businesses support general
infrastructure development. This alignment is true in the industrialized world,
where current infrastructure is continually being upgraded and expanded, as well as in
countries pursuing economic development with newly expanded infrastructure.
These opportunities are enduring. The management of fresh water resources world-
wide is becoming more critical. Economic development can only be sustained by
investment in infrastructure, including support structures for utility lines, lighting,
traffic controls, cellular antennas and many more applications.
3
We ho ld lea d ers hip pos it ions in a ll o f o ur m ajo r
p ro du ct lines.
We are the leading pole and tower company in the world and the only one with
a global reach. Our manufacturing facilities in Europe, North America, Africa and
Asia give us great flexibility in serving global markets.
We pioneered the center-pivot irrigation industry 50 years ago and have been the clear
market leader ever since. We initiated our international expansion in this business in
the mid-1970s. Today with manufacturing facilities for irrigation equipment in Europe,
North and South America, Africa and the Middle East, we are uniquely positioned to
partner with agriculture to help solve the world’s water management challenges.
From a modest beginning a few years ago, we have grown our coatings business to
where we are now the largest custom hot-dip galvanizing company in North America.
44
Clockwise from top left:
Members of Valmont’s Management Team
Tom Spears, Irrigation Division President
Terry McClain, Senior Vice President
and Chief Financial Officer (left) and
Bob Meaney, Senior Vice President
Mark Richards, Poles Division President (left)
and Doug Kochenderfer, Wireless Communication
Division Vice President and General Manager
Myron Noble, Wireless Communication
Division Chairman
Leonard Adams, Tubing Division President (left)
and Jeffrey Briggs, Coatings Division President
Ou r busines se s g ene rate st ro ng cas h flow s .
At current revenue and profitability levels we generate approximately $50 million in
annual free cash flow. That, combined with a conservative balance sheet, gives us great
flexibility to pursue growth, reduce debt and manage our business.
We have made key investments needed to grow our businesses.
We have invested in new modern facilities and added manufacturing capacity in our
major businesses. Therefore, we can support substantial growth in the coming years
without major new investments.
4
Outl ook fo r 20 03 :
The future is – by definition – unknown. The current political and economic uncertainty
worldwide, fueled by the war on terrorism and the conflict with Iraq, makes it very
difficult to make predictions about our businesses in the coming year.
In our Pole Segment, we expect the utility market to decline and the lighting and
traffic market to remain strong.
In the Irrigation Segment, we anticipate continued strength in North America and
most international markets but weakness in the important Middle East region.
Our Coatings and Tubing Segments will require some help from an economic recovery
to continue to improve, and in our Wireless Communication Segment we are still
waiting for indications that the carriers will accelerate their build out.
Internally, we will continue our efforts to improve the way we manage our capital and
costs. This will help us maximize our performance regardless of external circumstances.
In an area of particular importance to all of us – safety – we saw improved performance
in 2002. We have always put a high value on safety, and our record here is solid.
However, we must continue to improve our performance. We have no more important
responsibility than to create an environment where each employee can go home as
safe and sound as when he or she arrived.
This past year, in response to well-publicized business and accounting scandals, new
corporate governance regulations were introduced. Valmont has always had
a straightforward conservative financial philosophy and a long history of having
an independent Board of Directors. I am the only director who is also an employee
of the company. Historically, our Audit and Compensation Committees have been
comprised of only independent directors, and in 2002 we established an independent
Governance and Nominating Committee. Our Board has adopted the Valmont
Corporate Governance Principles, and each of our Board committees operates under
a Board-approved charter. You can review these documents on our Web site. Our
outside directors are independent in every way, I assure you. I thank them for their
guidance of and interest in our Company.
I am proud of each and every member of the Valmont team and their passion for
“Conserving Resources and Improving Life” for people all around the world.
They deserve our gratitude.
Sincerely,
Mogens C. Bay
Chairman and Chief Executive Officer
5
Look C losely. Ev ery Day, Everyw here . . .
Valmont Products
Touch Your
Life
66
at a glance
WWherever you live, whatever you do, chances are Valmont is part of
your life. Lighting and traffic poles guide your way. Utility poles
bring power to your home and business. Communication poles and
towers enable your wireless communications. Irrigation equipment
brings much-needed water to cropland while conserving fresh water
resources. And our long-lasting finishes improve products around the
world every day. Just take a look . . .
6
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Infrastructure
Po l es: Li ghti ng and Tr af f ic / Ut ilit y Po le s a n d S t ruc t ur e s
> Area lighting poles for parking lots and public areas > Sports lighting structures for arenas and stadiums
> Decorative lighting poles > Street and high-mast lighting poles > Traffic and sign structures
> Utility transmission and distribution poles > Utility substation structures
Wire les s Com munic atio n
> Monopoles, towers and structures for cellular, PCS, broadcast, microwave and two-way communications
> Wireless communication components > Minimum visual impact structures
Coatings
> Galvanizing, anodizing, powder coatings and integrated graphics
Agricult ure
I rri gat ion a nd Wate r Ma nage m e nt
> Mechanized irrigation systems > Environmental consulting services
Tub ing
> Custom-made tubing used for truck mufflers, fire extinguishers, grain augers, railings and fences, etc.
Prac ti cally a ny wh ere you a re in t h e wo r ld , Valm o nt is t h e r e w it h you.
Now ta ke a n e v en clos e r loo k . . .
88
In Athens, G re ec e,
Ou r Products Make Li fe
A Little
Brighter
8
poles: lighting and traffic
9
A
Athens, Greece, is one of the world’s oldest cities, with a rich, historical
past. Near the Acropolis where Socrates and Plato once strolled, you are
likely to see families with babies in strollers or backpacks today. Our
decorative light poles – custom designed in a style that would please
even the ancient Greeks – line the streets. They help keep tourists and
the citizens of Athens safe at night, and provide a tasteful homage to
the classical past of a bright, modern city.
How to honor the past while providing for
the future? Using Valmont’s innovative pole
design software, lighting designers created
a series of elegant decorative poles that
would capture just the right ambience.
Our manufacturing facilities in France then
carefully crafted functional yet aesthetically
pleasing poles. Classic collaboration.
I n Ch ic ago, I llinois,
Our Products Help Brin g Safe ty
And Order
To Life
1010
poles: lighting and traffic
In the U.S., federal spending on highway
infrastructure has increased annually at
the rate of three to five percent. The need
to improve roadway efficiency using
traffic controls and sign structures is
a high priority.
To meet this need in a cost-effective manner,
Valmont engineers design practical and
attractive products with the durability to
last well into the future.
C
Chicago, Illinois, is a fast-paced, bustling city. Once called “The Feedlot
to the World,” today it is a growing center of commerce and industry.
We installed one of our nostalgic design products here – a combination
decorative light and traffic structure that illuminates the roadway and
helps direct traffic at the same time. For years to come, this dual-purpose
product will benefit Chicago and other thriving communities with
growing traffic and safety concerns.
10
11
In S hang ha i, Ch ina,
We Help
Energize
Your Li fe
1212
poles: utility poles and structures
With a rapidly growing population, China
is on its way to becoming an economic
powerhouse in the 21st century. We expect
it to be our fastest-growing market for poles.
From our manufacturing facility in Shanghai,
we work closely with our customers to
ensure they receive quality products and
fast delivery to help keep pace with their
growing demands.
S
Shanghai, China, is one of the most energetic cities in the world . . . a
sea of sights, sounds and people. Shanghai is also energized by electricity,
and our utility poles and structures help provide the backbone that
delivers electricity – and the improved quality of life it provides – to
people in Shanghai and throughout China. Keeping pace with the
world’s electricity demand is a challenge, and we are proud to provide
the infrastructure products to help meet this growing need.
12
13
1414
In Patil las, Pue rt o Rico ,
We Help You Commu ni cate
An d Enjoy
Li fe
14
wireless communication
15
I
In Puerto Rican fishing villages like Patillas, sportfishing is a big industry
and every morning, guides who know these waters well set out to show
visitors their secret fishing spots. And when you make your first catch?
No matter the size of the fish . . . or the fisherman . . . you can call Mom
and tell her all about it. Our communication structures provide
the backbone to relay those phone calls and help fishermen and guides
alike stay in touch with shore, making fishing expeditions safer, more
efficient and much more fun.
In many parts of the world, wireless phone
service is more available and affordable
than landline. Evolving technology will make
wireless communications – and our poles,
towers and components – even more necessary.
With standard communication poles and our
minimum visual impact (MVI) product line –
built to resemble trees, flagpoles and other
objects that blend into the environment –
we’re ready to deliver.
1616
In Los Angel es, Cal ifo rnia,
Ou r Coatings Improve
Look s And
Service Li fe
16
coatings
17
I
In California, skateboarders do their acrobatic moves with even more
style, thanks to the custom-designed coatings we put on the ‘trucks’
that attach wheels and axles to the board. We apply designs for our
customers, the truck manufacturers, along with a protective coating
that extends service life. This winning combination adds value and lets
skaters create their own signature styles by mixing and matching trucks
and boards. So go ahead and try your best move, but always wear your
helmet. (By the way, we coat and protect those, too.)
We galvanized our own products for more
than 30 years, then other manufacturers asked
if we could do it for them. One thing led to
another, and now we are the largest custom
galvanizer in North America.
We also provide anodizing and powder
coatings for aluminum and other
products – from flashlights and baseball
bats to computers, cell phones and more.
In Uber ab a, B ra zil,
Center Pivots Con serve Water An d
Add To The Quality
Of Life
1818
irrigation
Mechanized irrigation is more precise
and efficient than other forms of irrigation,
lowering production costs and food
prices. Yet today, less than five percent
of irrigated agriculture outside the U.S.
uses mechanized irrigation methods.
Our manufacturing plants in Uberaba,
Brazil, and around the world make our
equipment more affordable and modern
water conservation techniques more
available for local farmers. Not only is
it our job, it is our mission.
I
In much of Brazil, the landscape and climate are ideal for growing
coffee. Valmont irrigation equipment helps farmers here use less labor
and more importantly, less water, while actually increasing yields.
Conserving water is important in Brazil and in every other country
in the world. Putting less burden on our fresh water supplies today
will help keep this precious resource more available for other uses for
generations to come.
18
19
2020
In Moses Lake , Washingto n,
Valley Life Is
All In
The Family
20
irrigation
21
I
In 1954, Valmont engineers built an innovative irrigation system that
many farmers knew would change the future of their business. Some
of them – like Arlie Updegrave in Moses Lake, Washington – opened
Valley Irrigation dealerships. Today, Arlie’s son helps run the dealership,
in some cases serving the third generation of Arlie’s first customers.
In Washington, and everywhere else you buy Valley products, our dealers
are more than business partners. They’re part of the family.
Today’s modern irrigation equipment can
be custom designed for specific crops and
terrain. It can be programmed to precisely
apply the right amounts of water, chemicals
and fertilizer.
Around the clock, Valley dealers are ‘on call’
to provide personalized service, training and
advice – one reason we are now the largest
supplier of mechanized irrigation equipment
and services in the world.
In Nort h Be nd, Ne b r as ka,
Our Tubing Products
Shape Everyday
Li fe
2222
tubing
Specialty tubing is a niche market. Often
customers come to us for a special part
or product.
That’s when our engineers go to work.
They design a product that is custom
designed yet mass produced. This saves
customers money and they appreciate that.
W
We make tubes. That doesn’t sound too exciting, but it’s an area of our
business where we really get creative. Our specialty is customized
shapes and sizes. Tubing is everywhere. Motorcycle mufflers. Fences.
Exercise equipment. In North Bend, Nebraska – and wherever grain
is produced – tubing is an essential part of a grain auger. Tubing is an
integral part of our business, and we think it is the shape of good things
to come.
22
23
Valm ont’s
Global Presence
TULSA, OKLAHOMA, USA
Steel Poles and Galvanizing
TULSA, OKLAHOMA, USA
Steel Poles and Galvanizing
TUALATIN, OREGON, USA
Galvanizing
TUALATIN, OREGON, USA
Galvanizing
SALEM, OREGON, USA
Wireless Communication Structures
and Components
SALEM, OREGON, USA
Wireless Communication Structures
and Components
ALBANY, OREGON, USA
Cascade Earth Sciences
ALBANY, OREGON, USA
Cascade Earth Sciences
LINDON, UTAH, USA
Galvanizing and Powder Coating
LINDON, UTAH, USA
Galvanizing and Powder Coating
2424
LOS ANGELES, CALIFORNIA, USA
Anodizing and Powder Coating
LOS ANGELES, CALIFORNIA, USA
Anodizing and Powder Coating
LONG BEACH, CALIFORNIA, USA
LONG BEACH, CALIFORNIA, USA
Galvanizing
Galvanizing
SIOUX CITY, IOWA, USA
Galvanizing
SIOUX CITY, IOWA, USA
Galvanizing
WEST POINT, NEBRASKA, USA
Galvanizing
WEST POINT, NEBRASKA, USA
Galvanizing
McCOOK, NEBRASKA, USA
Irrigation Equipment
McCOOK, NEBRASKA, USA
Irrigation Equipment
OMAHA, NEBRASKA, USA
Corporate Headquarters
OMAHA, NEBRASKA, USA
Corporate Headquarters
WAVERLY, NEBRASKA, USA
Steel Tubing
WAVERLY, NEBRASKA, USA
Steel Tubing
VALLEY, NEBRASKA, USA
Irrigation Equipment, Steel Poles,
Tubing and Galvanizing
VALLEY, NEBRASKA, USA
Irrigation Equipment, Steel Poles,
Tubing and Galvanizing
BRENHAM, TEXAS, USA
Steel Poles
BRENHAM, TEXAS, USA
Steel Poles
MONTERREY, MEXICO
Steel Poles
MONTERREY, MEXICO
Steel Poles
ST. JULIE, QUEBEC, CANADA
Steel and Aluminum Poles
ST. JULIE, QUEBEC, CANADA
Steel and Aluminum Poles
MINNEAPOLIS,
MINNEAPOLIS,
MINNESOTA, USA
MINNESOTA, USA
Anodizing, Powder Coating
Anodizing, Powder Coating
and E-Coating
and E-Coating
FARMINGTON,
MINNESOTA, USA
Aluminum Poles
FARMINGTON,
MINNESOTA, USA
Aluminum Poles
ELKHART, INDIANA, USA
Steel and Aluminum Poles
ELKHART, INDIANA, USA
Steel and Aluminum Poles
PLYMOUTH, INDIANA, USA
Wireless Communication
Structures and Components
PLYMOUTH, INDIANA, USA
Wireless Communication
Structures and Components
JASPER, TENNESSEE, USA
Steel Poles
JASPER, TENNESSEE, USA
Steel Poles
CHICAGO, ILLINOIS, USA
Galvanizing
CHICAGO, ILLINOIS, USA
Galvanizing
UBERABA, BRAZIL
Irrigation Equipment
UBERABA, BRAZIL
Irrigation Equipment
MAARHEEZE, THE NETHERLANDS
MAARHEEZE, THE NETHERLANDS
Steel Poles
Steel Poles
GELSENKIRCHEN, GERMANY
GELSENKIRCHEN, GERMANY
Steel Poles
Steel Poles
SIEDLCE, POLAND
SIEDLCE, POLAND
Steel Poles
Steel Poles
SHANGHAI, CHINA
SHANGHAI, CHINA
Steel Poles
Steel Poles
CHARMEIL, FRANCE
CHARMEIL, FRANCE
Steel Poles
Steel Poles
CREUZIER-LE-NEUF, FRANCE
CREUZIER-LE-NEUF, FRANCE
Industrial Covers and Conveyers
Industrial Covers and Conveyers
JEBEL ALI, U.A.E.
JEBEL ALI, U.A.E.
Irrigation Equipment
Irrigation Equipment
RIVE-DE-GIER, FRANCE
RIVE-DE-GIER, FRANCE
Aluminum Poles
Aluminum Poles
MADRID, SPAIN
MADRID, SPAIN
Irrigation Equipment
Irrigation Equipment
BERRECHID, MOROCCO
BERRECHID, MOROCCO
Steel Poles
Steel Poles
JOHANNESBURG, SOUTH AFRICA
JOHANNESBURG, SOUTH AFRICA
Irrigation Equipment
Irrigation Equipment
24
TULSA, OKLAHOMA, USA
Steel Poles and Galvanizing
TUALATIN, OREGON, USA
Galvanizing
SALEM, OREGON, USA
Wireless Communication Structures
and Components
ALBANY, OREGON, USA
Cascade Earth Sciences
LINDON, UTAH, USA
Galvanizing and Powder Coating
LOS ANGELES, CALIFORNIA, USA
Anodizing and Powder Coating
LONG BEACH, CALIFORNIA, USA
Galvanizing
SIOUX CITY, IOWA, USA
Galvanizing
WEST POINT, NEBRASKA, USA
Galvanizing
McCOOK, NEBRASKA, USA
Irrigation Equipment
OMAHA, NEBRASKA, USA
Corporate Headquarters
WAVERLY, NEBRASKA, USA
Steel Tubing
VALLEY, NEBRASKA, USA
Irrigation Equipment, Steel Poles,
Tubing and Galvanizing
BRENHAM, TEXAS, USA
Steel Poles
MONTERREY, MEXICO
Steel Poles
ST. JULIE, QUEBEC, CANADA
Steel and Aluminum Poles
MINNEAPOLIS,
MINNESOTA, USA
Anodizing, Powder Coating
and E-Coating
FARMINGTON,
MINNESOTA, USA
Aluminum Poles
ELKHART, INDIANA, USA
Steel and Aluminum Poles
PLYMOUTH, INDIANA, USA
Wireless Communication
Structures and Components
JASPER, TENNESSEE, USA
Steel Poles
CHICAGO, ILLINOIS, USA
Galvanizing
UBERABA, BRAZIL
Irrigation Equipment
MAARHEEZE, THE NETHERLANDS
Steel Poles
GELSENKIRCHEN, GERMANY
Steel Poles
SIEDLCE, POLAND
Steel Poles
SHANGHAI, CHINA
Steel Poles
CHARMEIL, FRANCE
Steel Poles
CREUZIER-LE-NEUF, FRANCE
Industrial Covers and Conveyers
JEBEL ALI, U.A.E.
Irrigation Equipment
RIVE-DE-GIER, FRANCE
Aluminum Poles
MADRID, SPAIN
Irrigation Equipment
BERRECHID, MOROCCO
Steel Poles
JOHANNESBURG, SOUTH AFRICA
Irrigation Equipment
25
Our g lobal bu si ne ss be gins in o ur loc a l m a n ufac t ur i ng fac i lit i es .
Wherever you are, whatever you do, Valmont is not far away. In fact, with 34 manufacturing facilities around the
world, we may be closer than you think. By working and living near our customers, we better understand their needs,
and they better understand our capabilities. That makes for stronger partnerships, and ultimately, a better world.
Val mo nt Indust r ie s, Inc .
Board Of
Directors
Mogens C. Bay
Chairman and Chief Executive Officer
Valmont Industries, Inc.
Director Since 1993
Robert B. Daugherty
Founder and Chairman Emeritus
Valmont Industries, Inc.
Director Since 1947
John E. Jones
Retired Chairman, President
and Chief Executive Officer
CBI Industries, Inc.
Director Since 1993
Dr. Stephen R. Lewis, Jr.
President Emeritus and
Professor of Economics
Carleton College
Director Since 2002
2626
Thomas F. Madison
President
MLM Partners
Chairman of the Board
Communications Holdings, Inc.
Director Since 1987
Charles D. Peebler, Jr.
Chairman Emeritus
True North Communications, Inc.
Director Since 1999
Walter Scott, Jr.
Chairman
Level 3 Communications, Inc.
Director Since 1981
Kenneth E. Stinson
Chairman and Chief Executive Officer
Peter Kiewit Sons’, Inc.
Director Since 1996
Audit Committee
Walter Scott, Jr., Chairman
John E. Jones
Charles D. Peebler, Jr.
Compensation Committee
Thomas F. Madison, Chairman
Charles D. Peebler, Jr.
Dr. Stephen R. Lewis, Jr.
Governance and
Nominating Committee
Thomas F. Madison, Chairman
Dr. Stephen R. Lewis, Jr.
26
27
Clockwise, from far left:
Mogens C. Bay
Kenneth E. Stinson
Dr. Stephen R. Lewis, Jr.
Thomas F. Madison
Charles D. Peebler, Jr.
John E. Jones
Robert B. Daugherty
Walter Scott, Jr.
28
It’s True.
Valmont Products Are
Part Of
Your Life
NNow you can see that wherever in the world you live, the chances are
good that one or more Valmont products touch your life in a positive
way. Guiding you through traffic. Helping light the places where you
live, work and play. Enabling your wireless connection to the rest
of the world. Providing you with more high-quality food thanks to
irrigation products that increase production while preserving precious
fresh water. Making many of the things you use every day last longer
and look better.
C o nse rving Re so urc es. Im prov ing Lif e .
That’s Valmont .
Financial And Corporate
Information
29
Selected 1 1- Ye ar
Finan ci al Su mmary
(Dollars in thousands, except per share amounts)
02
2002 2001 2000* 1999* 1998* 1997 1996 1995 1994 1993 1992
Operating Data
Net sales $ 854,898 872,380 846,129 639,869 630,858 622,506 644,531 544,642 501,740 464,274 445,481
Operating Income 70,289 65,021 67,256 50,176 47,752 61,990 36,644 41,831 31,679 16,768 13,122
Earnings from continuing operations 33,629 26,693 30,400 26,367 27,636 37,544 21,248 24,759 18,887 7,551 11,671
Earnings from discontinued operations – – – – – – – – – 4,637 35,644
Cumulative effect of accounting change (500) – – – – – – – – (4,910) –
Net earnings $ 33,629 26,693 30,400 26,367 27,636 37,544 21,248 24,759 18,887 7,278 15,235
Depreciation and amortization $ 33,942 36,324 30,270 21,949 19,843 16,437 14,832 12,361 11,018 10,907 12,585
Capital expenditures 13,942 25,652 46,456 37,783 29,667 39,115 35,559 34,772 23,535 17,089 8,353
Pe r Share Data
30
Earnings:
Basic $ 1.40 1.10 1.31 1.09 1.04 1.36 0.78 0.92 0.70 0.27 0.57
Diluted 1.37 1.09 1.28 1.08 1.02 1.33 0.76 0.90 0.69 0.27 0.56
Cash dividends 0.29 0.26 0.26 0.26 0.25 0.22 0.19 0.15 0.15 0.15 0.13
Shareholders’ equity 10.13 9.23 8.23 7.30 7.12 7.49 6.41 5.87 5.10 4.52 4.43
Fi nanci al Position
Working capital $ 154,112 145,550 145,575 98,588 99,466 94,416 81,403 80,993 88,278 87,793 68,551
Property, plant and equipment, net 193,175 209,580 208,272 173,920 157,447 140,834 120,579 113,532 89,201 75,501 78,150
Total assets 578,571 588,897 600,135 419,335 406,957 368,052 341,648 308,710 283,443 261,275 286,076
Long-term debt, including current installments 166,391 198,008 205,472 108,622 96,218 28,060 29,573 36,687 43,242 44,076 69,735
Shareholders’ equity 242,020 225,811 191,911 170,488 175,913 207,102 175,231 159,256 137,582 121,841 118,428
Invested capital 451,753 472,229 479,609 321,096 317,708 270,400 243,905 215,318 197,591 180,961 200,501
Ke y Fi nancial Measures
Return on beginning shareholders’ equity 14.9% 13.9% 17.8% 15.0% 13.3% 21.4% 13.3% 18.0% 15.5% 6.1% 14.1%
Return on invested capital 9.7% 8.6% 10.9% 9.8% 10.3% 15.4% 10.3% 13.0% 10.7% 5.6% 7.4%
Long-term debt as a percent of invested capital 36.8% 41.9% 42.8% 33.8% 30.3% 10.4% 12.1% 17.0% 21.9% 24.4% 34.8%
Year End Data
Shares outstanding (000) 23,883 24,477 23,320 23,354 24,721 27,641 27,330 27,120 26,990 26,972 26,750
Approximate number of shareholders 5,500 5,500 5,500 5,500 5,500 5,400 4,400 3,900 3,800 3,800 3,500
Number of employees 5,234 5,342 5,503 3,948 3,869 3,751 4,868 4,166 3,946 4,152 4,532
Per share amounts and number of shares reflect the two-for-one stock split 1997.
* In 2000, 1999, and 1998, freight costs have been reclassified to cost of goods sold.
The selected consolidated financial data set forth in the above table has been derived from the Company’s consolidated financial statements. This data should be read in conjunction
with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report form 10-K, and the
Company’s audited consolidated financial statements, including the notes thereto, and the other financial information included elsewhere in the Annual Report form 10-K filed with
the Securities and Exchange Commission.
(Dollars in thousands, except per share amounts)
Operating Data
Per Share Data
Earnings:
Financial Position
Key Financ ial M easures
Year E nd Data
2002 2001 2000* 1999* 1998* 1997 1996 1995 1994 1993 1992
Net sales $ 854,898 872,380 846,129 639,869 630,858 622,506 644,531 544,642 501,740 464,274 445,481
Operating Income 70,289 65,021 67,256 50,176 47,752 61,990 36,644 41,831 31,679 16,768 13,122
Earnings from continuing operations 33,629 26,693 30,400 26,367 27,636 37,544 21,248 24,759 18,887 7,551 11,671
Earnings from discontinued operations – – – – – – – – – 4,637 35,644
Cumulative effect of accounting change (500) – – – – – – – – (4,910) –
Net earnings $ 33,629 26,693 30,400 26,367 27,636 37,544 21,248 24,759 18,887 7,278 15,235
Depreciation and amortization $ 33,942 36,324 30,270 21,949 19,843 16,437 14,832 12,361 11,018 10,907 12,585
Capital expenditures 13,942 25,652 46,456 37,783 29,667 39,115 35,559 34,772 23,535 17,089 8,353
30
Basic $ 1.40 1.10 1.31 1.09 1.04 1.36 0.78 0.92 0.70 0.27 0.57
Diluted 1.37 1.09 1.28 1.08 1.02 1.33 0.76 0.90 0.69 0.27 0.56
Cash dividends 0.29 0.26 0.26 0.26 0.25 0.22 0.19 0.15 0.15 0.15 0.13
Shareholders’ equity 10.13 9.23 8.23 7.30 7.12 7.49 6.41 5.87 5.10 4.52 4.43
31
Working capital $ 154,112 145,550 145,575 98,588 99,466 94,416 81,403 80,993 88,278 87,793 68,551
Property, plant and equipment, net 193,175 209,580 208,272 173,920 157,447 140,834 120,579 113,532 89,201 75,501 78,150
Total assets 578,571 588,897 600,135 419,335 406,957 368,052 341,648 308,710 283,443 261,275 286,076
Long-term debt, including current installments 166,391 198,008 205,472 108,622 96,218 28,060 29,573 36,687 43,242 44,076 69,735
Shareholders’ equity 242,020 225,811 191,911 170,488 175,913 207,102 175,231 159,256 137,582 121,841 118,428
Invested capital 451,753 472,229 479,609 321,096 317,708 270,400 243,905 215,318 197,591 180,961 200,501
Return on beginning shareholders’ equity 14.9% 13.9% 17.8% 15.0% 13.3% 21.4% 13.3% 18.0% 15.5% 6.1% 14.1%
Return on invested capital 9.7% 8.6% 10.9% 9.8% 10.3% 15.4% 10.3% 13.0% 10.7% 5.6% 7.4%
Long-term debt as a percent of invested capital 36.8% 41.9% 42.8% 33.8% 30.3% 10.4% 12.1% 17.0% 21.9% 24.4% 34.8%
Shares outstanding (000) 23,883 24,477 23,320 23,354 24,721 27,641 27,330 27,120 26,990 26,972 26,750
Approximate number of shareholders 5,500 5,500 5,500 5,500 5,500 5,400 4,400 3,900 3,800 3,800 3,500
Number of employees 5,234 5,342 5,503 3,948 3,869 3,751 4,868 4,166 3,946 4,152 4,532
Per share amounts and number of shares reflect the two-for-one stock split 1997.
* In 2000, 1999, and 1998, freight costs have been reclassified to cost of goods sold.
The selected consolidated financial data set forth in the above table has been derived from the Company’s consolidated financial statements. This data should be read in conjunction
with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report form 10-K, and the
Company’s audited consolidated financial statements, including the notes thereto, and the other financial information included elsewhere in the Annual Report form 10-K filed with
the Securities and Exchange Commission.
Val mo nt’s Fina nc ial
Ob je ct ives
Total
Value
Impact
Return on
Invested
Capital
Long-Term Debt
as a Percent of
Invested Capital
3232
FFinancially, we have selected three principal factors that tell just how well we are
managing the Company and the money invested in it. These factors are: Total Value
Impact (TVI) – a tool for estimating growth in shareholder value; return on invested
capital – a yearly measure of our returns on money invested; and long-term debt as
a percent of invested capital – a measure of the financial risk we are taking. The goals we
have established for growth, return on invested capital and long-term debt leverage are
appropriate for the industries in which we participate, yet challenging enough to demand
the very best talents and performance of our management teams. In 2001, we replaced
our earnings-per-share growth goal with one to grow TVI, which we believe is a more
meaningful measure of growth in shareholder value.
TVI : Al i gn i ng
Management Performance
With Shareholders’
Goals
32
33
TThere are three major components used to calculate TVI: after-tax operating profits,
average-invested capital and the cost of capital. We subtract the cost of capital (average
invested capital times the weighted average cost of capital) from after-tax operating profits,
and this residual is TVI. If the results of an investment, project or division performance
do not contribute to positive TVI growth over time, we are not creating value for our
shareholders. To motivate our managers to think and act with shareholder interests in
mind, business unit bonuses are directly tied to increases in TVI.
Se gme nt
Su m mary
Segment
Sales
(Dollars in millions)
Change Change
2002 2001 2000 2002-2001 2001-2000
Net Sal es:
Infrastructure businesses:
Poles $ 359.2 $ 354.0 $ 310.0 1.5% 14.2%
Wireless Communication $ 77.5 $ 121.6 $ 92.6 -36.3% 31.3%
Coatings $ 96.0 $ 99.2 $ 94.1 -3.2% 5.4%
Total Infrastructure businesses $ 532.7 $ 574.8 $ 496.7 -7.3% 15.7%
Agricultural businesses:
Irrigation $ 264.7 $ 238.6 $ 283.6 10.9% -15.9%
Tubing $ 45.4 $ 42.4 $ 43.3 7.1% -2.1%
Total Agricultural businesses $ 310.1 $ 281.0 $ 326.9 10.4% -14.0%
Other $ 12.1 $ 16.6 $ 22.5 -27.5% -26.1%
34
Net Sales $ 854.9 $ 872.4 $ 846.1 -2.0% 3.1%
Ope rating Income:
Infrastructure businesses:
Poles $ 34.2 $ 34.1 $ 21.7 0.2% 57.4%
Wireless Communication $ (3.0) $ (1.6) $ 2.3 90.5% -167.5%
Coatings $ 10.7 $ 9.4 $ 13.5 14.0% -30.3%
Total Infrastructure businesses $ 41.9 $ 41.9 $ 37.5 0.0% 12.0%
Agricultural businesses:
Irrigation $ 24.0 $ 15.5 $ 21.2 55.6% -27.2%
Tubing $ 6.5 $ 5.8 $ 7.6 11.4% -23.5%
Total Agricultural businesses $ 30.5 $ 21.3 $ 28.8 43.6% -26.2%
Other $ (2.1) $ 1.8 $ 1.0 -221.3% 77.4%
Operating Income $ 70.3 $ 65.0 $ 67.3 8.1% -3.3%
34
I nt ernati ona l
Co ntact I nf or matio n
Corp o rate
One Valmont Plaza
Pole s Div ision
Valmont Poles Division Headquarters
China
Shanghai Valmont SST Co., Ltd.
Omaha, NE 68154-5215 USA
7002 North 288th Street
100 Rongchang Road
Tel 1-402-963-1000
Fax 1-402-963-1198
www.valmont.com
P.O. Box 358
Valley, NE 68064 USA
Tel 1-800-825-6668
Fax 1-402-359-6221
Valmont Lexington
20805 Eaton Avenue
Songjiang Industrial Development Zone
201611 Shanghai, China
Tel +86-21-5760-9200
Fax +86-21-5760-9222
France
Valmont Europe Headquarters
Farmington, MN 55024 USA
Parc Des Reflets-Paris Nord II
Tel 1-651-463-8990
Fax 1-651-463-3349
Valmont Indiana
57843 Charlotte Avenue
Elkhart, IN 46517 USA
Tel 1-219-295-6942
Fax 1-219-295-6998
Valmont Oklahoma
801 North Xanthus
P. O. Box 2620
Tulsa, OK 74110 USA
Tel 1-800-331-3002
Fax 1-918-585-1927
Valmont Texas
2551 Valmont Drive
Brenham, TX 77833 USA
Tel 1-979-836-9395
Fax 1-979-836-4415
Valmont Tennessee
1950 Industrial Boulevard
Jasper, TN 37347 USA
Tel 1-423-942-9888
Fax 1-423-942-9885
Canada
Valmont Feralux
2250, Bombardier
Sainte-Julie, Quebec
Canada J3E 2L6
Tel 450-649-4114
Fax 450-649-4940
35
165 Avenue Du Bois De La Pie
B.P. 40074 Roissy en France
95 913 Roissy Charles De Gaulle Cedex
Paris, France
Tel +33-148-17-7180
Fax +33-148-17-7189
Valmont Sermeto-Charmeil
Les Martoulets-B.P. 1
03110 Charmeil, France
Tel +33-470-58-8686
Fax +33-470-58-8687
Valmont Tubalco
Vallee de Couzon
BP 184
F-42800 Rive-de-Gier, France
Tel +33-477-83-0010
Fax +33-477-83-7425
Italy
Valmont International LLC
Residence la Genziana
Vicolo Casal Lumbroso 85
00166 Roma, Italy
Italy +39-06-66-17-0010
Tel +39-06-66-17-0010
Germany
Valmont Mastbau GmbH & Co. KG
Im Dörener Feld 3
D-33100 Paderborn, Germany
Tel +49-5251-500400
Fax +49-5251-5004045
36
Wir ele ss
Com municatio n
Div is ion
Valmont Communications
China
Shanghai Valmont SST Co., Ltd.
100 Rongchang Road
Songjiang Industrial Development Zone
3575 25th Street S.E.
P.O. Box 12985
Salem, OR 97309 USA
Tel 1-800-547-2151
Fax 1-503-363-4613
201611 Shanghai, China
Tel +86-21-5760-9200
Fax +86-21-5760-9222
France
Valmont Sermeto-Charmeil
Valmont Communications
Les Martoulets-B.P. 1
03110 Charmeil, France
Tel +33-470-58-8686
Fax +33-470-58-8687
Mexico
Valmont De Mexico
Chopo 530 Col.
Santa Maria Insurgentes
Mexico City C.P. 06430, Mexico
Tel +52-55-5547-4759
Fax +52-55-5547-4805
1545 Pidco Drive
Plymouth, IN 46563 USA
Tel 1-574-936-4221
Fax 1-574-936-6796
Valmont Poles
7002 North 288th Street
P.O. Box 358
Valley, NE 68064 USA
Tel 1-800-825-6668
Fax 1-402-343-6146
Valmont Texas
2551 Valmont Drive
Brenham, TX 77833 USA
Tel 1-979-836-9395
Fax 1-979-836-4415
Valmont Tennessee
1950 Industrial Blvd.
Jasper, TN 37347 USA
Tel 1-423-942-9888
Fax 1-423-942-9885
Po le s Di vi sion
(continued)
Morocco
Valmont SARL Maroc
Zone Industrielle Berrechid RP Nº7
26.100 Berrechid, Morocco
Tel +212-22-33-72-06
Fax +212-22-53-47-88
Mexico
Valmont Formet
Carretera a Laredo Km. 21
Apodaca, N.L. Mexico
C.P. 66600
Tel +52-81-8319-7939
Fax +52-81-8319-0636
The Netherlands
Valmont Nederland B. V.
Den Engelsman 3
NL-6026 RB
Maarheeze, The Netherlands
Tel +31-495-599-959
Fax +31-495-591-781
Poland
Valmont Polska Sp. z o.o.
UI: Terespolska 12
PL-08-110 Siedlce, Poland
Tel +48-25-644-78-85
Fax +48-25-644-82-94
Spain
Valmont S.A.
Ctra de Mejorada del Campo
A Velilla de San Antonio Km 0.64
28840 Mejorada del Campo
Madrid, Spain
Tel +34-91-679-4300
Fax +34-91-679-1677
United Kingdom
Valmont U.K.
Unit 8-Temple Normanton Business Park
Chesterfield-Derbyshire, S41 0JS U.K.
Tel +44-1246-222501
Fax +44-1246-222502
36
C oat in gs Di visi on
Valmont Coatings
George Industries Inc.
4116 Whiteside Street
Ir r igatio n Division
Valmont Irrigation
7002 North 288th Street
P.O. Box 358
Valley, NE 68064 USA
Tel 1-800-825-6668
Fax 1-402-359-6070
Applied Coating Technology
2411 Pilot Knob Road
Mendota Heights, MN 55120 USA
Tel 1-651-454-7777
Fax 1-651-454-0043
Calwest Galvanizing
2226 East Dominguez Street
Long Beach, CA 90810 USA
Tel 1-310-549-2200
Fax 1-310-513-6741
Pacific States Galvanizing
9700 Southwest Herman Road
Tualatin, OR 97062 USA
Tel 1-503-692-8888
Fax 1-503-612-0592
Empire Galvanizing
10909 Franklin Avenue
Franklin Park, IL 60131 USA
Tel 1-847-455-0884
Fax 1-847-455-0889
Los Angeles, CA 90063 USA
Tel 1-888-436-7434
Fax 1-323-263-9342
Intermountain Galvanizing
1085 West 400 North
Lindon, UT 84042 USA
Tel 1-801-785-7200
Fax 1-801-785-7009
Oklahoma Galvanizing
25055 Alliance Drive
Claremore, OK 74017 USA
Tel 1-918-266-2800
Fax 1-918-266-0614
Siouxland Galvanizing
P.O. Box 3807
2301 Bridgeport Drive
Sioux City, IA 51102 USA
Tel 1-712-252-4101
Fax 1-712-252-2792
Valmont Coatings / West Point
1700 South Beemer Street
P.O. Box 303
West Point, NE 68788 USA
Tel 1-402-372-3706
Fax 1-402-372-6908
7002 North 288th Street
P.O. Box 358
Valley, NE 68064 USA
Tel 1-800-825-6668
Fax: 1-402-359-2045
Valmont Industries Inc.
75 South Hwy 83
McCook, NE 69001 USA
Tel 1-308-345-2223
Fax 1-308-345-2224
Australia-Pacific
Valmont Australia
P.O. Box 125
Carole Park, Queensland, 4300, Australia
Tel +61-7-3879-3622
Fax +61-7-3879-3655
Mercosur
Valmont Industria e Comercio LTDA
Av. Francisco Podboy, 1600
CEP 38056-640
Uberaba/MG, Brazil
Tel +55-34-3318-9000
Fax +55-34-3318-9001
37
I rri gati on Div ision
(continued)
Mexico and Latin America
Valmont International Corporation
Tub ing Division
Valmont Tubing
South Africa
Valley Irrigation of Southern Africa
(Pty) Ltd.
P.O. Box 1234
Nigel, 1490 Republic of South Africa
Tel +27-11-814-7007
Fax +27-11-814-4533
Western Europe
Valmont S.A.
Ctra. de Mejorada Del Campo
A Velilla de San Antonio Km. 0,64
28840 Mejorada del Campo
Madrid, Spain
Tel +34-91-679-4300
Fax +34-91-679-1677
Middle East
Valmont Middle East FZE
Plot # MO0781 & 782, R/A/ #12
Street # 1245, JAFZA
P.O. BOX 17937
Jebel Ali, Dubai, United Arab Emirates
Tel +9714-88-39740
Fax +9714-88-39567
2105 Mannix Drive
7002 North 288th Street
San Antonio, TX 78217 USA
P.O. Box 358
Tel +1-210-829-7971
Fax +1-210-824-3233
China
Valmont China
Room 4-2-61, Bldg. 4
Jianwai DRC
1 Xiushui Street
Beijing 100600, China
Tel +86-10-8532-2607
Fax +86-10-8532-2610
Valley, Nebraska 68064 USA
Tel 1-800-825-6668
Fax 1-402-359-4481
Central Nebraska Tubing
14441 U.S. Highway 6
P.O. Box 446
Waverly, Nebraska 68462 USA
Tel 1-402-786-5005
Fax 1-402-786-2719
Ot h er
Valmont SIE
Les Rebrillons
F-03300 Creuzier le Neuf, France
Tel +33-470-58-4740
Fax: +33-470-58-0022
Valmont Wind Energy
7002 North 288th Street
P.O. Box 358
Valley, Nebraska 68064 USA
Tel 1-402-359-2201, ext. 3037
Fax 1-402-359-6173
38
38
O ffi cer s and
Manag e ment
C or po r ate a nd
Staff O ffi cer s
Mogens C. Bay
Chairman and Chief
Executive Officer
Terry J. McClain
Senior Vice President and
Chief Financial Officer
E. Robert Meaney
Senior Vice President
Ann F. Ashford
Vice President
Human Resources
Po le s Div ision
Coat ings Division
Mark R. Richards
President
Keith A. Huffman
Vice President
Operations
Richard M. Sampson
Vice President and General Manager
Utility Products and Services
Thomas F. Sanderson
Vice President
Global Marketing and
Product Development
Jeffrey Briggs
President
Richard S. Cornish
Vice President
Operations
Ir r igat io n D ivision
Thomas D. Spears
President
Duane Bier
Vice President
Operations
Steven G. Branscombe
Vice President
Thomas J. Sutko
Vice President and General Manager
James L. Brown
Vice President
Information Technology
Commercial Lighting and Transportation
North American Sales
39
Mark C. Jaksich
Vice President
Corporate Controller
Walter P. Pasko
Vice President
Procurement
P. Thomas Pogge
Vice President
General Counsel and Secretary
Mark E. Treinen
Vice President
Business Development
Products and Services
Philippe Guidez
President
Europe/Middle East/Africa
Klavs Guldager
General Manager
China
Wir ele s s
Com municatio n
Div is ion
Myron Noble
Chairman
Doug Kochenderfer
Vice President and General Manager
William G. Loughman III
Vice President
Parts and Service
Terry Rahe
President
Cascade Earth Sciences
Tub ing Division
Leonard M. Adams
Vice President and General Manager
C or po r ate And S t oc k
In fo rmati on
Corporate Headquarters
Valmont Industries, Inc.
One Valmont Plaza
Independent Public
Accountants
Deloitte & Touche LLP
Annual Meeting
The annual meeting of Valmont’s
shareholders will be held at 2:00 p.m.
Omaha, NE 68154 USA
Omaha, Nebraska USA
on Monday, April 28, 2003, at the Joslyn
Tel 1-402-963-1000
Fax 1-402-963-1198
www.valmont.com
40
Legal Counsel
McGrath North Mullin & Kratz, PC LLO
Omaha, Nebraska USA
Stock Transfer Agent
and Registrar
Address Shareholder Inquiries to:
The Bank of New York
Shareholder Relations Department, 11 E
P.O. Box 11258
Church Street Station
New York, N.Y. 10285 USA
1-866-886-9962
Send Certificates for Transfer
and Address Changes to:
The Bank of New York
Receive and Deliver Department
P.O. Box 11002
Church Street Station
New York, N.Y. 10286 USA
Art Museum in Omaha, Nebraska USA.
Shareholder and
Investor Relations
Valmont’s common stock trades on
the New York Stock Exchange (NYSE)
under the symbol VMI.
Valmont maintains an active investor
relations program and mailing list to keep
shareholders and potential investors
informed about the Company. Comments
and inquiries are welcomed and should
be directed to Investor Relations.
Valmont makes available, free of
charge, its Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, the other
company SEC filings, company press
releases, and other information, by
calling or writing Investor Relations,
or on the Internet at www.valmont.com,
under the heading “Investor Relations.”
Jeffrey S. Laudin
Investor Relations Department
Valmont Industries, Inc.
One Valmont Plaza
Omaha, NE 68154 USA
Tel 1-402-963-1000
Fax 1-402-963-1198
Valmont Industries, Inc.
One Valmont Plaza
Omaha, Nebraska 68154-5215 USA
402-963-1000
www.valmont.com