Annual Report 2007
Annual Report 2007
Global leveraGe
A t w o r k
Financial
H i gHl i gHt s
D o l l a r s i n m i l l i o n s , e x c e p t p e r sHa r e a m o u n t s
Operating Results
Net sales
Operating income
Net earnings
Diluted earnings per share
Dividends per share
Financial Position
2007
2006
2005
$
$
$
1,499.8
155.6
94.7
3.63
0.410
1,281.3
110.1
61.5
2.38
0.370
1,108.1
82.9
39.1
1.54
0.335
Shareholders’ equity
Long-term debt as a % of invested capital1
$
510.6
27.3%
$
401.3
$
31.3%
328.7
36.2%
Operating Profits
Gross profit as a % of net sales
Operating income as a % of net sales
Net earnings as a % of net sales
Return on beginning equity
Return on invested capital1
26.7%
10.4%
6.3%
23.6%
14.0%
25.5%
8.6%
4.8%
18.7%
11.1%
25.1%
7.5%
3.5%
13.3%
7.7%
Year-End Data
Shares outstanding (000)
Approximate number of shareholders
Number of employees
25,945
5,800
6,029
25,634
5,600
5,684
24,765
5,700
5,336
1 See footnote (a) on page 36 of this document and item 6 on pages 23 through 25 of the Company’s Form 10-K
07
06
05
04
03
07
06
05
04
03
07
06
05
04
03
1,281
1,108
1,031
155.6
838
110.1
2.38
3.63
1,500
net
Sales
Operating
income
Diluted
Earnings
Per Share
82.9
70.1
70.3
1.54
1.10
1.05
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Financial Highlights
Message To Fellow Shareholders
Valmont At A Glance
Engineered Support Structures Division
Utility Support Structures Division
Irrigation Division
Coatings Division
International Perspective
Global Dedication
Board Of Directors
Corporate and Business Unit Officers
Corporate and Stock Information
Financial Summary
O u r s t r o n g m a r k e t p o s i t i o n s i n o u r c o r e b u s i n e s s e s p e r s i s t .
O u r b u s i n e s s d r i v e r s a r e g l o b a l,
c o m p e l l i n g a n d e n d u r i n g.
O u r k n o w l e d g e i s a p l a t f o r m
f r o m w h i c h w e
b u i l d o u r
b u s i n e s s e s.
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In this annual report, we are featuring
our Presidents from each Valmont divi-
sion. I feel it is important that you have
an opportunity to become acquainted
with our business leaders. They are
the ones who manage our businesses
every day, and who – along with fellow
Valmont team members – create value
for our shareholders. I’m proud of my
colleagues for all they have accom-
plished, and for their vision and astute
leadership on behalf of Valmont and
its shareholders. I invite you to meet
these dedicated individuals and learn
more about their divisions through
the pages of this report.
We are sharpening our efforts in
this regard. In previous annual letters
to you, I have mentioned three initia-
tives at Valmont: pricing discipline;
lean manufacturing; and employee
engagement.
We are combining all three initiatives
into one overarching program that
should propel Valmont along a
global journey to become a true
lean enterprise. We call this The
Valmont Way. We will refine a set of
operating principles, which will help
us to become continuously more
efficient in how we deliver value to
our customers. This is a major under-
taking involving extensive training
throughout our global enterprise –
and it will take time. Our goal is for
The Valmont Way to become a
sustainable competitive advantage.
This is my 15th annual letter to my
fellow shareholders. In my very first
letter to you, I discussed global
leadership positions for Valmont in
engineered support structures (poles)
and water management for agriculture
(irrigation), and I spoke of leveraging
those positions for growth.
Fifteen years later, our focus has not
changed. We have seen tremendous
growth, and we are more excited
than ever about the opportunities
ahead of us.
The year 2007 was another record
one for Valmont. Net earnings grew
54 percent on a 17 percent increase in
revenue. Over the last few years, we
have had a keen focus on improving
the quality of our earnings. Operating
income as a percentage of sales
increased nearly two full percentage
points, to 10.4 percent, and our return
on invested capital reached 14 percent.
While we are pleased with our
performance in 2007, we are still not
satisfied. We are confident that we
can continue to improve the quality
of our earnings over time, but we also
know that incremental improvements
will become more difficult to attain.
MESSagE
to f e l l o w sHa r eHo lDe r s
mo g e n s c. B a y | c Ha i r m a n a nD c Hi e f ex e c u t i v e of f i c e r
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MESSagE
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v a l m o n t’ s
ViSiOn
Valmont is recognized throughout the world as an industry leader in engineered support structures
and services for infrastructure, and water management for agriculture. We grow our businesses
by leveraging our existing products, markets and processes. We recognize that our growth will
only create shareholder value if, at the same time, we exceed our cost of capital. Essential to our
success is a company-wide commitment to customer service and innovation, and the ability to be
the best cost producer for all products and services we provide. Recognizing that our employees
are the cornerstone of our accomplishments, we pride ourselves on being people of passion and
integrity who excel and deliver results.
I continue to spend time visiting our
facilities in the U.S. and around the
world. I appreciate the chance to meet
and thank each employee whose daily
efforts continue to make Valmont a
strong and successful global company.
As I have said many times before,
capital is allocated by Valmont’s
corporate office; our returns, on the
other hand, are generated by great
people whose work ethic and team-
work extend seamlessly across plants,
borders and oceans. Through their
efforts, Valmont succeeds at helping
to feed, light and connect the world.
Looking forward, we will continue to
leverage our leadership positions in
our core markets around the world.
We will also pursue our lean trans-
formation to grow and improve our
businesses. We are off to a good start
in 2008 and expect to deliver another
record year.
As always, thank you for your support.
I look forward to reporting to you
throughout 2008.
Sincerely,
Mogens c. Bay
Chairman and
Chief Executive Officer
In last year’s letter to you, I mentioned
that the drivers of our businesses
are global, compelling and enduring.
We’re confident this will continue to
be the case as the world’s needs for
infrastructure and agricultural water
management will continue to drive
demand for Valmont’s products. At the
present time, we do not see compet-
ing products or technologies being
a major threat in our markets. Local
priorities and economic conditions
may influence the short-term size of
our markets, but in general, we are
currently operating in a fairly robust
environment worldwide.
Our irrigation business had a very
strong year in 2007 with significant
increases in both revenue and
earnings. Demand was strong in the
U.S. as well as in most international
markets. The global macroeconomic
environment for agriculture is the
strongest we have seen in many years.
In recent years, the world has con-
sumed more agricultural commodities
than it has produced. This shortfall
is not due to production problems in
certain areas – as was often the case
in the past – but rather is a result of
ever-increasing demand. Today, this
demand is not only for agricultural
commodities to feed the world, it
is also for biofuels to help fuel the
world’s economic growth. We see
no reason in the near term why this
situation should change.
In the U.S., the utility structures
business delivered very solid financial
results in 2007 as we continue to
respond to growing demand from
utilities expanding or upgrading
their transmission and distribution
infrastructure. We are confident
that activity levels in this market
will continue to be strong in 2008.
Internationally, we also see good
prospects for our utility structures,
particularly with China investing
heavily in electricity generation to
support their fast-growing economy.
Our lighting and traffic structures
sales increased on a worldwide basis,
helped by strong performance outside
the U.S., especially in Europe. In
the U.S., we are experiencing good
activity levels in these markets, which
are dependent on federal and local
public funding. We expect further
growth in this business in 2008, both
in our important North American
market and in Europe and Asia. Our
specialty structures business, which
provides structures for the wireless
communication markets and the traffic
sign structures markets, saw improve-
ment as a result of very strong activity
in the wireless communication market
in China. In the U.S., where we have
not executed well in our sign struc-
tures operations in recent years, we
consolidated two facilities into one to
gain manufacturing efficiencies. Our
lower cost structure now should help
return this business to profitability.
Valmont’s Coatings Segment also had
a very good year. Higher industrial
demand coupled with strong internal
demand resulted in solid sales and
profitability gains.
During 2007, Charles Peebler, Jr.,
retired from Valmont’s Board of
Directors for health reasons. Chuck
served on our board for eight years
and can take great pride in his many
contributions to the success of our
company. His wise counsel will be
missed, and we thank him and wish
him well as he continues to inspire
us with his determined battle against
progressive supranuclear palsy (PSP).
At Valmont – as always – employee
safety remains closely tied to our
corporate values. While I am pleased
to report that Valmont’s safety perfor-
mance reached a new record in 2007,
there are always improvements to be
pursued. Nothing is more important
than the safety of our workforce,
and we will continue to work hard
on improving safety processes and
performance throughout the company.
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EnginEERED
SuPPORt
StRuctuRES
infrastructure
Area lighting poles for parking lots
and public areas » Sports lighting
structures for arenas and stadiums »
Decorative lighting poles » Traffic
and sign structures » Street and
high-mast lighting poles » Monopoles,
towers and structures for cellular,
PCS, broadcast, microwave and
two-way communications » Wireless
communication components »
Minimum visual impact structures »
Overhead sign structures
cOatingS
Galvanizing, anodizing, powder
coatings and integrated graphics
Utility transmission and
distribution poles » Utility
substation structures
utilitY
SuPPORt
StRuctuRES
va l m o n t
at a glancE
Wherever you live, whatever you do, chances are Valmont is part
of your life. Engineered structures for infrastructure and water
management for agriculture.
agriculture
iRRigatiOn
Mechanized irrigation systems
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“i’M cOnFiDEnt that we are well positioned to meet increasing
demands for our products.”
gr o u p pr e s iDen t
en g i n e e r eD s u p p o r t s t r u c t u r e s a nD c o a t i n g s Di v i s i o n s
e n g i n e e r e D s u p p o r t s t r u c t u r e s e n g i neereD support
S tRu c t uR E S E n g i nE E R E D
SuP P O Rt S tRu c t uR E S
E n g i n E E R E D
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As Group President of Valmont’s
North American Structures and
Coatings Division, Tom Spears takes
pride in Valmont’s leadership role in
engineered support structures. “We
leverage a network of manufacturing
facilities, engineering expertise and
resources,” says Spears, “and that
allows us to provide customers around
the world with products of superior
quality and value.”
Valmont manufactures structures for
area and decorative lighting, overhead
signs and traffic applications, mass
transit, intelligent traffic systems,
and wireless communication towers
and components.
Market leader
In describing Valmont’s structures
for lighting and traffic, Spears points
out that Valmont is the market leader
in supplying poles for the North
American commercial lighting and
roadway markets. “Our leadership
position allows us to have economies
of scale,” says Spears. “It allows us
to have a critical mass of engineering
resources that can offer custom
design work, answer critical questions
and provide optimal solutions to
our customers.
“We have highly efficient operations,
which helps make for a profitable
business,” says Spears. “We have
duplicated critical processes at
various locations, so if we have a
disruption at one facility, we have the
ability to back that up with another
plant. It’s one way we leverage our
gROwing DEManD
en g i n e e r eD s u p p o r t s t r u c t u r e s Di v i s i o n
“conservative design principles, excellent engineering and analysis capabilities,
leveraging resources, and long-standing relationships . . . these, i’m proud to say,
are some of valmont’s greatest strengths.”
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resources,” says Spears, “and it’s
an advantage in the marketplace.
It allows us to be more reliable and
provide added value to our customers.”
Valmont has also carved out a
substantial niche for itself in the
specialty structures business.
“When it comes to roadway and
traffic sign structures, Valmont has
an outstanding reputation in being
able to design and fabricate huge
bent tube structures, as well as truss
pipe structures,” says Spears. “Also,
we have good geographic dispersion
across the United States in specialty
structures, so we are reaching a
great number of different states
with our products.”
Valmont also manufactures structures
and components for the wireless
communications market. Says Spears,
“Valmont is one of the leading wireless
communication structures providers
in North America. We also supply
a broad range of components used in
wireless communications structures,
including ladders and platforms
and products to mount antennas
and cables.”
Opportunities to grow
While Valmont is the leader in engi-
neered support structures today,
Spears definitely sees opportunities
for growth in the company’s markets
in the future.
“We’re always looking for opportunities
to expand,” says Spears. “We have
opportunities to grow by broadening
our product offering. In fact, in the
past couple of years, we made
significant headway into the mass
transit market. And, we’ve expanded
our footprint in the decorative light
pole market, making Valmont a player
in that niche.”
A significant driver of Valmont’s
growth lies in the demand for new
and replacement infrastructure in
North America. New road construc-
tion, the replacement needs of aging
infrastructure, and the increased
usage by wireless telephone and data
system subscribers is driving demand,
opening new markets, and expanding
existing markets for Valmont’s steel,
aluminum and fiberglass poles, sign
structures and wireless communica-
tion poles and towers.
“The long-term trend for Valmont’s
engineered support structures
should produce solid growth,” says
Spears, and “I’m confident that we
are well positioned to meet increasing
demands for our products.”
“cOntinuOuS iMPROVEMEnt is part of valmont’s culture.
it’s the valmont way of doing business.”
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ut i l i t y s u p p o r t s t r u c t u r e s Di v i s i o n
pr e s iDen t
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MaRkEt POwER
ut i l i t y s u p p o r t s t r u c t u r e s Di v i s i o n
“Because of the issues facing utilities today, our utility customers absolutely need
partners who can deliver on durability, value, aesthetics, and responsiveness. they
utilize a wide array of products and operate on aggressive deadlines. at valmont,
we have the capacity to address the large project needs of the utility industry.”
“Valmont has always played a vital
role in meeting the rigorous needs of
the utility industry with its structures
for transmission, distribution, and
substations. However, that role is
becoming more important as greater
demands are placed on utilities to
meet the growing energy needs of
customers,” says Earl Foust, President
of Valmont’s North American Utility
Support Structures Division.
Optimized Solutions for utilities
“One of our greatest strengths at
Valmont is our ability to leverage our
resources to provide a diverse product
portfolio to our utility customers,” says
Foust. “Utilities serve their customers
in a variety of environments, and
because of our ability to leverage
our engineering and manufacturing
capabilities, we can meet those
needs with the right products.”
Foust is referring to Valmont’s unique
ability to provide tubular steel poles,
spun concrete structures and hybrid
steel/concrete poles. “In North
America, we have six concrete pole
operations and seven steel pole
facilities,” says Foust. “We are geo-
graphically dispersed and located
near all of our key customers.”
Overall, the demand for reliable
power is ever increasing. “No one
wants their power to go off,” says
Foust. “Everything is so computer-
ized and needs power for support.
Everyone demands 100 percent reli-
ability, and that’s created an increase
in generation and distribution liability.
Utilities can rely on Valmont to do our
part, providing the structural integrity
customers demand.”
Valmont engineers work together,
applying their expertise to provide
the right solutions for every utility
project. “When we work with our utility
customers,” says Foust, “we provide
optimized solutions. We perform a
value analysis for each application
to determine the most economical
transmission line, whether it includes
steel, concrete or hybrid poles, or
a combination of these.”
Because of the company’s success
in meeting the demands of the utility
industry, Valmont has developed a
series of long-term customer relation-
ships and strategic alliances. “Our
customers know they can count on
us because we can leverage our
engineering and production capacities
to respond to their short and long-
term needs.”
continuous improvement
“Continuous improvement is part of
Valmont’s culture,” says Foust. “It’s the
Valmont way of doing business. We
also focus on developing new products
for our customers.” In fact, most of
Valmont’s new product developments
were born out of working partnerships
with utility customers in an effort to
provide solutions for specific transmis-
sion projects.
looking ahead
The increased need for electricity is
leading to the development of major
transmission corridors. “We have
our interstate highway system,” says
Foust, “but we haven’t had the same
build-out for the transmission grid.
The new transmission corridors will
be established to carry power east
to west, and north to south.”
In addition, the focus on wind energy
presents opportunities for Valmont.
“We’re seeing a number of wind farms
being developed,” says Foust, “and
that creates opportunities for Valmont
in terms of building transmission lines
to connect wind farms to the grid.”
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“OuR VallEY BRanD center pivot and linear irrigation equipment
conserves water and eases the burden on the world’s fresh water supply.”
gr o u p pr e s iDen t
no r tH a m e r i c a n
ir r i g a t i o n a nD t uBi n g Di v i s i o n s
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IRRIGATION IRRIGATION
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Len Adams is Group President of
Valmont’s North American Irrigation
Division, the world’s largest manufac-
turer and distributor of mechanized
irrigation equipment.
“At Valmont,” says Adams, “our
dealer network is one of our biggest
strengths. We have over 200 Valley®
Brand dealers who serve farmers
in North America. Additionally,
we’ve built a worldwide dealer
organization that serves producers
around the world.”
components of Success
“We’ve leveraged our dealer network
for a number of years,” says Adams,
“and it really is critical to our success.”
But, as Adams is quick to point out,
there are other significant factors
contributing to Valmont’s strong per-
formance in the irrigation business,
including the strategic alignment
between its worldwide facilities.
“We operate as one global irrigation
business,” says Adams. “We make use
of our plant capacities everywhere.”
The plant in McCook, Nebraska, pri-
marily supplies North America, while
the original facility in Valley, Nebraska,
manufactures and ships irrigation
equipment to international customers.
“Most of our facilities are set up to
make certain components rather
than a complete machine,” said
Adams. “So, many of the essential
parts are manufactured and shipped
out of our Valley plant to our other
locations around the world. This way –
by sharing engineering capabilities,
manufacturing resources and
EFFiciEnt FlOw
ir r i g a t i o n Di v i s i o n
“we have an outstanding dealer network, and it’s something we’ve developed for many
years. our dealer network is a key component to our success.”
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Yet, Adams says a significant amount
of land around the world is still being
irrigated with flood irrigation and
gated pipe, presenting Valmont
with opportunities to convert these
areas to Valley Brand mechanized
irrigation equipment.
“The potential size of the conversion
market in North America is close to
the size of our current mechanized
irrigation market,” said Adams. “These
two market drivers – replacements and
conversions – will provide Valmont with
significant opportunities for growth,
now and well into the future.”
distribution channels – we can
meet the demands of the global
irrigation market while maximizing
operating efficiencies.”
in-line Efficiency
Adams says Valmont’s operation
and manufacturing efficiencies are,
in great part, a function of thoughtful
plant design at Valmont.
A prime example is the plant in
McCook, Nebraska. “We built the
McCook plant with material flow in
mind. In Valmont’s McCook manufac-
turing process, the tubing mill is right
in line, as is galvanizing. Everything is
batched, and the entire operation flows
smoothly and efficiently,” said Adams.
Room to grow
When it comes to growing Valmont’s
mechanized irrigation business,
Adams says the replacement market
presents long-term opportunities.
“There are approximately 250,000
machines that have been installed
by the irrigation industry in North
America alone,” said Adams. “Many
of these machines are 30 years old
and will need to be replaced in the
near future.”
Another long-term driver for Valmont’s
mechanized irrigation equipment is
the world’s growing population and
the resulting stress on the world’s
fresh water supply.
“Center pivot irrigation is much more
efficient than flood irrigation,” says
Adams. “Our Valley Brand center
pivot and linear irrigation equipment
conserves water and eases the burden
on the world’s fresh water supply.”
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nEtwORk StREngth
co a t i n g s Di v i s i o n
“this is a service business, and the measure of success is how fast you can provide
the service at the quality level the customer expects. through consistent, quality
performance, valmont has proven itself to have a well managed network of capacity
in north america.”
Tom Spears, Group President of
Valmont’s North American Structures
and Coatings Division, speaks with
confidence about Valmont’s coatings
business. Valmont is a full-service
coatings company, providing quality
surface finishes that improve the
looks and extend the service life
of steel and aluminum products
throughout the country.
Strong Performance
“At Valmont, we have the capability
to consistently process material that
comes in from our customers in a
timely manner, while delivering an
excellent level of quality,” said Spears.
Valmont’s strong performance in the
coatings industry is the result of the
company’s overarching commitment
to leveraging resources. “We have 10
galvanizing kettles in North America
that we operate together as a network,”
says Spears. “This network provides
us with the capability to serve our
customers at a high level. Our network
includes some state-of-the-art gal-
vanizing facilities, which allows us to
meet the specific needs of our clients
in a timely manner.”
Protecting the Future
With corrosion costing industry and
government agencies around $276
billion1 annually in the United States
alone, Valmont’s opportunities will
increase along with the need for
improved corrosion management
in the 21st century.
commitment to innovation
Valmont has earned the reputation
for being the market and technical
leader in hot-dip galvanizing. Through
the years, Valmont has introduced a
number of process innovations across
the company’s galvanizing facilities.
“Going forward, we see ample
opportunities for Valmont’s growth in
the galvanizing industry, particularly
through geographic expansion,” says
Spears. “We continuously evaluate
opportunities to grow and expand
our geographical footprint.”
“We are a source for technical
expertise in galvanizing in the United
States, and focus on innovation
leadership from a process standpoint,”
said Spears.
1. NACE International. (2002). Corrosion Costs
and Preventive Strategies in the United States.
Retrieved February 8, 2007, from http://www.
nace.org/nace/content/publicaffairs/cost_
corr_pres/cost_corrosion_files/frame.htm.
23
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“OuR intERnatiOnal facilities and our plants in north america
provide support to each other.”
gr o u p pr e s iDen t
in t e r n a t i o n a l Di v i s i o n
Victor Grizzle, Group President of
Valmont International, is enthusiastic
about Valmont’s presence in interna-
tional markets and the opportunities
to come as a result of continued
economic growth and improved
standards of living.
markets – lighting, communications and
utility. In particular, we saw strength
in China’s communication structures
market as the country continues to
build out its wireless infrastructure to
support the dramatic increase in the
number of mobile phones.
Structures
“Overall, we’ve benefited from
broad-based opportunities in our
international markets,” said Grizzle.
“We had a strong year in structures.
In China, we experienced solid
growth across all infrastructure
“Over the past year, we also expe-
rienced growth in Europe. The
economies in Europe were strong,”
said Grizzle, “and that stimulated
investment in infrastructure, particu-
larly in the lighting markets in France,
Holland, Poland, and Eastern Europe.”
Contributing to Valmont’s international
success in 2007 was the addition
of Tehomet to the Valmont family.
Tehomet is Scandinavia’s largest
manufacturer of decorative street
lighting poles. “Tehomet’s innova-
tive market designs combined with
Valmont’s global reach allows us to
better serve our European customers,”
says Grizzle.
Another area of opportunity for
Valmont’s structures business,
according to Grizzle, was North Africa.
“Our facility in Morocco experienced a
double-digit increase in sales,” he said.
glOBal FOOtPRint
in t e r n a t i o n a l Di v i s i o n
“we are pleased with the international opportunities and our team’s efforts to meet
customer needs in both existing markets and new markets around the world.”
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In 2007, China was – and continues
to be – a substantial area of focus for
Valmont’s International Division. “In
China, there is a tremendous amount
of investment in energy generation,”
said Grizzle, “and there is a need for
transmission and distribution struc-
tures to deliver that energy to homes
and businesses.
“In Eastern Europe,” Grizzle says,
“Poland, the Ukraine and Russia are
also upgrading their transmission
grid systems. Demand in Eastern
Europe has created opportunities for
us. We experienced growth in that
region during 2007. While it’s a small
base, the growth we’ve experienced
in Eastern Europe is an indication of
continuing opportunities for Valmont.”
To meet these growing international
demands, says Grizzle, Valmont
leverages its engineering, manufactur-
ing and distribution resources across
borders and continents. “Our interna-
tional facilities and our plants in North
America provide support to each
other,” he said. “This allows us to be
responsive to the unique needs of
our clients, anywhere in the world.”
irrigation
“In our international irrigation markets,”
said Grizzle, “higher commodity
prices and overall improving farm
incomes drove strong demand for our
mechanized irrigation products. We
experienced strong demand in the
Middle Eastern markets, in Asia, as
well as in our core markets of South
America and South Africa.”
Valmont continues to leverage its
agricultural experience of over 50
years and its global footprint to bring
a unique value to customers well
beyond the irrigation equipment the
company provides. “Partnering with
our customers to bring this value is
clearly being recognized by custom-
ers in emerging market regions,” says
Grizzle. “And, we will be working hard
to continue to meet these needs of our
international customers.”
Higher energy prices and increasing
standards of living are allowing many
emerging economies to diversify and
strengthen their agricultural sectors.
Valmont’s irrigation technology aids
these efforts through modernization
of the application and efficient use
of scarce water resources. “Now,
together with the emergence of bio-
fuels, additional land with available
water resources will need to come
into production, creating additional
opportunities for our mechanized
irrigation products,” says Grizzle.
looking Forward
While Valmont has experienced
growth in international markets,
Grizzle believes ample opportunities
will continue in both developed and
emerging markets around the world.
“I think that we have a very strong
lighting business in Europe, and I
see us getting stronger in the utility
and telecommunication structures
markets,” said Grizzle.
“Our international utilities group sees
new market opportunities moving into
Eastern Europe. We also envision con-
tinuing opportunities in Asia, as well as
the Middle East, where countries are
investing in infrastructure.
“As successful as Valmont has been
in the past internationally,” continues
Grizzle, “I’m particularly optimistic
about the future. Increasing popula-
tions, rapid urbanization in developing
countries and improved standards of
living will continue to drive Valmont’s
growth. I believe we have our best
opportunities ahead of us.”
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Delta, BC, Canada
Steel Poles
Winnipeg, MB, Canada
Steel Poles
Barrie, ON, Canada
Steel Poles
St. Julie, QC, Canada
Steel and Aluminum Poles
Monterrey, Mexico
Steel Poles
Uberaba, Brazil
Irrigation Equipment
Bay Minette, Alabama, USA
Concrete Poles
Tuscaloosa, Alabama, USA
Concrete Poles
Barstow, California, USA
Concrete and Steel Poles
Long Beach, California, USA
Galvanizing
Los Angeles, California, USA
Anodizing and Powder Coating
Aurora, Colorado, USA
Composite Poles
Bartow, Florida, USA
Concrete Poles
Claxton, Georgia, USA
Concrete Poles
Elkhart, Indiana, USA
Steel and Aluminum Poles
Plymouth, Indiana, USA
Wireless Communication
Structures, Components and
Specialty Structures
Chicago, Illinois, USA
Galvanizing
Sioux City, Iowa, USA
Galvanizing
El Dorado, Kansas, USA
Steel Poles
Salina, Kansas, USA
Galvanizing
Farmington, Minnesota, USA
Aluminum Poles
Minneapolis, Minnesota, USA
Powder Coating and E-Coating
McCook, Nebraska, USA
Irrigation Equipment
Omaha, Nebraska, USA
Corporate Headquarters
Valley, Nebraska, USA
Irrigation Equipment, Steel Poles,
Tubing and Galvanizing
West Point, Nebraska, USA
Galvanizing
Tulsa, Oklahoma, USA
Steel Poles and Galvanizing
Tualatin, Oregon, USA
Galvanizing
Salem, Oregon, USA
Wireless Communication Structures,
Components and Specialty Structures
Hazleton, Pennsylvania, USA
Steel Poles
Jasper, Tennessee, USA
Steel Poles
Bellville, Texas, USA
Concrete Poles
Brenham, Texas, USA
Steel Poles
Mansfield, Texas, USA
Steel Poles
Lindon, Utah, USA
Galvanizing and Powder Coating
Ferndale, Washington, USA
Steel Poles
glOBal
D eDi c a t i o n
Throughout the world, our dedicated employees strive
to make a difference. A difference at work, at home
and in their communities.
Guangzhou, China
Steel Poles
Shanghai, China
Steel Poles
Kiiu, Estonia
Steel Poles
Kangasniemi, Finland
Steel and Wood Poles
Charmeil, France
Steel Poles
Rive-de-Gier, France
Aluminum Poles
Gelsenkirchen, Germany
Steel Poles
Siedlce, Poland
Steel Poles
Madrid, Spain
Irrigation Equipment
Steel Poles
Jebel Ali, U.A.E.
Irrigation Equipment
Maarheeze, The Netherlands
Berrechid, Morocco
Steel Poles
Johannesburg, South Africa
Irrigation Equipment
Delta, BC, Canada
Steel Poles
Winnipeg, MB, Canada
Steel Poles
Barrie, ON, Canada
Steel Poles
St. Julie, QC, Canada
Steel and Aluminum Poles
Monterrey, Mexico
Steel Poles
Uberaba, Brazil
Irrigation Equipment
Bay Minette, Alabama, USA
Concrete Poles
Tuscaloosa, Alabama, USA
Concrete Poles
Barstow, California, USA
Concrete and Steel Poles
Long Beach, California, USA
Galvanizing
Los Angeles, California, USA
Anodizing and Powder Coating
Aurora, Colorado, USA
Composite Poles
Bartow, Florida, USA
Concrete Poles
Claxton, Georgia, USA
Concrete Poles
Elkhart, Indiana, USA
Steel and Aluminum Poles
Plymouth, Indiana, USA
Wireless Communication
Structures, Components and
Specialty Structures
Chicago, Illinois, USA
Galvanizing
Sioux City, Iowa, USA
Galvanizing
El Dorado, Kansas, USA
Steel Poles
Valley, Nebraska, USA
Irrigation Equipment, Steel Poles,
Tubing and Galvanizing
West Point, Nebraska, USA
Galvanizing
Tulsa, Oklahoma, USA
Steel Poles and Galvanizing
Tualatin, Oregon, USA
Galvanizing
Salem, Oregon, USA
Wireless Communication Structures,
Components and Specialty Structures
Hazleton, Pennsylvania, USA
Salina, Kansas, USA
Steel Poles
Jasper, Tennessee, USA
Galvanizing
Aluminum Poles
Farmington, Minnesota, USA
Steel Poles
Minneapolis, Minnesota, USA
Concrete Poles
Powder Coating and E-Coating
Brenham, Texas, USA
McCook, Nebraska, USA
Steel Poles
Bellville, Texas, USA
Irrigation Equipment
Omaha, Nebraska, USA
Corporate Headquarters
Mansfield, Texas, USA
Steel Poles
Lindon, Utah, USA
Galvanizing and Powder Coating
Ferndale, Washington, USA
Steel Poles
glOBal
D eDi c a t i o n
Guangzhou, China
Steel Poles
Shanghai, China
Steel Poles
Kiiu, Estonia
Steel Poles
Kangasniemi, Finland
Steel and Wood Poles
Charmeil, France
Steel Poles
Rive-de-Gier, France
Aluminum Poles
Gelsenkirchen, Germany
Steel Poles
Siedlce, Poland
Steel Poles
Madrid, Spain
Irrigation Equipment
Maarheeze, The Netherlands
Steel Poles
Jebel Ali, U.A.E.
Irrigation Equipment
Berrechid, Morocco
Steel Poles
Johannesburg, South Africa
Irrigation Equipment
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BOaRD
o f D i r e c t o r s
mogens c. Bay
Chairman and
Chief Executive Officer
Valmont Industries, Inc.
Director Since 1993
thomas f. madison
Lead Director
President
MLM Partners
Director Since 1987
glen a. Barton
Retired Chairman and
Chief Executive Officer
Caterpillar, Inc.
Director Since 2004
Kaj den Daas
Executive Vice President
Philips Lighting, B.V.
and Chairman of its North
American Lighting Operations
Director Since 2004
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
Daniel p. neary
Chairman and
Chief Executive Officer
Mutual of Omaha
Director Since 2005
walter scott, Jr.
Chairman
Level 3 Communications, Inc.
Director Since 1981
Kenneth e. stinson
Chairman
Peter Kiewit Sons’, Inc.
Director Since 1996
audit committee
Walter Scott, Jr., Chairman
John E. Jones
Daniel P. Neary
compensation committee
Thomas F. Madison, Chairman
Glen A. Barton
Dr. Stephen R. Lewis, Jr.
Kenneth E. Stinson
governance and
nominating committee
Thomas F. Madison, Chairman
Kaj den Daas
Dr. Stephen R. Lewis, Jr.
Top row, from left to right: Mogens C. Bay,
Thomas F. Madison, Glen A. Barton and
Kaj den Daas.
Second row, from left to right: John E. Jones,
Dr. Stephen R. Lewis, Jr. and Daniel P. Neary.
Bottom row, from left to right: Walter Scott, Jr.
and Kenneth E. Stinson, Jr.
OFFicERS
co r p o r a t e a nD Bu s i n e s s u n i t s
corporate Officers
mogens c. Bay
Chairman and
Chief Executive Officer
terry J. mcclain
Senior Vice President and
Chief Financial Officer
e. robert meaney
Senior Vice President and
Corporate Secretary
steven g. Branscombe
Vice President
Information Technology
mark c. Jaksich
Vice President
Corporate Controller
walter p. pasko
Vice President
Procurement
John g. graboski
Vice President
Human Resources
infrastructure
thomas D. spears
Group President
North American Structures
and Coatings
mark e. treinen
Group Vice President
Business Development
richard s. cornish
Vice President and
General Manager
Galvanizing Services
Joseph a. Kerner
Vice President and
General Manager
Specialty Structures
thomas f. sanderson
Vice President
Sales and Marketing
North American Structures
thomas J. sutko
Vice President
Operations
North American Structures
utility Support
Structures Division
earl foust
President
steven a. schmid
Vice President Operations
James p. ruddy
Vice President
Steel Business Units
Douglas c. sherman
Vice President
Market Development
irrigation and tubing
leonard m. adams
Group President
North American Irrigation
and Tubing
James l. Brown
Vice President
North American Sales
Irrigation
stephen B. legrand
Vice President
Operations
Irrigation
craig malsam
Vice President
Engineering
Irrigation
international
victor D. grizzle
Group President
Valmont International
michael Banat
Vice President
International Structure
Sales and Marketing
Klavs guldager
Vice President
Operations
Bernhard l. Kiep
Vice President and
General Manager
International Irrigation
stéphane Devulder
General Manager
Southern Europe
Huang xiao yong
General Manager
China
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cORPORatE
a n D s t o c K i n f o r m a t i o n
annual Meeting
The annual meeting of Valmont’s
shareholders will be held at 2:00
p.m. on Monday, April 28, 2008,
at the Joslyn Art Museum in Omaha,
Nebraska USA.
corporate headquarters
Valmont Industries, Inc.
One Valmont Plaza
Omaha, Nebraska 68154-5215 USA
Tel
Fax
Online valmont.com
1-402-963-1000
1-402-963-1198
independent Public accountants
Deloitte & Touche LLP
Omaha, Nebraska USA
legal counsel
McGrath North Mullin & Kratz, PC LLO
Omaha, Nebraska USA
Stock transfer agent and Registrar
address Shareholder inquiries to:
BNY Mellon Shareowner Services
480 Washington Boulevard
New Jersey, NJ 07310-1900 USA
1-866-886-9962
Send certificates for transfer
and address changes to:
BNY Mellon Shareowner Services
480 Washington Boulevard
New Jersey, NJ 07310-1900 USA
Shareholder and investor Relations
Valmont’s common stock trades on the
New York Stock Exchange (NYSE)
under the symbol VMI.
We make available, free of charge
through our Internet Web site at
www.valmont.com, our annual report
on Form 10-K, quarterly reports
on Form 10-Q, current reports on
Form 8-K, and amendments to those
reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as soon as
reasonably practicable after such
material is electronically filed with
or furnished to the Securities and
Exchange Commission.
Valmont has filed the Chief Executive
Officer and Chief Financial Officer
certifications required by Section 302
of the Sarbanes-Oxley Act of 2002
as exhibits with the company’s annual
report or Form 10-K for the fiscal year
ended December 29, 2007.
We have also posted on our Web
site our (1) Corporate Governance
Principles, (2) Charters for the
Audit Committee, Compensation
Committee, and Governance and
Nominating Committee of the Board,
(3) Code of Business Conduct, and
(4) Code of Ethics for Senior Officers
applicable to the Chief Executive
Officer, Chief Financial Officer and
Controller. Valmont shareholders may
also obtain copies of these items at
no charge by writing to:
Jeffrey s. laudin
Investor Relations Department
Valmont Industries, Inc.
One Valmont Plaza
Omaha, NE 68154 USA
1-402-963-1000
Tel
1-402-963-1198
Fax
Financial
S u m m a r y
SElEctED 5-YEar
F i n a n c i a l Su m m a r y
D o l l a rS i n T h o uSa nD S, e x c e pT p e r
Sh a r e a m o u nT S
2007
2006
2005
2004
2003
Operating Data
Net sales
Operating income
Cumulative effect of accounting change
Net earnings
Depreciation and amortization
Capital expenditures
Per Share Data
Earnings:
Basic
Diluted
Cash dividends
Financial Position
Working capital
Property, plant and equipment, net
Total assets
Long-term debt, including current
installments
Shareholders’ equity
cash Flow Data
$
$
$
1,499,834
155,626
–
94,713
35,176
56,610
3.71
3.63
0.410
350,561
232,684
1,052,613
223,248
510,613
$
$
$
$
$
$
1,281,281
110,085
–
61,544
36,541
27,898
2.44
2.38
0.370
277,736
200,610
892,310
221,137
401,281
1,108,100
82,863
–
39,079
39,392
35,119
1.61
1.54
0.335
229,161
194,676
802,042
232,340
328,675
Net cash flows from operations
Net cash flows from investing activities
Net cash flows from financing activities
$
110,249
(71,040)
(210)
$
$
59,130
(36,735)
(6,946)
133,777
(30,354)
(93,829)
$
$
$
$
$
$
1,031,475
70,112
–
26,881
38,460
17,182
1.13
1.10
0.320
277,444
205,655
843,351
322,775
294,655
$
$
$
837,625
54,623
(366)
25,487
34,597
17,679
1.07
1.05
0.315
169,568
190,103
613,022
149,662
265,494
$
5,165
(150,673)
139,741
52,928
(21,116)
(26,442)
697,691
7.6%
97,541
$
$
483,764
7.4%
86,515
Financial Measures
Invested capital(a)
Return on invested capital(a)
EBITDA(b)
Return on beginning
shareholders’ equity(c)
Long-term debt as a percent
of invested capital(d)
Year End Data
$
$
819,092
14.0%
191,635
$
$
706,855
$
641,392
11.1%
7.7%
146,029
$
122,317
23.6%
18.7%
13.3%
10.1%
10.5%
27.3%
31.3%
36.2%
46.3%
30.9%
Shares outstanding (000)
Approximate number of shareholders
Number of employees
25,945
5,800
6,029
25,634
5,600
5,684
24,765
5,700
5,336
24,162
5,600
5,542
23,825
5,400
5,074
See footnotes on page 36.
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SEgMEnt
Su m m a r y
D o l l a rS i n mi l l i o nS, e x c e pT p e r
Sh a r e a m o u nT S
consolidated
Net sales
Gross profit
as a percent of sales
SG&A expense
as a percent of sales
Operating income
as a percent of sales
Net interest expense
Effective tax rate
Net earnings
Diluted earnings per share
Engineered Support Structures Segment
Net sales
Gross profit
SG&A expense
Operating income
Utility Support Structures Segment
Net sales
Gross profit
SG&A expense
Operating income
coatings Segment
Net sales
Gross profit
SG&A expense
Operating income
irrigation Segment
Net sales
Gross profit
SG&A expense
Operating income
Other
Net sales
Gross profit
SG&A expense
Operating income
net corporate expense
Gross profit
SG&A expense
Operating loss
NM = Not meaningful
2007
2006
Change
2007-2006
2005
Change
2006-2005
$
1,499.8
399.8
$
1,281.3
326.7
17.1 % $
22.4 %
1,108.1
278.3
26.7 %
244.2
16.3 %
155.6
10.4 %
14.9
31.4 %
94.7
3.63
$
$
25.5 %
216.6
16.9 %
110.1
8.6 %
15.1
32.0 %
61.5
2.38
$
$
$
$
$
581.5
154.1
98.6
55.5
327.3
82.4
38.0
44.4
106.5
33.9
10.9
23.0
388.9
98.5
46.8
51.7
95.6
30.7
11.8
18.9
509.3
136.0
89.8
46.2
280.8
62.9
31.9
31.0
90.4
29.5
10.7
18.8
312.8
73.9
40.9
33.0
87.9
25.1
12.5
12.5
12.7 %
41.3 %
(1.5) %
53.9 % $
52.3 % $
14.2 % $
13.3 %
9.8 %
20.1 %
16.5 % $
31.0 %
19.2 %
43.1 %
17.7 % $
15.0 %
1.7 %
22.6 %
24.3 % $
33.3 %
14.4 %
56.7 %
8.7 % $
22.3 %
(5.6) %
51.2 %
25.1 %
195.4
17.6 %
82.9
7.5 %
17.7
37.8 %
39.1
1.54
470.7
127.2
82.6
44.6
218.9
48.6
27.9
20.7
72.1
17.6
9.2
8.4
260.4
61.0
36.2
24.8
86.0
24.9
14.4
10.5
$
0.2
38.1
(37.9)
(0.7)
30.6
(31.4)
$
NM
24.3 %
(20.7) %
(1.0)
25.1
(26.1)
$
$
$
$
$
$
$
$
15.6 %
17.4 %
10.8 %
32.8 %
(14.7) %
57.3 %
54.5 %
8.2 %
6.9 %
8.7 %
3.6 %
28.3 %
29.4 %
14.3 %
49.8 %
25.4 %
67.6 %
16.3 %
123.8 %
20.1 %
21.1 %
13.0 %
33.1 %
2.2 %
0.8 %
(13.2) %
19.0 %
30.0 %
21.9 %
(20.3) %
35
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Footnotes
(a) Return on Invested Capital is calculated as Operating Income (after-tax) divided by the average of beginning and ending Invested
Capital. Invested Capital represents Total Assets minus Accounts Payable, Accrued Expenses and Dividends Payable. Return on
Invested Capital is one of our key operating ratios, as it allows investors to analyze our operating performance in light of the amount
of investment required to generate our operating profit. Return on Invested Capital is also a measurement used to determine
management incentives. Return on Invested Capital is not a measure of financial performance or liquidity under generally accepted
accounting principles (GAAP). Accordingly, Return on Invested Capital should not be considered in isolation or as a substitute for
net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP or as a measure
of our operating performance or liquidity. Return on Invested Capital, as presented, may not be comparable to similarly titled
measures of other companies.
(b) Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) is one of our key financial ratios in that it is the basis
for determining our maximum borrowing capacity at any one time. Our bank credit agreements contain a financial covenant that
our total interest-bearing debt not exceed 3.75x EBITDA for the most recent twelve month period. If this covenant is violated, we
may incur additional financing costs or be required to pay the debt before its maturity date. EBITDA is not a measure of financial
performance or liquidity under GAAP and, accordingly, should not be considered in isolation or as a substitute for net earnings,
cash flows from operations or other income or cash flow data prepared in accordance with GAAP or as a measure of our operating
performance or liquidity.
(c) Return on beginning shareholders' equity is calculated by dividing Net earnings by the prior year's ending Shareholders equity.
(d) Long-term debt as a percent of invested capital is calculated as the sum of Current portion of long-term debt and Long-term debt
divided by Total Invested Capital. This is one of our key financial ratios in that it measures the amount of financial leverage on our
balance sheet at any point in time. We also have covenants under our major debt agreements that relate to the amount of debt we
carry. If those covenants are violated, we may incur additional financing costs or be required to pay the debt before its maturity
date. We have an internal target to maintain this ratio at or below 40%. This ratio may exceed 40% from time to time to take
advantage of opportunities to grow and improve our businesses. Long-term debt as a percent of invested capital is not a measure
of financial performance or liquidity under GAAP and, accordingly, should not be considered in isolation or as a substitute for net
earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP or as a measure of
our operating performance or liquidity.
(e) See pages 23-25 of our attached Form 10-K for tables that show how the financial measurement described in the above footnotes
are calculated from our financial statements.
Photo information
Cover: “Earth Flight,” steel sculpture outside Valmont’s corporate headquarters created by artist Milton B. Heinrich of Blair, NE.
Page 10: Thomas D. Spears, Group President, Engineered Support Structures Division. Page 12: Valmont provides an array of
roadway and traffic structures. Page 13: Valmont lighting pole designs range from classic, to historic, to contemporary. Page 14:
Earl Foust, President, Utility Support Structures Division. Page 16: Transmission poles like these Valmont structures support power
networks around the world. Page 17: Valmont’s substation structure, transmission structure and distribution poles deliver power to
end consumers. Page 18: Leonard M. Adams, Group President, Irrigation Division. Page 20-21: Valmont’s center pivot irrigation
equipment improves crop yields and conserves water. Page 22-23: From large steel poles to small component parts, Valmont’s hot
dip galvanizing services protect metal products from corrosion. Page 24: Victor D. Grizzle, Group President, International Division.
Page 26: Valmont's center pivot irrigation equipment in the Middle East. Page 27: Road lighting in Helsinki designed and manufac-
tured by Tehomet, a Valmont company.
Forward-looking Statements
This report 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. The Company cautions that any
forward-looking statements included in this report are made as of the date of this report.
Valmont IndustrIes, Inc.
one Valmont Plaza
omaha, nebrask a 68154-5215 usa
402 .963 .1000
Valmont.com