2023 MESSAGE TO
FELLOW STAKEHOLDERS
AND FORM 10-K
FOR THE FISCAL YEAR ENDING DECEMBER 30, 2023
A MESSAGE TO
OUR STAKEHOLDERS
AVNER M. APPLBAUM
President &
Chief Executive Officer
Valmont achieved full-year net sales of $4.2 billion, a decrease of 3.9%. When accounting for sales from the offshore wind energy
structures business that was divested in December 2022, net sales decreased 1.7%. While the North American agriculture and
telecommunications markets experienced a meaningful slowdown, the rest of the portfolio showed strength. Despite these short-term
demand headwinds adversely impacting the top line, we expanded both gross profit margins and adjusted1 operating margins. We
also achieved adjusted2 diluted earnings per share of $14.98, over 8% growth year-over-year. Additionally, we achieved
adjusted1 return on invested capital of 14%. I am proud of the global Valmont team for their achievements.
Driving Sustainable Profitable Growth
During my tenure at the company, first as CFO and now as CEO, the global team has showcased their commitment to maintaining
our market leadership. We deliver value to our customers through innovative solutions and operational excellence initiatives, and we
capture that value through superior customer service and disciplined pricing strategies. This approach has led to significant profitability
improvements. We will continue to build on this success, and we expect further enhancement in the years to come.
Operating Income ($M)
and Operating Margin
$450
$433
$334
$287
$268
$226
7.8%
10.3%
10.0%
9.3%
8.2%
9.5%
$473
11.3%
$292
7.0%
Return on Invested Capital
14.0%
13.3%
11.7%
10.3%
10.1%
12.9%
8.7%
7.2%
2020
2021
GAAP
2022
2023
2020
Adjusted1
2021
Base
2022
2023
Adjusted1
1 Fiscal 2023 excludes the impairment of long-lived assets, realignment charges, and other non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership.
Fiscal 2022 excludes intangible asset amortization and stock-based compensation recognized for the Prospera subsidiary. Fiscal 2021 excludes the impairment of long-lived assets, intangible asset amortization and
stock-based compensation recognized for the Prospera subsidiary, the write-off of a receivable, acquisition diligence, and severance expense. Fiscal 2020 excludes the impairment of long-lived assets and restructuring
and related asset impairment costs. See reconciliations provided on the Financial Highlights page.
2 Fiscal 2023 excludes the above referenced items, the loss from Argentine peso hyperinflation, and non-recurring tax benefit items. Fiscal 2022 excludes the above referenced items and the loss from the
divestiture of the offshore wind energy structures business. Fiscal 2021 excludes the above referenced items, the impact of the U.K. tax rate change, and a valuation allowance against certain tax assets.
Fiscal 2020 excludes the above referenced items. See reconciliations provided on the Financial Highlights page.
1
Additionally, we generated strong operating cash flows in 2023. We strengthened our balance sheet and are reinforcing a disciplined
capital allocation strategy of supporting growth initiatives and returning cash to shareholders. Capital expenditures and acquisitions
are filtered through strategic and financial criteria to ensure resources are deployed effectively. We will continue returning cash to
shareholders through a combination of opportunistic share repurchases and dividends. We believe this capital allocation approach,
enabled by strong and consistent cash generation, is the right plan to maximize value for our shareholders.
Taking Action to Advance Our Strategic Objectives
2023 was a year of change for Valmont. Following my transition into the CEO role, I took steps to improve leadership, focus and
structure at Valmont. Among the most notable leadership changes were naming Aaron Schapper as Group President, Agriculture and
Chief Strategy Officer and Tim Donahue as Group President, Infrastructure. These two industry veterans have proven time and again
their ability to lead high-performance teams that consistently deliver results. Our leadership team is aligned around achieving our
strategic objectives and I am confident we have the right team in place to deliver sustainable results.
We made several strategic decisions to better position Valmont for the future. We implemented an organization realignment to simplify
reporting lines and improve the efficiency and effectiveness of our organizational structure. This realignment enhances our ability to re-
spond quickly to market dynamics, including accelerating operations when short-term market headwinds abate. Additionally, we made
necessary changes to the commercial and go-to-market strategies of our ag tech solution offerings, allowing us to better serve growers
around the world. The successful execution of these actions was critical. As a result, I am confident we are better positioned to deliver
sustainable, profitable growth and value creation for all our stakeholders.
Leveraging Our Competitive Advantages
Our Proven Competitive Advantages Uniquely
Position Us as a Leader In Our Markets.
We Expect To Grow Faster Than Our Markets With:
For nearly 80 years, Valmont has built a legacy of success on a
diversified portfolio of businesses. We have a leading presence in
markets with multi-year demand drivers addressing global megatrends.
Infrastructure is supported by the energy transition, making reliable
power accessible to all while adapting to increasing energy needs.
In Agriculture, growers are maximizing their yields through productivity
and sustainability enhancements in order to feed a growing population.
Our businesses satisfy these demand drivers with innovation that
solves our customers’ greatest challenges, both now and in the future.
Our customer-centric approach to innovation improves the adoption
rate of new products and helps us retain and gain customers. With unwavering dedication to our customers and by leveraging our com-
petitive advantages, we deliver a compelling and unique value proposition through innovation with a strong return on investment.
• Strategic Geographic Expansion
• Customer-Centric Innovation
• New Products and Services
• Footprint & Response Time
• Engineering Capabilities
Our purpose, Conserving Resources. Improving Life. ® is at the core of everything we do. It supports our overarching promise to
provide solutions that improve the lives of our customers and our communities. We prioritize sustainability initiatives not only because
it’s the right thing to do for the planet — it’s also a business decision that drives continuous improvement of our operations and reduces
our costs associated with energy, waste and resource consumption. We’ve also naturally evolved our product offerings and have
established a competitive advantage in helping our customers meet their own sustainability goals. Our strategic approach drives
governance and accountability for these vital initiatives. We will publish our 2024 Sustainability Report later this year, highlighting
recent achievements and progress toward our 2025 sustainability goals.
As we pursue opportunities in 2024 and beyond, we will do so with discipline, focus and strong accountability to drive shareholder
value. I am honored to be the CEO of a company with a rich legacy and a bright future, and I’m grateful for the trust placed in me by
our board of directors. Our executive leadership team is aligned and eager to lead Valmont to new heights and advance our strategic
objectives. And our global team is united around creating value through our core values and focus areas. Thank you, our shareholders,
for your continued support and investment in Valmont.
Avner M. Applbaum
President & Chief Executive Officer
2
2023 PERFORMANCE
$4.2
Billion Dollars
in Net Sales
100+
Countries
of Operation
21
84
11,000+
Countries with
Valmont Facilities
Manufacturing
Facilities Worldwide
Global
Employees
GAAP
Adjusted1
GAAP
Adjusted1
$291.6M $473.2M
7.0% 11.3%
Operating Income
Operating Margin
GAAP
Adjusted2
Base
Adjusted
$6.78 $14.98
7.2% 14.0%
Diluted Earnings per Share
After-Tax Return on Invested Capital3
5-Year Cumulative Total Return
Valmont Compared to S&P MidCap 400 Index and S&P 400 Industrial Machinery & Supplies & Components Index
$300
$250
$200
$150
$100
DEC 18
DEC 19
DEC 20
DEC 21
DEC 22
DEC 23
Valmont Industires, Inc.
S&P MidCap 400 Index
S&P 400 Industrial Machinery & Supplies & Components Index
This graph compares the yearly change in the cumulative total shareholder return on the Company’s common stock with the cumulative total returns of the S&P MidCap 400 Index and the S&P 400 Industrial Machinery
& Supplies & Components Index for the fi ve-year period ending December 30, 2023. The Company was added to these indexes in 2009 by Standard & Poor’s. The graph assumes that the beginning value of the invest-
ment in Valmont Common Stock and each index was $100 and that all dividends were reinvested.
1 Excludes the impairment of long-lived assets, realignment charges, and other non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership. See
reconciliations provided on the Financial Highlights page.
2 Excludes the impairment of long-lived assets, realignment charges, and other non-recurring charges associated with major scope changes for two strategic projects initiated by departed senior leadership, the loss from
Argentine peso hyperinfl ation, and non-recurring tax benefi t items. See reconciliations provided on the Financial Highlights page.
3 See Part II, Item 7, Selected Financial Measures, in the Company’s attached Form 10-K for calculation of invested capital, return on invested capital, and adjusted return on invested capital.
3
Infrastructure sales were $3.0 billion, an increase of
3% year-over-year, due to higher average selling prices across the
portfolio. Additionally, higher volumes in Solar and Transmission,
Distribution and Substation were partially offset by much lower
Telecommunications volumes.
The short and long-term outlook on Infrastructure remains
positive. Although Telecommunications sales are expected to
remain lower until major carriers increase network enhancement
spending, this softness is expected to be more than offset by
strength across the segment. Infrastructure is supported by
multi-year megatrends, including an energy transition. The shift
to renewables and increase in energy needs, along with aging
infrastructure and severe weather is leading utilities to sustain
elevated capital spending. In addition, Solar is supported by
favorable policy and Lighting and Transportation is supported by
road construction investments. Our products and solutions in a
wide variety of resilient and sustainable materials will support
the needs of our customers.
Agriculture sales were $1.2 billion, a decline of 12% year-over-year.
Higher international sales, due to higher project sales and
incremental sales from the HR Products acquisition, were more
than offset by lower volumes in North America.
In the short term, we expect more challenging global
market conditions due to lower grain prices and farm income
projections. However, we expect growers’ balance sheets
to remain strong. To help mitigate some of the softening
demand, we remain focused on price leadership, strengthening
our international project pipeline and increasing adoption of
our technology solutions. We remain confi dent in the
long-term market opportunity driven by weather volatility,
water scarcity and sustainability considerations. International
market demand is driven by ongoing food security concerns
and population growth. Our mechanized irrigation and
technology solutions provide a compelling return on investment
and will continue to help growers do more with less.
Infrastructure Sales ($M) by Product Line
Agriculture Sales ($M) by Product Line
20 23
20 22
%
202 3
202 2
%
Transmission, Distribution
and Substation
Lighting &
Transportation
$1,243.8
$1,184.7
+5%
North America
$587.1
$766.9
(23%)
$964.1
$940.5
+3%
International
$595.1
$579.8
+3%
Coatings
$354.3
$356.7
(1%)
Telecommunications
$252.2
$320.3
(21%)
Solar
$195.7
$126.2
+55%
Irrigation
Equipment & Parts
Technology Products
& Services
202 3
202 2
%
$1,069.4
$1,231.6
(13%)
$112.8
$115.1
(2%)
2023 NET SALES BY GEOGRAPHY
70%
USA &
CANADA
9%
LATIN
AMERICA
10%
EMEA
11%
APAC
4
5
CAPITAL ALLOCATION
Growing Our Businesses:
Capital Expenditures, Acquisitions
Returning Cash to Shareholders:
Share Repurchases, Dividends
Our number one capital allocation priority is investing back
into the business. Capital expenditures totaled $96.8 million
in 2023, including strategic capacity expansions, most notably
in our Brenham, Texas, manufacturing facility. We are focused
on driving organic growth and elevating our customer service
through efficiency and productivity investments such as capacity
optimization and industry 4.0 advanced manufacturing.
We prioritize projects that deliver high ROIC, and each capital
request goes through a disciplined internal review and selection
process to maximize our return on investments.
Acquisitions continue to be an avenue for growth. Targets are
assessed with clear strategic and financial criteria to ensure we
will achieve bottom-line profitable growth and returns. We employ
rigorous due diligence and a proven integration process with the
expectation our return on invested capital will exceed our cost
of capital by year three. In 2023, Valmont acquired HR Products,
a leading wholesale supplier of irrigation parts in Australia.
The acquisition strengthens our value proposition to customers in
the key agriculture market of Australia by expanding our
geographic footprint and accelerating our aftermarket
parts presence.
$525M of Capital Deployed in 2023
We returned $394.8 million to shareholders in share
repurchases and dividends. Our opportunistic share
repurchase strategy was accelerated in 2023 based on cash
flow generation and intrinsic value assessment. Shares were
repurchased throughout the year and approximately
$136.1 million remained on our current authorization as of
year-end. In late 2023, we announced an accelerated share
repurchase program of $120.0 million that will be completed
during the first quarter of 2024. Reflecting our confidence in
our performance and future cash flow generation this action
was an opportunistic way to leverage our strong balance
sheet to drive shareholder value.
We are committed to increasing our dividend over time as
a function of earnings growth, which aligns with the strategy
of steadily increasing shareholder return. In February 2023,
we increased our dividend by 9% to align with earnings
growth. We have increased our dividend four years in a row,
at an average of 13%.
SHARE
REPURCHASES
$345M
ACQUISITIONS
$33M
DIVIDENDS
$50M
CAPITAL
EXPENDITURES
$97M
5
SUSTAINABILITY
We have an enduring commitment to conserving resources and improving life, and over the last several years we have been expanding
that commitment. By creating vital infrastructure and advancing agriculture productivity, both of our business segments help build a safer,
cleaner, and more sustainable world. Environmental, Social and Governance (ESG) is supported and managed at the highest levels of
the organization, including our executives and board of directors, because we believe sustainability drives competitive advantage and
excellence across all functions. Our ESG strategy creates value for our customers, propels innovation and allows us to manage resources
most effi ciently. By minimizing our environmental impact and holding ourselves to high social and governance standards, our actions
support our employees and the communities in which we live and work around the world.
Our 2025 Sustainability Goals:
10%
12%
Reduction in
Scope I/II Carbon Intensity
Additional Reduction in Normalized
Global Electrical Usage
19%
Reduction in Scope I
Mobile Source Combustion
Fuel Carbon Emissions
2023 ESG Accomplishments:
• Our 7 Employee Resource Groups (ERG) continue to foster
diverse and unique perspectives and a voice to leadership.
We continue to enhance and embrace diverse talent and culture
at Valmont. This year each of our ERGs hosted an event for
Valmont employees to learn more about the culture and
background of their respective ERG.
• We recognized our manufacturing facility in Indapur Taluka,
India, with our annual Sustainability Award for implementing
a number of sustainability improvements that enhanced
resource effi ciency and contributed to a cleaner environment.
• In July 2023, Valmont opened a sustainability-focused concrete
utility pole manufacturing facility in Bristol, Indiana. This plant
features an on-site solar array designed to offset 100% of its
electricity usage.
• We have a Board Committee that has been meeting for two
years and continues to provide oversight for environmental,
health, safety and social risks, and reports back to offi cers
and other groups. Our ESG task force continues to meet on a
regular basis to discuss ESG strategy cross functionally and
how to apply it throughout the company.
• Valmont was a recipient of the 2023 SEAL Business
Sustainability Awards. SEAL (Sustainability, Environmental
Achievement & Leadership) Awards is an environmental
advocacy organization honoring leadership with awards for
business sustainability and environmental journalism.
• Our vision is to create a culture where a safe, healthy and
sustainable workplace is recognized by everyone as essential
to our success. We’ve continued and implemented various
proactive programs for injury prevention during 2023 — New
Employee Onboarding Safety Training, Safety Absolutes Training,
Critical Risk Safety Assessments, EHS Representative and
Supervisor Workshop Training.
6
FINANCIAL HIGHLIGHTS
$ GAAP $ ADJUSTED
$4,175
$4,345
$3,502
$449.71
$433.2
$473.21
$291.6
$334.01
$286.8
$14.982
$13.822
$11.62
$10.922
$9.10
$6.78
2023
2022
Net Sales
2021
Dollars in millions; except per-share amounts
OPERATING RESULTS
Net sales
Operating income1
Net earnings 2,3
Diluted earnings per share2
Dividends per share
FINANCIAL POSITION
Total shareholders’ equity
Invested capital4
OPERATING PROFITS
Gross profi t as a % of net sales
Operating income as a % of net sales
Adjusted operating income as a % of net sales1
Net earnings 3 as a % of net sales
Adjusted net earnings as a % of net sales 2,3
Return on invested capital4
Adjusted return on invested capital 4
YEAR-END DATA
Shares outstanding (000’s)
Approximate number of shareholders
Number of employees
2023
2022
Operating Income
2021
2023
2022
Diluted Earnings Per Share
2021
2023
$ 4,174.6
291.6
150.8
6.78
2.40
$ 1,354.3
2,513.5
29.6%
7.0%
11.3%
3.6%
7.6%
7.2%
14.0%
21,159
57,128
11,125
2022
$ 4,354.2
433.2
250.9
11.62
2.20
$ 1,580.8
2,495.5
25.9%
10.0%
10.3%
5.8%
6.9%
12.9%
13.3%
21,580
36,163
11,364
2021
$ 3,501.6
286.8
195.6
9.10
2.00
$ 1,386.8
2,379.0
25.2%
8.2%
9.5%
5.6%
6.7%
10.1%
11.7%
21,493
25,765
11,041
1Fiscal 2023 GAAP operating income included the impairment of long-lived assets of $140.8 million (pre-tax), realignment charges of $35.2 million (pre-tax), and non-recurring charges associated with major scope changes for
two strategic projects initiated by departed senior leadership of $5.6 million (pre-tax). On an adjusted basis, operating income was $473.2 million. Fiscal 2023 GAAP operating income also included stock-based compensation for
Prospera of $4.3 million (pre-tax) and intangible amortization for Prospera of $3.3 million (pre-tax). On a further adjusted basis, operating income was $480.8 million. Fiscal 2022 GAAP operating income included stock-based com-
pensation for Prospera of $9.9 million (pre-tax) and intangible amortization for Prospera of $6.6 million (pre-tax). On an adjusted basis, operating income was $449.7 million. Fiscal 2021 GAAP operating income included impairment
costs of long-lived assets of $27.9 million (pre-tax), intangible amortization and stock-based compensation for Prospera of $8.6 million (pre-tax), receivable write-off of $5.5 million (pre-tax), acquisition diligence expense of $1.1
million (pre-tax), and severance expense of $4.1 million (pre-tax). On an adjusted basis operating income was $334.0 million.
2Fiscal 2023 GAAP net earnings included the impairment of long-lived assets of $136.5 million after-tax ($6.45 per share), realignment charges of $26.5 million after-tax ($1.25 per share), non-recurring charges associated
with major scope changes for two strategic projects initiated by departed senior leadership of $4.2 million after-tax ($0.20 per share), loss from Argentine peso hyperinfl ation attributable to Valmont Industries, Inc. of $2.5
million after-tax ($0.12 per share), and non-recurring tax benefi t items of $3.6 million ($0.17 per share). Fiscal 2023 GAAP net earnings also included intangible asset amortization for Prospera of $2.5 million after-tax
($0.12 per share) and stock-based compensation for Prospera of $3.9 million after-tax ($0.19 per share). Fiscal 2022 GAAP net earnings included the loss from divestiture of the offshore wind energy structures business of
$33.3 million after-tax ($1.54 per share), intangible asset amortization for Prospera of $6.6 million after-tax ($0.30 per share), and stock-based compensation for Prospera of $7.4 million after-tax ($0.35 per share). Fiscal
2021 GAAP net earnings included impairment costs of long-lived offshore structures assets of $21.7 million after-tax ($1.01 per share), intangible amortization and stock-based compensation for Prospera of $6.6 million
after-tax ($0.31 per share), receivable write-off of $4.2 million after-tax ($.20 per share), acquisition diligence expense of $0.9 million after-tax ($0.04 per share), severance expense of $3.1 million after-tax ($0.14 per share),
impact of UK tax rate change of $2.8 million ($0.13 per share), and valuation allowance against deferred tax asset of $5.1 million ($0.24 per share).
3Net earnings attributable to Valmont Industries, Inc.
4See Part II, Item 7, Selected Financial Measures, in the Company’s attached Form 10-K for calculation of invested capital, return on invested capital, and adjusted return on invested capital.
For more information on the footnotes above and the reasons why we believe the non-GAAP measures are useful, please see Part II, Item 7 and Item 8 of the attached 2023 Form 10-K.
Timothy P. Francis
Interim Chief
Financial Officer
T. Mitchell Parnell
Executive Vice President,
Chief Human Resources Officer
J. Timothy Donahue
Group President,
Infrastructure
Ellen S. Dasher
Vice President,
Global Taxation
EXECUTIVE LEADERSHIP
Avner M. Applbaum
President
& Chief Executive Officer
Diane M. Larkin
Executive Vice President,
Global Operations
Aaron M. Schapper
Group President,
Agriculture & Chief
Strategy Officer
Renee L. Campbell
Senior Vice President,
Investor Relations &
Treasurer
R. Andrew Massey
Vice President,
Chief Legal Officer
& Corporate Secretary
8
BOARD OF DIRECTORS
Dr. Theodor W. Freye
Retired CEO of CLAAS KgaA
ESG Committee
Governance & Nominating Committee
Richard Lanoha
President & CEO,
Kiewit Corporation
Human Resources Committee
James B. Milliken
Chancellor, University of Texas System
Audit Committee
ESG Committee
Chair, Governance & Nominating Committee
Daniel P. Neary
Former Chairman & Retired CEO,
Mutual of Omaha
Audit Committee
ESG Committee
Chair, Human Resources Committee
Joan Robinson-Berry
Retired SVP & Chief Engineer,
The Boeing Company
Human Resources Committee
Mogens C. Bay
Chairman
Valmont Industries, Inc.
Catherine J. Paglia
Lead Director
Enterprise Asset Management Inc.
Audit Committee
Human Resources Committee
Avner M. Applbaum
President
& Chief Executive Officer
K. R. den Daas
Retired CEO, Quality Light Source
Retired EVP, Phillips Lighting B.V.
of the Netherlands
Chair, Audit Committee
ESG Committee
Governance & Nominating Committee
Ritu Favre
President,
Test & Measurement Business Group
NI, now part of Emerson
Chair, ESG Committee
Governance & Nominating Committee
9
CONTACT INFORMATION
Shareholder and Investor Relations
Corporate Headquarters
Valmont’s common stock trades on the New York Stock
Exchange (NYSE) under the symbol VMI. We make available,
free of charge through our website at 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 re-
ports 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.
We have also posted on our website our (1) Corporate
Governance Principles, (2) Charters for the Audit Committee,
ESG Committee, Human Resources 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 corporate controller. Valmont shareholders may
also obtain copies of these items at no charge by contacting:
Renee L. Campbell
Senior Vice President,
Investor Relations & Treasurer
Valmont Industries, Inc.
15000 Valmont Plaza
Omaha, Nebraska 68154 USA
investorrelations@valmont.com
Valmont Industries, Inc.
15000 Valmont Plaza
Omaha, Nebraska 68154 USA
+1 402.963.1000
valmont.com
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Omaha, Nebraska USA
Stock Transfer Agent and Registrar
Address Inquiries To:
Broadridge Corporate Issuer Solutions, Inc.
PO Box 1342
Brentwood, New York 11717-0718 USA
+1 844.202.5345 or +1 720.414.6878
Annual Meeting
The annual meeting of Valmont shareholders
will be held at 10:00 a.m. CT, on May 6, 2024, at
15000 Valmont Plaza, Omaha, Nebraska 68154 USA.
10
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-31429
Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
15000 Valmont Plaza,
Omaha, Nebraska
(Address of principal executive offices)
47-0351813
(I.R.S. Employer
Identification No.)
68154
(Zip Code)
(402) 963-1000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $1.00 par value
Trading Symbol(s)
VMI
Name of each exchange on which registered
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act:
Large accelerated filer
☒ Accelerated
filer
☐ Non-accelerated
filer
☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of February 23, 2024, there were 20,216,385 of the Company’s common shares outstanding. The aggregate market value of the voting stock held by non-
affiliates of the Company based on the closing sale price of the common shares as reported on the New York Stock Exchange as of July 1, 2023 was $5,766,436,565.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s proxy statement for its annual meeting of shareholders to be held on May 6, 2024 (the “Proxy Statement”), to be filed within 120 days
of the fiscal year ended December 30, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PART I
Item 1
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1C
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4
PART II
Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6
Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . .
Item 7A Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8
Item 9
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . . . . . . . . . . .
Item 9A Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III
Item 10
Item 11
Item 12
Item 13
Item 14
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . .
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . .
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV
Item 15
Item 16
Signatures
Exhibit and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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9
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20
38
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1
ITEM 1. BUSINESS
PART I
Valmont Industries, Inc., along with its subsidiaries (collectively, the “Company”, “Valmont”, “we”, “us”, or “our”),
is a diversified manufacturer of products and services for infrastructure and agriculture markets. We were founded in 1946,
went public in 1968, and our shares trade on the New York Stock Exchange under the ticker symbol “VMI”. We are
headquartered in Omaha, Nebraska. Our purpose as a company is to conserve resources and improve life.
Segments
We have two reportable segments based on our management structure. Both reportable segments are global in nature
with a manager responsible for operational performance and allocation of capital. Corporate expense is net of certain service-
related expenses that are allocated to business units generally based on employee headcounts and sales dollars.
Customers and end-users of our Infrastructure products include utility and telecommunication companies,
municipalities and government entities, manufacturers of commercial lighting fixtures, and contractors. Customers of our
Agriculture segment are primarily dealers who resell mechanized irrigation equipment to their end-customer, the farmer.
Both segments service the general manufacturing sector as well. In fiscal 2023, approximately 31% of our net sales were
either sold in markets or produced by our manufacturing plants outside of North America.
Our reportable segments are as follows:
Infrastructure: This segment consists of the manufacture and distribution of products and solutions to serve the
infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to
protect metal products.
Agriculture: This segment consists of the manufacture of center pivot components and linear irrigation equipment
for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.
In addition to these two reportable segments, we had a business and related activities that were not more than 10%
of consolidated sales, operating income, or assets. These activities comprised the offshore wind energy structures business
until its divestiture in the fourth quarter of fiscal 2022.
Information concerning the principal products produced and services rendered, markets, competition, and
distribution methods for each of our two reportable segments is set forth below.
Infrastructure Segment
Products
• Transmission, Distribution, and Substation (“TD&S”): We engineer and manufacture steel, pre-stressed
concrete, and composite structures to support the lines and equipment that carry and transform power for
electrical transmission, substation, and distribution applications for the utility industry. Transmission refers to
moving high-voltage power from where it is produced to where it is used. Substations transform the electricity
from the generation source so that it can be carried on the transmission lines. A substation is then required to
transform the high-voltage electricity from the transmission lines to low voltage so it can be distributed to the
end-user. These innovative structures are offered to meet the growing demand for reliable energy. These
solutions also support grid hardening across the globe, where fires, storms, and floods are occurring with
increasing regularity.
TD&S projects are often complex and include large structures, therefore product design engineering is
important to the function and safety of these solutions. Our engineering process considers weather and loading
conditions, such as wind speeds, ice loads, and power line requirements, to arrive at the final design.
• Lighting and Transportation (“L&T”): We design, engineer, and manufacture steel, aluminum, wood, and
composite poles and structures for a wide range of lighting and transportation applications. The demand for
these products is driven by infrastructure, commercial, and residential construction and by consumers’ desire for
2
well-lit streets, highways, parking lots, and common areas. Beyond technical and engineering needs, customers
also want product designs that are visually appealing and meet local aesthetic requirements.
Our traffic and sign structures contribute to the orderly flow of automobile traffic. These structures support
traffic signals and overhead signs. They are engineered to meet customer specifications to ensure the proper
function and safety of the structure. Product engineering considers factors such as weather (e.g., wind, ice) and
the products loaded on the structure (e.g., lighting fixtures, traffic signals, overhead signs) to determine the
design. We have expanded our capabilities in the traffic market with the development of patented vibration
mitigation technology which continuously improves the safety of traffic and roadway structures by reducing the
effects of wind and fatigue. Our L&T product line also includes highway safety system products that are
designed and engineered to enhance roadway safety. These systems include guardrail barriers, wire rope safety
barriers, crash attenuation barriers, and other products which primarily serve the Australian and Indian markets.
• Coatings: We provide finishing services that inhibit corrosion, extend service lives, and enhance the aesthetics
of a wide range of materials and products. With a variety of finish options, including galvanizing, anodizing,
and painting, we can meet customer-specific requirements for a variety of applications. Hot-dip galvanizing is a
process that protects and prolongs the life of steel with a zinc coating that is bonded to the product surface to
inhibit rust and corrosion. CorroCote® adds protection to steel against the corrosive effects of soil and
underground moisture for those products that are anchored below ground. Anodizing is a process applied to
aluminum that oxidizes the surface of the aluminum in a controlled manner, which protects the aluminum from
corrosion and allows the material to be dyed a variety of colors. We also paint products using powder coating
for certain industries and markets.
• Telecommunications: We engineer, manufacture, and distribute products including towers, small cell
structures, camouflage concealment solutions, passive intermodulation (“PIM”) mitigation equipment, and
components serving the wireless communication market. These solutions support expanded 5G requirements
and the ever-growing demand for data. A wireless communication cell site mainly consists of a steel pole or
tower, shelter (enclosure where the radio equipment is located), antennas (devices that receive and transmit data
and voice information to and from wireless communication devices), and components (items that are used to
mount antennas to a structure and to connect cabling and other parts from the antennas to the shelter). Small cell
applications are utilized to enhance signal densification in urban environments and enhance the signal from the
tower. Concealment solutions, such as faux trees, convert traditional telecommunication structures and
camouflage them to fit seamlessly into the surrounding environment. PIM mitigation solutions are provided to
solve issues with signal interference. Our telecommunication structures are engineered and designed to
customer specifications, which include factors such as equipment and antenna requirements, wind and soil
conditions, and aesthetic standards, all while ensuring that they meet safety specifications.
• Solar: Our solar single-axis tracker product is an integrated system of steel structures, electric motors, and
electronic controllers. Trackers move solar panels throughout the day to maintain an optimal orientation to the
sun, which materially increases their energy production. Our trackers utilize a simple, modular design allowing
ease of installation and low operational maintenance. Further, the flexibility of our trackers’ design allows for
improved site utilization, which is especially valuable to our customers considering that solar projects are being
constructed on increasingly challenging sites. We sell our products to engineering, procurement, and
construction firms that build solar energy projects as well as solar developers, independent power producers,
and utilities.
Markets
The key markets across the Infrastructure product lines have a portion of their funding supported through local,
state, and federal government programs. Currently, the United States of America (“U.S.”) government is supporting
infrastructure improvement through the Infrastructure Investment and Jobs Act (“IIJA”) and the Inflation Reduction Act
(“IRA”). These acts will allocate funding to reinforce the nation’s bridges, increase safety for the traveling public, update
vital infrastructure, improve highway safety, and harden the electrical grid.
The utility industry in North America is a significant market for the Infrastructure segment. The key drivers are
significant upgrades in the electrical grid to support enhanced reliability standards, policy changes encouraging more
generation from renewable energy sources, and increased electrical consumption, which has outpaced transmission
investment in the past decades. According to the Edison Electric Institute, the electrical transmission grid in the U.S. requires
significant investment in the coming years to respond to compelling industry drivers and lack of investment prior to 2008.
3
Electrical consumption is also expected to increase within international markets. This will require substantial investment in
new electricity generation capacity and growth in transmission grid development. We expect these factors to result in
increased demand for electrical utility structures to transport electricity from source to user, as is used in U.S. markets today.
We also serve the transportation, construction, and industrial markets. Many products from our transportation
product portfolio will be utilized when making enhancements to traffic structures, bridge systems, roadway and street
lighting, and high-mast lighting. A combination of state and federal funding, including the IIJA, supports transportation
projects throughout the U.S. Public and private partnerships have also recently emerged as an additional funding source. In
the U.S., there are approximately four million miles of public roadways, with approximately 24% carrying over 80% of the
traffic. Accordingly, the need to improve traffic flow through traffic controls and lighting is a priority for many communities.
The commercial construction market is mostly privately funded and includes lighting for applications such as parking lots,
shopping centers, sports stadiums, and business parks. This market is driven by macroeconomic factors such as general
economic growth rates, interest rates, and the commercial construction economy. We have many long-standing relationships
with lighting and equipment manufacturers who also serve this market. Industrial markets are typically driven by
infrastructure, industrial, and commercial construction spending.
Markets for our Coatings products are varied and our profitability is not substantially dependent on any one industry
or external customer. However, a meaningful percentage of demand is internal, driven by our other product lines and their
market demand. Demand for coatings services generally follows the local industrial economies. Galvanizing is used in a wide
variety of industrial applications where corrosion protection of steel is desired. While markets are varied, our markets for
anodized or painted products are more directly dependent on consumer markets than industrial markets.
The market for our Telecommunications products is driven by demand for wireless communication and data. Our
customers are wireless network providers and companies that own and maintain cell sites. We also sell products to state and
federal governments for two-way radio communication, radar, broadcasting, and security applications. We believe long-term
growth should mainly be driven by increased data usage and technologies such as 5G, which demands higher network
density. Improved emergency response systems, as part of U.S. Department of Homeland Security initiatives, create
additional demand.
The solar market is driven by the transition to clean energy sources globally and incentives for renewable energy
investment. As utilities increase the development of large-scale solar power and micro-grid applications, single-axis solar
tracker solutions will be an essential tool for achieving higher energy production.
Competition
Our competitive strategy is to provide high-value solutions to the customer at the appropriate price. We compete
based on product quality, engineering expertise, high levels of customer service, and timely, complete, and accurate delivery
of the product. We leverage the production capacity at our network of plants to ensure that the customer receives quality and
timely service. There are numerous competitors in North America as well as in international markets. Pricing can be very
competitive, especially when demand is weak or when strong local currencies result in increased competition from imported
products. Infrastructure sales are often made through a competitive bid process, whereby the lowest bidder is awarded the
contract, provided the bidder meets all other qualifying criteria. We also sell on a preferred-provider basis to certain large
customers. These contractual arrangements often last between three and five years and are frequently renewed.
The Coatings product line markets have traditionally been very fragmented with a large number of competitors.
Most of these competitors are relatively small, privately held companies that compete based on price and personal
relationships with their customers. Our strategy is to compete based on the quality of the coating finish and timely delivery of
the coated product to the customer.
The Solar product line offers solutions that are specific to the solar industry. We primarily compete with other
mid-sized market participants and differentiate ourselves based on the quality of service and ability to combine offerings
from the TD&S product line to provide full-grid solutions.
Distribution Methods
Infrastructure sales and distribution activities are handled through a combination of a direct sales force and
commissioned agents. Working with end-users and distributors, our sales force represents Valmont as well as light fixture
and traffic-signal manufacturers. This enables our agents to provide the pole, fixtures, and other equipment to the end-user as
a complete package. Commercial lighting, wireless communication products and components, access systems, and highway
4
safety sales are normally made through our sales employees, although some sales are made through independent
commissioned sales agents. Our TD&S and Solar products are normally sold directly to electrical utilities, developers, or
energy providers with some sales sold through commissioned sales agents.
Due to freight costs, a galvanizing location has an effective service area of an approximate 300-to-500-mile radius.
While we believe that we are globally one of the largest custom galvanizers, our sales are a small percentage of the total
market. Sales and customer service are provided directly to the user by a direct sales force, generally assigned to each
specific location.
Agriculture Segment
Products
•
Irrigation Equipment and Parts: We manufacture and distribute mechanical irrigation equipment and related
service parts under the Valley® brand name. A Valley® irrigation machine is powered by electricity (via a grid,
solar, or diesel generator), propels itself over a farm field, and applies water and chemicals to crops. Water and
chemicals are applied through sprinklers attached to a pipeline that is supported by a series of towers, each of
which is propelled via a drivetrain and tires. A standard mechanized irrigation machine (also known as a center
pivot) rotates in a circle, although we also manufacture and distribute center pivot extensions that can irrigate
corners of square and rectangular farm fields as well as conform to irregular field boundaries (referred to as a
corner machine). Our irrigation machines can also irrigate fields by moving up and down the field as opposed to
rotating in a circle (referred to as a linear machine). Irrigation machines can be configured to irrigate fields in
sizes from four acres to over 500 acres, with a standard size in the U.S. configured for a 160-acre tract of
ground. The irrigation machine used in international markets is substantially the same as the one produced for
the North American market. We also manufacture tubular products for industrial customers primarily in the
agriculture industry as well as in transportation and other industries.
• Technology Products and Services: Through over 100,000 connected devices, Valley® has paired sustainable
infrastructure with technology to help growers see crop production issues before they become problems. Our
suite of advanced technology solutions offers capabilities to assist in reducing water and energy use as the
center pivot is the only infrastructure on the farm that is continually in the field every day of the year. During
fiscal 2021, we purchased Prospera Technologies, Ltd., a leading global artificial intelligence and machine
learning provider of advanced agronomy monitoring solutions. Our crop anomaly detection can alert growers of
pivot-related water issues with artificial intelligence and machine learning (in select markets) to help farmers
determine where and how much to irrigate.
Markets
Market drivers in North American and international markets are essentially the same. Since the purchase of an
irrigation machine is a capital expenditure, the purchase decision is based on the expected return on investment. The benefits
a grower may realize through investment in mechanical irrigation include improved yields through better irrigation, cost
savings through reduced labor, and lower water and energy usage. The purchase decision is also affected by current and
expected net farm income, commodity prices, interest rates, the status of government support programs, and water regulations
in local areas. In many international markets, the relative strength or weakness of local currencies as compared with the U.S.
dollar may affect net farm income, as export markets are generally denominated in U.S. dollars. In addition, governments are
sponsoring irrigation projects for self-sufficiency in food production to help alleviate food security concerns.
The demand for mechanized irrigation comes from the following sources:
•
conversion from flood irrigation;
•
•
replacement of existing mechanized irrigation machines; and
converting land that is not irrigated to mechanized irrigation.
5
One of the key drivers in our Agriculture segment worldwide is that the usable water supply is limited. We estimate
that:
•
•
•
only 2.5% of the total worldwide water supply is freshwater;
of that 2.5%, only 30% of freshwater is available to humans; and
the largest user of that freshwater is agriculture.
We believe these factors, along with the trends of a growing worldwide population, improving diets, and
governments’ efforts to address food security, reflect the need to use water more efficiently while increasing food production
to feed the growing population. We believe that mechanized irrigation can improve water application efficiency by 40% to
90% compared with traditional irrigation methods by applying water uniformly near the root zone and reducing water runoff.
Furthermore, reduced water runoff improves water quality in nearby rivers, aquifers, and streams, thereby providing
environmental benefits in addition to the conservation of water.
Competition
In North America, there are a number of entities that provide irrigation products and services to agricultural
customers. We believe we are the leader of the four main participants in the mechanized irrigation business. Participants
compete for sales based on product durability and reliability, price, quality, and service capabilities of the local dealer. We
continue to innovate and expand our technology offerings as growers continue to seek more solutions to increase their crop
yields. Pricing can become very competitive, especially in periods when market demand is low. In international markets, our
competitors are a combination of our major U.S. competitors and privately owned local companies. Competitive factors are
similar to those in North America, although pricing tends to be a more prevalent competitive strategy in international
markets. Since competition in international markets is local, we believe local manufacturing capability is important to
competing effectively in international markets and we have that capability in key regions.
Distribution Methods
We market our irrigation machines, technology offerings, and service parts through independent dealers. There are
approximately 250 dealer locations in North America, with another approximately 400 dealers serving international markets
in over 60 countries. The dealer determines the grower’s requirements, designs the configuration of the machine, installs the
machine (including providing ancillary products that deliver water and electrical power to the machine), and provides
after‑sales service. Our dealer network is supported and trained by our technical and sales teams. Our international dealers are
supported through our regional operations in South America, South Africa, Western Europe, Australia, China, and the United
Arab Emirates, as well as our manufacturing facility in Valley, Nebraska.
General
Certain information generally applicable to our two reportable segments is set forth below.
Business Strategy
Our strategy is to pursue growth opportunities that leverage our existing product portfolio, knowledge of our
principal end-markets and customers, and engineering capabilities to increase our sales, earnings, and cash flow, including:
Increasing the Market Penetration of Our Existing Products: Our strategy is to increase our market penetration by
differentiating our products from our competitors through superior customer service, engineering proficiency, technological
innovation, and consistent high quality. Our Agriculture segment experienced international sales growth in fiscal 2023 which
we believe was partially due to the continuing importance of our precision agriculture and technology offerings.
Bringing Our Existing Products to New Markets: Our strategy is to expand the sales of our existing products into
geographic areas where there is market opportunity, where we do not currently serve, and where end-users do not currently
purchase our type of products. For example, we have a manufacturing presence in Poland and India to expand our offering of
structures for L&T, TD&S, and Telecommunications to these markets and we have expanded our manufacturing presence in
the United Arab Emirates to serve growing Middle East markets. Our Agriculture segment has a long history of developing
new emerging markets for mechanized irrigation around the world. For example, in January 2023, we secured an
approximately $85.0 million multi-year agreement for projects in Africa.
6
Developing New Products for Markets That We Currently Serve: Our strategy is to grow by developing new
products for markets using our comprehensive understanding of end-user requirements and leveraging longstanding
relationships with key distributors and end-users. In recent years, in North America, we developed and sold structures for
spun concrete distribution poles and steel bridge girders. Additionally, we began offering concealment solutions for the
wireless communication markets.
Developing New Products for New Markets or Leveraging Core Competencies to Further Diversify Our Business Is
a Path to Increase Sales: For example, the establishment and growth of our Coatings product line was based on using our
expertise in galvanizing to develop what is now a global product line. We have grown sales through expanding our presence
in the decorative lighting market, which has different requirements and preferences than our traditional transportation and
commercial markets. Acquisitions are a key component of our strategy to expand the markets we serve through new products
and services. In fiscal 2023, we acquired HR Products, a leading wholesale supplier of irrigation parts in Australia, expanding
our geographic footprint and growing our parts presence in a key agriculture market. In fiscal 2022, we acquired a majority
interest in ConcealFab, a 5G infrastructure and passive intermodulation mitigation solutions company, expanding our
portfolio of telecommunications products that support 5G technology.
Acquisitions
We have grown organically and by acquisition. Our significant business acquisitions during the past two fiscal years
include the following (including the segment in which the business reports):
2023
• Acquisition of HR Products, a leading wholesale supplier of irrigation parts in Australia (Agriculture)
2022
• Acquisition of 51% of ConcealFab, a 5G infrastructure and PIM mitigation solutions company in Colorado
(Infrastructure)
• Acquisition of the remaining 9% not previously owned of Convert Italia S.p.A. (Infrastructure)
• Acquisition of the remaining 20% not previously owned of Valmont West Coast Engineering, Ltd.
(Infrastructure)
Divestitures
Our business divestitures during the past two fiscal years include the following (including the segment in which the
business reported):
2023
• Divestiture of Torrent Engineering and Equipment, an integrator of prepackaged pump stations in Indiana
(Agriculture)
2022
• Divestiture of Valmont SM, an offshore wind energy structures business in Denmark (Other)
Suppliers and Availability of Raw Materials
Hot rolled steel coil and plate, zinc, and other carbon steel products are the primary raw materials utilized in the
manufacture of finished products for all segments. We purchase these essential items from steel mills, steel service centers,
and zinc producers where these materials are usually readily available. While we may experience increased lead times to
acquire materials and volatility in our purchase costs, we do not believe that key raw materials would be unavailable for
extended periods. We have not experienced extended or widespread shortages of steel in the past several years, due to what
we believe are strong relationships with some of the major steel producers. In the past several years, we experienced volatility
in steel, zinc, and natural gas prices, but we did not experience any disruptions to our operations due to availability.
7
Patents, Licenses, Franchises, and Concessions
We have a number of patents for our manufacturing machinery, structures, solar trackers, highway guardrails, and
irrigation designs. We also have a number of registered trademarks. We do not believe the loss of any individual patent or
trademark would have a material adverse effect on our financial condition, results of operations, or liquidity.
Seasonal Factors in Business
Sales can be somewhat seasonal based on the agricultural growing season and the infrastructure construction season.
Sales of mechanized irrigation equipment to farmers are traditionally higher during the spring and fall and lower in the
summer. Sales of infrastructure products are traditionally higher in the summer and fall and lower in the winter.
Customers
We are not dependent upon a single customer or upon very few customers for a material part of any segment’s
business. The loss of any one customer would not have a material adverse effect on our financial condition, results of
operations, or liquidity.
Backlog
As of December 30, 2023 and December 31, 2022, the backlog of orders for our principal products manufactured
and marketed was $1,465.5 million and $1,656.4 million, respectively. An order is reported in our backlog upon receipt of a
purchase order from the customer or execution of a sales order contract. We anticipate that most of the fiscal 2023 backlog of
orders will be filled during fiscal 2024. The total backlog by segment as of December 30, 2023 and December 31, 2022 was
as follows:
Dollars in millions
Infrastructure
Agriculture
Total backlog
Environmental Protection
December 30,
2023
December 31,
2022
$
$
1,299.6
165.9
1,465.5
$
$
1,339.1
317.3
1,656.4
We are subject to various federal, state, and local laws and regulations pertaining to environmental protection and
the discharge of materials into the environment. Although we continually incur expenses and make capital expenditures
related to environmental protection, we do not anticipate that future expenditures will materially impact our financial
condition, results of operations, or liquidity.
Number of Employees
As of December 30, 2023, we had 11,125 employees.
Human Capital Resources
Our policies and practices with respect to human capital resources are generally set forth in our Code of Business
Conduct, our Human Rights Policy, and the principles described on our website at www.valmont.com. Essential to our
success is a company-wide commitment to customer service and innovation and the ability to provide the best value to our
customers for our products and services. Our employees are the cornerstone of our accomplishments, and we pride ourselves
on being people of passion and integrity who excel and deliver results. Our Code of Business Conduct and our culture require
each employee to act responsibly and to treat each other fairly and with the utmost respect.
Our businesses require skilled workers and management in order to meet our customers’ needs, grow our sales, and
maintain competitive advantages. We require employees with skills in engineering, welding, equipment maintenance, and the
operation of complex manufacturing machinery. Management talent is critical, as well, to help grow our businesses and
effectively plan for the succession of key employees upon retirement.
8
As of December 30, 2023, we had 6,356 employees in the U.S. and 4,769 employees in countries outside the U.S.
We place a high value on diversity and inclusion, seeking employees with diverse backgrounds and experiences who share a
common interest in profitable development, improving corporate culture, and delivering sustainable business results.
We have adopted a Human Rights Policy which is published on our website. We expect our employees, suppliers,
vendors, dealers, and distributors to share our commitment to human rights. We prohibit discrimination based on age, race,
disability, ethnicity, marital or family status, national origin, religion, gender, sexual orientation, veteran status, gender
identity, or any other characteristic protected by law.
We are committed to voluntary employment, and we strictly prohibit all forms of compulsory labor, including child
labor, forced labor, slavery, and human trafficking. We respect internally recognized human rights standards, and this policy
is guided by the United Nations Guiding Principles on Business and Human Rights.
We require full compliance with applicable wage, work hours, overtime, and benefits laws. We are committed to
creating a culture where a healthy and safe workplace is recognized by everyone as essential to our success. Any employee
can always contact our compliance officer, and confidential reporting of a situation or the ability to ask a question is available
on a secure website maintained by a third party. Employees are eligible for health insurance, paid and unpaid leaves,
retirement plans, and life, disability, and accident coverage.
When positions come open at Valmont, we try first to fill them from within. We like to reward the hard-working
members of our Valmont community with new opportunities that are not only a chance to expand their worlds but to also
recognize and reward their dedication. We have found them to be our richest talent resource.
Our program for succession and management development has our highest level of attention with our Chief
Executive Officer (“CEO”) responsible for reporting on the program directly to our Board of Directors.
For additional information, please see the “Governance” and “Sustainability” pages on our website and the section
titled “Governance, Human Capital and Sustainability Highlights” in our 2024 Proxy Statement.
Available Information
We make available, free of charge on the “Investors” page of our website 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 (the "SEC"). Additionally,
we use our website, through the “Investors” page, as a channel for routine distribution of important information, including
news releases, analyst presentations, and financial information. The information on our website is not, and will not be
deemed to be, a part of this annual report on Form 10-K or incorporated into any of our other filings with the SEC.
ITEM 1A. RISK FACTORS
The following risk factors describe various risks that may affect our business, financial condition, and operations.
Economic and Business Risks
The ultimate consumers of our products operate in cyclical industries that have been subject to significant downturns
which have adversely impacted our sales in the past and may again in the future.
Our sales are sensitive to the market conditions present in the industries in which the ultimate consumers of our
products operate, which in some cases have been highly cyclical and subject to substantial downturns. For example, a
significant portion of our sales of support structures is to the electric utility industry. Our sales to the U.S. electric utility
industry were over $1.0 billion in fiscal 2023. Purchases of our products are deferrable to the extent that utilities may reduce
capital expenditures for reasons such as unfavorable regulatory environments, a slow U.S. economy, or financing constraints.
In the event of weakness in the demand for utility structures due to reduced or delayed spending for electrical generation and
transmission projects, our sales and operating income likely will decrease.
The end-users of our mechanized irrigation equipment are farmers. Accordingly, economic changes within the
agriculture industry, particularly the level of farm income, may affect sales of these products. From time to time, lower levels
of farm income resulted in reduced demand for our mechanized irrigation and tubing products. Farm income decreases when
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commodity prices, acreage planted, crop yields, government subsidies, and export levels decrease. In addition, weather
conditions, which may be exacerbated by climate change, such as extreme drought, may result in reduced availability of
water for irrigation and can affect farmers’ buying decisions. Farm income can also decrease as farmers’ operating costs
increase. Increases in oil and natural gas prices result in higher costs of energy and nitrogen‑based fertilizer (which uses
natural gas as a major ingredient).
Furthermore, uncertainty as to future government agricultural policies may cause indecision on the part of farmers.
The status and trend of government farm supports, financing aids, and policies regarding the ability to use water for
agricultural irrigation can affect the demand for our irrigation equipment. In the U.S., certain parts of the country are
considering policies that would restrict usage of water for irrigation. All of these factors may cause farmers to delay capital
expenditures for farm equipment. Consequently, downturns in the agricultural industry will likely result in a slower, and
possibly a negative, rate of growth in irrigation equipment and tubing sales. In February 2024, the U.S. Department of
Agriculture (“USDA”) forecasted U.S. 2024 net farm income to be $116.1 billion, a decrease of $39.8 billion (or -25.5%),
relative to 2023. The decrease was primarily related to a decrease in cash receipts from crops and livestock, in addition to a
decrease in direct government support payments and higher production expenses. With this projected decline, net farm
income in 2024 would be 1.7% below its 20-year average.
We have also experienced cyclical demand for those of our products that we sell to the wireless communications
industry. Sales of wireless structures and components to wireless carriers and build-to-suit companies that serve the wireless
communications industry have historically been cyclical. These customers may elect to curtail spending on new capacity to
focus on cash flow and capital management. Changes in the competitive structure of the wireless industry, due to industry
consolidation or reorganization, may interrupt capital plans of the wireless carriers as they assess their networks.
Due to the cyclical nature of these markets, we have experienced, and in the future we may experience, significant
fluctuations in our sales and operating income with respect to a substantial portion of our total product offering, and such
fluctuations could be material and adverse to our overall financial condition, results of operations, and liquidity.
Changes in prices and reduced availability of key commodities such as steel, aluminum, zinc, natural gas, and fuel may
increase our operating costs and likely reduce our net sales and profitability.
Hot rolled steel coil and other carbon steel products have historically constituted approximately one-third of the cost
of manufacturing our products. We also use large quantities of aluminum for lighting structures and zinc for the galvanization
of most of our steel products. Our facilities use large quantities of natural gas for heating and processing tanks in our
galvanizing operations. We use gasoline and diesel fuel to transport raw materials to our locations and to deliver finished
goods to our customers. The markets for these commodities can be volatile. The following factors increase the cost and
reduce the availability of these commodities:
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increased demand, which occurs when we and other industries require greater quantities of these commodities,
which can result in higher prices and lengthen the time it takes to receive these commodities from suppliers;
lower production levels of these commodities, due to reduced production capacities or shortages of materials
needed to produce these commodities (such as coke and scrap steel for the production of steel) which could
result in reduced supplies of these commodities, higher costs for us, and increased lead times;
increased cost of major inputs, such as scrap steel, coke, iron ore, and energy;
fluctuations in foreign exchange rates can impact the relative cost of these commodities, which may affect the
cost effectiveness of imported materials and limit our options in acquiring these commodities; and
international trade disputes, import duties, tariffs, and quotas since we import some steel and aluminum finished
components and products for various product lines.
Increases in the selling prices of our products may not fully recover higher commodity costs and generally lag
increases in our costs of these commodities. Consequently, an increase in these commodities will increase our operating costs
and likely reduce our profitability.
Rising steel prices, as seen for example in the first half of fiscal 2021 and the first quarter of fiscal 2023, can put
pressure on gross profit margins, especially in our Infrastructure segment product lines. The elapsed time between the release
of a customer’s purchase order and the manufacturing of the product ordered can be several months. As some of the sales in
the Infrastructure segment are fixed-price contracts, rapid increases in steel costs likely will result in lower operating income.
Steel prices for both hot rolled coil and plate can also decrease substantially in a given period, which occurred, for example,
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in the fourth quarter of fiscal 2021 and through much of fiscal 2022. Steel is most significant for our TD&S product line
where the cost of steel has been approximately 50% of the net sales, on average. Assuming a similar sales mix, a hypothetical
20% change in the price of steel would have affected our net sales in this product line by approximately $100.0 million for
the fiscal year ended December 30, 2023.
We believe the volatility over the past several years was due to significant increases in global steel production and
rapid changes in consumption (especially in rapidly growing economies, such as China and India). The speed with which
steel suppliers impose price increases on us may prevent us from fully recovering these price increases particularly in our
lighting, traffic, and utility businesses. In the same respect, rapid decreases in the price of steel can also result in reduced
operating margins in our utility businesses due to the long production lead times.
Demand for our infrastructure products including coating services is highly dependent upon the overall level of
infrastructure spending.
We manufacture and distribute engineered infrastructure products for lighting and traffic, utility, and other specialty
applications. Our Coatings product line serves many construction‑related industries. Because these products are used
primarily in infrastructure construction, sales in these businesses are highly correlated with the level of construction activity,
which historically has been cyclical. Construction activity by our private and government customers is affected by, and can
decline because of, a number of factors, including, but not limited to:
• weakness in the general economy, which may negatively affect tax revenues, resulting in reduced funds
available for construction;
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interest rate increases, which increase the cost of construction financing; and
adverse weather conditions, which slow construction activity.
The current economic uncertainty in the U.S. and Europe will have some negative effects on our business. In our
L&T product line, some of our lighting structure sales are for new residential and commercial areas. When residential and
commercial construction is weak, we have experienced some negative impact on our light pole sales to these markets. In a
broader sense, in the event of an overall downturn in the economies in Europe, Australia, or China, we may experience
decreased demand if our customers in these countries have difficulty securing credit for their purchases from us.
In addition, sales in our Infrastructure segment, particularly our lighting, transportation, and highway safety
products, are highly dependent upon federal, state, local, and foreign government spending on infrastructure development
projects. U.S. federal funding initiatives, such as the IIJA and the IRA, support multi-year demand for our infrastructure
products, although the timing and amount of funding appropriations from these initiatives can be difficult to predict. The
level of spending on such projects may decline for a number of reasons beyond our control, including, among other things,
budgetary constraints affecting government spending generally or transportation agencies in particular, decreases in tax
revenues, and changes in the political climate, including legislative delays, with respect to infrastructure appropriations.
We are subject to currency fluctuations from our international sales, which can negatively impact our reported earnings.
We sell our products in many countries around the world. Approximately 31% of our fiscal 2023 sales were in
markets outside the U.S. and are often made in foreign currencies, mainly the Australian dollar, Brazilian real, Canadian
dollar, Chinese renminbi, and Euro. Because our Consolidated Financial Statements are denominated in U.S. dollars,
fluctuations in exchange rates between the U.S. dollar and other currencies have had and will continue to have an impact on
our reported earnings. If the U.S. dollar weakens or strengthens versus the foreign currencies mentioned above, the result will
be an increase or decrease in our reported sales and earnings, respectively. Currency fluctuations have affected our financial
performance in the past and may affect our financial performance in any given period. In cases where local currencies are
strong, the relative cost of goods imported from outside our country of operation becomes lower and affects our ability to
compete profitably in our home markets.
We also face risks arising from the imposition of foreign exchange controls and currency devaluations. Exchange
controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our
foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations result in
a diminished value of funds denominated in the currency of the country instituting the devaluation. Actions of this nature
could have a material adverse effect on our results of operations and financial condition in any given period.
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In addition to the discussion above of economic and business risks, please see our further discussion on interest
rates, foreign currency exchange rates, and commodity prices included in “Market Risk” within “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in this report.
Legal and Regulatory Risks
We may lose some of our foreign investment or our foreign sales and profits may decline because of risks of doing
business in foreign markets, including trade relations and tariffs.
We are an international manufacturing company with operations around the world. As of December 30, 2023, we
operated over 80 manufacturing plants located on six continents and sold our products in more than 100 countries. In fiscal
2023, approximately 31% of our net sales were either sold in markets or produced by our manufacturing plants outside of
North America (primarily the U.S., Canada, and Mexico). We have operations in geographic markets that have recently
experienced political instability, such as the Middle East, and economic uncertainty, such as Western Europe. Our geographic
diversity also requires that we hire, train, and retain competent management for our various local markets, which not only
impacts our operational results but also our managing and reporting functions.
Demand for our products and our profitability are affected by trade relations between countries. We have a
significant manufacturing presence in Australia, Brazil, Europe, and China. These operations are affected by U.S. trade
policies, such as additional tariffs on a broad range of imports and retaliatory actions by foreign countries, most recently
China, which have impacted sales of our products. In addition, there can be a derived indirect impact on demand for our
products arising from quotas, restrictions, and retaliatory tariffs (e.g., China tariffs on imported soybeans affect U.S. net farm
income).
We expect that international sales will continue to account for a significant percentage of our net sales in the future.
Accordingly, our foreign business operations and our foreign sales and profits are subject to the following potential risks:
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political and economic instability, resulting in the reduction of the value of, or the loss of, our investment;
recessions in economies of countries in which we have business operations, decreasing our international sales;
natural disasters and public health issues in our geographic markets, negatively impacting our workforce,
manufacturing capability, and sales;
difficulties and costs of staffing and managing our foreign operations, increasing our foreign operating costs and
decreasing profits, with additional risk to our managing and reporting functions;
potential violation of local laws or unsanctioned management actions that could affect our profitability or ability
to compete in certain markets;
difficulties in enforcing our rights outside the U.S. for patents on our manufacturing machinery, poles, and
irrigation designs;
increases in tariffs, export controls, taxes, and other trade barriers reducing our international sales and our profit
on these sales; and
acts of war or terrorism.
As a result, we may lose some of our foreign investment, or our foreign sales and profits may be materially reduced,
because of risks of doing business in foreign markets.
Failure to comply with any applicable anti-corruption legislation could result in fines, criminal penalties, and an adverse
effect on our business.
We must comply with all applicable laws, which include the U.S. Foreign Corrupt Practices Act, the United
Kingdom (“U.K.”) Bribery Act, and other anti-corruption laws. These anti-corruption laws generally prohibit companies and
their intermediaries from making improper payments or providing anything of value to improperly influence government
officials or private individuals for the purpose of obtaining or retaining a business advantage regardless of whether those
practices are legal or culturally expected in a particular jurisdiction. Recently, there has been a substantial increase in the
global enforcement of anti-corruption laws. Although we have a compliance program in place designed to reduce the
likelihood of potential violations of such laws, violations of these laws could result in criminal or civil sanctions and an
adverse effect on our reputation, business, and results of operations and financial condition.
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We could incur substantial costs as the result of violations of, or liabilities under, environmental laws.
Our facilities and operations are subject to U.S. and foreign laws and regulations relating to the protection of the
environment, including those governing the discharge of pollutants into the air and water, the management and disposal of
hazardous substances and wastes, and the cleanup of contamination. Failure to comply with these laws and regulations, or
with the permits required for our operations, could result in fines or civil or criminal sanctions, third-party claims for property
damage or personal injury, and investigation and cleanup costs. Potentially significant expenditures could be required in
order to comply with environmental laws that regulators may adopt or impose in the future.
Certain of our facilities have been in operation for many years and, over time, we and other predecessor operators of
these facilities have generated, used, handled, and disposed of hazardous and other regulated wastes. We detected
contaminants at some of our present and former sites, principally in connection with historical operations. In addition, from
time to time, we have been named as a potentially responsible party under Superfund or similar state laws. While we are not
aware of any contaminated sites that are not provided for in our Consolidated Financial Statements, including third‑party
sites, at which we may have material obligations, the discovery of additional contaminants or the imposition of additional
cleanup obligations at these sites could result in significant liability beyond amounts provided for in our Consolidated
Financial Statements.
Failure to successfully commercialize or protect our intellectual property rights may have a material adverse effect on our
business, financial condition, and operating results.
The successful commercialization and protection of our current and future patents, trademarks, trade secrets,
copyrights, unpatented proprietary processes, methods, and other technologies are critical to our business and competitive
position. We rely on our business expertise to commercialize these intellectual property rights. We rely on patents,
trademarks, trade secrets, copyrights, and contractual restrictions to protect our intellectual property rights. We may fail to
apply the appropriate business expertise to successfully commercialize an intellectual property right, particularly with respect
to new and developing technologies. Our intellectual property rights protections could be challenged, invalidated,
circumvented, or rendered unenforceable. Third parties may infringe or misappropriate our intellectual property rights. We
may incur substantial unrecoverable litigation costs in seeking to protect our intellectual property rights. Failure to
successfully commercialize or protect our intellectual property rights may have a material adverse effect on our business,
financial condition, and operating results.
We have been and may be subject to or involved in litigation or threatened litigation, the outcome of which may be
difficult to predict, and which may be costly to defend, divert management attention, require us to pay damages, or restrict
the operation of our business.
From time to time, we have been and may be subject to disputes and litigation, with and without merit, which may
be costly, and which may divert the attention of our management and our resources in general, whether or not any dispute
actually proceeds to litigation. The results of complex legal proceedings are difficult to predict. Moreover, complaints filed
against us may not specify the amount of damages that plaintiffs seek, and we therefore may be unable to estimate the
possible range of damages that might be incurred should these lawsuits be resolved against us. Even if we are able to estimate
losses related to these actions, the ultimate amount of loss may be materially higher than our estimates. Any resolution of
litigation, or threatened litigation, could involve the payment of damages or expenses by us, which may be significant or
involve an agreement with terms that restrict the operation of our business. Even if any future lawsuits are not resolved
against us, the costs of defending such lawsuits may be significant. These costs may exceed the dollar limits or may not be
covered at all by our insurance policies.
Design patent litigation related to guardrails could reduce demand for such products and raise litigation risk.
Certain of our foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety products,
primarily for sale in non-U.S. markets, and license certain design patents related to guardrails to third parties. There are
currently domestic U.S. product liability lawsuits against some companies that manufacture and install certain guardrail
products. Such lawsuits, some of which have at times involved a foreign subsidiary based on its design patent, could lead to a
decline in demand for such products or approval for use of such products by government purchasers both domestically and
internationally, and potentially raise litigation risk for foreign subsidiaries and negatively impact their sales and license fees.
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Liquidity and Capital Resources Risks
We have, from time to time, maintained a substantial amount of outstanding indebtedness, which could impair our ability
to operate our business and react to changes in our business, remain in compliance with debt covenants, and make
payments on our debt.
As of December 30, 2023, we had $1,138.1 million of total outstanding indebtedness, of which $379.9 million
matures within the next five fiscal years. We also had $421.9 million of capacity to borrow under our revolving credit facility
as of December 30, 2023. We occasionally borrow money to make business acquisitions and repurchase shares. From time to
time, our borrowings have been significant. Most of our interest‑bearing debt is borrowed by U.S. entities. Rising interest
rates have increased our cost of indebtedness.
Our level of indebtedness could have important consequences, including:
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our ability to satisfy our obligations under our debt agreements could be affected and any failure to comply with
the requirements, including significant financial and other restrictive covenants, of any of our debt agreements
could result in an event of default under the agreements governing our indebtedness;
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a substantial portion of our cash flow from operations will be required to make interest and principal payments
and will not be available for operations, working capital, capital expenditures, expansion, or general corporate
and other purposes, including possible future acquisitions that we believe would be beneficial to our business;
our ability to obtain additional financing in the future may be impaired;
• we may be more highly leveraged than our competitors, which may place us at a competitive disadvantage;
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our flexibility in planning for, or reacting to, changes in our business and industry may be limited; and
our degree of leverage may make us more vulnerable in the event of a downturn in our business, our industry, or
the economy in general.
The restrictions and covenants in our debt agreements could limit our ability to obtain future financings, make
needed capital expenditures, withstand a future downturn in our business or the economy in general, or otherwise conduct
necessary corporate activities. These covenants may prevent us from taking advantage of business opportunities that arise.
A breach of any of these covenants would result in a default under the applicable debt agreement. A default, if not
waived, could result in acceleration of the debt outstanding under our agreement and a default or acceleration of the debt
outstanding under our other debt agreements. The accelerated debt would become immediately due and payable. If that were
to occur, we may not be able to pay all such debt or to borrow sufficient funds to refinance it. Even if new financing were
then available, it may not be on terms that are favorable to us.
As of December 30, 2023, we had $203.0 million of cash and cash equivalents. Approximately 80% of our
consolidated cash balance is outside the U.S. In the event that we would have to repatriate cash from international operations
to meet cash needs in the U.S., we may be subject to legal, contractual, or other restrictions. In addition, as we use cash for
acquisitions and other purposes, any of these factors could have a material adverse effect on our business, financial condition,
results of operations, cash flows, and business prospects.
We assumed an underfunded pension liability as part of the fiscal 2010 acquisition of Delta Ltd., and the combined
company may be required to increase funding of the plan and/or be subject to restrictions on the use of excess cash.
Delta Ltd. is the sponsor of a U.K. defined benefit pension plan (the “Plan”) that, as of December 30, 2023, covered
approximately 5,400 inactive or retired former Delta employees. The Plan has no active employees as members. As of
December 30, 2023, the Plan was, for accounting purposes, overfunded by approximately £12.1 million ($15.4 million). The
current agreement with the trustees of the Plan for annual funding is approximately £13.1 million ($16.7 million) in respect
of the funding shortfall at the time of acquisition and approximately £1.3 million ($1.7 million) in respect of administrative
expenses. Although this funding obligation was considered in the acquisition price for the Delta shares, the underfunded
position may adversely affect the combined company as follows:
• Laws and regulations in the U.K. normally require the Plan trustees to agree on a new funding plan with us
every three years. The last funding plan was developed in fiscal 2022. Changes in actuarial assumptions,
including future discount, inflation, and interest rates, investment returns, and mortality rates may increase the
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underfunded position of the Plan and cause the combined company to increase its funding levels in the Plan to
cover underfunded liabilities.
• The U.K. regulates the Plan, and the trustees represent the interests of covered workers. Laws and regulations,
under certain circumstances, could create an immediate funding obligation to the Plan, which could be
significantly greater than the asset recognized for accounting purposes as of December 30, 2023. Such
immediate funding is calculated by reference to the cost of buying out liabilities on the insurance market and
could affect our ability to fund the future growth of the business or finance other obligations.
General Risks
Our businesses require skilled labor and management talent, and we may be unable to attract and retain qualified
employees.
Our businesses require skilled factory workers and management in order to meet our customers’ needs, grow our
sales, and maintain competitive advantages. Skills such as welding, equipment maintenance, and operating complex
manufacturing machinery may be in short supply in certain geographic areas, leading to shortages of skilled labor and
increased labor costs. Management talent is critical, as well, to help grow our businesses and effectively plan for succession
of key employees upon retirement. In some geographic areas, skilled management talent for certain positions may be difficult
to find. To the extent we have difficulty in finding and retaining these skills in the workforce, there may be an adverse effect
on our ability to grow profitably in the future.
We face strong competition in our markets.
We face competitive pressures from a variety of companies in each of the markets we serve. Our competitors
include companies who provide the technologies that we provide as well as companies who provide competing technologies,
such as drip irrigation. Our competitors include international, national, and local manufacturers, some of whom may have
greater financial, manufacturing, marketing, and technical resources than we do or greater penetration in, or familiarity with,
a particular geographic market than we have.
In addition, certain of our competitors, particularly with respect to our TD&S and Telecommunications product
lines, have sought bankruptcy protection in recent years and may emerge with reduced debt service obligations, which could
allow them to operate at pricing levels that put pressure on our margins. Some of our customers have moved manufacturing
operations or product sourcing overseas, which can negatively impact our sales of galvanizing and anodizing services.
To remain competitive, we will need to invest continuously in manufacturing, product development, and customer
service, and we may need to reduce our prices, particularly with respect to customers in industries that are experiencing
downturns. We cannot provide assurance that we will be able to maintain our competitive position in each of the markets that
we serve.
We may not realize the improved operating results that we anticipate from acquisitions we may make in the future, and we
may experience difficulties in integrating the acquired businesses or may inherit significant liabilities related to such
businesses.
We explore opportunities to acquire businesses that we believe are related to our core competencies from time to
time, some of which may be material to us. We expect such acquisitions will produce operating results better than those
historically experienced or presently expected to be experienced in the future by us in the absence of the acquisition. We
cannot provide assurance that this assumption will prove correct with respect to any acquisition.
Any future acquisitions may present significant challenges for our management due to the time and resources
required to properly integrate management, employees, information systems, accounting controls, personnel, and
administrative functions of the acquired business with those of Valmont and to manage the combined company going
forward. We may not be able to completely integrate and streamline overlapping functions or, if such activities are
successfully accomplished, such integration may be more costly to accomplish than originally contemplated. We may also
have difficulty in successfully integrating our product offerings with those of acquired businesses to improve our collective
product offering. Our efforts to integrate acquired businesses could be affected by a number of factors beyond our control,
including general economic conditions. In addition, the process of integrating acquired businesses could cause the
interruption of, or loss of momentum in, the activities of our existing business. The diversion of management’s attention and
any delays or difficulties encountered in connection with the integration of acquired businesses could adversely impact our
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business, results of operations, and liquidity, and the benefits we anticipate may never materialize. These factors are relevant
to any acquisition we undertake.
In addition, although we conduct reviews of businesses we acquire, we may be subject to unexpected claims or
liabilities, including environmental cleanup costs, as a result of these acquisitions. Such claims or liabilities could be costly to
defend or resolve and be material in amount, and thus could materially and adversely affect our business, results of
operations, and liquidity.
We may incur significant warranty or contract management costs.
In our Infrastructure segment, we manufacture large structures for electrical transmission. These products may be
highly engineered for very large, complex contracts and subject to terms and conditions that penalize us for late delivery and
result in consequential and compensatory damages. From time to time, we may have a product quality issue on a large utility
structures order and the related costs may be significant. Our products in the Infrastructure segment also include structures
for a wide range of outdoor lighting, traffic, and wireless communication applications.
Our Agriculture products carry warranty provisions, some of which may span several years. In the event we have
widespread product reliability issues with certain components, we may be required to incur significant costs to remedy the
situation.
Our operations could be adversely affected if our information technology systems and networks are compromised or
otherwise subjected to cyberattacks.
Global cyberattacks continually increase in sophistication and pose significant risks to the security of our
information technology systems and networks which, if breached, could materially adversely affect the confidentiality,
availability, and integrity of our data. Our operations involve transferring data across international borders, and we must
comply with increasingly complex and rigorous standards to protect business and personal data in the U.S. and foreign
countries, including members of the European Union.
The primary objective of our risk management and strategy is maintaining and protecting the confidentiality,
integrity, and availability of information for our business and customers. We rely on our information security program which
covers a range of cybersecurity activities. More information on these measures may be found in Part I, Item 1C in this report.
While these measures are designed to prevent, detect, respond to, and mitigate unauthorized activity, there is no guarantee
that they will be sufficient to prevent or mitigate the risk of a cyberattack whether experienced directly through our
information technology systems and networks or third-party service providers, or allow us to detect, report, or respond
adequately in a timely manner.
Successful cybersecurity attacks or other security incidents could result in the loss of key innovations in artificial
intelligence, Internet of Things, or other disruptive technologies; the loss of access to critical data or systems through
ransomware, crypto mining, destructive attacks, or other means; and business delays, service or system disruptions, or denials
of service. This could lead to legal risk, fines and penalties, negative publicity, theft, modification or destruction of
proprietary information or key information, manufacture of defective products, production downtimes, and operational
disruptions, which could adversely affect our reputation, competitiveness, and results of operations.
Regulatory and business developments regarding climate change could adversely impact our operations and demand for
our products.
Regulatory and business developments regarding climate change could adversely impact our operations. We follow
the scientific discussion on climate change and related legislative and regulatory enactments, including those under
consideration, to deliberate the potential impact on our operations and demand for our products. The scientific discussion on
the presence and scope of climate change and the attention that domestic and international legislatures and regulatory
authorities have given to enacting or considering laws or rules related to climate change are expected to continue. The
production and market for our products are subject to the impact of laws and rules related to climate change. Our customers
and our operating segments are exposed to risks of increased costs to comply with such laws and rules, including increased
costs for raw materials and transportation, as well as exposure to damage to our respective business reputations upon any
failure of compliance. Other adverse consequences of climate change could include an increased frequency of severe weather
events and rising sea levels that could affect operations at our manufacturing facilities, the price of insuring our assets, or
other unforeseen disruptions of our operations, systems, property, or equipment.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
Our information security program covers a range of cybersecurity activities with a primary objective of maintaining
the confidentiality, integrity, and availability of information for our business and customers. The program and our systems
are designed to identify and mitigate information security risks and data privacy breaches. Our risk mitigation processes
include a cybersecurity incident response plan that is exercised regularly with tabletop exercises, security awareness training
with attack simulations to reinforce the training, cybersecurity risk assessment integrated with technology acquisition
processes and utilization of third-party partnerships for threat intelligence, incident response and escalation, and attack
surface monitoring.
We measure our security performance against the International Organization for Standardization 27001 Framework
and Enterprise Risk Management strategies. We implement policies and practices to mitigate risks to organization data and
operational processes.
Our Global Data Privacy Program continues to align with environmental, social, and corporate governance standards
and considers both risks and benefits of privacy-driven spending. The program operating model is based on the General Data
Protection Regulation, which is adjusted for specific local requirements. The operating model is scalable to manage strategic,
operational, legal, compliance, and financial risks and benefits, and uses technology to automate portions of the program,
such as data subject access requests and consent and preference management.
Our membership on the Data Privacy Board, a group comprised of some of the world’s largest companies with a
mission to help members engage in confidential, leader-level discussion, presents opportunities using unbiased benchmarking
and support from peers in various industries. We continue to build privacy resilience across international operating
environments.
We work with third-party vendors to enhance our processes against the occurrences and impact of unauthorized
access to our network, computers, programs, and data. Risk is inherent in risk management and strategy for cybersecurity.
See “Risk Factors” in Part I, Item 1A in this report for further discussion.
Governance
The Board of Directors has oversight responsibility for cyber risks affecting the Company. The Board has delegated
risk oversight with respect to operational, compliance, and financial matters, including cybersecurity and information
technology risk, to the Audit Committee.
Our Director of Security has extensive experience implementing and managing cybersecurity policies including
oversight of investments in tools, resources, and processes that allows for the continued maturity of our cybersecurity
program. Team members who support our information security program have relevant educational and industry experience.
Our CEO, Chief Financial Officer, and Audit Committee receive regular reports provided by our Director of Security on the
Company’s risk and compliance with respect to cybersecurity matters including data privacy, incidents, and industry trends,
along with prevention, detection, mitigation, and remediation of cyber incidents.
ITEM 2. PROPERTIES
Our corporate headquarters are located in Omaha, Nebraska. The headquarters facility is leased through fiscal 2046
and houses the majority of our executive offices, reportable segment business units, and administrative functions. We also
maintain a management headquarters in Sydney, Australia. Most of our significant manufacturing locations are owned or are
subject to long-term renewable leases. Our principal manufacturing locations are in Valley, Nebraska; McCook, Nebraska;
Tulsa, Oklahoma; Brenham, Texas; Charmeil, France; Uberaba, Brazil; Monterrey, Mexico; Siedlce, Poland; Shanghai,
China; and Dubai, United Arab Emirates. All of these facilities are owned by us. We believe that our manufacturing
capabilities and capacities are adequate for us to effectively serve our customers. Our capital spending programs consist of
investment for replacement, achieving operational efficiencies, and expanding capacities where needed. Our principal
operating locations by reportable segment are listed below.
17
Infrastructure segment North American manufacturing operations are located in Alabama, Arizona, California,
Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Minnesota, Nebraska, New Jersey, Oklahoma, Oregon, Pennsylvania, South
Carolina, Tennessee, Texas, Utah, Virginia, Canada, and Mexico. The largest of these operations are in Valley, Nebraska;
Brenham, Texas; Tulsa, Oklahoma; and Monterrey, Mexico, all of which are owned facilities. We have communication
component distribution locations in California, Colorado, Florida, Georgia, Indiana, Maryland, Nebraska, Nevada, New
York, Oregon, and Texas. International locations are in Australia, China, England, Estonia, Finland, France, India, Indonesia,
Italy, Malaysia, the Netherlands, New Zealand, the Philippines, Poland, and Thailand. The largest of these operations are in
Charmeil, France, and Shanghai, China, both of which are owned facilities.
Agriculture segment North American manufacturing operations are located in Nebraska. Our principal
manufacturing operations serving international markets are located in Uberaba, Brazil; Dubai, United Arab Emirates; and
Shandong, China; along with a technology research and development center in Israel. All facilities are owned except for
China and Israel, which are leased.
Operations in the Other segment, which were divested in fiscal 2022, were located in Denmark.
ITEM 3. LEGAL PROCEEDINGS
We are not a party to, nor are any of our properties subject to, any material legal proceedings. We are, from time to
time, engaged in routine litigation incidental to our businesses. For further information on legal proceedings, please refer to
Note 18 to the Consolidated Financial Statements contained in this report.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The names, ages, positions, and business experiences of the last five years of our current executive officers are as
follows:
Avner M. Applbaum, age 52, President and Chief Executive Officer since July 2023. Executive Vice President and
Chief Financial Officer from March 2020 to July 2023. Chief Financial Officer and Chief Operating Officer of
Double E Company, an equipment manufacturer, from 2017 to March 2020.
Timothy P. Francis, age 47, Interim Chief Financial Officer since July 2023 and Interim Chief Accounting Officer
since December 2023. Senior Vice President and Finance Business Partner of Global Operations from June 2022 to
July 2023. Senior Vice President and Controller from June 2014 to June 2022.
Diane M. Larkin, age 59, Executive Vice President of Global Operations since June 2020. Senior Vice President of
Operations and Global Supply for Pentair, a water treatment company, from 2017 to June 2020.
T. Mitchell Parnell, age 58, Executive Vice President and Chief Human Resources Officer since January 2019.
Aaron M. Schapper, age 50, Group President of Agriculture and Chief Strategy Officer since July 2023. Group
President of Infrastructure from February 2020 to July 2023. Group President of Utility Support Structures from
October 2016 to February 2020.
J. Timothy Donahue, age 59, Group President of Infrastructure since July 2023. Executive Vice President of
Corporate and Business Development from January 2023 to July 2023. President of Global Engineered Support
Structures from December 2019 to January 2023. Vice President of North America Engineered Support Structures
from April 2018 to December 2019.
Renee L. Campbell, age 54, Senior Vice President of Investor Relations and Treasurer since February 2022. Vice
President of Investor Relations and Corporate Communications from October 2017 to February 2022.
Ellen S. Dasher, age 54, Vice President of Global Taxation since December 2015.
R. Andrew Massey, age 54, Vice President, Chief Legal Officer, and Corporate Secretary since July 2006.
18
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
PART II
Market Information
Our common stock is traded on the New York Stock Exchange under the ticker symbol “VMI”.
Holders
As of December 30, 2023, we had approximately 57,128 shareholders of common stock.
Dividends
Cash dividends on our common stock are paid quarterly. We paid a total of $49.5 million and $45.8 million in
dividends in fiscal 2023 and 2022, respectively. The Board of Directors determines whether to declare dividends, the timing,
and the amount based on financial condition and other factors it deems relevant. We currently expect that dividends
comparable to those paid historically will continue to be paid in the future.
Purchase of Equity Securities By the Issuer and Affiliated Purchasers
Period
October 1, 2023 to October 28, 2023
October 29, 2023 to December 2, 2023
Non-Accelerated Share Repurchase
November 2023 Accelerated Share Repurchase (2)
December 3, 2023 to December 30, 2023
Total
Total
Number
of Shares
Purchased
Total Number of
Shares Purchased Approximate Dollar
Average
Price Paid Announced Plans
as Part of
Publicly
Value of
Shares that May Yet
Be Purchased
per Share
—
— $
or Programs
Under the Program (1)
314,724,000
— $
240,120
438,917
35,000
714,037
$
211.69
(2)
222.11
250.15
240,120
438,917
35,000
714,037 $
263,883,000
143,883,000
136,108,000
136,108,000
(1) On May 13, 2014, we announced a capital allocation philosophy that covered both the quarterly dividend rate as
well as a share repurchase program. The Board of Directors at that time authorized the purchase of up to $500.0
million of the Company’s outstanding common stock from time to time over twelve months at prevailing
market prices, through open market or privately negotiated transactions. On February 24, 2015, and again on
October 31, 2018, the Board of Directors authorized additional purchases of up to $250.0 million of the
Company’s outstanding common stock with no stated expiration date. On February 27, 2023, the Board of
Directors increased the amount remaining under the program by an additional $400.0 million, with no stated
expiration date, bringing the total authorization to $1,400.0 million. As of December 30, 2023, we have
acquired 7,895,724 shares for approximately $1,263.9 million under this share repurchase program.
(2) In November 2023, we entered into an accelerated purchase agreement to repurchase $120.0 million of the
Company’s outstanding common stock (“November 2023 ASR”) with CitiBank, N.A. as counterparty. The
November 2023 ASR was entered into under our previously announced share repurchase program described
above. In the fourth quarter of fiscal 2023, the Company pre-paid $120.0 million and received an initial delivery
of 438,917 shares of common stock from CitiBank, which represented 75% of the prepayment amount divided
by the closing price of $205.05 per share on November 28, 2023. The final number of shares to be delivered and
the average price paid per share will be based on the daily volume weighted average share price during the term
of the November 2023 ASR less a discount, which will be completed during the first quarter of fiscal 2024.
The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1%
excise tax on the net value of certain stock repurchases made after December 31, 2022. Excise tax accrued for the fiscal year
ended December 30, 2023 totaled $2.8 million.
19
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Forward‑Looking Statements
Management’s discussion and analysis, and other sections of this annual report, contain 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 SEC, 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 following discussion and analysis provide information that management believes is relevant to an assessment
and understanding of the Company’s consolidated results of operations and financial position. This discussion should be read
in conjunction with the Consolidated Financial Statements and related notes.
This section of the Form 10-K generally discusses fiscal 2023 items, fiscal 2022 items, and year-to-year
comparisons between fiscal 2023 and fiscal 2022. Discussions of fiscal 2021 items and year-to-year comparisons between
fiscal 2022 and fiscal 2021 that are not included on Form 10-K can be found in "Management’s Discussion and Analysis of
Financial Condition and Results of Operations" in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2022.
20
24.1 %
27.4 %
17.3 %
NM
NM
51.1 %
9.9 %
28.3 %
27.7 %
23.2 %
22.0 %
15.8 %
NM
NM
29.6 %
31.3 %
28.2 %
26.1 %
NM
NM
30.8 %
(18.5)%
NM
(63.9)%
NM
NM
NM
21.7 %
NM
22.8 %
Fiscal Year Ended
December 30,
2023
December 31,
2022
Percent
Change
Fiscal Year Ended
December 25,
2021
Percent
Change
General
Dollars in millions, except per share amounts
Consolidated
Net sales
Gross profit
$
4,174.6
1,236.0
$
4,345.2
1,126.3
(3.9)% $
9.8 %
3,501.6
883.9
as a percent of net sales
Selling, general, and administrative expenses
as a percent of net sales
Impairment of goodwill and intangible assets
Realignment charges
Operating income
as a percent of net sales
Net interest expense
Effective tax rate
Net earnings attrib. to Valmont Industries, Inc.
Diluted earnings per share
$
Infrastructure
Net sales
Gross profit
Selling, general, and administrative expenses
Impairment of goodwill and intangible assets
Realignment charges
Operating income
$
Agriculture
Net sales
Gross profit
Selling, general, and administrative expenses
Impairment of goodwill and intangible assets
Realignment charges
Operating income
$
Other
Net sales
Gross profit (loss)
Selling, general, and administrative expenses
Impairment of goodwill and intangible assets
Operating income (loss)
$
Corporate
Gross profit
$
Selling, general, and administrative expenses
Realignment charges
Operating loss
NM = not meaningful
29.6 %
768.4
18.4 %
140.8
35.2
291.6
7.0 %
50.6
38.1 %
$
$
$
150.8
6.78
2,999.6
842.1
424.9
3.6
17.3
396.3
1,175.0
393.9
230.7
137.2
9.1
16.9
— $
—
—
—
—
— $
112.8
8.8
(121.6)
25.9 %
693.0
15.9 %
—
—
433.3
10.0 %
45.5
29.9 %
250.9
11.62
2,909.7
736.6
382.1
—
—
354.5
1,335.3
381.8
202.5
—
—
179.3
100.2
7.9
5.6
—
2.3
—
102.8
—
(102.8)
10.9 %
NM
NM
(32.7)%
11.2 %
(39.9)%
(41.7)% $
3.1 % $
14.3 %
11.2 %
NM
NM
11.8 %
(12.0)% $
3.2 %
13.9 %
NM
NM
(90.6)%
$
$
NM
NM
NM
NM
NM
NM
9.7 %
NM
18.3 %
25.2 %
590.6
16.9 %
6.5
—
286.8
8.2 %
41.4
23.6 %
195.6
9.10
2,361.5
603.6
330.0
—
—
273.6
1,017.1
297.7
160.6
—
—
137.1
123.0
(18.2)
15.5
6.5
(40.2)
0.8
84.5
—
(83.7)
21
FISCAL 2023 COMPARED WITH FISCAL 2022
Overview
The decrease in net sales in fiscal 2023, as compared with fiscal 2022, was the result of lower sales in the
Agriculture segment, partially offset by higher sales in the Infrastructure segment. Fiscal 2023 included 52 weeks, while
fiscal 2022 included 53 weeks. The estimated impact on the Company's results of operations due to the extra week in fiscal
2022 was additional net sales of approximately $80.8 million and additional net earnings of approximately $5.3 million.
Dollars in millions
Net sales - fiscal 2022
Volume
Pricing and mix
Acquisition
Divestiture
Currency translation
Net sales - fiscal 2023
$
$
Infrastructure Agriculture
1,335.3
(175.5)
(1.2)
14.0
—
2.4
1,175.0
2,909.7
9.6
85.1
12.2
—
(17.0)
2,999.6
$
$
Other
Total
100.2 $
—
—
—
(100.2)
—
— $
4,345.2
(165.9)
83.9
26.2
(100.2)
(14.6)
4,174.6
$
$
Volume impacts are estimated based on physical production or sales measure. Since products we sell are not
uniform in nature, pricing and mix relate to a combination of changes in sales prices and the attributes of the products sold.
Accordingly, pricing and mix changes do not necessarily result in operating income changes.
Steel prices for both hot rolled coil and plate have remained volatile over the past two fiscal years, especially in
North America. Decreases in the average cost of consumed steel combined with recent customer pricing strategy mechanisms
more than offset the overall decrease in volumes on a consolidated basis in fiscal 2023, as compared to fiscal 2022.
During the third quarter of fiscal 2023, management initiated a plan to streamline segment support across the
Company and reduce costs through an organizational realignment program (the “Realignment Program”). The Realignment
Program provided for a reduction in force through a voluntary early retirement program and other headcount reduction
actions, which were completed by the end of fiscal 2023. The Board of Directors authorized the incurrence of cash charges
up to $36.0 million in connection with the Realignment Program of which $35.2 million were incurred in fiscal 2023.
Severance and other employee benefit costs totaled approximately $17.3 million within the Infrastructure segment, $9.1
million within the Agriculture segment, and $8.8 million within Corporate expense.
Items Impacting Comparability
Items of note impacting the comparability of results from net earnings for fiscal 2023 included:
•
charges of $140.8 million ($136.5 million after-tax) related to the impairment of long-lived assets, namely
goodwill,
•
•
charges of $35.2 million ($26.5 million after-tax) related to the Realignment Program,
charges of $5.6 million ($4.2 million after-tax) related to non-recurring charges related to major scope changes
for two strategic projects initiated by departed senior leadership,
Items of note impacting the comparability of results from net earnings for fiscal 2022 included:
•
charges of $33.3 million (no associated tax benefit) related to the divestiture of the offshore wind energy
structures business,
•
•
charges of $6.6 million ($5.1 million after-tax) related to amortization of identified intangible assets from the
Prospera subsidiary, and
charges of $9.9 million ($8.9 million after-tax) related to stock-based compensation expense for the employees
from the Prospera subsidiary acquired in the second quarter of fiscal 2021.
22
Acquisitions
The Company acquired the following businesses in fiscal 2023 and fiscal 2022:
• HR Products, a leading wholesale supplier of irrigation parts in Australia, in the third quarter of fiscal 2023, for
$37.3 million, included in the Agriculture segment, and
•
51% of ConcealFab, a Colorado-based 5G infrastructure and passive intermodulation mitigation solutions
company, in the second quarter of fiscal 2022, for $39.3 million, included in the Infrastructure segment.
Divestitures
The Company divested the following businesses in fiscal 2023 and fiscal 2022:
• Torrent Engineering and Equipment in the second quarter of fiscal 2023, which resulted in a gain of $3.0
million. The integrator of prepackaged pump stations in Indiana was included in the Agriculture segment and
the gain was recorded in “Other income (expenses)” in the Consolidated Statements of Earnings, and
• Valmont SM in the fourth quarter of fiscal 2022, which resulted in a loss of $33.3 million with no associated tax
benefit. The offshore wind energy structures business in Denmark was included in the Other segment and the
loss was recorded in “Other income (expenses)” in the Consolidated Statements of Earnings.
Macroeconomic Impacts on Financial Results and Liquidity
We continue to monitor several macroeconomic and geopolitical uncertainties that have impacted or may impact our
business, including inflationary cost pressures, supply chain disruptions, changes in foreign currency exchange rates against
the U.S. dollar, rising interest rates, ongoing international armed conflicts, and labor shortages.
Reportable Segments
In addition to the two reportable segments, the Company had a business and related activities in fiscal 2022 that
were not more than 10% of consolidated sales, operating income, or assets. This business, the offshore wind energy structures
business, was reported in the Other segment until its divestiture in the fourth quarter of fiscal 2022. All prior period
information has been recast to reflect this change in reportable segments. See Note 21 to our Consolidated Financial
Statements for additional information.
Backlog
The consolidated backlog of unshipped orders was approximately $1.5 billion as of December 30, 2023 as compared
to approximately $1.7 billion as of December 31, 2022. The decrease is attributed to the Agriculture segment, while
Infrastructure segment backlog remains comparable to the prior year end.
Gross Profit, Selling, General, and Administrative Expenses (“SG&A”), and Operating Income
On a consolidated basis, gross profit and gross profit as a percentage of sales increased in fiscal 2023, as compared
to fiscal 2022. Gross profit and gross profit as a percentage of sales increased for both the Infrastructure and Agriculture
segments in fiscal 2023 primarily due to increased average selling prices and activities executed to improve overall costs of
goods sold, partially offset by decreased volumes.
Consolidated SG&A increased in fiscal 2023, as compared to fiscal 2022, due to increased employment costs and
increased professional fees, partially offset by slightly decreased incentive expenses.
Consolidated operating income in fiscal 2023, as compared to fiscal 2022, was impacted by the impairment of
certain goodwill and intangible assets totaling $140.8 million primarily within the Agriculture Technology reporting unit and
realignment charges totaling $35.2 million, along with higher SG&A partially offset by increased gross profit.
Net Interest Expense
Consolidated interest expense increased in fiscal 2023, as compared to fiscal 2022, primarily due to additional
borrowings on the revolving line of credit along with increased interest rates.
23
Other Income / Expenses (including Gain (Loss) on Investments – Unrealized)
Amounts in “Gain (loss) on investments - unrealized" included changes in the market value of deferred
compensation assets which were offset by an equal opposite amount included in SG&A for the corresponding change in the
valuation of deferred compensation liabilities. Other items included in “Other income (expenses)” were pension expense, a
gain related to the sale of Torrent Engineering and Equipment in the second quarter of fiscal 2023 totaling approximately
$3.0 million, and a loss related to Argentine peso hyperinflation totaling approximately $5.1 million. Pension expense in
fiscal 2023 was $0.2 million compared to a pension benefit of $10.1 million in fiscal 2022.
Income Tax Expense
Our effective income tax rate in fiscal 2023 and fiscal 2022 was 38.1% and 29.9%, respectively. In fiscal 2023, the
effective tax rate was the result of goodwill impairment charges for which no tax benefits were recorded. In fiscal 2022, the
effective tax rate was the result of a change in geographical earnings and the approximately $33.3 million loss from
divestiture of the offshore wind energy structures business which had no associated income tax benefit.
Loss (Earnings) Attributable to Redeemable Noncontrolling Interests
Loss (earnings) attributable to redeemable noncontrolling interests reflects the operating results of the subsidiaries
the Company does not own 100%. Two of the subsidiaries not 100% owned generated net losses in fiscal 2023 whereas these
two subsidiaries generated net earnings in fiscal 2022.
Infrastructure Segment
Fiscal Year Ended
Dollars in millions
2023
2022
December 30, December 31,
Dollar
Change
Transmission, Distribution, and Substation
Lighting and Transportation
Coatings
Telecommunications
Solar
Total sales
Operating income
$
$
$
1,243.8
964.1
354.3
252.2
195.7
3,010.1
396.3
$
$
$
1,184.7
940.5
356.7
320.3
126.2
2,928.4
354.5
$
$
$
Percent
Change
5.0 %
2.5 %
(0.7)%
(21.3)%
55.1 %
2.8 %
59.1
23.6
(2.4)
(68.1)
69.5
81.7
41.8
11.8 %
Infrastructure segment sales increased in fiscal 2023, as compared to fiscal 2022, due to increased average selling
prices across all product lines and increased volumes in TD&S and Solar, partially offset by unfavorable foreign currency
translation effects and much lower volumes in Telecommunications. Infrastructure segment sales increased in North America
in fiscal 2023, as compared to fiscal 2022, while decreasing slightly internationally in the same period.
Transmission, Distribution, and Substation product line sales increased in fiscal 2023, as compared to fiscal 2022,
due to increased average selling prices and increased sales volumes, partially offset by unfavorable foreign currency
translation effects totaling approximately $4.0 million.
Lighting and Transportation product line sales increased in fiscal 2023, as compared to fiscal 2022, due to increased
average selling prices and increased sales volumes, partially offset by an unfavorable currency translation effect totaling
approximately $8.1 million.
Coatings product line sales decreased in fiscal 2023, as compared to fiscal 2022, due to decreased sales volumes
along with an unfavorable currency translation effect totaling approximately $6.5 million partially offset by increased
average selling prices.
Telecommunications product line sales decreased in fiscal 2023, as compared to fiscal 2022, due to decreased sales
volumes partially offset by increased average selling prices and incremental sales from the second quarter of fiscal 2022
acquisition of ConcealFab totaling $12.2 million. We expect sales for Telecommunications to remain lower until network
enhancement spending of the major carriers returns to more elevated levels. As the continued rollout and expansion of 5G
wireless technology accelerates globally, sales for our products are expected to grow.
24
Solar product line sales increased in fiscal 2023, as compared to fiscal 2022, due to increased sales volumes
primarily attributable to increased market share and throughput in the North American and European markets.
We expect Infrastructure segment sales to increase mid-single digits in fiscal 2024 from growth in the TD&S and
Solar product lines attributed to the grid hardening efforts in the U.S. and the global energy transition.
Infrastructure segment gross profit and gross profit margin increased in fiscal 2023, as compared to fiscal 2022, due
to contractual customer pricing mechanisms and selling price management leading to increased average selling prices and
deliberate actions to improve overall costs of goods sold. These items, partially offset by a decrease in sales volumes in the
Telecommunications product line, resulted in an overall increase in the amount of gross profit.
Infrastructure segment SG&A increased in fiscal 2023, as compared to fiscal 2022, due to increased compensation
and incentive costs, increased bad debt reserve charges including approximately $2.7 million related to a
Telecommunications customer that became insolvent, increased research and development expenses, and incremental SG&A
from the June 2022 acquisition of ConcealFab.
We incurred severance and other employee benefit costs totaling $17.3 million within the Infrastructure segment in
fiscal 2023 related to the Realignment Program.
Infrastructure segment operating income increased in fiscal 2023, as compared to fiscal 2022, due to gross profit
improvements, driven by favorable pricing and deliberate actions to improve overall costs of goods sold more than offsetting
increased SG&A.
Agriculture Segment
Dollars in millions
North America
International
Total sales
Operating income
Fiscal Year Ended
December 30, December 31,
2023
587.1
595.1
1,182.2
16.9
$
$
$
2022
766.9
579.8
1,346.7
179.3
$
$
$
Dollar
Change
Percent
Change
$
$
$
(179.8)
15.3
(164.5)
(23.4)%
2.6 %
(12.2)%
(162.4)
(90.6)%
Agriculture segment sales decreased in fiscal 2023, as compared to fiscal 2022. In North America, the decrease in
sales in fiscal 2023, as compared to fiscal 2022, was primarily due to notably lower sales volumes of irrigation equipment.
This was impacted by lower net farm income, growers’ decisions to delay capital investments due to general economic
uncertainty, and a number of macroeconomic factors including higher interest rates, continued inflationary pressures, and
recessionary fears. International sales growth was driven by higher project sales and incremental sales from the HR Products
acquisition totaling $14.0 million partially offset by lower sales volumes in Brazil due to muted farmer sentiment attributed
to lower agricultural commodity prices. Sales of technology-related products and services in fiscal 2023 were similar to fiscal
2022.
Our Agriculture business is cyclical and is impacted by changes in net farm income, commodity prices, weather
volatility, geopolitical factors, and farmer sentiment related to future economic uncertainty. We continue to monitor potential
impacts of these factors on our financial results including estimated U.S. net farm income, as released periodically by the
USDA. In Brazil, we also actively track changes in soybean and other crop prices and projected farm input costs to evaluate
grower sentiment.
Irrigation equipment and aftermarket part sales in North America are expected to remain below prior year levels in
fiscal 2024. The previous three fiscal years benefited from record levels of disaster relief and pandemic-related stimulus for
farmers in North America which contributed to higher demand.
Agriculture segment gross profit increased in fiscal 2023, as compared to fiscal 2022, due to deflation in the cost of
steel and other favorable changes in input costs more than offsetting the impact of lower sales volumes.
Agriculture segment SG&A increased in fiscal 2023, as compared to fiscal 2022, due to increased bad debt reserve
charges, particularly in Brazil, and increased employment costs, partially offset by decreased incentive expenses.
25
We incurred severance and other employee benefit costs totaling $9.1 million within the Agriculture segment in
fiscal 2023 related to the Realignment Program.
Agriculture segment operating income decreased in fiscal 2023, as compared to fiscal 2022, primarily due to the
impairment of certain goodwill and other intangible assets in the third quarter of fiscal 2023 totaling approximately $137.2
million, along with decreased sales volumes offset by gross profit improvements.
Other
In November 2022, we completed the sale of Valmont SM, an offshore wind energy structures business with
operations in Denmark. We realized an approximate $33.3 million loss on the sale that was recorded in “Other income
(expenses)” in the Consolidated Statements of Earnings. The final payment of $2.2 million was received in January 2024,
subsequent to the fiscal year ended December 30, 2023.
Corporate
Corporate SG&A increased in fiscal 2023, as compared to fiscal 2022, due to increased employment costs, increased
professional fees, and incremental expense from changes in the valuation of deferred compensation plan liabilities. Charges
related to changes in deferred compensation plan liabilities are offset by an opposite change in an equal amount included in
“Other income (expenses)” for the change in deferred compensation plan assets.
We incurred severance and other employee benefit costs totaling $8.8 million within Corporate expense in fiscal
2023 related to the Realignment Program.
LIQUIDITY AND CAPITAL RESOURCES
Capital Allocation Philosophy
We have historically funded our growth, capital spending, and acquisitions through a combination of operating cash
flows and debt financing. The following are the capital allocation priorities for cash generated:
• working capital and capital expenditure investments necessary for future sales growth;
•
dividends on common stock generally in the range of 15% of the prior fiscal year’s fully diluted net earnings;
•
•
acquisitions; and
return of capital to shareholders through share repurchases.
We intend to manage our capital structure to maintain our investment grade debt rating. Our most recent ratings
were Baa3 by Moody’s Investors Service, Inc., BBB- by Fitch Ratings, Inc., and BBB+ by S&P Global Ratings. We would
be willing to allow our debt rating to fall to BBB- to finance a special acquisition or other opportunity. We expect to maintain
a ratio of debt to invested capital which will support our current investment grade debt rating.
In May 2014, the Board of Directors authorized the purchase of up to $500.0 million of the Company’s outstanding
common stock from time to time over twelve months at prevailing market prices, through open market or privately negotiated
transactions. The Board of Directors authorized an additional $250.0 million of share repurchases in February 2015 and again
in October 2018, and authorized an additional $400.0 million of share repurchases in February 2023. These authorizations
have no expiration date. The purchases are funded from available working capital and short-term borrowings and will be
made subject to market and economic conditions. We are not obligated to make any repurchases and may discontinue the
program at any time. As of December 30, 2023, we have acquired approximately 7.9 million shares for approximately
$1,263.9 million under this share repurchase program.
In November 2023, we entered into an accelerated purchase agreement to repurchase $120.0 million of the
Company’s outstanding common stock, under our previously announced share repurchase program described above. In the
fourth quarter of fiscal 2023, we pre-paid $120.0 million and received an initial delivery of a number of shares of common
stock which represented 75% of the prepayment amount. The accelerated share repurchase will be completed during the first
quarter of fiscal 2024.
26
In February 2023, the Company announced that the Board of Directors approved an increase to the quarterly cash
dividend on the common stock to $0.60 per share, or a rate of $2.40 per share on an annualized basis, an increase of 9% from
the prior quarterly cash dividend of $0.55 per share.
Supplier Finance Program
We have a supplier finance program agreement with a financial institution which allows qualifying suppliers, at their
election and on terms they negotiate directly with the financial institution, to sell their receivables from the Company. A
supplier’s voluntary participation in the program does not change our payment terms, amounts paid, payment timing, or
impact our liquidity, and we have no economic interest in a supplier’s decision to participate. As of December 30, 2023 and
December 31, 2022, our accounts payable on our Consolidated Balance Sheets included $41.9 million and $48.9 million,
respectively, of our payment obligations under this program.
Sources of Financing
Our debt financing as of December 30, 2023 consisted primarily of long‑term debt and borrowings on our revolving
credit facility. Our long‑term debt as of December 30, 2023, principally consisted of:
•
•
$450.0 million face value ($433.5 million carrying value) of senior unsecured notes that bear interest at 5.00%
per annum and are due in October 2044, and
$305.0 million face value ($295.2 million carrying value) of senior unsecured notes that bear interest at 5.25%
per annum and are due in October 2054.
We are allowed to repurchase the notes subject to the payment of a make-whole premium. Both tranches of these
notes are guaranteed by certain of our subsidiaries.
Our revolving credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, and the other lenders party
thereto, has a maturity date of October 18, 2026.
The revolving credit facility provides for $800.0 million of committed unsecured revolving credit loans with
available borrowings thereunder to $400.0 million in foreign currencies. We may increase the credit facility by up to an
additional $300.0 million at any time, subject to lenders increasing the amount of their commitments. The Company and our
wholly-owned subsidiaries, Valmont Industries Holland B.V. and Valmont Group Pty. Ltd., are authorized borrowers under
the credit facility. The obligations arising under the revolving credit facility are guaranteed by the Company and its wholly-
owned subsidiaries, Valmont Telecommunications, Inc., Valmont Coatings, Inc., Valmont Newmark, Inc., and Valmont
Queensland Pty. Ltd.
The interest rate on our borrowings will be, at our option, either:
(a) term Secured Overnight Financing Rate (“SOFR”) (based on a 1-, 3-, or 6-month interest period, as
selected by the Company) plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points,
depending on the credit rating of the Company’s senior unsecured long-term debt published by S&P Global
Ratings and Moody’s Investors Service, Inc.;
(b) the higher of
•
•
•
the prime lending rate,
the overnight bank rate plus 50 basis points, and
term SOFR (based on a one-month interest period) plus 100 basis points,
plus, in each case, 0 to 62.5 basis points, depending on the credit rating of our senior unsecured long-term
debt published by S&P Global Ratings and Moody’s Investors Service, Inc.; or
(c) daily simple SOFR plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points, depending
on the credit rating of the Company’s senior unsecured long-term debt published by S&P Global Ratings
and Moody’s Investors Service, Inc.
A commitment fee is also required under the revolving credit facility which accrues at 10 to 25 basis points,
depending on the credit rating of our senior unsecured long-term debt published by S&P Global Ratings and Moody’s
Investors Service, Inc., on the average daily unused portion of the commitments under the revolving credit agreement.
27
As of December 30, 2023 and December 31, 2022, we had outstanding borrowings of $377.9 million and $140.5
million, respectively, under the revolving credit facility. The revolving credit facility has a maturity date of October 18, 2026
and contains a financial covenant that may limit our additional borrowing capability under the agreement. As of
December 30, 2023, we had the ability to borrow $421.9 million under this facility, after consideration of standby letters of
credit of $0.2 million associated with certain insurance obligations. We also maintain certain short‑term bank lines of credit
totaling $39.3 million, of which $36.1 million were unused as of December 30, 2023.
Our senior unsecured notes and revolving credit agreement each contain cross-default provisions which permit the
acceleration of our indebtedness to them if we default on other indebtedness that results in, or permits, the acceleration of
such other indebtedness.
The revolving credit facility requires maintenance of a financial leverage ratio, measured as of the last day of each
of our fiscal quarters, of 3.50 or less. The leverage ratio is the ratio of: (a) interest-bearing debt minus unrestricted cash in
excess of $50.0 million (but not exceeding $500.0 million) to (b) earnings before interest, taxes, depreciation, and
amortization, adjusted for non-cash stock-based compensation and non-cash charges or gains that are non-recurring in nature,
subject to certain limitations (“Adjusted EBITDA”). The leverage ratio is permitted to increase from 3.50 to 3.75 for the four
consecutive fiscal quarters after certain material acquisitions.
The revolving credit agreement also contains customary affirmative and negative covenants or credit facilities of this
type, including, among others, limitations on us and our subsidiaries with respect to indebtedness, liens, mergers and
acquisitions, investments, dispositions of assets, restricted payments, transactions with affiliates, and prepayments of
indebtedness. The revolving credit agreement also provides for acceleration of the obligations thereunder and exercise of
other enforcement remedies upon the occurrence of customary events of default (subject to customary grace periods, as
applicable).
As of December 30, 2023, we were in compliance with all covenants related to these debt agreements.
The calculation of Adjusted EBITDA and the leverage ratio are presented in the tables below in Selected Financial
Measures.
Cash Uses
Our principal cash requirements include working capital, capital expenditures, payments of principal and interest on
our debt, payments of taxes, contributions to the pension plan, and, if market conditions warrant, occasional investments in,
or acquisitions of, business ventures. In addition, we regularly evaluate our ability to pay dividends or repurchase stock, all
consistent with the terms of our debt agreements.
Cash requirements for fiscal 2024 are expected to consist primarily of capital expenditures, pension plan
contributions, operating leases, and interest on outstanding debt. We also have unconditional purchase commitments that
relate to purchase orders for zinc, aluminum, and steel, all of which we plan to use in fiscal 2024. We believe the quantities
under contract are reasonable in light of normal fluctuations in business levels and we expect to use the commodities under
contract during the contract period. Total capital expenditures for fiscal 2024 are expected to be approximately $125.0
million to $140.0 million.
The following table summarizes current and long-term material cash requirements as of December 30, 2023:
Dollars in millions
Long‑term debt
Interest1
Pension plan contributions
Operating leases
Total contractual cash obligations
Next 12
Months
Thereafter
Total
$
$
0.7
57.7
16.7
27.9
103.0
$
$
1,134.2
901.3
200.2
222.4
2,458.1
$
$
1,134.9
959.0
216.9
250.3
2,561.1
1 Interest expense amount assumes that long-term debt will be held to maturity.
Our businesses are cyclical, but we have diversity in our markets from a product, customer, and a geographical
standpoint. We have demonstrated the ability to effectively manage through business cycles and maintain liquidity. We have
consistently generated operating cash flows in excess of our capital expenditures. Based on our available credit facilities,
28
access to capital markets, and our history of positive operational cash flows, we believe that we have adequate liquidity to
meet our needs for fiscal 2024 and beyond.
We had cash balances of $203.0 million as of December 30, 2023 with approximately $162.0 million held in our
non-U.S. subsidiaries. If we distributed our foreign cash balances, certain taxes would be applicable. As of December 30,
2023, we had a liability for foreign withholding taxes and U.S. state income taxes of $1.6 million and $0.8 million,
respectively.
Cash Flows
The following table includes a summary of our cash flow information for the fiscal years ended December 30, 2023,
December 31, 2022, and December 25, 2021:
Dollars in thousands
Net cash flows provided by operating activities
Net cash flows used in investing activities
Net cash flows provided by (used in) financing activities
$
2023
306,775
(115,281)
(176,405)
$
2022
326,265 $
(132,080)
(181,905)
2021
65,938
(417,308)
133,500
Fiscal Year Ended
December 30, December 31, December 25,
Operating Cash Flows and Working Capital – Cash provided by operating activities totaled $306.8 million in fiscal
2023, as compared with $326.3 million in fiscal 2022. The decrease in operating cash flows reflects cash flows generated
from higher gross profits, more than offset by increases in tax and interest payments of $10.6 million and $8.9 million,
respectively, and payments of severance and other employee benefit costs related to the Realignment Program totaling $22.7
million in fiscal 2023.
Investing Cash Flows – Cash used in investing activities totaled $115.3 million in fiscal 2023, as compared to
$132.1 million in fiscal 2022. Investing activities in fiscal 2023 included capital spending of $96.8 million and the acquisition
of HR Products, net of cash acquired, of $32.7 million partially offset by proceeds from the divestiture of Torrent
Engineering and Equipment, net of cash divested, of $6.4 million, and proceeds from property damage insurance claims of
$7.5 million. Investing activities in fiscal 2022 included capital spending of $93.3 million and the acquisition of a controlling
ownership investment in ConcealFab for $39.3 million.
Financing Cash Flows – Cash used in financing activities totaled $176.4 million in fiscal 2023, as compared to
$181.9 million in fiscal 2022. Our total interest‑bearing debt increased to $1,138.1 million as of December 30, 2023, from
$878.0 million as of December 31, 2022. The financing cash used in fiscal 2023 was primarily the result of borrowings on the
revolving credit agreement and short-term notes of $400.8 million, offset by principal payments on our long-term debt and
short-term borrowings of $168.8 million, dividends paid of $49.5 million, the purchase of treasury shares of $345.3 million,
and $12.9 million of net activity from stock option and incentive plans, including the associated withholding tax payments.
The financing cash used in fiscal 2022 primarily consisted of principal payments of long-term borrowings of $336.4, offset
by proceeds from long-term debt borrowings of $254.0 million, dividends paid of $45.8 million, net payments on short-term
agreements of $7.6 million, the purchase of treasury shares of $40.5 million, and the purchase of redeemable noncontrolling
interests of $7.3 million.
Guarantor Summarized Financial Information
We are providing the following information in compliance with Rule 3-10 and Rule 13-01 of Regulation S-X with
respect to our two tranches of senior unsecured notes. All of the senior notes are guaranteed, jointly, severally, fully, and
unconditionally (subject to certain customary release provisions, including sale of the subsidiary guarantor, or sale of all or
substantially all of its assets) by certain of our current and future direct and indirect domestic and foreign subsidiaries
(collectively the “Guarantors”). The Parent is the Issuer of the notes and consolidates all Guarantors.
The financial information of the Issuer and Guarantors is presented on a combined basis with intercompany balances
and transactions between the Issuer and Guarantors eliminated. The Issuer’s or Guarantors’ amounts due from, amounts due
to, and transactions with non-guarantor subsidiaries are separately disclosed.
29
Combined financial information for the fiscal years ended December 30, 2023, December 31, 2022, and
December 25, 2021 was as follows:
December 30, December 31, December 25,
Fiscal Year Ended
Dollars in thousands
Net sales
Gross profit
Operating income
Net earnings
Net earnings attributable to Valmont Industries, Inc.
$
2023
2,713,928
756,966
255,401
134,831
133,300
$
2022
2,876,425
695,211
268,142
167,114
167,220
$
2021
2,139,427
574,128
208,041
120,655
120,458
Combined financial information as of December 30, 2023 and December 31, 2022 was as follows:
Dollars in thousands
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Redeemable noncontrolling interests
December 30,
December 31,
$
2023
777,539
872,016
361,211
1,436,131
10,518
$
2022
769,263
925,088
459,961
1,189,548
1,612
Included in non-current assets is a due from non-guarantor subsidiaries receivable of $136,904 and $205,424 as of
December 30, 2023 and December 31, 2022, respectively. Included in non-current liabilities is a due to non-guarantor
subsidiaries payable of $216,633 and $200,522 as of December 30, 2023 and December 31, 2022, respectively.
Selected Financial Measures
We are including the following financial measures for the Company.
Return on Invested Capital – Return on invested capital (“ROIC”) and Adjusted ROIC are some of our key
operating ratios, as they allow investors to analyze our operating performance in light of the amount of investment required to
generate our operating profit. ROIC and Adjusted ROIC are also measurements used to determine management incentives.
The table below shows how invested capital, ROIC, and Adjusted ROIC are calculated from our Consolidated Statements of
Earnings and our Consolidated Balance Sheets. ROIC is calculated as after-tax operating income divided by the average of
beginning and ending invested capital. Adjusted ROIC is calculated as after-tax operating income adjusted for the
impairment of long-lived assets, realignment charges, non-recurring charges associated with the major scope changes for two
strategic projects initiated by departed senior leadership, intangible asset amortization and stock-based compensation related
to the Prospera subsidiary acquisition, the write-off of a receivable, and acquisition diligence then divided by the average of
beginning and ending invested capital. Invested capital represents total assets minus total liabilities (excluding interest-
bearing debt and redeemable noncontrolling interests). ROIC and Adjusted ROIC are non-generally accepted accounting
principles (“GAAP”) measures. Accordingly, invested capital, ROIC, and Adjusted ROIC 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.
30
The calculation of these ratios for the fiscal years ended December 30, 2023, December 31, 2022, and December 25,
2021 was as follows:
Dollars in thousands
Operating income
Adjusted effective tax rate1
Tax effect on operating income
After-tax operating income
Average invested capital
Return on invested capital
Operating income
Impairment of long-lived assets
Realignment charges
Other non-recurring charges
Prospera intangible asset amortization3
Prospera stock-based compensation3
Write-off of a receivable
Acquisition diligence
Adjusted operating income
Adjusted effective tax rate1,2
Tax effect on adjusted operating income
After-tax adjusted operating income
Average invested capital
Adjusted return on invested capital
Total assets
Less: Defined benefit pension asset
Less: Accounts payable
Less: Accrued expenses
Less: Contract liabilities
Less: Income taxes payable
Less: Dividends payable
Less: Deferred income taxes
Less: Operating lease liabilities
Less: Deferred compensation
Less: Defined benefit pension liability
Less: Other non-current liabilities
Total invested capital
Beginning invested capital
Average invested capital
Fiscal Year Ended
December 30,
2023
291,557
$
December 31, December 25,
2022
433,249
$
2021
286,785
$
38.1 %
27.7 %
23.6 %
(111,124)
$
180,433
$ 2,504,474
(119,872)
$
313,377
$ 2,437,232
(67,681)
$
219,104
$ 2,176,577
7.2 %
12.9 %
10.1 %
$
$
291,557
140,844
35,210
5,626
—
—
—
—
473,237
$
433,249
$
—
—
—
6,580
9,896
—
—
$
449,725
$
286,785
27,911
4,052
—
3,396
5,240
5,545
1,120
334,049
25.9 %
27.7 %
23.6 %
(122,665)
350,572
$
$ 2,504,474
(124,431)
325,294
$
$ 2,437,232
(78,836)
255,213
$
$ 2,176,577
14.0 %
13.3 %
11.7 %
$ 3,477,448
(15,404)
(358,311)
(277,764)
(70,978)
—
(12,125)
(21,205)
(162,743)
(32,623)
—
(12,818)
$ 2,513,477
$ 2,495,471
$ 2,504,474
$ 3,556,996
(24,216)
(360,312)
(248,320)
(172,915)
(3,664)
(11,742)
(41,091)
(155,469)
(30,316)
(13,480)
$ 2,495,471
$ 2,378,992
$ 2,437,232
$ 3,447,249
—
(347,841)
(253,330)
(135,746)
—
(10,616)
(47,849)
(147,759)
(35,373)
(536)
(89,207)
$ 2,378,992
$ 1,974,162
$ 2,176,577
—
1 The adjusted effective tax rate for fiscal 2022 excluded the effects of the $33.3 million loss from the divestiture of
the offshore wind energy structures business which was not deductible for income tax purposes. The effective tax rate
including the loss on the divestiture was 29.9%.
2 The adjusted effective tax rate for fiscal 2023 excluded the effects of the impairment of long-lived assets of $140.8
million, realignment charges of $35.2 million, non-recurring charges associated with major scope changes for two strategic
projects initiated by departed senior leadership of $5.6 million, loss from Argentine peso hyperinflation of $5.1 million, and
non-recurring tax benefit items of $3.6 million. The effective tax rate including these items was 38.1%.
3The Company does not include adjustments for the Prospera non-cash expenses for fiscal 2023 or going forward as
these amounts are no longer financially significant after the third quarter of fiscal 2023 impairment of long-lived assets and
realignment activities completed during the fourth quarter of fiscal 2023.
ROIC and Adjusted ROIC, as presented, may not be comparable to similarly titled measures of other companies.
31
Adjusted EBITDA – Adjusted 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 3.50 times Adjusted EBITDA (or 3.75 times Adjusted EBITDA after certain material
acquisitions), calculated on a rolling four fiscal quarter basis. These bank credit agreements allow us to add estimated
EBITDA from acquired businesses for periods we did not own the acquired businesses. The bank credit agreements also
outline adjustments for non-cash stock-based compensation and non-cash charges or gains that are non-recurring in nature,
subject to certain limitations, to be included in the calculation of Adjusted EBITDA. If this financial covenant is violated, we
may incur additional financing costs or be required to pay the debt before its maturity date. Adjusted EBITDA is a non-
GAAP measure 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.
The calculation of Adjusted EBITDA for the fiscal year ended December 30, 2023 was as follows:
Dollars in thousands
Net cash flows provided by operating activities
Interest expense
Income tax expense
Impairment of long-lived assets
Deferred income tax benefit
Redeemable noncontrolling interests
Defined benefit pension plan cost
Contribution to defined benefit pension plan
Changes in assets and liabilities, net of acquisitions
Other
EBITDA
Impairment of long-lived assets
Realignment charges
Proforma acquisition adjustment
Adjusted EBITDA
Dollars in thousands
Net earnings attributable to Valmont Industries, Inc.
Interest expense
Income tax expense
Depreciation and amortization expense
Stock-based compensation
EBITDA
Impairment of long-lived assets
Realignment charges
Proforma acquisition adjustment
Adjusted EBITDA
Fiscal Year Ended
December 30,
2023
306,775
56,808
90,121
(140,844)
18,649
5,937
(249)
17,345
80,561
602
435,705
140,844
35,210
5,152
616,911
Fiscal Year Ended
December 30,
2023
150,849
56,808
90,121
98,708
39,219
435,705
140,844
35,210
5,152
616,911
$
$
$
$
Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.
Leverage Ratio – Leverage ratio is calculated as the sum of interest-bearing debt minus unrestricted cash in excess
of $50.0 million (but not exceeding $500.0 million) divided by Adjusted EBITDA. The leverage ratio is one of the key
financial ratios in the covenants under our major debt agreements and the ratio cannot exceed 3.50 (or 3.75 after certain
material acquisitions), calculated on a rolling four fiscal quarter basis. If those covenants are violated, we may incur
additional financing costs or be required to pay the debt before its maturity date. Leverage ratio is a non-GAAP measure 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.
32
The calculation of this ratio as of December 30, 2023 was as follows:
Dollars in thousands
Interest-bearing debt, excluding origination fees and discounts of $26,310
Less: Cash and cash equivalents in excess of $50,000
Net indebtedness
Adjusted EBITDA
Leverage ratio
$
December 30,
2023
1,138,119
153,041
985,078
616,911
1.60
Leverage ratio, as presented, may not be comparable to similarly titled measures of other companies.
MARKET RISK
Changes in Prices
Certain key materials we use are commodities traded in worldwide markets which are subject to fluctuations in
price. The most significant materials are steel, aluminum, zinc, and natural gas. Over the last several years, prices for these
commodities have been volatile. The volatility in these prices was due to such factors as fluctuations in supply and demand
conditions, government tariffs, and the costs of steel‑making inputs. Steel is most significant for our TD&S product line
where the cost of steel has been approximately 50% of net sales, on average. In fiscal 2018, we began using hot rolled steel
coil derivative contracts on a limited basis to mitigate the impact of rising steel prices on operating income. Assuming a
similar sales mix, a hypothetical 20% change in the price of steel would have affected net sales in this product line by
approximately $100.0 million for the fiscal year ended December 30, 2023.
We have also experienced volatility in natural gas prices in the past several years. Our main strategies in managing
these risks are a combination of fixed-price purchase contracts with our vendors to reduce the volatility in our purchase prices
and sales price increases where possible. We use natural gas swap contracts on a limited basis to mitigate the impact of rising
natural gas prices on our operating income.
Risk Management
The principal market risks affecting us are exposure to interest rates, foreign currency exchange rates, and
commodity prices. At times, we utilize derivative financial instruments to hedge these exposures, but we do not use
derivatives for trading purposes.
Interest Rate Risk: Our interest‑bearing debt as of December 30, 2023 was primarily fixed-rate debt and borrowings
on our revolving credit facility. Our notes payable, revolving credit facility, and a small portion of our long-term debt accrue
interest at a variable rate. Assuming average interest rates and borrowings on variable rate debt, a hypothetical 10% change in
interest rates would have affected our interest expense in fiscal 2023 and fiscal 2022 by approximately $2.5 million and $0.8
million, respectively. Likewise, we have excess cash balances on deposit in interest‑bearing accounts in financial institutions.
An increase or decrease in interest rates of ten basis points would have impacted our annual interest earnings by
approximately $0.2 million and $0.2 million in fiscal 2023 and fiscal 2022, respectively.
Foreign Exchange Risk: Exposures to transactions denominated in a currency other than an entity’s functional
currency are not material and, therefore, the potential exchange losses in future earnings, fair value, and cash flows from
these transactions are not material. We are also exposed to investment risk related to foreign operations. From time to time,
as market conditions indicate, we will enter into foreign currency contracts to manage the risks associated with anticipated
future transactions, current balance sheet positions, and foreign subsidiary investments that are in currencies other than the
functional currencies of our businesses. As of December 30, 2023, the Company had one outstanding fixed-for-fixed cross
currency swap (“CCS”), swapping U.S. dollar principal and interest payments on a portion of its 5.00% senior unsecured
notes due in fiscal 2044 for Euro denominated payments. The CCS was entered into in fiscal 2019 in order to mitigate foreign
currency risk on our Euro investments and to reduce interest expense. The notional amount of the Euro CCS is $80.0 million
and matures in fiscal 2024. In fiscal 2019, the Company entered into a fixed-for-fixed CCS, swapping U.S. dollar principal
and interest payments on a portion of its 5.00% senior unsecured notes due in fiscal 2044 for Danish krone (“DKK”)
denominated payments. The DKK CCS, which qualified as a net investment hedge, was settled in fiscal 2022, with the
Company receiving $3.5 million.
33
Much of our cash in non-U.S. entities is denominated in foreign currencies, where fluctuations in exchange rates
will impact our cash balances in U.S. dollar terms. A hypothetical 10% change in the value of the U.S. dollar would impact
our reported cash balance by approximately $13.2 million in fiscal 2023 and $11.2 million in fiscal 2022.
We manage our investment risk in foreign operations by borrowing in the functional currencies of the foreign
entities or by utilizing hedging instruments, as discussed above, where appropriate. The following table indicates the change
in the recorded value of our most significant investments as of December 30, 2023 and December 31, 2022 assuming a
hypothetical 10% change in the value of the U.S. dollar.
Dollars in millions
Australian dollar
Brazilian real
British pound
Canadian dollar
Chinese renminbi
Euro
$
December 30,
2023
December 31,
2022
$
6.9
18.8
17.2
4.0
5.6
9.5
4.3
11.8
17.5
3.8
6.0
8.6
Commodity Risk: Hot rolled steel coil is a significant commodity input used by each of our segments in the
manufacture of our products, with the exception of the Coatings product line. Steel prices are volatile and we may utilize
derivative financial instruments to mitigate commodity price risk on fixed-price orders. In fiscal 2023 and fiscal 2022, we
entered into hot rolled steel coil forward contracts and swaps which qualified as cash flow hedges of the variability in the
cash flows attributable to future steel purchases. As of December 30, 2023, we had open forward contracts and swaps with a
notional amount of $7.8 million for the total purchase of 8,500 short tons from December 2023 to April 2024.
Natural gas is a significant commodity used in our factories, especially in our Coatings product line galvanizing
operations, where it is used to heat tanks that enable the hot-dipped galvanizing process. Natural gas prices are volatile which
is somewhat mitigated through the use of derivative financial instruments. Our current policy is to manage this commodity
price risk for 0 to 75% of our U.S. natural gas requirements for the upcoming 6 to 24 months through the purchase of natural
gas swaps based on New York Mercantile Exchange futures prices for delivery in the month being hedged. The objective of
this policy is to mitigate the impact on our earnings of sudden, significant increases in the price of natural gas. As of
December 30, 2023, we had open natural gas swaps with a notional value of $4.3 million for 960,475 MMBtu from
January 2024 to October 2025.
Diesel fuel is a significant commodity used by our contracted carriers who deliver our products. Diesel fuel prices
are volatile which is somewhat mitigated through the use of derivative financial instruments. In fiscal 2023, we entered into
diesel fuel option contracts that qualified as cash flow hedges of the variability of cash flows attributable to the diesel fuel
costs charged by contracted carriers. As of December 30, 2023, we had open option contracts with a notional amount of $0.5
million for the total purchase of 1,890,000 gallons from January 2024 to September 2024.
CRITICAL ACCOUNTING POLICIES
The following accounting policies involve judgments and estimates used in preparation of the Consolidated
Financial Statements. There is a substantial amount of management judgment used in preparing financial statements. We
must make estimates on a number of items, such as impairments of long-lived assets, income taxes, revenue recognition for
the product lines recognized over time, inventory obsolescence, and pension benefits. We base our estimates on our
experience and on other assumptions that we believe are reasonable under the circumstances. Further, we re-evaluate our
estimates from time to time and as circumstances change. Actual results may differ under different assumptions or
conditions. The selection and application of our critical accounting policies are discussed annually with our Audit
Committee.
Depreciation, Amortization, and Impairment of Long-Lived Assets
Our long-lived assets consist primarily of property, plant, and equipment, right-of-use assets, and goodwill and
intangible assets acquired in business acquisitions. We have assigned useful lives to our property, plant, and equipment and
certain intangible assets ranging from 2 to 30 years. In the fourth quarter of fiscal 2021, a pre-tax impairment of $21.4 million
of property, plant, and equipment was recognized for the offshore wind energy structures business.
34
We annually evaluate our reporting units for goodwill impairment during the third fiscal quarter, which usually
coincides with our strategic planning process. We estimated the value of all fourteen of the reporting units identified for the
fiscal 2023 goodwill impairment analysis utilizing a discounted cash flow model. The discounted cash flow model uses
projected after-tax cash flows from operations (less capital expenditures) discounted to present value. We perform sensitivity
analyses to determine what the impact of changes in key assumptions, including discount rates and cash flow forecasts, may
have on the valuation of the reporting units.
For the fiscal 2023 annual impairment test, the estimated fair value of two of our reporting units was less than their
respective carrying value. As a result, a $120.0 million impairment of our Agriculture Technology reporting unit and a $1.9
million impairment of our India Structures reporting unit were recognized in the third quarter of fiscal 2023.
The primary drivers for the reduction in the estimated fair value of the Agriculture Technology reporting unit were
the less favorable outlook for the North American agriculture market and lower revenue projections for the Prospera
agronomy software solutions. A higher weighted average cost of capital, primarily driven by increases in overall interest rates
since the fiscal 2022 annual impairment test, and lower long-term revenue growth rate assumptions also partially contributed
to the reduction in the estimated fair value of the reporting unit.
For the India Structures reporting unit, assumptions around future cash flows including working capital requirements
resulted in the impairment of the goodwill.
For all reporting units, if our assumptions on discount rates and future cash flows change as a result of events or
circumstances and we believe these assets may have declined in value, we may record impairment charges, resulting in lower
profits. Our reporting units are all cyclical, and their sales and profitability may fluctuate from year to year. We continue to
monitor changes in the global economy that could impact the future operating results of our reporting units. If such adverse
conditions arise, we will test impacted reporting units for impairment prior to the annual test. In the evaluation of our
reporting units, we look at the long-term prospects for the reporting unit and recognize that current performance may not be
the best indicator of future prospects or value, which requires management judgment.
For four of our reporting units, Europe, Middle East & Africa Structures, Asia Pacific Highway Safety, Asia Pacific
Access Systems, and Solar Tracking Structure, the amount of cushion or excess fair value above carrying value was less than
15%. We have identified cost-saving initiatives within these reporting units and believe they will continue to generate
positive cash flows in excess of their current carrying value, however, we will continue to monitor their prospects for growth
and continuous improvement. Should our assumptions around these businesses change negatively, there could be additional
triggers for another goodwill assessment in the future.
Our indefinite-lived intangible assets consist of trade names. We assess the values of these assets apart from
goodwill as part of the annual impairment testing. We use the relief-from-royalty method to evaluate our trade names, under
which the value of a trade name is determined based on a royalty that could be charged to a third party for using the trade
name in question. The royalty, which is based on a reasonable rate applied against estimated future sales, is tax-effected and
discounted to present value. Based on our fiscal 2023 annual testing, the carrying value of one trade name exceeded its
estimated fair value. An impairment of $1.7 million was recognized within the Infrastructure segment.
During the fourth quarter of fiscal 2021, an impairment test was required when the Company received clarifying
information on the competitive environment of the offshore wind energy structures business. As a result, impairment charges
of $2.0 million were recognized against the related trade name and $4.5 million were recognized against the related customer
relationships asset.
In the third quarter of fiscal 2023, the Company tested the recoverability of a certain amortizing proprietary
technology intangible asset related to Prospera included within the Agriculture Technology reporting unit due to identified
impairment indicators. The Company determined the carrying value of the asset exceeded the total undiscounted estimated
future cash flows and reduced the asset to its fair value. An impairment of $17.3 million was recognized within the
Agriculture segment.
35
Inventories
Inventories are valued at the lower of cost, determined on a first-in, first-out basis, or net realizable value. We write
down slow-moving and obsolete inventory by the difference between the value of the inventory and our estimate of the
reduced value based on potential future uses, the likelihood that overstocked inventory will be sold, and the expected selling
prices of the inventory. If our ability to realize value on slow-moving or obsolete inventory is less favorable than assumed,
additional inventory write-downs may be required.
Income Taxes
We record valuation allowances to reduce our deferred tax assets to amounts that are more likely than not to be
realized. We consider future taxable income expectations and tax-planning strategies in assessing the need for the valuation
allowance. If we estimate a deferred tax asset is not likely to be fully realized in the future, a valuation allowance to decrease
the amount of the deferred tax asset would decrease net earnings in the period the determination was made. Likewise, if we
subsequently determine that we are able to realize all or part of a net deferred tax asset in the future, an adjustment reducing
the valuation allowance would increase net earnings in the period such determination was made.
As of December 30, 2023, we had approximately $58.5 million in deferred tax assets relating to tax credits and loss
carryforwards, with a valuation allowance of $42.4 million, including $2.5 million in valuation allowances related to capital
loss carryforwards, which are unlikely ever to be realized. If circumstances related to our deferred tax assets change in the
future, we may be required to increase or decrease the valuation allowance on these assets, resulting in an increase or
decrease in income tax expense and a reduction or increase in net income. Also, we consider the earnings in our greater than
50% owned non-U.S. subsidiaries to not be indefinitely re-invested and, accordingly, we have a deferred tax liability of $2.4
million related to these unremitted foreign earnings for future taxes that will be incurred when cash is repatriated.
We are subject to examination by taxing authorities in the various countries in which we operate. The tax years
subject to examination vary by jurisdiction. We regularly consider the likelihood of additional income tax assessments in
each of these taxing jurisdictions based on our experiences related to prior audits and our understanding of the facts and
circumstances of the related tax issues. We include in current income tax expense any changes to accruals for potential tax
deficiencies. If our judgments related to tax deficiencies differ from our actual experience, our income tax expense could
increase or decrease in a given fiscal period.
Pension Benefits
Delta Ltd. maintains a defined benefit pension plan for qualifying employees in the U.K. There are no active
employees as members in the plan. Independent actuaries assist in properly measuring the liabilities and expenses associated
with accounting for pension benefits to eligible members. In order to use actuarial methods to value the liabilities and
expenses, we must make several assumptions. The critical assumptions used to measure pension obligations and expenses are
the discount rate and expected rate of return on pension assets.
We evaluate our critical assumptions at least annually. Key assumptions are based on the following factors:
• Discount rate is based on the yields available on AA-rated corporate bonds with durational periods similar to
that of the pension liabilities.
• Expected return on plan assets is based on our asset allocation mix and our historical return, taking into
consideration current and expected market conditions. Most of the assets in the pension plan are invested in
corporate bonds, the expected return of which is estimated based on the yield available on AA-rated corporate
bonds. The long-term expected returns on equities are based on historic performance over the long term.
•
Inflation is based on the estimated change in the consumer price index (“CPI”) or the retail price index (“RPI”),
depending on the relevant plan provisions.
36
The discount rate used to measure the defined benefit obligation was 4.50% as of December 30, 2023. The following
tables present the key assumptions in the measurement of the pension cost for fiscal 2024 and the estimated impact relative to
a change in those assumptions for fiscal 2024:
Discount rate
Expected return on plan assets
Inflation - CPI
Inflation - RPI
Dollars in millions
0.25% decrease in discount rate
0.25% decrease in expected return on plan assets
0.25% increase in inflation
Revenue Recognition
Assumptions
4.50 %
5.05 %
2.25 %
3.05 %
Increase
in Pension
Cost
$
0.3
1.3
1.0
We determine the appropriate revenue recognition for our contracts by analyzing the type, terms, and conditions of
each contract or arrangement with a customer. We have no contracts with customers, under any product line, where we could
earn variable consideration.
The following provides additional information about our contracts with TD&S and certain Telecommunications
customers where the revenue recognition is over time, the judgments we make in accounting for those contracts, and the
resulting amounts recognized in our Consolidated Financial Statements.
Accounting for utility structures and telecommunication monopole contracts: TD&S and Telecommunications
monopole structures are engineered to customer specifications resulting in limited ability to sell the structure to a different
customer if an order is canceled after production commences. The continuous transfer of control to the customer is evidenced
either by contractual termination clauses or by our rights to payment for work performed to date plus a reasonable profit as
the products do not have an alternative use to us. Since control is transferred over time, revenue is recognized based on the
extent of progress toward completion of the performance obligation. We also have certain Telecommunications structures
customers’ contracts where we do not have the right to payment for work performed. In those instances, we recognize
revenue at a point in time which is the time of the shipment of the structure.
The selection of the method to measure progress toward completion requires judgment. For our TD&S and
Telecommunications product lines, we recognize revenue on an inputs basis, using total production hours incurred to date for
each order as a percentage of total hours estimated to produce the order. The completion percentage is applied to the order’s
total revenue and total estimated costs to determine reported revenue, cost of goods sold, and gross profit. Our enterprise
resource planning system captures the total costs incurred to date and the total production hours, both incurred to date and
forecast to complete. The offshore wind energy structures business, divested in the fourth quarter of fiscal 2022, also
recognized revenue using an inputs method, based on the cost-to-cost measure of progress. Under the cost-to-cost measure of
progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total
estimated costs at completion of the performance obligation.
Management must make assumptions and estimates regarding manufacturing labor hours and wages, the usage and
cost of materials, and manufacturing burden and overhead recovery rates for each production facility. For our steel, concrete,
and wireless communication structures, production of an order, once started, is typically completed within three months.
Projected profitability on open production orders is reviewed and updated monthly. We elected the practical expedient to not
disclose the partially satisfied performance obligation at the end of the period when the contract has an original expected
duration of one year or less.
We also have a few TD&S customer orders in a fiscal year that require one to three years to complete, due to the
quantity of structures. Burden rates and routed production hours, per structure, will be adjusted if and when actual costs
incurred are significantly higher than what had been originally projected. This resets the timing of revenue recognition for
future periods so it is better aligned with the new production schedule. For our offshore wind energy structures business,
prior to its divestiture in the fourth quarter of fiscal 2022, we updated the estimates of total costs to complete each order
quarterly. Based on these updates, revenue in the current fiscal period may reflect adjustments for amounts that had been
previously recognized. During fiscal 2023, 2022, and 2021, there were no changes to inputs or estimates which resulted in
37
adjustments to revenue for production that occurred prior to the beginning of the fiscal year. A provision for loss on the
performance obligation is recognized if and when an order is projected to be at a loss, whether or not production has started.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required is included in the section “Market Risk” within "Management’s Discussion and Analysis
of Financial Condition and Results of Operations" in Part II, Item 7 of this report.
38
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Valmont Industries, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Valmont Industries, Inc. and subsidiaries (the "Company")
as of December 30, 2023 and December 31, 2022, the related consolidated statements of earnings, comprehensive income,
shareholders' equity and redeemable noncontrolling interests, and cash flows, for each of the three years in the period ended
December 30, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 30, 2023 and
December 31, 2022, and the results of its operations and its cash flows for each of the three years in the period ended
December 30, 2023, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 30, 2023, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 28, 2024, expressed an unqualified opinion on the Company's internal control
over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due
to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Goodwill — Refer to Notes 1 and 8 to the consolidated financial statements
Critical Audit Matter Description
The Company has goodwill which is allocated among fourteen reporting units. The Company evaluates its fourteen reporting
units for goodwill impairment during the third fiscal quarter of each year, or when events or changes in circumstances
indicate the carrying value may not be recoverable. Reporting units are evaluated using projected after-tax cash flows from
operations (less capital expenses) discounted to present value. This valuation method requires management to make
significant estimates and assumptions related to projected cash flows and discount rates.
We identified goodwill at the Agriculture Technology, Solar Tracking Structure, and Asia Pacific Access Systems reporting
units as a critical audit matter because of the significant estimates and assumptions made by management to estimate fair
value and the difference between the fair values and the carrying values as of September 2, 2023. This required a high degree
39
of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when
performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the
projected cash flows and discount rates for these three reporting units.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the goodwill impairment assessment for the Agriculture Technology, Solar Tracking
Structure, and Asia Pacific Access Systems reporting units included the following, among others:
• We tested the effectiveness of internal controls over management’s goodwill impairment evaluation, including those
over the projected cash flows and discount rates.
• We evaluated management’s ability to accurately forecast cash flows by comparing actual results to management’s
historical forecasts.
• We evaluated the reasonableness of management’s projected cash flows by comparing to (1) historical results,
(2) internal communications to management and the Board of Directors, and (3) industry reports.
• With the assistance of our fair value specialists, we evaluated the discount rates including testing the underlying
source information and the mathematical accuracy of the calculations. In addition, we developed a range of
independent estimates and compared those to the discount rates selected by management.
/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 28, 2024
We have served as the Company’s auditor since 1996.
40
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
Fiscal Year Ended
December 30, December 31, December 25,
Product sales
Service sales
Net sales
Product cost of sales
Service cost of sales
Total cost of sales
Gross profit
Selling, general, and administrative expenses
Impairment of goodwill and intangible assets
Realignment charges
Operating income
Other income (expenses):
Interest expense
Interest income
Gain (loss) on investments - unrealized
Gain (loss) on divestitures
Other
Total other income (expenses)
Earnings before income taxes and equity in loss of nonconsolidated subsidiaries
Income tax expense (benefit):
Current
Deferred
Total income tax expense
Earnings before equity in loss of nonconsolidated subsidiaries
Equity in loss of nonconsolidated subsidiaries
Net earnings
Loss (earnings) attributable to redeemable noncontrolling interests
Net earnings attributable to Valmont Industries, Inc.
Earnings per share:
Basic
Diluted
$
$
$
2023
3,772,835 $
$
2022
3,955,320
389,930
4,345,250
2,958,208
260,818
3,219,026
1,126,224
692,975
—
—
433,249
(47,534)
2,015
(3,374)
(33,273)
12,805
(69,361)
363,888
109,912
(1,225)
108,687
255,201
(950)
254,251
(3,388)
250,863
401,763
4,174,598
2,672,740
265,824
2,938,564
1,236,034
768,423
140,844
35,210
291,557
(56,808)
6,230
3,564
2,994
(11,085)
(55,105)
236,452
108,770
(18,649)
90,121
146,331
(1,419)
144,912
5,937
150,849 $
6.85 $
6.78 $
11.77
11.62
2021
3,159,605
341,970
3,501,575
2,395,630
222,056
2,617,686
883,889
590,608
6,496
—
286,785
(42,612)
1,192
1,920
—
12,798
(26,702)
260,083
61,343
71
61,414
198,669
(944)
197,725
(2,095)
195,630
9.23
9.10
$
$
$
$
See accompanying notes to consolidated financial statements.
41
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
Fiscal Year Ended
December 30, December 31, December 25,
2023
144,912 $
2022
254,251
$
2021
197,725
$
Net earnings
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
Unrealized translation gain (loss)
Realized loss on offshore wind energy structures business recorded in other
expense
Total foreign currency translation adjustments
Hedging activities:
Unrealized gain (loss) on commodity hedges
Realized loss (gain) on commodity hedges recorded in earnings
Unrealized gain (loss) on cross currency swaps
Realized gain on offshore wind energy structures business cross currency
swap, net of tax expense of $1,207
Amortization cost included in interest expense
Total hedging activities
Net gain (loss) on defined benefit pension plan
Other comprehensive income (loss), net of tax
Comprehensive income
Comprehensive loss (income) attributable to redeemable noncontrolling interests
Comprehensive income attributable to Valmont Industries, Inc.
$
25,261
(44,741)
(31,405)
—
25,261
(2,227)
5,288
(2,119)
—
(52)
890
(23,326)
2,825
147,737
4,785
152,522 $
25,977
(18,764)
(2,352)
5,212
5,146
(3,620)
(64)
4,322
1,345
(13,097)
241,154
(2,073)
239,081
$
—
(31,405)
20,019
(25,821)
6,093
—
(64)
227
76,718
45,540
243,265
(976)
242,289
See accompanying notes to consolidated financial statements.
42
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value)
December 30,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
Receivables, less allowance of $32,897 and $20,890, respectively
Inventories
Contract assets
Prepaid expenses and other current assets
Refundable income taxes
Total current assets
Property, plant, and equipment, at cost
Less accumulated depreciation
Property, plant, and equipment, net
Goodwill
Other intangible assets, net
Defined pension benefit asset
Other non-current assets
Total assets
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,
AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt
Notes payable to banks
Accounts payable
Accrued employee compensation and benefits
Contract liabilities
Other accrued expenses
Income taxes payable
Dividends payable
Total current liabilities
Deferred income taxes
Long-term debt, excluding current installments
Operating lease liabilities
Deferred compensation
Other non-current liabilities
Total liabilities
Redeemable noncontrolling interests
Shareholders’ equity:
$
$
$
$
$
$
203,041
657,960
658,428
175,721
91,754
725
1,787,629
1,513,239
(895,845)
617,394
632,964
150,687
15,404
273,370
3,477,448
719
3,205
358,311
130,861
70,978
146,903
—
12,125
723,102
21,205
1,107,885
162,743
32,623
12,818
2,060,376
62,792
Common stock of $1 par value, authorized 75,000,000 shares; 27,900,000 issued
Retained earnings
Accumulated other comprehensive loss
Treasury stock, at cost, common shares of 7,691,192 and 6,549,833, respectively
Total shareholders’ equity
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity
27,900
2,643,606
(273,236)
(1,043,990)
1,354,280
3,477,448
$
$
See accompanying notes to consolidated financial statements.
185,406
604,181
728,762
174,539
87,697
—
1,780,585
1,433,151
(837,573)
595,578
739,861
176,615
24,216
240,141
3,556,996
1,194
5,846
360,312
124,355
172,915
123,965
3,664
11,742
803,993
41,091
870,935
155,469
30,316
13,480
1,915,284
60,865
27,900
2,593,039
(274,909)
(765,183)
1,580,847
3,556,996
43
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Cash flows from operating activities:
Net earnings
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization
Contribution to defined benefit pension plan
Impairment of long-lived assets
Loss (gain) on divestitures
Stock-based compensation
Defined benefit pension plan cost (benefit)
Loss (gain) on sale of property, plant, and equipment
Equity in loss of nonconsolidated subsidiaries
Deferred income taxes
Changes in assets and liabilities:
Receivables
Inventories
Contract assets
Prepaid expenses and other assets (current and non-current)
Accounts payable
Contract liabilities
Accrued expenses
Income taxes payable / refundable
Other non-current liabilities
Net cash flows provided by operating activities
Cash flows from investing activities:
Purchase of property, plant, and equipment
Proceeds from divestitures, net of cash divested
Proceeds from sale of assets
Proceeds from property damage insurance claims
Acquisitions, net of cash acquired
Other, net
Net cash flows used in investing activities
Cash flows from financing activities:
Proceeds from short-term borrowings
Payments on short-term borrowings
Proceeds from long-term borrowings
Principal payments on long-term borrowings
Proceeds from settlement of financial derivatives
Debt issuance costs
Dividends paid
Dividends to redeemable noncontrolling interests
Purchase of redeemable noncontrolling interests
Purchase of treasury shares
Proceeds from exercises under stock plans
Tax withholdings on exercises under stock plans
Net cash flows provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents—beginning of period
Cash and cash equivalents—end of period
Fiscal Year Ended
December 30, December 31,
2023
2022
December 25,
2021
$
144,912 $
254,251
$
197,725
98,708
(17,345)
140,844
(2,994)
39,219
249
973
1,419
(18,649)
(46,308)
88,433
(1,230)
(26,161)
(10,529)
(106,884)
22,591
13,746
(14,219)
306,775
(96,771)
6,369
1,710
7,468
(32,676)
(1,381)
(115,281)
30,785
(34,083)
370,012
(134,748)
—
—
(49,515)
(662)
—
(345,279)
5,841
(18,756)
(176,405)
2,546
17,635
185,406
203,041 $
$
97,167
(17,155)
—
33,273
41,850
(10,087)
237
950
(1,225)
(74,163)
(3,429)
(53,008)
26,625
36,990
(567)
624
10,836
(16,904)
326,265
(93,288)
—
1,582
—
(39,287)
(1,087)
(132,080)
9,665
(17,242)
253,999
(336,403)
3,532
—
(45,813)
(714)
(7,338)
(40,474)
16,849
(17,966)
(181,905)
(4,106)
8,174
177,232
185,406
$
92,577
(1,924)
27,911
—
28,720
(14,567)
(961)
944
71
(69,275)
(289,942)
(21,579)
(36,066)
89,418
6,589
30,556
5,560
20,181
65,938
(107,790)
—
1,745
—
(312,500)
1,237
(417,308)
5,821
(26,062)
312,485
(91,313)
—
(2,267)
(41,412)
—
—
(26,100)
23,895
(21,547)
133,500
(5,624)
(223,494)
400,726
177,232
See accompanying notes to consolidated financial statements.
44
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND
REDEEMABLE NONCONTROLLING INTERESTS
(Dollars in thousands, except per share amounts)
Common
stock
Additional
paid-in
capital
Balance as of December 26, 2020
$
Net earnings
Other comprehensive income (loss), net of tax
Cash dividends declared ($2.00 per share)
Purchase of treasury shares; 111,833 shares acquired
Stock option and incentive plans
Balance as of December 25, 2021
Net earnings
Other comprehensive loss, net of tax
Cash dividends declared ($2.20 per share)
Dividends to redeemable noncontrolling interests
Addition of redeemable noncontrolling interests
Reduction of redeemable noncontrolling interests
Purchase of treasury shares; 137,612 shares acquired
Stock option and incentive plans
Balance as of December 31, 2022
Net earnings (loss)
Other comprehensive income, net of tax
Cash dividends declared ($2.40 per share)
Change in redemption value of redeemable noncontrolling
interest
Dividends to redeemable noncontrolling interests
Purchase of treasury shares; 1,282,706 shares acquired
Stock option and incentive plans
Balance as of December 30, 2023
$
27,900
—
—
—
—
—
27,900
—
—
—
—
—
—
—
—
27,900
—
—
—
—
—
—
—
27,900
$
$
Total
Redeemable
shareholders’ noncontrolling
Retained
earnings
$ 2,245,035
195,630
—
(42,472)
—
(3,886)
2,394,307
250,863
—
(46,939)
—
—
—
—
(5,192)
2,593,039
150,849
—
(49,898)
335
—
—
—
—
1,144
1,479
—
—
—
—
—
1,599
—
(3,078)
—
—
—
—
(7,374)
—
—
—
(30,000)
—
—
(13,010)
— $ 2,643,606
Accumulated
other
comprehensive
income (loss)
$
Treasury
stock
(309,786) $ (781,422) $
—
46,659
—
—
—
(263,127)
—
(11,782)
—
—
—
—
—
—
(274,909)
—
1,673
—
—
—
—
—
—
—
—
(26,100)
33,810
(773,712)
—
—
—
—
—
—
(40,474)
49,003
(765,183)
—
—
—
—
—
(318,121)
39,314
$
(273,236) $ (1,043,990) $
equity
1,182,062
195,630
46,659
(42,472)
(26,100)
31,068
1,386,847
250,863
(11,782)
(46,939)
—
—
1,599
(40,474)
40,733
1,580,847
150,849
1,673
(49,898)
(7,374)
—
(348,121)
26,304
1,354,280
$
$
interests
25,774
2,095
(1,119)
—
—
—
26,750
3,388
(1,315)
—
(714)
41,693
(8,937)
—
—
60,865
(5,937)
1,152
—
7,374
(662)
—
—
62,792
See accompanying notes to consolidated financial statements.
45
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Valmont Industries, Inc. and its controlled
subsidiaries (the “Company”). Investments in affiliates and joint ventures through which the Company exercises significant
influence over but does not control the investee and is not the primary beneficiary of the investee's activities are accounted
for using the equity method. All intercompany items have been eliminated.
Fiscal Year
The Company operates on a 52 or 53 week fiscal year with each fiscal year ending on the last Saturday in
December. Accordingly, the Company’s fiscal year ended December 30, 2023 consisted of 52 weeks, the Company’s fiscal
year ended December 31, 2022 consisted of 53 weeks, and the Company’s fiscal year ended December 25, 2021 consisted of
52 weeks. The estimated impact on the Company's results of operations due to the additional week in the fiscal year ended
December 31, 2022 was additional net sales of approximately $80,800 and additional net earnings of approximately $5,300.
Reportable Segments
The Company has two reportable segments based on its management structure. Each segment is global in nature
with a manager responsible for operational performance and allocation of capital. Reportable segments are as follows:
INFRASTRUCTURE: This segment consists of the manufacture and distribution of products and solutions
to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with
coatings services to protect metal products.
AGRICULTURE: This segment consists of the manufacture of center pivot components and linear
irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology
solutions for precision agriculture.
In addition to these two reportable segments, the Company had a business and related activities in fiscal 2022 that
were not more than 10% of consolidated sales, operating income, or assets. This business, the offshore wind energy structures
business, was reported in the “Other” segment until its divestiture in the fourth quarter of fiscal 2022.
Cash Overdrafts
Cash book overdrafts totaling $19,869 and $25,075 were classified as “Accounts payable” in the Consolidated
Balance Sheets as of December 30, 2023 and December 31, 2022, respectively. The Company’s policy is to report the change
in book overdrafts as “Cash flows from operating activities” in the Consolidated Statements of Cash Flows.
Receivables
Receivables are reported on the Consolidated Balance Sheets net of any allowance for credit losses. Allowances are
maintained in amounts considered to be appropriate in relation to the outstanding receivables based on the age of the
receivable, economic conditions, and customer credit quality. As the Company’s international business has grown, the
exposure to potential losses in international markets has also increased. These exposures can be difficult to estimate,
particularly in areas of political instability, with governments with which the Company has limited experience, or where there
is a lack of transparency as to the current credit condition of governmental units.
46
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
The following table details the balances of the allowance for credit losses and changes therein:
Balance as of Charged to Currency Deductions Balance as of
Beginning of Profit and Translation
from
Close of
Period
Fiscal year ended:
December 30, 2023
December 31, 2022
December 25, 2021
$
Period
20,890
18,050
15,952
$
Loss
17,657
4,237
3,379
Adjustment Reserves
$
$
911
(522)
(339)
(6,561) $
(875)
(942)
32,897
20,890
18,050
The Company sells trade accounts receivable at a discount under uncommitted trade accounts receivable sale
programs to third-party financial institutions without recourse. As these accounts receivable are sold without recourse, the
Company does not retain the associated risks following the transfer of such accounts receivable to the financial institutions.
Transfers of accounts receivable are accounted for as sales and, accordingly, accounts receivable sold are excluded
from “Receivables, less allowance” in the Consolidated Balance Sheets, and cash proceeds are reflected in “Cash flows from
operating activities” in the Consolidated Statements of Cash Flows. The difference between the carrying amount of the trade
accounts receivables sold and the cash received, or discount, is recorded in “Other income (expenses)” in the Consolidated
Statements of Earnings.
As of December 30, 2023 and December 31, 2022, the Company sold trade accounts receivable of $60,000 and
$100,000, respectively. The fees associated with the trade accounts receivables factoring program are recognized within
“Selling, general, and administrative expenses” in the Consolidated Statements of Earnings and were approximately $4,500
for the fiscal year ended December 30, 2023.
Inventories
Inventory is valued at the lower of cost, determined on the first-in, first-out method, or net realizable value. Finished
goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead
charges required to convert raw materials to manufactured and finished goods.
Long-Lived Assets
Property, plant, and equipment are recorded at historical cost. The Company generally uses the straight-line method
in computing depreciation and amortization for financial reporting purposes and accelerated methods for income tax
purposes. The annual provisions for depreciation and amortization have been computed principally in accordance with the
following ranges of asset lives: buildings and improvements - 10 to 30 years, machinery and equipment - 3 to 10 years,
transportation equipment - 3 to 10 years, office furniture and equipment - 3 to 7 years, and intangible assets - 2 to 20 years.
Depreciation expense was $78,138, $73,938, and $70,223 for the fiscal years ended December 30, 2023, December 31, 2022,
and December 25, 2021, respectively.
An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds the
estimated future undiscounted cash flows of the asset. A recognized impairment loss reduces the carrying amount of the asset
to its estimated fair value. The Company evaluates its reporting units for impairment of goodwill during the third quarter of
each fiscal year or when events or changes in circumstances indicate the carrying value may not be recoverable. Reporting
units are evaluated using after-tax operating cash flows (less capital expenditures) discounted to present value.
Indefinite‑lived intangible assets are assessed separately from goodwill as part of the annual impairment testing using a
relief-from-royalty method. If the underlying assumptions related to the valuation of a reporting unit’s goodwill or
indefinite‑lived intangible assets change materially before or after the annual impairment testing, the reporting unit or asset is
evaluated for potential impairment. In these evaluations, management considers recent operating performance, expected
future performance, industry conditions, and other indicators of potential impairment. The Company recognized a pre-tax
$21,415 impairment of property, plant, and equipment in fiscal 2021 when it determined that its offshore wind energy
structures business reporting unit would not generate sufficient cash flows to recover the carrying values, recorded as
“Product cost of sales” in the Consolidated Statements of Earnings. See Note 8 for details of impairments of goodwill and
other intangible assets recognized during the fiscal years ended December 30, 2023 and December 25, 2021.
47
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Leases
The Company's operating lease right-of-use (“ROU”) assets are included in “Other non-current assets” and the
corresponding lease obligations are included in “Other accrued expenses” and “Operating lease liabilities” in the
Consolidated Balance Sheets.
Income Taxes
The Company uses the asset and liability method to calculate deferred income taxes. Deferred tax assets and
liabilities are recognized on temporary differences between financial statement and tax bases of assets and liabilities using
enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities is recognized in income during the
period that includes the enactment date.
Warranties
The Company’s provision for product warranty reflects management’s best estimate of probable liability under its
product warranties. Estimated future warranty costs are recorded at the time a sale is recognized. Future warranty liability is
determined based on applying historical claim rate experience to units sold that are still within the warranty period. In
addition, the Company records provisions for known warranty claims.
Pension Cost (Benefit)
Certain expenses are incurred in connection with a defined benefit pension plan. In order to measure the expense and
the related benefit obligation, various assumptions are made including discount rates used to value the obligation, the
expected return on plan assets used to fund these expenses, and the estimated future inflation rates. These assumptions are
based on historical experience as well as current facts and circumstances. An actuarial analysis is used to measure the
expense and liability associated with the pension cost (benefit).
Stock Plans
The Company maintains stock-based compensation plans approved by the shareholders, which provide that the
Human Resources Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock.
Fair Value
The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurement (“ASC
820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value
measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value
measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date.
Derivative Instruments
The Company may enter into derivative financial instruments to manage risk associated with fluctuation in interest
rates, foreign currency rates, or commodity prices. Where applicable, the Company may elect to account for such derivatives
as either a cash flow, fair value, or net investment hedge.
48
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Comprehensive Income (Loss)
Comprehensive income (loss) includes net earnings, foreign currency translation adjustments, certain derivative-
related activity, and changes in prior service cost from the pension plan. Results of operations for foreign subsidiaries are
translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in
effect on the balance sheet dates. Accumulated other comprehensive income (loss) (“AOCI”) consisted of the following as of
December 30, 2023 and December 31, 2022:
Foreign currency translation adjustments
Hedging activities
Defined benefit pension plan
Accumulated other comprehensive loss
$
$
(236,690)
20,989
(57,535)
(273,236)
$
$
Revenue Recognition
December 30,
2023
December 31,
2022
(260,799)
20,099
(34,209)
(274,909)
The Company determines the appropriate revenue recognition model for contracts by analyzing the type, terms, and
conditions of each contract or arrangement with a customer. Contracts with customers for all businesses are fixed-price with
sales tax excluded from revenue and do not include variable consideration. Discounts included in contracts with customers,
typically early pay discounts, are recorded as a reduction of net sales in the period in which the sale is recognized. Contract
revenues are classified as “Product sales” when the performance obligation is related to the manufacturing and sale of goods.
Contract revenues are classified as “Service sales” when the performance obligation is the performance of a service. Service
revenue is primarily related to the Coatings product line and Technology Products and Services product line.
Customer acceptance provisions exist only in the design stage of our products (on a limited basis, the Company may
agree to other acceptance terms), and acceptance of the design by the customer is required before manufacturing commences
and the product is manufactured and delivered to the customer. The Company is generally not entitled to any compensation
solely based on the design of the product and does not recognize this service as a separate performance obligation, therefore,
no revenue is recognized for design services. No general rights of return exist for customers once the product has been
delivered, and the Company establishes provisions for estimated warranties.
Shipping and handling costs associated with sales are recorded within cost of sales. The Company elected to use the
practical expedient of treating freight as a fulfillment obligation instead of a separate performance obligation and ratably
recognize freight expense as the structure is being manufactured when the revenue from the associated customer contract is
being recognized over time. With the exception of the Transmission, Distribution, and Substation ("TD&S"), Solar, and
Telecommunications product lines, the Company’s inventory is interchangeable for a variety of each segment’s customers.
The Company has elected to not disclose the partially satisfied performance obligation at the end of the period when the
contract has an original expected duration of one year or less. In addition, the Company does not adjust the amount of
consideration to be received in a contract for any significant financing component if payment is expected within one year of
transfer of control of goods or services.
Most of the Company’s customers are invoiced upon shipment or delivery of the goods to the customer’s specified
location. Contract assets are recorded as revenue is recognized over time and such contract assets are relieved when the
customer is invoiced. As of December 30, 2023 and December 31, 2022, the Company’s contract assets totaled $175,721 and
$174,539, respectively.
49
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Certain customers are also invoiced by advanced billings or progress billings. When progress on performance
obligations is less than the amount the customer has been billed, a contract liability is recognized. As of December 30, 2023,
total contract liabilities of $70,978 were recorded as “Contract liabilities” in the Consolidated Balance Sheets. As of
December 31, 2022, contract liabilities of $172,915 were recorded as “Contract liabilities” and $5,616 were recorded as
“Other non-current liabilities” in the Consolidated Balance Sheets. Additional details are as follows:
• During the fiscal years ended December 30, 2023 and December 31, 2022, the Company recognized $162,182
and $96,373 of revenue that was included in the total contract liability as of December 31, 2022 and
December 25, 2021, respectively. The revenue recognized was due to applying advance payments received for
performance obligations completed during the period.
• As of December 30, 2023, the Company had no material remaining performance obligations on contracts with
an original expected duration of one year or more.
Segment and Product Line Revenue Recognition
Infrastructure Segment
Steel and concrete structures within the TD&S and Telecommunications product lines are engineered to customer
specifications resulting in limited ability to sell the structure to a different customer if an order is canceled after production
commences. The continuous transfer of control to the customer is evidenced either by contractual termination clauses or by
rights to payment for work performed to date plus a reasonable profit as the products do not have an alternative use to the
Company. Since control is transferred over time, revenue is recognized based on the extent of progress toward completion of
the performance obligation. The selection of the method to measure progress toward completion requires judgment. For the
structures manufactured within the TD&S and Telecommunications product lines, the Company generally recognizes revenue
on an inputs basis, using total production hours incurred to date for each order as a percentage of total hours estimated to
complete the order. The completion percentage is applied to the order’s total revenue and total estimated costs to determine
reported revenue, cost of sales, and gross profit. Production of an order, once started, is typically completed within three
months. Depending on the product sold, revenue from the Solar product line is recognized upon shipment or delivery of
goods to the customer depending on contract terms, or by using an inputs method, based on the ratio of costs incurred to date
to the total estimated costs at completion of the performance obligation. External sales agents are used in certain TD&S
product line sales and the Company has chosen to expense estimated commissions owed to third parties by recognizing them
proportionately as the goods are manufactured.
For the structures sold for the Lighting and Transportation product line and for the majority of Telecommunications
products, revenue is recognized upon shipment or delivery of goods to the customer depending on contract terms, which is
the same point in time that the customer is billed. Some large regional customers have unique product specifications for
telecommunication structures. When the customer contract includes a cancellation clause that would require them to pay for
work completed plus a reasonable margin if an order was canceled, revenue is recognized over time based on hours worked
as a percent of total estimated hours to complete production.
The Coatings product line revenues are derived by providing coating services to customers’ products, which include
galvanizing, anodizing, and powder coating. Revenue is recognized once the service has been performed and the goods are
ready to be picked up or delivered to the customer, which is the same time that the customer is billed.
Agriculture Segment
Revenue recognition from the manufacture of irrigation equipment and related parts and services (including tubular
products for industrial customers) is generally upon shipment of the goods to the customer which is the same point in time
that the customer is billed. The remote monitoring subscription services recognized as part of the Technology Products and
Services product line are primarily billed annually and revenue is recognized on a straight-line basis over the contract period.
50
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
The disaggregation of revenue by product line is disclosed in Note 21. A breakdown by segment of revenue
recognized over time and revenue recognized at a point in time for the fiscal years ended December 30, 2023, December 31,
2022, and December 25, 2021 was as follows:
Infrastructure
Agriculture
Other
Total net sales
Use of Estimates
December 30, 2023
Point in Time Over Time
$ 1,255,498
$ 1,744,139
30,328
1,144,633
—
—
$ 1,285,826
$ 2,888,772
Fiscal Year Ended
December 31, 2022
December 25, 2021
Point in Time Over Time Point in Time Over Time
973,227
$ 1,222,288 $ 1,388,297
$ 1,687,458
20,772
996,278
1,307,681
123,001
—
—
$ 1,117,000
$ 1,350,111 $ 2,384,575
$ 2,995,139
27,604
100,219
$
Management of the Company has made a number of estimates and assumptions relating to the reporting of assets
and liabilities, the reported amounts of revenue and expenses, and the disclosure of contingent assets and liabilities to prepare
the Consolidated Financial Statements in conformity with generally accepted accounting principles. Actual results could
differ from those estimates.
Equity Method Investments
The Company has equity method investments in nonconsolidated subsidiaries which are recorded within “Other
non-current assets” in the Consolidated Balance Sheets.
Treasury Stock
Repurchased shares are recorded as “Treasury stock, at cost” and result in a reduction of “Shareholders’ equity” in
the Consolidated Balance Sheets. When treasury shares are reissued, the Company uses the last-in, first-out method, and the
difference between the repurchase cost and re-issuance price is charged or credited to “Additional paid-in capital”.
In May 2014, the Company announced a capital allocation philosophy that covered a share repurchase program.
Specifically, the Board of Directors at that time authorized the purchase of up to $500,000 of the Company’s outstanding
common stock from time to time over twelve months at prevailing market prices, through open market or privately negotiated
transactions. In February 2015 and again in October 2018, the Board of Directors authorized an additional purchase of up to
$250,000 of the Company’s outstanding common stock with no stated expiration date. In February 2023, the Board of
Directors increased the amount remaining under the program by an additional $400,000, with no stated expiration date,
bringing the total authorization to $1,400,000. As of December 30, 2023, the Company has acquired 7,895,724 shares for
approximately $1,263,900 under this share repurchase program.
In November 2023, the Company entered into an accelerated purchase agreement to repurchase $120,000 of the
Company’s outstanding common stock (“November 2023 ASR”) with CitiBank, N.A. as counterparty. The November 2023
ASR was entered into under the Company’s previously announced share repurchase program described above. In the fourth
quarter of fiscal 2023, the Company pre-paid $120,000 and received an initial delivery of 438,917 shares of common stock
from CitiBank, which represented 75% of the prepayment amount divided by the closing price of $205.05 per share on
November 28, 2023. The final number of shares to be delivered and the average price paid per share will be based on the
daily volume weighted average share price during the term of the November 2023 ASR less a discount, which will be
completed during the first quarter of fiscal 2024.
Research and Development
Research and development costs are charged to operations in the fiscal year incurred. These costs are a component
of “Selling, general, and administrative expenses” in the Consolidated Statements of Earnings. During the fiscal years ended
December 30, 2023, December 31, 2022, and December 25, 2021, research and development costs were approximately
$55,000, $46,000, and $37,000, respectively.
51
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Supplier Finance Program
In the first quarter of fiscal 2023, the Company adopted Accounting Standards Update No. 2022-04, Liabilities –
Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, as well as early
adopted the amendment on rollforward information. During fiscal 2019, the Company entered into an agreement with a third-
party financial institution to facilitate a supplier finance program that allows qualifying suppliers to sell their receivables
from the Company to the financial institution. These participating suppliers negotiate their outstanding receivable
arrangements directly with the financial institution and the Company’s rights and obligations to suppliers are not impacted.
The Company has no economic interest in a supplier’s decision to enter into these agreements. Once a qualifying supplier
elects to participate in the supplier finance program and reaches an agreement with a financial institution, they elect which
individual Company invoices they sell to the financial institution. The Company’s obligation is to make payment in the
invoice amount negotiated with participating suppliers to the financial institution on the invoice due date, regardless of
whether the individual invoice is sold by the supplier to the financial institution. The financial institution pays the supplier on
the invoice due date for any invoices that were not previously sold under the supplier finance program. The invoice amounts
and scheduled payment terms are not impacted by the suppliers’ decisions to sell amounts under these arrangements. The
payment of these obligations is included in “Cash flows from operating activities” in the Consolidated Statements of Cash
Flows. As of December 30, 2023 and December 31, 2022, there were $41,916 and $48,880 of outstanding payment
obligations, respectively, that were sold to the financial institution under the Company’s supplier finance program included in
“Accounts payable” in the Consolidated Balance Sheets.
Confirmed obligations outstanding as of December 31, 2022
Invoices confirmed during the period
Confirmed invoices paid during the period
Confirmed obligations outstanding as of December 30, 2023
$
$
48,880
264,051
(271,015)
41,916
Redeemable Noncontrolling Interests
Subsequent to the issuance of the Company’s Consolidated Financial Statements as of and for the year ended
December 31, 2022, the Company identified an error in the presentation of “Noncontrolling interests in consolidated
subsidiaries” of $60,865 as of December 31, 2022, $26,750 as of December 25, 2021, and $25,774 as of December 26, 2020,
that has been corrected in the current year. Such amounts were previously reported within “Total shareholders’ equity” and
have been revised in the December 31, 2022 Consolidated Balance Sheets and the Consolidated Statements of Shareholders’
Equity and Redeemable Noncontrolling Interests to be presented as “Redeemable noncontrolling interests” outside of “Total
shareholders’ equity”. We have evaluated the materiality of this error based on an analysis of quantitative and qualitative
factors and concluded it was not material to the prior period financial statements, individually or in aggregate.
Noncontrolling interests with redemption features that are not solely within the Company’s control are considered
redeemable noncontrolling interests. The Company has redeemable noncontrolling interests in certain entities. The seller can
require the Company to purchase their remaining ownership, known as a put right, for an amount and on a date specified in
the applicable operating agreement. Likewise, the Company can require the seller to sell the Company their remaining
ownership based on the same amount and timing, known as a call option.
As a result of these redemption features, the Company records the noncontrolling interests as redeemable and
classifies the balances in temporary equity in the Consolidated Balance Sheets initially at its acquisition-date fair value. The
Company adjusts the redeemable noncontrolling interests each reporting period for the net income (loss) attributable to the
noncontrolling interests and any redemption value adjustments. The redeemable noncontrolling interest is accreted to the
future redemption value using the effective interest method up to the date on which the put right becomes effective. Any
accretion adjustment in the current reporting period of the redeemable noncontrolling interest is offset against retained
earnings and impacts earnings used in the calculation of earnings per share in the reporting period.
As of December 30, 2023 and December 31, 2022, the redeemable noncontrolling interests were $62,792 and
$60,865, respectively. The ultimate amount paid for the redeemable noncontrolling interests could be significantly different
because the redemption amounts depend on the future results of operations of the businesses.
52
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves the
disclosures about reportable segments including more detailed information about a reportable segment’s expenses. This
guidance will be effective for the fiscal year ending December 28, 2024 and the interim periods thereafter, with early
adoption permitted. The guidance will have no effect on the Company’s results of operations as the changes are primarily
disclosure related.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740):
Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax
disclosures, primarily related to the rate reconciliation and income taxes paid information. This guidance will be effective on
a prospective basis for the fiscal year ending December 27, 2025, with early adoption permitted. The guidance will have no
effect on the Company’s results of operations as the changes are primarily disclosure related.
(2) ACQUISITIONS
Acquisitions of Businesses
On August 31, 2023, the Company acquired HR Products for $58,044 Australian dollars ($37,302 United States
(“U.S.”) dollars) in cash (net of cash acquired) and subject to working capital adjustments. Of this amount, $7,200 Australian
dollars ($4,626 U.S. dollars) was withheld by the Company at closing as a retention fund, to be settled in two equal payments
at 12 and 24 months from the acquisition date for contingencies and disagreements. HR Products provides a broad range of
irrigation products to serve the agriculture and landscaping industries and its operations are reported in the Agriculture
segment. The acquisition strengthens the Company’s value proposition to customers in the key agriculture market of
Australia by expanding its geographic footprint and accelerating its aftermarket parts presence. The amount allocated to
goodwill is attributable to anticipated synergies and other intangibles that do not qualify for separate recognition and is not
deductible for tax purposes. The Company is currently completing its fair value assessment and expects to finalize the
purchase price allocation by the third quarter of fiscal 2024.
The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed of HR
Products as of the date of acquisition:
Current assets
Property, plant, and equipment
Goodwill
Customer relationships
Other non-current assets
Total fair value of assets acquired
Current liabilities
Operating lease liabilities
Deferred income taxes
Total fair value of liabilities assumed
Net assets acquired
August 31,
2023
24,816
1,379
9,177
11,632
3,997
51,001
4,183
2,792
3,489
10,464
40,537
$
$
On June 1, 2022, the Company acquired approximately 51% of ConcealFab for $39,287 in cash (net of cash
acquired). Approximately $1,850 of the purchase price was contingent on seller representations and warranties that were
settled in the fourth quarter of fiscal 2023. ConcealFab is located in Colorado Springs, Colorado, and its operations are
reported in the Infrastructure segment. The acquisition was made to allow the Company to incorporate innovative 5G
infrastructure and passive intermodulation mitigation solutions into its advanced Infrastructure portfolio. Goodwill was not
deductible for tax purposes. The amount allocated to goodwill was primarily attributable to anticipated synergies and other
intangibles that do not qualify for separate recognition. The Company finalized the purchase price allocation in the first
quarter of fiscal 2023.
53
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Pursuant to the operating agreement and subject to the terms and conditions thereof, the minority owners have the
right to sell all of the remaining interest in ConcealFab to the Company, and the Company has the right to purchase all of the
remaining interest in ConcealFab from the minority owners, in each case generally at any time following the fifth anniversary
of the effective date of the transaction. The purchase price for any remaining interest put to, or called by, the Company will
be determined based on a pre-defined formula as stated in the operating agreement. As a result of this redemption feature, the
Company recorded the noncontrolling interest as redeemable and classified it in temporary equity within the Consolidated
Balance Sheets. See Note 1 for discussion of the Company’s redeemable noncontrolling interests.
The following table summarizes the fair values of the assets acquired and liabilities assumed of ConcealFab as of the
date of acquisition:
Current assets
Property, plant, and equipment
Goodwill
Customer relationships
Trade name
Other non-current assets
Total fair value of assets acquired
Current liabilities
Long-term debt
Operating lease liabilities
Deferred income taxes
Other non-current liabilities
Total fair value of liabilities assumed
Redeemable noncontrolling interest
Net assets acquired
June 1,
2022
21,133
3,813
42,465
26,200
5,000
9,108
107,719
6,658
2,038
7,812
5,464
12
21,984
41,693
44,042
$
$
On May 12, 2021, the Company acquired the outstanding shares of Prospera Technologies, Ltd. ("Prospera"), an
artificial intelligence company focused on machine learning and computer vision in agriculture, for $300,000 in cash (net of
cash acquired). The acquisition of Prospera, located in Tel Aviv, Israel, was made to allow the Company to accelerate
innovation with machine learning for agronomy and is reported in the Agriculture segment. Goodwill was not deductible for
tax purposes, the trade name was assigned an estimated useful life of seven years, and the developed technology asset was
assigned an estimated useful life of five years. The amount allocated to goodwill was primarily attributable to anticipated
synergies and other intangibles that did not qualify for separate recognition. See Note 8 for details of impairments of
goodwill and other intangible assets recognized during the fiscal year ended December 30, 2023. The Company finalized the
purchase price allocation in the fourth quarter of fiscal 2021.
54
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
The following table summarizes the fair values of the assets acquired and liabilities assumed of Prospera as of the
date of acquisition:
Current assets
Property, plant, and equipment
Goodwill
Developed technology
Trade name
Total fair value of assets acquired
Current liabilities
Deferred income taxes
Total fair value of liabilities assumed
Net assets acquired
May 12,
2021
647
1,063
273,453
32,900
2,850
310,913
2,690
8,223
10,913
300,000
$
$
$
$
On April 20, 2021, the Company acquired the assets of PivoTrac for $12,500 in cash. The agreed-upon purchase
price was $14,000, with $1,500 being held back for seller representations and warranties. The acquisition of PivoTrac,
located in Texas, was made to allow the Company to advance its technology strategy and increase its number of connected
agricultural devices and is reported in the Agriculture segment. The fair values assigned were $10,800 for goodwill and
$2,627 for customer relationships, with the remainder representing net working capital. Goodwill was not deductible for tax
purposes and the customer relationships will be amortized over eight years. The amount allocated to goodwill was primarily
attributable to anticipated synergies and other intangibles that do not qualify for separate recognition. The Company finalized
the purchase price allocation in the second quarter of fiscal 2022.
Proforma disclosures were omitted for these acquisitions as they do not have a significant impact on the Company’s
financial results.
Acquisition-related costs incurred for the above acquisitions were insignificant for all fiscal years presented.
Acquisitions of Redeemable Noncontrolling Interests
Subsequent to fiscal 2023, on January 26, 2024, the Company acquired approximately 9% of ConcealFab for
$7,227. Additionally, subsequent to fiscal 2023, the minority owner of a consolidated subsidiary exercised their put option to
require the Company to purchase their remaining ownership. As such, $10,518 is expected to be paid to acquire the
remaining portion of this entity prior to the end of the first quarter of fiscal 2024.
On August 10, 2022, the Company acquired the remaining 9% of Convert Italia S.p.A. for $3,046. On May 10,
2022, the Company acquired the remaining 20% of Valmont West Coast Engineering, Ltd. for $4,292.
These transactions were for the acquisitions of portions of the remaining shares of consolidated subsidiaries with no
changes in control.
(3) DIVESTITURES
On April 30, 2023, the Company completed the sale of Torrent Engineering and Equipment, an integrator of
prepackaged pump stations in Indiana, reported in the Agriculture segment, for net proceeds of $6,369. In the second quarter
of fiscal 2023, a pre-tax gain of $2,994 was reported in “Other income (expenses)” in the Consolidated Statements of
Earnings.
On November 30, 2022, the Company completed the sale of Valmont SM, the offshore wind energy structures
business in Denmark, reported in the Other segment. The business was sold because it did not align with the long-term
strategic plans for the Company. The offshore wind energy structures business’ historical annual sales, operating income, and
net assets were not significant for discontinued operations presentation.
55
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
The offshore wind energy structures business had an operating income of $2,259 for the fiscal year ended
December 31, 2022, and an operating loss of $40,192 (inclusive of an approximately $27,900 impairment of long-lived
assets) for the fiscal year ended December 25, 2021. The Company received 90,000 Danish kroner ($12,570 U.S. dollars) at
closing. An additional 15,000 Danish kroner ($2,189 U.S. dollars) had been held in an escrow account subject to normal
closing conditions before it was released to the Company in the first quarter of fiscal 2024.
The assets and liabilities of the offshore wind energy structures business as of closing on November 30, 2022 were
as follows:
Cash and cash equivalents
Receivables, net
Inventories
Contract assets
Prepaid expenses and other current assets
Property, plant, and equipment, net
Other intangible assets, net
Other non-current assets
Total assets
Accounts payable
Contract liabilities
Other accrued expenses
Deferred income taxes
Total liabilities
Net assets divested
November 30,
2022
$
$
$
$
12,420
35,407
1,144
19,127
1,852
12,915
5,579
1,103
89,547
23,611
34,814
4,737
1,375
64,537
25,010
The pre-tax loss from divestiture was reported in “Other income (expenses)” in the Consolidated Statements of
Earnings for the fiscal year ended December 31, 2022. The loss was comprised of the proceeds and an asset recognized for
the escrow funds not at the time released from the buyer, less deal-related costs, and the net assets of the business, which
resulted in a loss of $12,123. In addition to this amount was a $21,150 realized loss on foreign exchange translation
adjustments and net investment hedges previously reported in “Shareholders’ equity” in the Consolidated Balance Sheets.
Pre-tax loss from divestitures, before recognition of currency translation loss
Recognition of cumulative currency translation loss and hedges (reclassified from OCI)
Net pre-tax loss from divestiture of offshore wind energy structures business
$
$
12,123
21,150
33,273
The transaction did not result in a tax-deductible capital loss.
(4) REALIGNMENT ACTIVITIES
During the third quarter of fiscal 2023, management initiated a plan to streamline segment support across the
Company and reduce costs through an organizational realignment program (the “Realignment Program”). The Realignment
Program provided for a reduction in force through a voluntary early retirement program and other headcount reduction
actions, which were completed as of December 30, 2023. The Board of Directors authorized the incurrence of cash charges
up to $36,000 in connection with the Realignment Program.
During the fiscal year ended December 30, 2023, the Company recorded the following pre-tax expenses for the
Realignment Program:
Severance and other employee benefit costs
Infrastructure Agriculture Corporate
$
17,260
9,101
8,849 $
$
$
Total
35,210
56
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Changes in liabilities recorded for the Realignment Program were as follows:
Severance and other employee benefit costs $
— $
2022
Expense
35,210
Settled
2023
$
(22,696) $
12,514
Balance as of Recognized Costs Paid or Balance as of
December 31, Realignment Otherwise December 30,
(5) CASH FLOW SUPPLEMENTARY INFORMATION
The Company considers all highly liquid temporary cash investments purchased with an original maturity of three
months or less at the time of purchase to be cash equivalents. Cash payments for interest and income taxes (net of refunds)
for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021 were as follows:
Fiscal Year Ended
December 30, December 31, December 25,
2022
2021
2023
Interest
Income taxes
(6) INVENTORIES
$
55,541
103,697
$
46,653 $
93,109
41,159
60,366
Inventories as of December 30, 2023 and December 31, 2022 consisted of the following:
Raw materials and purchased parts
Work-in-process
Finished goods and manufactured goods
Total inventories
(7) PROPERTY, PLANT, AND EQUIPMENT
December 30, December 31,
2023
217,134 $
37,826
403,468
658,428 $
2022
258,814
44,453
425,495
728,762
$
$
Property, plant, and equipment, at cost, as of December 30, 2023 and December 31, 2022 consisted of the following:
Land and improvements
Buildings and improvements
Machinery and equipment
Transportation equipment
Office furniture and equipment
Construction in progress
Total property, plant, and equipment, at cost
December 30, December 31,
2023
118,869 $
409,092
750,959
31,278
140,061
62,980
1,513,239 $
2022
113,188
390,435
721,223
30,610
128,922
48,773
1,433,151
$
$
57
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(8) GOODWILL AND INTANGIBLE ASSETS
Goodwill
The carrying amount of goodwill by segment as of December 30, 2023 and December 31, 2022 was as follows:
Gross balance as of December 31, 2022
Accumulated impairment losses
Balance as of December 31, 2022
Acquisitions
Divestiture
Impairment
Foreign currency translation
Balance as of December 30, 2023
Gross balance as of December 25, 2021
Accumulated impairment losses
Balance as of December 25, 2021
Acquisitions
Foreign currency translation
Balance as of December 31, 2022
Infrastructure
473,551
$
(47,467)
426,084
—
—
(1,915)
5,112
429,281
$
Infrastructure
$
$
442,521
(47,467)
395,054
42,465
(11,435)
426,084
Agriculture
313,777
—
313,777
9,177
(160)
(120,000)
889
203,683
Agriculture
313,512
—
313,512
—
265
313,777
$
$
$
$
$
$
$
$
Total
787,328
(47,467)
739,861
9,177
(160)
(121,915)
6,001
632,964
Total
756,033
(47,467)
708,566
42,465
(11,170)
739,861
In the third quarter of fiscal 2023, the Company performed its annual goodwill impairment assessment utilizing a
quantitative test on all of its reporting units using a measurement date of September 2, 2023. The fair values of the reporting
units were estimated using a discounted cash flow analysis which requires the Company to estimate the future cash flows as
well as select a risk-adjusted discount rate to measure the present value of the anticipated cash flows.
The carrying value for two of the reporting units, Agriculture Technology and India Structures, exceeded their
respective estimated fair value. As a result, impairments of $120,000 and $1,915 were recognized in the Agriculture and
Infrastructure segments, respectively, and recorded as “Impairment of goodwill and intangible assets” in the Consolidated
Statements of Earnings. For the Agriculture Technology reporting unit, the recent less favorable outlook for the agriculture
market in North America and the slower-than-expected adoption rate of the agronomy software solution led to a reduction in
forecasted sales. These reduced forecasted cash flows resulted in a lower fair value of the Agriculture Technology reporting
unit when discounted back to the present value. For the India Structures reporting unit, assumptions around future cash flows
including working capital requirements resulted in the impairment of its goodwill.
Intangible Assets
The components of intangible assets as of December 30, 2023 and December 31, 2022 were as follows:
Amortizing intangible assets:
Customer relationships
Patents & proprietary technology
Trade names
Other
Non-amortizing intangible assets:
Trade names
December 30, 2023
December 31, 2022
Gross
Carrying
Amount
Gross
Accumulated
Amortization
Carrying Accumulated
Amortization
Amount
$
$
233,852
59,311
2,870
4,787
58,750
359,570
$
$
157,873
45,416
1,056
4,538
—
208,883
$
222,716 $
58,404
2,850
2,462
59,785
$
346,217 $
145,502
21,291
645
2,164
—
169,602
58
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Amortizing intangible assets carry a remaining weighted average life of approximately four years. Amortization
expense was $19,455, $22,120, and $21,320 for the fiscal years ended December 30, 2023, December 31, 2022, and
December 25, 2021, respectively. Based on amortizing intangible assets recognized in the Consolidated Balance Sheets as of
December 30, 2023, amortization expense is estimated to average $11,158 for each of the next five fiscal years.
The Company’s indefinite-lived trade names were tested for impairment as of September 2, 2023. The values of
each trade name were determined using the relief-from-royalty method. Based on this evaluation, the carrying value of one
trade name exceeded its estimated fair value. An impairment charge of $1,656 was recognized within the Infrastructure
segment and recorded as “Impairment of goodwill and intangible assets” in the Consolidated Statements of Earnings. In the
fourth quarter of fiscal 2021, an impairment test was required when the Company received clarifying information on the
competitive environment of the offshore wind energy structures business. As a result, an impairment charge of approximately
$2,013 was recognized against the related trade name and recorded as “Impairment of goodwill and intangible assets” in the
Consolidated Statements of Earnings.
In the third quarter of fiscal 2023, the Company tested the recoverability of a certain amortizing proprietary
technology intangible asset related to Prospera included within the Agriculture Technology reporting unit due to identified
impairment indicators. The Company determined the carrying value of the asset exceeded the total undiscounted estimated
future cash flows and reduced the asset to its fair value. An impairment charge of $17,273 was recognized within the
Agriculture segment and recorded as “Impairment of goodwill and intangible assets” in the Consolidated Statements of
Earnings. In the fourth quarter of fiscal 2021, an impairment test was required when the Company received clarifying
information on the competitive environment of the offshore wind energy structures business. As a result, an impairment
charge of $4,483 was recognized against the remaining net book value of the related customer relationships and recorded as
“Impairment of goodwill and intangible assets” in the Consolidated Statements of Earnings.
(9) BANK CREDIT ARRANGEMENTS
The Company maintains various lines of credit for short-term borrowings totaling $39,336 available as of
December 30, 2023. As of December 30, 2023 and December 31, 2022, $3,205 and $5,846 was outstanding and recorded as
“Notes payable to banks” in the Consolidated Balance Sheets, respectively. The interest rates charged on these lines of credit
vary in relation to the banks’ costs of funds. The weighted average interest rate on short-term borrowings was 5.16% as of
December 30, 2023. The unused and available borrowings under the lines of credit were $36,131 as of December 30, 2023.
The lines of credit can be modified at any time at the option of the banks.
(10) INCOME TAXES
Earnings before income taxes and equity in loss of nonconsolidated subsidiaries for the fiscal years ended
December 30, 2023, December 31, 2022, and December 25, 2021 were as follows:
United States
Foreign
Earnings before income taxes and equity in loss
of nonconsolidated subsidiaries
Fiscal Year Ended
December 30, December 31,
December 25,
2023
195,491
40,961
236,452
$
$
$
$
2022
224,370
139,518
$
2021
202,051
58,032
363,888
$
260,083
59
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Income tax expense (benefit) for the fiscal years ended December 30, 2023, December 31, 2022, and December 25,
2021 consisted of:
Fiscal Year Ended
December 30, December 31, December 25,
2022
2021
2023
Current:
Federal
State
Foreign
Total current income tax expense
Non-current:
Deferred:
Federal
State
Foreign
Total deferred income tax expense (benefit)
Total income tax expense
$
$
42,226
8,480
56,107
106,813
1,957
(12,585)
(2,586)
(3,478)
(18,649)
90,121
$
$
48,309 $
11,888
48,273
108,470
1,442
(7,544)
(1,973)
8,292
(1,225)
108,687 $
30,031
8,891
20,644
59,566
1,777
4,587
558
(5,074)
71
61,414
The reconciliations of the statutory federal income tax rate and the effective tax rate for the fiscal years ended
December 30, 2023, December 31, 2022, and December 25, 2021 were as follows:
Fiscal Year Ended
December 30, December 31, December 25,
2022
2023
Statutory federal income tax rate
State income taxes, net of federal benefit
Carryforwards, credits and changes in valuation allowances
Foreign jurisdictional tax rate differences
Changes in unrecognized tax benefits
Impairment of long-lived assets
Excess tax benefit on equity compensation
Loss from divestiture of offshore wind energy structures
business
Other
Effective tax rate
21.0 %
1.8
(2.4)
4.6
0.8
11.9
1.1
—
(0.7)
38.1 %
21.0 %
2.3
1.0
4.2
0.3
—
0.5
2.2
(1.6)
29.9 %
2021
21.0 %
2.9
1.5
(0.1)
0.7
—
0.7
—
(3.1)
23.6 %
The fiscal year ended December 30, 2023 included $28,079 of tax expense related to non-tax deductible impairment
of goodwill. The fiscal year ended December 31, 2022 included $8,166 of tax expense related to the divestiture of the
offshore wind energy structures business for which no benefit was recorded. The fiscal year ended December 25, 2021
included $1,894 of U.S. tax benefits related to foreign taxes paid offset by $5,102 of valuation allowance recorded against the
offshore wind energy structures business’ deferred tax assets.
60
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss and tax
credit carryforwards. The tax effects of significant items comprising the Company’s net deferred income tax assets
(liabilities) as of December 30, 2023 and December 31, 2022 were as follows:
Deferred income tax assets:
Accrued expenses and allowances
Tax credits and loss carryforwards
Inventory allowances
Accrued compensation and benefits
Lease liabilities
Research and development expenditures
Deferred compensation
Gross deferred income tax assets
Valuation allowance
Net deferred income tax assets
Deferred income tax liabilities:
Property, plant, and equipment
Intangible assets
Defined benefit pension asset
Lease assets
Other deferred tax liabilities
Total deferred income tax liabilities
Net deferred income tax assets (liabilities)
December 30,
2023
December 31,
2022
$
$
36,883
58,519
8,427
23,880
41,769
22,751
16,163
208,392
(48,632)
159,760
42,299
52,017
3,851
42,717
6,616
147,500
12,260
$
$
25,927
67,249
7,912
24,398
40,709
7,650
16,308
190,153
(48,974)
141,179
45,300
52,750
6,054
40,708
4,941
149,753
(8,574)
Deferred income tax assets (liabilities) were presented as follows as of December 30, 2023 and December 31, 2022
in the Consolidated Balance Sheets:
Other non-current assets
Deferred income taxes
Net deferred income tax assets (liabilities)
December 30,
2023
December 31,
2022
$
$
33,465
(21,205)
12,260
$
$
32,517
(41,091)
(8,574)
Management of the Company has reviewed recent operating results and projected future operating results. The
Company’s belief that realization of its net deferred tax assets is more likely than not is based on, among other factors,
changes in operations that have occurred in recent fiscal years and available tax planning strategies. As of December 30, 2023
and December 31, 2022, respectively, there were $58,519 and $67,249 relating to tax credits and loss carryforwards.
Valuation allowances have been established for certain losses that reduce deferred tax assets to an amount that will
more likely than not be realized. During fiscal 2021, the Company recorded a valuation allowance of $6,472 against the tax
attributes related to the acquisition of Prospera. The deferred tax assets as of December 30, 2023 that are associated with tax
loss and tax credit carryforwards not reduced by valuation allowances expire in periods starting in 2024.
Uncertain tax positions included in “Other non-current liabilities” in the Consolidated Balance Sheets are evaluated
in a two-step process, whereby (1) the Company determines whether it is more likely than not that the tax positions will be
sustained based on the technical merits of the position and (2) for those tax positions that meet the more likely than not
recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely
to be realized upon ultimate settlement with the related tax authority.
61
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
The following summarizes the activity related to the unrecognized tax benefits for the fiscal years ended
December 30, 2023 and December 31, 2022:
Gross unrecognized tax benefits—beginning of period
Gross increases—tax positions in prior period
Gross increases—current‑period tax positions
Settlements with taxing authorities
Lapses of statutes of limitation
Gross unrecognized tax benefits—end of period
Fiscal Year Ended
December 30,
2023
December 31,
2022
$
$
2,536
2,174
370
(32)
(742)
4,306
$
$
2,664
1,133
523
(1,576)
(208)
2,536
There are approximately $1,514 of uncertain tax positions for which reversal is reasonably possible during the next
12 months due to the closing of the statutes of limitation. The nature of these uncertain tax positions is generally the
computation of a tax deduction or a tax credit. During the fiscal year ended December 30, 2023, the Company recorded a
reduction of its gross unrecognized tax benefit of $742, with $586 recorded as a reduction of income tax expense, due to the
expiration of statutes of limitation in the U.S. During the fiscal year ended December 31, 2022, the Company recorded a
reduction of its gross unrecognized tax benefit of $208, with $165 recorded as a reduction of income tax expense, due to the
expiration of statutes of limitation in the U.S. In addition to these amounts, there was an aggregate of $442 and $172 of
interest and penalties as of December 30, 2023 and December 31, 2022, respectively. The Company’s policy is to record
interest and penalties directly related to income taxes as “Income tax expense” in the Consolidated Statements of Earnings.
The Company files income tax returns in the U.S. and various states as well as foreign jurisdictions. Tax years 2020
and forward remain open under U.S. statutes of limitation. The total amount of unrecognized tax benefits that, if recognized,
would affect the effective tax rate was $4,372 and $2,447 as of December 30, 2023 and December 31, 2022, respectively.
The Organisation for Economic Co-operation and Development (“OECD”) has released the Pillar Two Model Rules
Framework (the “Framework”) defining the global minimum tax rules, which contemplate a minimum tax rate of 15% and
continues to release additional guidance. Although it is uncertain whether the U.S. will enact legislation to adopt the
minimum tax directive, certain countries in which the Company operates have adopted legislation effective January 1, 2024,
and other countries are in the process of introducing legislation to implement the minimum tax directive. Further, the OECD
issued administrative guidance providing transition and safe harbor rules that could delay the impact of the minimum tax
directive. The Company will continue to monitor the implementation of the Framework by the countries in which the
Company operates. The Company does not expect the Framework to have a material impact on its Consolidated Financial
Statements.
(11) LONG-TERM DEBT
Long-term debt as of December 30, 2023 and December 31, 2022 was as follows:
December 30, December 31,
5.00% senior unsecured notes due in fiscal 2044 (a)
5.25% senior unsecured notes due in fiscal 2054 (b)
Unamortized discount on 5.00% and 5.25% senior unsecured notes (a) (b)
Revolving credit agreement (c)
Other notes
Debt issuance costs
Long-term debt
Less: Current installments of long-term debt
Long-term debt, excluding current installments
2023
450,000 $
305,000
(19,665)
377,899
2,015
(6,645)
1,108,604
719
1,107,885 $
2022
450,000
305,000
(20,053)
140,513
3,587
(6,918)
872,129
1,194
870,935
$
$
62
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(a)
(b)
(c)
The 5.00% senior unsecured notes due in fiscal 2044 include an aggregate principal amount of $450,000 on which
interest is paid and an unamortized discount balance of $12,503 as of December 30, 2023. The notes bear interest at
5.00% per annum and are due on October 1, 2044. The discount will be amortized and recognized as interest
expense as interest payments are made over the term of the notes. The notes may be repurchased prior to maturity in
whole, or in part, at any time at 100% of their principal amount plus a make-whole premium and accrued and unpaid
interest. These notes are guaranteed by certain subsidiaries of the Company.
The 5.25% senior unsecured notes due in fiscal 2054 include an aggregate principal amount of $305,000 on which
interest is paid and an unamortized discount balance of $7,162 as of December 30, 2023. The notes bear interest at
5.25% per annum and are due on October 1, 2054. The discount will be amortized and recognized as interest
expense as interest payments are made over the term of the notes. The notes may be repurchased prior to maturity in
whole, or in part, at any time at 100% of their principal amount plus a make-whole premium and accrued and unpaid
interest. These notes are guaranteed by certain subsidiaries of the Company.
On October 18, 2021, the Company along with its wholly-owned subsidiaries, Valmont Industries Holland B.V. and
Valmont Group Pty. Ltd., as borrowers, entered into an amendment and restatement of the revolving credit
agreement with the Company’s lenders. The maturity date of the revolving credit facility was extended to
October 18, 2026. The credit facility provides for $800,000 of committed unsecured revolving credit loans with
available borrowings thereunder to $400,000 in foreign currencies. The Company may increase the credit facility by
up to an additional $300,000 at any time, subject to lenders increasing the amount of their commitments. The
interest rate on the borrowings will be, at the Company’s option, either:
(i)
(ii)
term Secured Overnight Financing Rate (“SOFR”) (based on a 1-, 3-, or 6-month interest period, as
selected by the Company) plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points,
depending on the credit rating of the Company’s senior unsecured long-term debt published by S&P Global
Ratings and Moody’s Investors Service, Inc.;
the higher of
•
•
the prime lending rate,
the overnight bank rate plus 50 basis points, and
•
term SOFR (based on a one-month interest period) plus 100 basis points,
plus, in each case, 0 to 62.5 basis points, depending on the credit rating of the Company’s senior
unsecured long-term debt published by S&P Global Ratings and Moody’s Investors Service, Inc.; or
(iii)
daily simple SOFR plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points, depending
on the credit rating of the Company’s senior unsecured long-term debt published by S&P Global Ratings
and Moody’s Investors Service, Inc.
As of December 30, 2023, the Company had $377,899 outstanding borrowings under the revolving credit facility.
The revolving credit facility has a maturity date of October 18, 2026 and contains a financial covenant that may limit
additional borrowing capability under the agreement. As of December 30, 2023, the Company had the ability to borrow
$421,939 under this facility, after consideration of standby letters of credit of $162 associated with certain insurance
obligations. The Company also maintains certain short-term bank lines of credit totaling $39,336, of which $36,131 were
unused as of December 30, 2023.
The revolving credit facility includes a financial leverage covenant. The Company was in compliance with this
covenant as of December 30, 2023. The minimum aggregate maturities of long-term debt for each of the five fiscal years
following the fiscal year ended December 30, 2023 are $719; $599; $378,554; $43; and $0.
The obligations arising under the 5.00% senior unsecured notes due in fiscal 2044, the 5.25% senior unsecured notes
due in fiscal 2054, and the revolving credit facility are guaranteed by the Company and its wholly owned subsidiaries,
Valmont Telecommunications, Inc., Valmont Coatings, Inc., Valmont Newmark, Inc., and Valmont Queensland Pty. Ltd.
63
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(12) STOCK-BASED COMPENSATION
The Company maintains stock‑based compensation plans approved by the shareholders, which provide that the
Human Resources Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. As of December 30, 2023,
1,513,652 shares of common stock remained available for issuance under the plans. Shares and options issued and available
are subject to changes in capitalization. The Company’s policy is to issue shares upon exercise of stock options or vesting of
restricted stock units or issuance of restricted stock from treasury shares held by the Company.
Stock options granted under the plans call for the exercise price of each option to equal the closing market price as
of the date of the grant. Options vest beginning on the first anniversary of the grant date in equal amounts over three years or
on the grant’s fifth anniversary date. Expiration of grants is seven to ten years from the date of the award. Restricted stock
units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant.
For the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company recorded $39,219,
$41,850, and $28,720 of compensation expense (included in “Selling, general, and administrative expenses” in the
Consolidated Statements of Earnings) for all share-based compensation programs, respectively. The associated tax benefits
recorded for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, were $7,092, $10,463,
and $7,180, respectively.
As of December 30, 2023, the amount of unrecognized stock option compensation expense, to be recognized over a
weighted average period of 2.00 years, was approximately $6,408. During the fiscal years ended December 30, 2023,
December 31, 2022, and December 25, 2021, compensation expense for stock options was $3,687, $3,120, and $2,538,
respectively.
The Company uses a binomial option pricing model to value its stock options. The fair value of each option grant
made as of December 30, 2023, December 31, 2022, and December 25, 2021 was estimated using the following assumptions:
Expected volatility
Risk-free interest rate
Expected life from vesting date
Dividend yield
December 30, December 31, December 25,
2023
31.97 %
4.21 %
5.4 yrs
0.87 %
2022
32.36 %
3.75 %
5.4 yrs
1.10 %
2021
33.01 %
1.26 %
4.0 yrs
1.20 %
The following is a summary of the stock option activity during the fiscal years ended December 30, 2023,
December 31, 2022, and December 25, 2021:
Outstanding as of December 31, 2022
Granted
Exercised
Forfeited
Outstanding as of December 30, 2023
Options vested or expected to vest as of December 30, 2023
Options exercisable as of December 30, 2023
Weighted
Weighted Average
Aggregate
Average Remaining
Number of Exercise Contractual Intrinsic
Shares
Value
195,690
43,340
(39,055)
(18,445)
181,530
178,820
116,545
Price
$ 214.62
226.55
155.24
307.81
$ 220.77
$ 220.31
$ 203.78
7.99 $
7.96
7.13
5,992
5,975
5,576
Term
The weighted average per share fair value of options granted during the fiscal year ended December 31, 2023 was
$72.60.
64
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Outstanding as of December 25, 2021
Granted
Exercised
Forfeited
Outstanding as of December 31, 2022
Options vested or expected to vest as of December 31, 2022
Options exercisable as of December 31, 2022
Weighted
Weighted Average
Aggregate
Average Remaining
Number of Exercise Contractual Intrinsic
Shares
Value
276,464
40,564
(121,163)
(175)
195,690
189,267
90,556
Price
$ 164.48
332.63
139.89
104.47
$ 214.62
$ 212.69
$ 172.08
7.53 $ 22,644
22,261
7.48
14,276
6.40
Term
The weighted average per share fair value of options granted during the fiscal year ended December 31, 2022 was
$104.01.
Outstanding as of December 26, 2020
Granted
Exercised
Forfeited
Outstanding as of December 25, 2021
Options vested or expected to vest as of December 25, 2021
Options exercisable as of December 25, 2021
Weighted
Weighted Average
Aggregate
Average Remaining
Number of Exercise Contractual Intrinsic
Shares
Value
399,565
47,223
(169,908)
(416)
276,464
268,338
154,860
Price
$ 141.79
252.89
135.76
132.84
$ 164.48
$ 163.42
$ 142.15
5.88 $ 22,586
22,188
5.80
15,896
4.00
Term
The weighted average per share fair value of options granted during the fiscal year ended December 25, 2021 was
$67.81.
In accordance with shareholder-approved plans, the Human Resources Committee of the Board of Directors may
grant stock under various stock‑based compensation arrangements, including restricted stock awards, restricted stock units,
performance-based restricted stock units, and stock issued in lieu of cash bonuses. Under such arrangements, stock is issued
without direct cost to the employee. The restricted stock units are settled in Company stock when the restriction period ends.
Restricted stock units and awards generally vest in equal installments over three years beginning on the first anniversary of
the grant. During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company
granted restricted stock units to directors and certain management employees as follows (which are not included in the above
stock plan activity tables):
Restricted stock units granted
Weighted‑average per share price on grant date
Recognized compensation expense
Fiscal Year Ended
December 30, December 31, December 25,
2023
2022
67,723
233.96
22,478
$
$
60,901
313.75
22,664
$
$
$
$
2021
216,971
236.28
16,147
During the second half of fiscal 2021, the Company granted 159,982 restricted stock units, worth $36,916, to certain
employees of Prospera, of which 50,141 remain outstanding as of December 30, 2023. These restricted stock units vest in
equal installments over four years and require the employees to continue employment over those four years. As such, the
related compensation expense will be incurred over the vesting period.
As of December 30, 2023, the amount of deferred stock‑based compensation granted, to be recognized over a
weighted‑average period of 2.12 years, was approximately $33,933.
65
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Performance-based restricted stock units (“PSUs”) awards consist of shares of the Company’s stock which are
payable upon the determination that the Company achieves certain established performance targets and can range from 0% to
200% of the targeted payout based on the actual results. PSUs granted in the fiscal years ended December 30, 2023 and
December 31, 2022 have a performance period of three years. The fair value of each PSU granted is equal to the fair market
value of the Company’s common stock on the date of grant. PSUs granted generally have a three-year period cliff vesting
schedule; however, according to the grant agreements, if certain conditions are met, the employee (or beneficiary) will
receive a prorated amount of the award based on active employment during the service period.
During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company
granted PSU awards as follows (which are not included in the above stock plan activity tables):
Fiscal Year Ended
December 30, December 31, December 25,
2022
2021
2023
Shares granted
Weighted‑average per share price on grant date
Recognized compensation expense
38,201
299.20
13,054
$
$
33,736
215.15
16,066
$
$
41,060
230.40
10,035
$
$
(13) EARNINGS PER SHARE
The following table provides a reconciliation between the earnings and average share amounts used to compute both
basic and diluted earnings per share:
Fiscal Year Ended
December 30, December 31, December 25,
2022
2021
2023
Net earnings attributable to Valmont Industries, Inc. including change in
redemption value of redeemable noncontrolling interest:
Net earnings attributable to Valmont Industries, Inc.
Change in redemption value of redeemable noncontrolling interest
Net earnings attributable to Valmont Industries, Inc. including change in
redemption value of redeemable noncontrolling interest
Weighted average shares outstanding (000s):
Basic
Dilutive effect of various stock awards
Diluted
Net earnings per share attributable to common shareholders:
Basic
Dilutive effect of various stock awards
Diluted
$
$
$
$
150,849
(7,374)
$
250,863
—
143,475
$
250,863
20,956
203
21,159
6.85
(0.07)
6.78
$
$
21,311
269
21,580
11.77
(0.15)
11.62
$
$
$
$
195,630
—
195,630
21,193
300
21,493
9.23
(0.13)
9.10
Basic and diluted net earnings and earnings per share in the fiscal year ended December 30, 2023 were impacted by
the impairment of certain long-lived assets of $136,457 after-tax ($6.45 per share) and realignment charges of $26,490 after-
tax ($1.25 per share). Basic and diluted net earnings and earnings per share in the fiscal year ended December 31, 2022 were
impacted by a loss from the divestiture of the offshore wind energy structures business of $33,273 (no associated tax benefit)
($1.54 per share). Basic and diluted net earnings and earnings per share in the fiscal year ended December 25, 2021 were
impacted by impairments of long-lived assets associated with the offshore wind energy structures business of $21,678 after-
tax ($1.01 per share) and a valuation allowance against the deferred tax assets of the offshore wind energy structures business
of $5,076 after-tax ($0.24 per share).
As of December 30, 2023, December 31, 2022, and December 25, 2021, there were 127,774; 40,564; and 47,223
outstanding stock options with exercise prices exceeding the average market price of common stock during the applicable
period that were excluded from the computation of diluted earnings per share, respectively.
66
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(14) EMPLOYEE RETIREMENT SAVINGS PLAN
Established under Internal Revenue Code Section 401(k), the Valmont Employee Retirement Savings Plan
(“VERSP”) is a defined contribution plan available to all eligible employees. Participants can elect to contribute up to 60% of
their annual pay, on a pre-tax and/or after-tax basis. The Company also makes contributions to the VERSP and a non-
qualified deferred compensation plan for certain Company executives. The Company’s contributions to these plans for the
fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, amounted to approximately $20,000,
$18,300, and $16,000, respectively.
The Company sponsors a fully‑funded, non-qualified deferred compensation plan for certain Company executives
who otherwise would be limited in receiving Company contributions into the VERSP under Internal Revenue Service
regulations. The invested assets and related liabilities of these participants were $26,803 and $25,008 as of December 30,
2023 and December 31, 2022, respectively. Such amounts are included in “Other non-current assets” and “Deferred
compensation” in the Consolidated Balance Sheets. Amounts distributed from the Company’s non-qualified deferred
compensation plan to participants under the transition rules of Section 409A of the Internal Revenue Code were
approximately $5,476 and $4,691 as of December 30, 2023 and December 31, 2022, respectively. All distributions were
made in cash.
(15) FAIR VALUE MEASUREMENTS
The carrying amounts of cash and cash equivalents, receivables, accounts payable, notes payable to banks, and
accrued expenses approximate fair value because of the short maturity of these instruments. The fair values of each of the
Company’s long-term debt instruments are based on the amount of future cash flows associated with each instrument
discounted using the Company’s current borrowing rate for similar debt instruments of comparable maturity. The fair value
estimates are made at a specific point in time and the underlying assumptions are subject to change based on market
conditions. As of December 30, 2023, the carrying amount of the Company’s long-term debt was $1,108,604 with an
estimated fair value of approximately $1,064,916. As of December 31, 2022, the carrying amount of the Company’s long-
term debt was $872,129 with an estimated fair value of approximately $807,281.
ASC 820 establishes a three‑level hierarchy for fair value measurements based on the transparency of inputs to the
valuation of an asset or liability as of the measurement date used. Inputs refer broadly to the assumptions that market
participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities
carried at fair value will be classified and disclosed in one of the following three categories:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity
can access at the measurement date.
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
• Level 3: Unobservable inputs for the asset or liability.
The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair
value measurement. The following are descriptions of the valuation methodologies used for assets and liabilities measured at
fair value:
Trading Securities: The Company’s trading securities represent the investments held in the Valmont Deferred
Compensation Plan (the “DCP”). As of December 30, 2023 and December 31, 2022, the assets of the DCP were $26,803 and
$25,008, respectively. These assets represent mutual funds, invested in debt and equity securities, classified as trading
securities, considering the employee’s ability to change investment allocation of their deferred compensation at any time.
Quoted market prices are available for these securities in an active market and therefore are categorized as Level 1 inputs.
These securities are included in “Other non-current assets” in the Consolidated Balance Sheets.
Derivative Financial Instruments: The fair values of foreign currency, commodity, and cross currency swap
derivative contracts are based on valuation models that use market observable inputs including forward and spot prices for
commodities and currencies.
67
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Mutual Funds: The Company has short-term investments in various mutual funds.
Trading securities
Derivative financial instruments, net
Cash and cash equivalents - mutual funds
Trading securities
Derivative financial instruments, net
Cash and cash equivalents - mutual funds
(16) DERIVATIVE FINANCIAL INSTRUMENTS
Carrying Value
December 30, 2023
$
26,803
2,860
6,258
Carrying Value
December 31, 2022
$
25,008
1,404
7,205
$
$
Fair Value Measurement Using:
Level 2
Level 3
Level 1
26,803
$
—
6,258
$
—
2,860
—
Fair Value Measurement Using:
Level 2
Level 3
Level 1
25,008
$
—
7,205
$
—
1,404
—
—
—
—
—
—
—
The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency
denominated transactions and investments in foreign subsidiaries. Depending on the circumstances, the Company may
manage these risks by utilizing derivative financial instruments. Some derivative financial instruments are marked to market
and recorded in the Company’s Consolidated Statements of Earnings, while others may be accounted for as fair value, cash
flow, or net investment hedges. Derivative financial instruments have credit and market risk. The Company manages these
risks of derivative instruments by monitoring limits as to the types and degree of risk that can be taken and by entering into
transactions with counterparties who are recognized, stable multinational banks. Any gains or losses from net investment
hedge activities remain in AOCI until either the sale or substantially complete liquidation of the related subsidiaries.
The fair value of derivative instruments as of December 30, 2023 and December 31, 2022 was as follows:
December 30,
2023
December 31,
2022
$
$
2,520
(1,586)
—
1,938
(12)
2,860
$
$
—
(3,854)
83
5,385
(210)
1,404
Derivatives designated as hedging instruments:
Commodity contracts
Commodity contracts
Foreign currency forward contracts
Cross currency swap contracts
Cross currency swap contracts
Balance Sheets location
Prepaid expenses and other current assets
Other accrued expenses
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Other accrued expenses
68
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Gains (losses) on derivatives recognized in the Consolidated Statements of Earnings for the fiscal years ended
December 30, 2023, December 31, 2022, and December 25, 2021 were as follows:
Derivatives designated as
hedging instruments:
Commodity contracts
Foreign currency forward contracts
Interest rate hedge amortization
Cross currency swap contracts
Cross currency swap contracts
Statements of
Earnings location
Product cost of sales
Other income (expenses)
Interest expense
Other income (expenses)
Interest expense
December 30,
Fiscal Year Ended
December 31, December 25,
2023
2022
2021
$
$
(7,057)
177
(64)
—
1,813
(5,131)
$
$
(5,212)
(45)
(64)
4,827
2,875
2,381
$
$
25,821
(40)
(64)
—
2,780
28,497
Cash Flow Hedges
The Company enters into commodity forward, swap, and option contracts that qualify as cash flow hedges of the
variability in cash flows attributable to future purchases. The gain (loss) realized upon settlement for each will be recorded in
“Product cost of sales” in the Consolidated Statements of Earnings in the period consumed. Notional amounts, purchase
quantities, and maturity dates of these contracts as of December 30, 2023 were as follows:
Commodity Type
Hot rolled steel coil
Natural gas
Diesel fuel
Net Investment Hedges
$
Notional
Amount
7,844
4,272
542
Total
Purchase Quantity
8,500 short tons
960,475 MMBtu
1,890,000 gallons
Maturity Dates
December 2023 to April 2024
January 2024 to October 2025
January 2024 to September 2024
In fiscal 2019, the Company entered into two fixed-for-fixed cross currency swaps ("CCS"), swapping U.S. dollar
principal and interest payments on a portion of its 5.00% senior unsecured notes due in fiscal 2044 for Danish krone
(“DKK”) and Euro denominated payments. The CCS were entered into in order to mitigate foreign currency risk on the
Company’s Euro and DKK investments and to reduce interest expense. Interest is exchanged twice per year on April 1 and
October 1.
The Company designated the initial full notional amount of the two CCS ($130,000) as a hedge of the net
investment in certain Danish and European subsidiaries under the spot method, with all changes in the fair value of the CCS
that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) recorded as cumulative
foreign currency translation within AOCI. Net interest receipts will be recorded as a reduction of interest expense over the
life of the CCS.
In the third and fourth quarters of fiscal 2022, the Company settled the DKK CCS and received proceeds of $3,532.
Due to the sale of the offshore wind energy structures business in the fourth quarter of fiscal 2022, the Company reclassified
the cumulative net investment hedge gain of $4,827 ($3,620 after-tax) from AOCI to “Other income (expenses)” in the
Consolidated Statements of Earnings.
Key terms of the Euro CCS are as follows:
Currency
Euro
Notional
Amount
Termination Date
$
80,000
April 1, 2024
Swapped
Interest Rate
2.825%
Set Settlement
Amount
71,550
€
69
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(17) WARRANTIES
The Company’s product warranty accrual reflects management’s best estimate of the probable liability under its
product warranties. Historical product claims data is used to estimate the cost of product warranties at the time revenue is
recognized.
Changes in the product warranty accrual, which are recorded in “Other accrued expenses” in the Consolidated
Balance Sheets, for the fiscal years ended December 30, 2023 and December 31, 2022 were as follows:
Balance, beginning of period
Payments made
Change in liability for warranties issued during the period
Change in liability for pre-existing warranties
Balance, end of period
(18) COMMITMENTS & CONTINGENCIES
Fiscal Year Ended
December 30,
2023
December 31,
2022
$
$
19,773
(17,072)
24,096
(4,363)
22,434
$
$
21,308
(10,569)
12,866
(3,832)
19,773
Various claims and lawsuits are pending against the Company and certain of its subsidiaries. The Company cannot
fully determine the effect of all asserted and unasserted claims on its consolidated results of operations, financial condition,
or liquidity. Where asserted and unasserted claims are considered probable and reasonably estimable, a liability has been
recorded. The Company does not expect that any known lawsuits, claims, environmental costs, commitments, or contingent
liabilities will have a material adverse effect on the consolidated results of operations, financial condition, or liquidity.
(19) DEFINED BENEFIT RETIREMENT PLAN
Delta Ltd., a wholly-owned subsidiary of the Company, is the sponsor of the Delta Pension Plan (the "Plan"). The
Plan provides defined benefit retirement income to eligible employees in the United Kingdom (“U.K.”). Pension retirement
benefits to qualified employees are 1.67% of final salary per year of service upon reaching the age of 65 years. The Plan has
no active employees as members as of December 30, 2023.
Funded Status
The Company recognizes the overfunded or underfunded status of the pension plan as an asset or liability. The
funded status represents the difference between the projected benefit obligation (“PBO”) and the fair value of the plan assets.
The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary
increases (if applicable) and inflation. Plan assets are measured at fair value. Because the Plan is denominated in British
pounds, the Company used exchange rates of $1.273/£ and $1.209/£ to translate the net pension asset into U.S. dollars as of
December 30, 2023 and December 31, 2022, respectively. The PBO was $477,763 as of December 30, 2023. The net funded
status of $15,404 as of December 30, 2023 is recorded as a non-current asset reflecting, in part, an actuarial loss for the
period from December 31, 2022 to December 30, 2023 attributed to a slight decrease in the discount rate.
Projected Benefit Obligation and Fair Value of Plan Assets—The accumulated benefit obligation (“ABO”) is the
present value of benefits earned to date, assuming no future compensation growth.
As there are no active employees in the plan, the ABO is equal to the PBO for all years presented. The overfunded
ABO represents the difference between the PBO and the fair value of plan assets.
70
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Changes in the PBO and fair value of plan assets for the Plan for the period from December 31, 2022 to
December 30, 2023 were as follows:
Fair value as of December 31, 2022
Employer contributions
Interest cost
Actual return on plan assets
Benefits paid
Actuarial loss
Currency translation
Fair value as of December 30, 2023
Projected
Benefit
Obligation
435,711
—
21,555
—
(20,683)
17,692
23,488
477,763
$
$
Plan
Assets
459,927
17,345
—
10,966
(20,683)
—
25,612
493,167
$
$
Funded
Status
$
24,216
$
15,404
The actuarial loss increased the projected benefit obligation and resulted primarily from a decrease in the discount
rate from 4.80% in fiscal 2022 to 4.50% in fiscal 2023.
Changes in the PBO and fair value of plan assets for the Plan for the period from December 25, 2021 to
December 31, 2022 were as follows:
Fair value as of December 25, 2021
Employer contributions
Interest cost
Actual return on plan assets
Benefits paid
Actuarial gain
Currency translation
Fair value as of December 31, 2022
Projected
Benefit
Obligation
761,706
—
12,551
—
(20,175)
(248,252)
(70,119)
435,711
$
$
Plan
Assets
761,170
17,155
—
(228,493)
(20,175)
—
(69,730)
459,927
$
$
Funded
Status
$
(536)
$
24,216
The actuarial gain decreased the project benefit obligation and resulted from an increase in the discount rate from
1.90% in fiscal 2021 to 4.80% in fiscal 2022.
Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 30, 2023 and
December 31, 2022 consisted of actuarial losses, as follows:
Balance as of December 25, 2021
Actuarial loss
Amortization of prior service costs
Currency translation gain
Balance as of December 31, 2022
Actuarial loss
Amortization of prior service costs
Currency translation loss
Balance as of December 30, 2023
$
$
(60,940)
(2,915)
493
5,451
(57,911)
(28,071)
498
(3,667)
(89,151)
71
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Assumptions—The weighted-average actuarial assumptions used to determine the benefit obligation as of
December 30, 2023 and December 31, 2022 were as follows:
Discount rate
Salary increase
Consumer Price Index ("CPI") inflation
Retail Price Index ("RPI") inflation
Cost/(Benefit)
December 30,
2023
December 31,
2022
4.50 %
N/A
2.25 %
3.05 %
4.80 %
N/A
2.35 %
3.25 %
Pension cost (benefit) is determined based on the annual service cost of benefits (the actuarial cost of benefits earned
during a period) and the interest cost on those liabilities, less the expected return on plan assets. The interest cost component
is calculated using the full yield curve approach to estimate the interest cost by applying the specific spot rates along the yield
curve used to determine the present value of the benefit plan obligations to relevant cash outflows for the corresponding year.
The expected long-term rate of return on plan assets is applied to the fair value of plan assets. Differences in actual
experience in relation to assumptions are not recognized in net earnings immediately, but are deferred and, if necessary,
amortized as pension cost.
The components of the net periodic pension cost (benefit) for the fiscal years ended December 30, 2023 and
December 31, 2022 were as follows:
Interest cost
Expected return on plan assets
Amortization of prior service costs
Net periodic pension cost (benefit)
Fiscal Year Ended
December 30,
2023
December 31,
2022
$
$
21,555
(21,804)
498
249
$
$
12,551
(23,131)
493
(10,087)
Assumptions—The weighted-average actuarial assumptions used to determine the cost (benefit) were as follows for
the fiscal years ended December 30, 2023 and December 31, 2022:
Discount rate for benefit obligations
Discount rate for interest cost
Expected return on plan assets
CPI inflation
RPI inflation
December 30,
2023
December 31,
2022
4.80 %
4.90 %
4.85 %
2.35 %
3.25 %
1.90 %
1.80 %
3.48 %
2.70 %
3.30 %
The discount rate is based on the yields of AA-rated corporate bonds with durational periods similar to that of the
pension liabilities. The expected return on plan assets is based on the asset allocation mix and the historical return, taking into
account current and expected market conditions. The expected return on plan assets increased from 3.48% to 4.85% for fiscal
2023 as the investment composition has more liability matching versus return-seeking assets. Inflation is based on expected
changes in the CPI or the RPI in the U.K. depending on the relevant plan provisions.
Cash Contributions
The Company completed negotiations with Plan trustees in fiscal 2022 regarding annual funding for the Plan. The
annual contributions into the Plan are approximately $16,700 (£13,100) per annum as part of the Plan’s recovery plan, along
with a contribution to cover the administrative costs of the Plan of approximately $1,700 (£1,300) per annum. In the fourth
quarter of fiscal 2020, the Company made its required fiscal 2021 annual contribution in addition to the required fiscal 2020
annual contribution that was made earlier in fiscal 2020.
72
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Benefit Payments
The following table details expected pension benefit payments for the fiscal years 2024 through 2033:
2024
2025
2026
2027
2028
2029 - 2033
Asset Allocation Strategy
$
21,641
22,278
23,042
23,678
24,442
133,540
The investment strategy for pension plan assets is to maintain a diversified portfolio consisting of
• Long-term fixed-income securities that are investment grade or government‑backed in nature,
• Common stock mutual funds in U.K. and non-U.K. companies, and
• Diversified growth funds, which are invested in a number of investments, including common stock, fixed
income funds, properties, and commodities.
The Plan, as required by U.K. law, has an independent trustee that sets investment policy. The general strategy is to
invest approximately 50% of the assets of the Plan in common stock mutual funds and diversified growth funds, with the
remainder of the investments in long-term fixed income securities, including corporate bonds and index-linked U.K. gilts.
The trustees regularly consult with representatives of the Plan sponsor and independent advisors on such matters.
The pension plan investments are held in a trust. The weighted average maturity of the corporate bond portfolio was
13 years as of December 30, 2023.
Fair Value Measurements
The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used
for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation
hierarchy.
Leveraged Inflation-Linked Gilts—These investments are a combination of U.K. government-backed securities
(such as bonds or other fixed income securities issued directly by the U.K. Treasury) money market instruments, and
derivatives combined to give leveraged exposure to changes in the U.K. long-term interest and inflation rates. These funds
are expected to offset a proportion of the impact changes in the long-term interest and inflation rates in the U.K. have on the
pension plan’s benefit plan obligation liability. The fair value recorded by the Plan is calculated using net asset value
(“NAV”) for each investment.
Temporary Cash Investments—These investments consist of British pounds, reported in terms of U.S. dollars based
on currency exchange rates readily available in active markets. These temporary cash investments are classified as Level 1
investments.
Corporate Bonds—Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations.
The fair value recorded by the Plan is calculated using NAV for each investment.
Corporate Stock—This investment category consists of common and preferred stock, including mutual funds, issued
by U.K. and non-U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment.
73
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Secured Income Asset Funds—This investment category consists of holdings that have a high level of expected
inflation linkage. Examples of underlying asset classes are rental streams and infrastructure debt. Due to the private nature of
these investments, pricing inputs are not readily observable. Asset valuations are developed by the fund manager. These
valuations are based on the application of public market multiples to private company cash flows, market transactions that
provide valuation information for comparable companies, and other methods. The fair value recorded by the Plan is
calculated using NAV.
As of December 30, 2023 and December 31, 2022, the pension plan assets measured at fair value on a recurring
basis were as follows:
December 30, 2023
Plan assets at fair value:
Temporary cash investments
Plan assets at NAV:
Leveraged inflation-linked gilt funds
Corporate bonds
Corporate stock
Secured income asset funds
Total plan assets at NAV
Total plan assets
December 31, 2022
Plan assets at fair value:
Temporary cash investments
Plan assets at NAV:
Leveraged inflation-linked gilt funds
Corporate bonds
Corporate stock
Secured income asset funds
Total plan assets at NAV
Total plan assets
(20) LEASES
Fair Value Measurement Using:
Level 2
Level 1
Level 3
Total
$
7,077
$
— $
—
$
7,077
216,405
74,440
72,548
122,697
486,090
493,167
Total
$
Fair Value Measurement Using:
Level 2
Level 1
Level 3
$
5,916
$
— $
—
$
5,916
206,555
63,953
55,379
128,124
454,011
459,927
$
The Company has operating leases for plant locations, corporate offices, sales offices, and certain equipment.
Outstanding leases as of December 30, 2023 have remaining lease terms of one year to twenty-three years, some of which
include options to extend leases for up to ten years. The Company does not have any financing leases. The Company elected
to not separate lease and non-lease components for all classes of underlying assets.
The Company determines if an arrangement is a lease at inception. Operating leases are included in “Other non-
current assets”, “Other accrued expenses”, and “Operating lease liabilities” in the Consolidated Balance Sheets. ROU assets
represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make future
lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date
based on the present value of lease payments over the lease term. The Company used its collateralized incremental borrowing
rate in determining the present value of future lease payments. The operating lease ROU assets are adjusted for any lease
payments made, lease incentives, and impairments. The lease terms for some of the Company’s facility leases include options
to extend the lease when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-
line basis over the lease term.
74
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Lease cost and other information related to the Company’s operating leases as of and for the fiscal year ended
December 30, 2023 and December 31, 2022 were as follows:
Operating lease cost
Operating cash outflows from operating leases
ROU assets obtained in exchange for lease obligations
Weighted average remaining lease term
Weighted average discount rate
December 30,
$
$
$
2023
33,714
34,967
25,688
16 years
December 31,
2022
31,062
$
$
$
33,150
27,480
17 years
4.4 %
4.2 %
Operating lease cost includes approximately $1,900 for short-term lease costs and approximately $4,800 for variable
lease payments in fiscal 2023.
Supplemental balance sheet information related to operating leases as of December 30, 2023 and December 31,
2022 was as follows:
Operating lease assets
Other non-current assets
Classification
Operating lease short-term liabilities Other accrued expenses
Operating lease long-term liabilities Operating lease liabilities
Total lease liabilities
December 30,
2023
$
$
171,616
19,553
162,743
182,296
December 31,
2022
162,930
$
16,857
155,469
172,326
$
Minimum lease payments under operating leases expiring subsequent to December 30, 2023 are as follows:
Fiscal year ending:
2024
2025
2026
2027
2028
Subsequent
Total minimum lease payments
Less: Interest
Present value of minimum lease payments
(21) BUSINESS SEGMENTS
$
$
27,924
26,507
22,613
17,288
15,384
140,573
250,289
67,993
182,296
The Company has two reportable segments based on its management structure. Each segment is global in nature
with a manager responsible for segment operational performance and the allocation of capital within the segment. Net
corporate expense is net of certain service‑related expenses that are allocated to business units generally based on employee
headcounts and sales dollars.
Reportable segments are as follows:
INFRASTRUCTURE: This segment consists of the manufacture and distribution of products and solutions
to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with
coatings services to protect metal products.
AGRICULTURE: This segment consists of the manufacture of center pivot components and linear
irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology
solutions for precision agriculture.
75
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
In addition to these two reportable segments, the Company had a business and related activities in fiscal 2022 that
were not more than 10% of consolidated sales, operating income, or assets. This business, the offshore wind energy structures
business, was reported in the “Other” segment until its divestiture in the fourth quarter of fiscal 2022.
The accounting policies of the reportable segments are the same as those described in Note 1. The Company
evaluates the performance of its reportable segments based on operating income and return on invested capital. The
Company’s operating income for segment purposes excludes unallocated corporate general and administrative expenses,
interest expense, non-operating income and deductions, or income taxes.
Summary by Business
SALES:
Infrastructure
Agriculture
Other
Total sales
INTERSEGMENT SALES:
Infrastructure
Agriculture
Total intersegment sales
NET SALES:
Infrastructure
Agriculture
Other
Total net sales
OPERATING INCOME (LOSS):
Infrastructure
Agriculture
Other
Corporate
Total operating income
Fiscal Year Ended
December 30, December 31,
December 25,
2023
2022
2021
$
$
$
3,010,067
1,182,223
—
4,192,290
(10,430)
(7,262)
(17,692)
2,999,637
1,174,961
—
4,174,598
396,253
16,850
—
(121,546)
291,557
$
$
$
2,928,419
1,346,672
100,219
4,375,310
$
2,372,100
1,028,717
123,001
3,523,818
(18,673)
(11,387)
(30,060)
2,909,746
1,335,285
100,219
4,345,250
354,499
179,263
2,259
(102,772)
433,249
(10,576)
(11,667)
(22,243)
2,361,524
1,017,050
123,001
3,501,575
273,598
137,027
(40,192)
(83,648)
286,785
$
$
76
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Geographical market:
North America
International
Total sales
Product line:
Transmission, Distribution, and Substation
Lighting and Transportation
Coatings
Telecommunications
Solar
Irrigation Equipment and Parts
Technology Products and Services
Total sales
Fiscal year ended December 30, 2023
Infrastructure Agriculture Intersegment Consolidated
$
$
$
$
2,318,801
691,266
3,010,067
$
587,056 $
595,167
$ 1,182,223 $
(16,282)
(1,410)
(17,692)
$ 2,889,575
1,285,023
$ 4,174,598
1,243,768
964,072
354,330
252,165
195,732
—
—
3,010,067
$
— $
—
—
—
—
1,069,425
112,798
$ 1,182,223 $
— $ 1,243,768
964,072
—
345,310
(9,020)
252,165
—
194,322
(1,410)
1,062,163
(7,262)
—
112,798
$ 4,174,598
(17,692)
Infrastructure Agriculture
Fiscal year ended December 31, 2022
Other
Intersegment Consolidated
Geographical market:
North America
International
Total sales
Product line:
$
$
2,234,339
694,080
2,928,419
$
Transmission, Distribution, and Substation
Lighting and Transportation
Coatings
Telecommunications
Solar
Irrigation Equipment and Parts
Technology Products and Services
Other
Total sales
$
1,184,660
940,462
356,707
320,342
126,248
—
—
—
2,928,419
$
$
$
$
766,929
579,743
1,346,672
$
$
— $
100,219
100,219 $
(26,248)
(3,812)
(30,060)
$
$
2,975,020
1,370,230
4,345,250
— $
—
—
—
—
1,231,587
115,085
—
1,346,672
$
— $
—
—
—
—
—
—
100,219
100,219 $
— $
—
(15,327)
—
(3,346)
(11,387)
—
—
(30,060)
$
1,184,660
940,462
341,380
320,342
122,902
1,220,200
115,085
100,219
4,345,250
Infrastructure Agriculture
Fiscal year ended December 25, 2021
Other
Intersegment Consolidated
Geographical market:
North America
International
Total sales
Product line:
$
$
1,724,531
647,569
2,372,100
$
545,574
483,143
$ 1,028,717
$
$
— $
123,001
123,001 $
(22,243)
—
(22,243)
$
— $
—
—
—
—
930,858
97,859
—
$ 1,028,717
$
— $
—
—
—
—
—
—
123,001
123,001 $
—
—
(10,575)
—
—
(11,668)
—
—
(22,243)
$
Transmission, Distribution, and Substation
Lighting and Transportation
Coatings
Telecommunications
Solar
Irrigation Equipment and Parts
Technology Products and Services
Other
Total sales
$
935,099
825,923
309,647
238,527
62,904
—
—
—
2,372,100
77
$
$
$
$
2,247,862
1,253,713
3,501,575
935,099
825,923
299,072
238,527
62,904
919,190
97,859
123,001
3,501,575
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
EARNINGS BEFORE INCOME TAXES AND EQUITY IN
LOSS OF NONCONSOLIDATED SUBSIDIARIES:
Infrastructure
Agriculture
Other
Corporate
Total operating income
Interest expense, net
Other income (expenses)
Earnings before income taxes and equity in loss of
nonconsolidated subsidiaries
ASSETS:
Infrastructure
Agriculture
Other
Corporate
Total assets
CAPITAL EXPENDITURES:
Infrastructure
Agriculture
Other
Corporate
Total capital expenditures
DEPRECIATION AND AMORTIZATION:
Infrastructure
Agriculture
Other
Corporate
Total depreciation and amortization expense
December 30,
2023
Fiscal Year Ended
December 31,
2022
December 25,
2021
$
$
396,253
16,850
—
(121,546)
291,557
(50,578)
(4,527)
$
354,499
179,263
2,259
(102,772)
433,249
(45,519)
(23,842)
273,598
137,027
(40,192)
(83,648)
286,785
(41,420)
14,718
$
236,452
$
363,888
$
260,083
December 30,
2023
December 31,
2022
December 25,
2021
$
$
$
$
$
$
2,249,132
978,590
—
249,726
3,477,448
$
$
2,267,800
1,112,588
—
176,608
3,556,996
December 30,
2023
Fiscal Year Ended
December 31,
2022
68,295
10,890
—
17,586
96,771
$
$
53,228
32,886
—
7,174
93,288
December 30,
2023
Fiscal Year Ended
December 31,
2022
64,654
23,409
—
10,645
98,708
$
$
62,398
23,681
1,393
9,695
97,167
$
$
$
$
$
$
2,102,851
1,027,272
67,592
249,534
3,447,249
December 25,
2021
72,129
17,509
345
17,807
107,790
December 25,
2021
59,748
17,813
5,988
9,028
92,577
78
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
Summary by Geographical Area by Location of Valmont Facilities
NET SALES:
United States
Australia
Brazil
Denmark
Other
Total net sales
LONG-LIVED ASSETS:
United States
Australia
Brazil
Denmark
Other
Total long-lived assets
December 30,
2023
Fiscal Year Ended
December 31,
2022
December 25,
2021
$
$
2,860,951
313,075
311,367
—
689,205
4,174,598
December 30,
2023
$
$
1,116,962
103,847
60,937
—
408,073
1,689,819
$
$
$
$
2,965,673
292,072
354,497
100,219
632,789
4,345,250
December 31,
2022
1,246,956
82,290
42,259
—
404,906
1,776,411
$
$
$
$
2,260,198
297,720
200,402
123,001
620,254
3,501,575
December 25,
2021
1,172,552
173,240
28,583
21,232
338,879
1,734,486
No single customer accounted for more than 10% of net sales in fiscal 2023, 2022, or 2021. Net sales by
geographical area are based on the location of the facility producing the sales and do not include sales to other operating units
of the Company. Brazil and Australia each accounted for approximately 7% of the Company’s net sales in fiscal 2023; no
other foreign country accounted for more than 4% of the Company’s net sales.
Operating income by business segment is based on net sales less identifiable operating expenses and allocations and
includes profits recorded on sales to other operating units of the Company. Long-lived assets consist of property, plant, and
equipment, net of depreciation; goodwill; other intangible assets, net of amortization; and other non-current assets. Long-
lived assets by geographical area are based on the location of facilities.
79
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Company carried out an evaluation, under the supervision and with the participation of the Company’s
management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are
effective in providing reasonable assurance that information required to be disclosed by the Company in the reports the
Company files or submits under the Securities Exchange Act of 1934 is (1) accumulated and communicated to management,
including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required
disclosures and (2) recorded, processed, summarized, and reported within the periods specified in the Commission’s rules
and forms.
Management’s Annual Report on Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. The Company carried out an
evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s internal control over financial
reporting. The Company’s management used criteria established in Internal Control—Integrated Framework (2013), issued
by the Committee of Sponsoring Organizations of the Treadway Commission, to perform this evaluation. Based on that
evaluation, the Company’s management concluded that the Company’s internal control over financial reporting was effective
as of December 30, 2023.
The effectiveness of the Company’s internal control over financial reporting as of December 30, 2023 has been
audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, a copy of
which is included in this annual report on Form 10-K.
80
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Valmont Industries, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Valmont Industries, Inc. and subsidiaries (the “Company”) as
of December 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 30, 2023, based on criteria established
in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 30, 2023, of the Company and our
report dated February 28, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 28, 2024
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ITEM 9B. OTHER INFORMATION
Shareholder Return Performance Graphs
The graphs below compare the annual change in the cumulative total shareholder return on the Company’s common
stock with the cumulative total returns of the S&P MidCap 400 Index and the S&P 400 Industrial Machinery & Supplies &
Components Index for the five and ten-year periods ended December 30, 2023. The Company was added to these indexes in
2009 by S&P Global Ratings. The graphs assume that the beginning value of the investment in Valmont Industries, Inc.
common stock and each index was $100 and that all dividends were reinvested.
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ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Except for the information relating to the executive officers of the Company set forth in Part I of this Form 10-K, the
information called for by Items 10, 11, and 13 is incorporated by reference to the sections entitled “Certain Shareholders”,
“Corporate Governance”, “Board of Directors and Election of Directors”, “Board Committees”, “Compensation Discussion
and Analysis”, “Compensation Risk Assessment”, “Human Resources Committee Report”, “Pay Ratio Information”,
“Summary Compensation Table”, “Grants of Plan-Based Awards for Fiscal 2023”, “Outstanding Equity Awards at Fiscal
Year-End”, “Options Exercised and Stock Vested in Fiscal 2023”, “Nonqualified Deferred Compensation”, “Director
Compensation”, and “Potential Payments Upon Termination or Change-in-Control” in the Company’s Proxy Statement.
The Company has adopted a Code of Ethics for Senior Officers that applies to the Company’s Chief Executive
Officer, Chief Financial Officer, and Controller and has posted the code on its website at www.valmont.com through the
“Investor Relations” link. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to
amendments to or waivers from any provision of the Code of Ethics for Senior Officers applicable to the Company’s Chief
Executive Officer, Chief Financial Officer, or Controller by posting that information on the Company’s website
at www.valmont.com through the “Investor Relations” link.
ITEM 11. EXECUTIVE COMPENSATION
See Item 10.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated herein by reference to the sections titled “Certain
Shareholders” and “Equity Compensation” in the Company’s Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
See Item 10.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated herein by reference to the section titled “Ratification of
Appointment of Independent Auditors” in the Company’s Proxy Statement.
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ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a)(1)(2) Financial Statements and Schedules
PART IV
The following Consolidated Financial Statements of the Company and its subsidiaries are included herein as listed
below:
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Earnings—Three-Year Period Ended December 30, 2023 . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income—Three-Year Period Ended December 30, 2023 . . . . . . . . .
Consolidated Balance Sheets—December 30, 2023 and December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows—Three-Year Period Ended December 30, 2023 . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interests—Three-Year
Period Ended December 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements—Three-Year Period Ended December 30, 2023 . . . . . . . . . . . . . . . .
39
41
42
43
44
45
46
All financial statement schedules have been omitted as the required information is not applicable, not required, or
the information is included in the Consolidated Financial Statements or related notes. Separate financial statements of the
registrant have been omitted because the registrant meets the requirements which permit omission.
(3)
Index to Exhibits
See exhibits listed under Part B below.
(b)
Exhibits
Exhibit 3.1 — The Company’s Restated Certificate of Incorporation, as amended. This document was filed as Exhibit
3.1 to the Company’s Quarterly Report on Form 10-Q (Commission file number 001-31429) for the
quarter ended March 28, 2009 and is incorporated herein by this reference.
Exhibit 3.2 — The Company’s By-Laws, as amended. This document was filed as Exhibit 3.2 to the Company’s
Current Report on Form 8-K dated December 13, 2022 and is incorporated herein (Commission file
number 001-31429) by reference.
Exhibit 4.1* — Second Amended and Restated Credit Agreement, dated as of October 18, 2021, among the Company,
Valmont Industries Holland B.V. and Valmont Group Pty. Ltd., as Borrowers, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other lenders party thereto together with the First Amendment
dated as of May 16, 2022 and the Second Amendment dated as of February 17, 2023.
Exhibit 4.2 — Indenture relating to senior debt, dated as of April 12, 2010, among Valmont Industries, Inc., the
Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association., as Trustee. This
document was filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission file
number 001-31429) dated April 12, 2010 and is incorporated herein by this reference.
Exhibit 4.3 — First Supplemental Indenture, dated as of April 12, 2010, to indenture relating to senior debt, dated as of
April 12, 2010, among Valmont Industries, Inc., the Subsidiary Guarantors party thereto and Wells
Fargo Bank, National Association, as Trustee. This document was filed as Exhibit 4.2 to the Company’s
Current Report on Form 8-K (Commission file number 001-31429) dated April 12, 2010 and is
incorporated herein by this reference.
Exhibit 4.4 — Second Supplemental Indenture, dated as of September 22, 2014, to Indenture relating to senior debt,
dated as of April 12, 2010, among Valmont Industries, Inc., the Subsidiary Guarantors party thereto and
Wells Fargo Bank, National Association, as Trustee. This document was filed as Exhibit 4.2 to the
Company’s Current Report on Form 8-K (Commission file number 001-31429) dated September 22,
2014 and is incorporated herein by this reference.
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Exhibit 4.5 — Third Supplemental Indenture, dated as of September 22, 2014, to Indenture relating to senior debt,
dated as of April 12, 2010, among Valmont Industries, Inc., the Subsidiary Guarantors party thereto and
Wells Fargo Bank, National Association, as Trustee. This document was filed as Exhibit 4.3 to the
Company’s Current Report on Form 8-K (Commission file number 001-31429) dated September 22,
2014 and is incorporated herein by this reference.
Exhibit 4.6 — Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act
of 1934. This document was filed as Exhibit 4.9 to the Company’s Annual Report on Form 10-K
(Commission file number 001-31429) for the year ended December 28, 2019 and is incorporated herein
by this reference.
Exhibit 10.1 — The Company’s 2013 Stock Plan. This document was filed as Exhibit 10.1 to the Company’s Current
Report on Form 8-K (Commission file number 001-31429) dated April 30, 2013 and is incorporated
herein by reference.
Exhibit 10.2 — 2013 Stock Plan Amendment, dated December 17, 2015. This document was filed as Exhibit 10.7 to the
Company’s Annual Report on Form 10-K (Commission file number 001-31429) for the year ended
December 26, 2015 and is incorporated herein by this reference.
Exhibit 10.3 — The Company’s 2018 Stock Plan. This document was filed as Exhibit 10.1 to the Company’s Current
Report on Form 8-K (Commission file number 001-31429) dated March 12, 2018 and is incorporated
herein by reference.
Exhibit 10.4 — The Company’s 2022 Stock Plan. This document was filed as Exhibit 10.1 to the Company's Current
Report on Form 8-K dated March 14, 2022 (Commission file number 001-1429) and herein incorporated
by reference.
Exhibit 10.5 — Form of Stock Option Agreement. This document was filed as Exhibit 10.4 to the Company’s Annual
Report on Form 10-K (Commission file number 001-31429) for the year ended December 25, 2021 and
is incorporated herein by this reference.
Exhibit 10.6 — Form of Restricted Stock Unit Agreement (Domestic). This document was filed as Exhibit 10.5 to the
Company’s Annual Report on Form 10-K (Commission file number 001-31429) for the year ended
December 25, 2021 and is incorporated herein by this reference.
Exhibit 10.7 — Form of Restricted Stock Unit Agreement (Director). This document was filed as Exhibit 10.6 to the
Company’s Annual Report on Form 10-K (Commission file number 001-31429) for the year ended
December 25, 2021 and is incorporated herein by this reference.
Exhibit 10.8 — Form of Restricted Stock Unit Agreement (International). This document was filed as Exhibit 10.7 to
the Company’s Annual Report on Form 10-K (Commission file number 001-31429) for the year ended
December 25, 2021 and is incorporated herein by this reference.
Exhibit 10.9 — The Valmont Executive Incentive Plan. This document was filed as Exhibit 10.2 to the Company’s
Current Report on Form 8-K (Commission file number 001-31429) dated April 30, 2013 and is
incorporated herein by reference.
Exhibit 10.10 — The Amended Unfunded Deferred Compensation Plan for Nonemployee Directors. This document was
filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K (Commission file number
001-31429) for the fiscal year ended December 28, 2013 and is incorporated herein by this reference.
Exhibit 10.11 — VERSP Deferred Compensation Plan. This document was filed as Exhibit 10.16 to the Company’s
Annual Report on Form 10-K (Commission file number 001-31429) for the fiscal year ended
December 28, 2013 and is incorporated herein by this reference.
Exhibit 10.12 — Separation and Release Agreement between Stephen G. Kaniewski and Valmont Industries, Inc. dated
August 1, 2023. This document was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K
(Commission file number 001-31429) dated August 1, 2023 and is incorporated herein by reference.
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Exhibit 19.1* — Valmont’s Insider Trading Policy.
Exhibit 21* — Subsidiaries of the Company.
Exhibit 22.1 — List of Issuer and Guarantor Subsidiaries. This document was filed as Exhibit 22.1 to the Company’s
Quarterly Report on Form 10-Q (Commission file number 001-31429) for the quarter ended
September 25, 2021 and is incorporated herein by reference.
Exhibit 23* — Consent of Deloitte & Touche LLP.
Exhibit 24* — Power of Attorney.
Exhibit 31.1* — Section 302 Certification of Chief Executive Officer.
Exhibit 31.2* — Section 302 Certification of Chief Financial Officer.
Exhibit 32.1* — Section 906 Certifications.
Exhibit 97.1* — Valmont’s Policy for the Recovery of Erroneously Awarded Compensation.
Exhibit 101 — The following financial information from the Company’s Annual Report on Form 10-K for the year
ended December 30, 2023, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the
Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Income, (iii)
the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated
Statements of Shareholders’ Equity and Redeemable Noncontrolling Interests, (vi) Notes to
Consolidated Financial Statements, and (vii) document and entity information.
Exhibit 104 — Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith
Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with respect to the registrant’s long-term debt are
not filed with this Form 10-K. The Company will furnish a copy of such long-term debt agreements to the Securities and
Exchange Commission upon request.
Management contracts and compensatory plans are set forth as Exhibits 10.1 through 10.12.
ITEM 16. FORM 10-K SUMMARY
None.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 28th day of February, 2024.
SIGNATURES
Valmont Industries, Inc.
By:
/s/ AVNER M. APPLBAUM
Avner M. Applbaum
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Director, President and Chief Executive Officer
(Principal Executive Officer)
Date
2/28/2024
/s/ AVNER M. APPLBAUM
Avner M. Applbaum
/s/ TIMOTHY P. FRANCIS
Timothy P. Francis
Senior Vice President and Interim Chief Financial Officer
(Principal Financial and Accounting Officer)
2/28/2024
Mogens C. Bay*
K.R. den Daas*
Ritu C. Favre*
Theo W. Freye*
Richard A. Lanoha*
James B. Milliken*
Daniel P. Neary*
Catherine J. Paglia*
Joan Robinson-Berry*
* Avner M. Applbaum, by signing his name hereto, signs the Annual Report on behalf of each of the directors indicated on
this the 28th day of February, 2024. A Power of Attorney authorizing Avner M. Applbaum to sign the Annual Report on
Form 10-K on behalf of each of the indicated directors of Valmont Industries, Inc. has been filed herein as Exhibit 24.
By:
/s/ AVNER M. APPLBAUM
Avner M. Applbaum
Attorney-in-Fact
88