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What changed in VALMONT INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of VALMONT INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+375 added−435 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-28)

Top changes in VALMONT INDUSTRIES INC's 2024 10-K

375 paragraphs added · 435 removed · 251 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest change(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.
Biggest changeOur significant business acquisitions and divestitures during the past three fiscal years included the following (with the relevant segment noted): 2024 ● Acquired an additional 9% of ConcealFab, Inc., a 5G infrastructure and PIM mitigation solutions company in Colorado (Infrastructure) ● Acquired the remaining 25% of Valmont Substations, LLC, a utility substation product provider in Kansas (Infrastructure) ● Divested our extractive business, which included the manufacturing and distribution of screening products for the mining and quarrying sectors in Australia and New Zealand (Infrastructure) ● Divested George Industries, a coating and anodizing company in California (Infrastructure) 6 Table of Contents 2023 ● Acquired HR Products, a leading wholesale supplier of irrigation parts in Australia (Agriculture) ● Divested Torrent Engineering and Equipment Company, LLC, an integrator of prepackaged pump stations in Indiana (Agriculture) 2022 ● Acquired 51% of ConcealFab, Inc., a 5G infrastructure and PIM mitigation solutions company in Colorado (Infrastructure) ● Acquired the remaining 9% of Convert Italia S.p.A., a designer and provider of engineered solar tracker solutions in Italy (Infrastructure) ● Acquired the remaining 20% of Valmont West Coast Engineering, Ltd., a manufacturer of steel and aluminum structures for the lighting, transportation, and wireless communication industries in Canada (Infrastructure) ● Divested Valmont SM, an offshore wind energy structures business in Denmark (Other) Suppliers and Availability of Raw Materials Our primary raw materials include hot-rolled steel coil and plate, zinc, and other carbon steel products, all essential for manufacturing across our segments.
The total backlog by segment as of December 30, 2023 and December 31, 2022 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 30, ​ December 31, Dollars in millions ​ 2023 2022 Infrastructure ​ $ 1,299.6 ​ $ 1,339.1 Agriculture ​ 165.9 ​ 317.3 Total backlog ​ $ 1,465.5 ​ $ 1,656.4 Environmental Protection We are subject to various federal, state, and local laws and regulations pertaining to environmental protection and the discharge of materials into the environment.
The total backlog by segment as of December 28, 2024 and December 30, 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 28, ​ December 30, Dollars in millions ​ 2024 2023 Infrastructure ​ $ 1,273.3 ​ $ 1,299.6 Agriculture ​ 163.4 ​ 165.9 Total backlog ​ $ 1,436.7 ​ $ 1,465.5 Environmental Protection We are subject to a range of federal, state, and local laws and regulations concerning 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.
Although we regularly incur expenses and make capital expenditures related to environmental compliance, we do not anticipate that these future expenditures will materially impact our financial condition, results of operations, or liquidity. Number of Employees As of December 28, 2024, we had a total of 10,986 employees.
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.
We have been publicly traded since 1968, with our shares listed on the New York Stock Exchange under the ticker symbol “VMI.” Segments 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 and transportation, and telecommunications, along with coatings services to protect metal products.
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.
The commercial construction market, which is predominantly privately funded, includes lighting for a variety of applications, such as parking lots, shopping centers, sports stadiums, and business parks. This market is influenced by macroeconomic factors, including overall economic growth, interest rates, and urban development trends. We have established long-term relationships with lighting and equipment manufacturers serving this market.
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.
Each structure is engineered to meet specific customer requirements, considering factors such as equipment and antenna specifications, wind and soil conditions, aesthetic demands, and compliance with safety standards. ● Solar: Our single-axis solar tracker is a fully integrated system that combines steel structures, electric motors, and electronic controllers.
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.
We believe that mechanized irrigation can improve water application efficiency by 40% to 90% compared to traditional methods by delivering water uniformly to the root zone and minimizing runoff. Reduced runoff not only conserves water but also improves the quality of adjacent rivers, aquifers, and streams, contributing environmental benefits and supporting vital water conservation efforts.
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.
While these intellectual properties are valuable to our business, we do not believe that the loss of any single patent or trademark would materially impact our financial condition, results of operations, or liquidity. Seasonal Factors in Business Sales in our business can be influenced by seasonal patterns tied to the agricultural growing season and the infrastructure construction season.
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.
Meanwhile, the industrial market is typically driven by investments in infrastructure, industrial facilities, and commercial construction. Our Coatings business serves diverse markets and is not reliant on any single industry or external customer for profitability. A significant portion of demand comes from our internal operations, supporting other product lines.
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 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 legally protected characteristic. We are dedicated to voluntary employment and strictly prohibit all forms of compulsory labor, including child labor, forced labor, slavery, and human trafficking.
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.
As such, the loss of any one customer would not materially impact our financial condition, results of operations, or liquidity. 7 Table of Contents Backlog As of December 28, 2024, our backlog of orders for principal products was $1,436.7 million, compared to $1,465.5 million as of December 30, 2023. Backlog includes confirmed customer purchase orders and executed sales order contracts.
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.
Distribution Methods Our Infrastructure products are distributed through a combination of direct sales force and commissioned agents. Our sales team works closely with end-users and distributors, representing Valmont as well as light fixture and traffic signal manufacturers. This collaborative approach enables our agents to deliver a comprehensive package that includes poles, fixtures, and other equipment directly to the end-user.
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.
Please note that the information on our website is not, and will not be considered, part of this annual report on Form 10-K or incorporated into any other SEC filings.
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.
Our transportation product portfolio includes traffic structures, bridge systems, roadway and street lighting, and high-mast lighting. In the U.S., funding for transportation projects comes from a combination of state and federal sources, including the IIJA, which provides multi-year support for infrastructure investments. Public-private partnerships are also emerging as a viable funding option for major transportation projects.
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.
Competition In North America, several companies provide irrigation products and services for agricultural customers. Our company is recognized as the leader among the four main participants in the mechanized irrigation industry. Competitors differentiate themselves based on product durability, reliability, pricing and value proposition, quality, and the service capabilities of local dealers.
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 U.S. has approximately four million miles of public roadways, with around 24% carrying over 3 Table of Contents 80% of the nation’s traffic. As a result, improving traffic flow through efficient control measures and modern lighting solutions has become a key priority for many communities and government agencies.
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.
To help growers improve crop yields, we continuously innovate and expand our technology offerings to meet evolving customer needs. Pricing in the industry can become highly competitive, particularly during periods of low demand. In international markets, our competition includes both major U.S. companies and privately owned local businesses.
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.
Distribution Methods We market our irrigation machines, technology offerings, and service parts through an extensive network of independent dealers. In North America, approximately 250 dealer locations serve our customers, with around 400 dealers covering international markets across more than 60 countries. Dealers assess growers’ needs, customize machine configurations, manage installation (including water and power systems), and provide ongoing support.
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").
These materials include our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to these reports filed or furnished under Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
ITEM 1. BUSINESS 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”.
ITEM 1. BUSINESS Valmont Industries, Inc., along with its subsidiaries (collectively referred to as the “Company,” “Valmont,” “we,” “us,” or “our”), is a diversified manufacturer of products and services for infrastructure and agriculture markets. Founded in 1946 and headquartered in Omaha, Nebraska, our purpose is to conserve resources and improve life.
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.
To ensure dealers can meet customer needs effectively, our technical and sales teams provide ongoing training and support. Internationally, our dealers receive additional support through 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.
Commercial lighting, wireless communication products and components, access systems, and highway 4 Table of Contents 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.
Commercial lighting, wireless communication, access systems, and highway safety products are sold by our internal sales teams or through independent commissioned agents.
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).
A typical wireless communication cell site consists of a steel pole or tower, an enclosure for housing radio equipment, antennas for data and voice transmission, and mounting components that connect the antennas to cabling and equipment. Our steel mounting solutions and other products play a vital role in 5G infrastructure expansion.
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.
By addressing factors such as wind speeds and specific power line requirements, we contribute to the development of resilient infrastructure that can withstand the challenges of an evolving energy landscape. ● Lighting and Transportation (“L&T”): We design, engineer, and manufacture poles and structures made of steel, aluminum, wood, and composites to support a wide range of lighting and transportation needs.
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.
Agriculture: This segment consists of the manufacture of center pivot and linear irrigation equipment components for agricultural markets, including aftermarket parts and tubular products, and advanced technology solutions for precision agriculture. Included in the “Other” segment are the activities of the offshore wind energy structures business, which was divested in the fourth quarter of fiscal 2022.
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 value the unique insights and experiences that a diverse workforce brings, and we actively seek employees who share our commitment to profitable development, improving corporate culture, and delivering sustainable business results. Our Human Rights Policy, available on our website, reflects our expectation that employees, suppliers, vendors, dealers, and distributors uphold our commitment to human rights.
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.
Human Capital Resources Our approach to human capital resources is outlined in our Code of Business Conduct, in our Human Rights Policy, and on our website at www.valmont.com. A company-wide commitment to customer service and innovation is essential to our success, enabling us to deliver the best value to our customers.
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.
Additionally, linear machines move vertically across fields rather than rotating, offering versatility for a variety of field layouts. Our irrigation systems are highly customizable, capable of servicing fields from four to over 500 acres, with the standard configuration in the U.S. designed for a 160-acre tract.
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.
The Solar market is driven by the global shift towards renewable energy adoption and incentives for clean energy investments. As utilities accelerate the development of large-scale solar power projects and micro-grid applications, our single-axis solar tracker solutions will play a crucial role in maximizing energy production.
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.
We give the highest level of attention to our succession and management development programs, with our Chief Executive Officer (“CEO”) reporting directly to the Board of Directors on these initiatives. We recognize the importance of diversity and inclusion in bringing different perspectives to our global organization.
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.
Water scarcity is a key driver of demand in our Agriculture segment. It is estimated that only 2.5% of the world’s total water supply is freshwater, and of that, only 30% is accessible for human use.
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.
A significant market for our Infrastructure segment is the utility industry in North America, which is increasing investment in critical electrical grid upgrades to improve reliability, integrate renewable energy sources, and expand transmission capacity.
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.
While the global competitive landscape is similar to that of North America, pricing often plays a more critical role. Recognizing the local nature of competition in international markets, we maintain manufacturing facilities in key regions, which enables us to compete effectively and meet region-specific demands.
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.
Employees also have access to health insurance, paid and unpaid leave, retirement plans, and coverage for life, disability, and accidents.
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.
In urban areas, small cell applications help densify networks, enhancing signal strength and coverage. To blend telecommunication structures into their surroundings, we offer concealment solutions, such as faux trees. Our PIM mitigation technology addresses signal interference issues, improving network performance.
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.
Further information on the principal products, services, markets, competition, and distribution methods for each of our two reportable segments is provided below. Infrastructure Segment Products ● Utility: We design, engineer, and manufacture structures made of steel, pre-stressed concrete, and composites to support the infrastructure necessary for electrical transmission, substations, and distribution applications within the utility industry.
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.
We offer various finishing options, including galvanizing and painting, tailored to meet the specific needs of diverse applications. Our hot-dip galvanizing process applies a protective zinc coating to steel, creating a protective bond that prevents rust and corrosion, ensuring long-lasting durability. For underground steel installations, our CorroCote ® solution offers added protection against soil and moisture corrosion.
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.
Our customers include wireless carriers, cell site operators, and state and federal agencies that require products for two-way radio communication, radar, broadcasting, and security applications. The continued expansion of 5G networks and rising connectivity needs are fueling long-term growth, requiring higher network density.
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.
For mechanized irrigation equipment, sales typically peak in spring and fall, aligning with farmers’ planting and harvesting periods, and are generally lower in the summer. In contrast, sales of infrastructure products tend to increase during the summer and fall, in line with the construction season, and are usually lower in the winter.
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.
This tracker adjusts the position of solar panels throughout the day to maintain optimal alignment with the sun, significantly enhancing energy production. Our trackers feature a modular design, enabling easy installation and minimal maintenance. Additionally, their flexible design maximizes site utilization, making them particularly advantageous for solar projects developed in challenging locations.
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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.
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Transmission involves moving high-voltage power from generation sources to consumption points, while substations play a crucial role in transforming electricity to make it suitable for both transmission and distribution to end-users.
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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.
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Our scalable solutions feature innovative designs that address the growing demand for reliable energy, especially considering increasing concerns about grid resilience due to natural disasters like fires, storms, and floods. Each project is complex, requiring significant engineering expertise to address various loading conditions and environmental factors.
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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.
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Our products serve infrastructure, commercial, and residential projects, creating well-lit environments for streets, highways, parking lots, and public spaces, including sports complexes. We prioritize structural requirements and aesthetic appeal, ensuring that our designs comply with local standards and preferences.
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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.
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Our offerings include traffic and sign structures that support traffic signals and overhead signage, specifically designed to facilitate efficient traffic flow and enhance public safety. Each structure is meticulously engineered to meet environmental conditions, such as wind and ice, as well as load requirements for lighting fixtures and signage.
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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.
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Additionally, our patented vibration mitigation technology improves roadway safety by reducing wind-induced vibrations and material fatigue, promoting long-term stability and durability. We also provide comprehensive highway safety systems, including guardrail barriers, wire rope safety barriers, and crash attenuation barriers, primarily serving the Australian and Indian markets.
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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.
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These products are designed to enhance roadway safety, reduce the impact of collisions, and improve driver protection.
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The demand for these products is driven by infrastructure, commercial, and residential construction and by consumers’ desire for 2 Table of Contents 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.
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Our L&T solutions 2 Table of Contents not only meet the technical, aesthetic, and safety requirements of modern infrastructure projects but also contribute to the development of cohesive and functional public spaces. ● Coatings: Our finishing services prevent corrosion, extend product lifespans, and enhance material aesthetics.
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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.
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Our painting services, including powder coating, provide both aesthetic appeal and durability for various industries. These coating solutions cater to a wide array of industry needs, enhancing performance and extending product life for our customers. ● Telecommunications: We design, manufacture, and distribute a broad range of products for the wireless communication market.
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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.
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Valmont Site Pro 1 ® supports wireless carriers and contractors through multiple nationwide warehouses and a catalog of wireless site components including antenna mounts and accessories. Our offering also includes towers, small cell structures, camouflage concealment solutions, and passive intermodulation (“PIM”) mitigation equipment, all essential for meeting the increasing demands of 5G networks and rising data consumption.
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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.
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Our customers include engineering, procurement, and construction firms specializing in solar energy projects, as well as solar developers, independent power producers, and utilities. Markets The key markets for our Infrastructure product lines benefit from various local, state, and federal government funding initiatives.
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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.
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Notably, the United States (“U.S.”) government is advancing long-term infrastructure improvements through the Infrastructure Investment and Jobs Act (“IIJA”) and the Inflation Reduction Act (“IRA”). These programs allocate resources to enhance the nation’s bridges, ensure public safety, update essential infrastructure, improve highway safety, and modernize the electrical grid to meet growing energy demands and support grid resiliency.
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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.
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Increasing electricity consumption, an aging grid, and the expansion of renewable energy sources have intensified the need for enhanced transmission infrastructure, which has historically struggled to keep pace with demand. According to the Edison Electric Institute, substantial investments will be required for the U.S. electrical transmission grid, particularly to replace aging assets and support electrification trends across industries.
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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.
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In response, we are strategically investing in our manufacturing capabilities and expanding our geographic presence to increase flexible production capacity. International markets are also experiencing rising electricity consumption, driven by urbanization, industrial growth, and electrification efforts, fueling demand for new electricity generation capacity and expanded transmission grids. We also serve the transportation, commercial construction, and industrial markets.
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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.
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The demand for coatings services generally correlates with local industrial economic activity. Galvanizing remains essential for industrial applications that require corrosion protection for steel. Demand for painted products is more closely tied to consumer markets. The Telecommunications market is driven by growing demand for wireless communication and data services.
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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”).
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Government policies, corporate sustainability commitments, and technological advancements are expected to continue to drive demand for this product line. Competition Our competitive strategy focuses on delivering high-value, innovative solutions to customers at competitive prices, emphasizing product quality, engineering expertise, exceptional customer service, and the timely, accurate delivery of our products.
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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.
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To achieve this, we leverage the production capacity across our extensive network of facilities, ensuring both quality and efficient service delivery. The competitive landscape is dynamic, with numerous players operating in both North American and international markets. Pricing competition can be particularly intense during periods of weak demand or when fluctuations in local currencies create advantages for imported products.
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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 Table of Contents Electrical consumption is also expected to increase within international markets.
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In the Infrastructure sector, sales are often determined through competitive bidding processes, with contracts awarded to the lowest bidder that meets all necessary qualifications. To maintain strong customer relationships, we establish preferred-provider arrangements with certain key customers, typically lasting between three to five years and often renewed.
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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.
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The Coatings market is traditionally fragmented, consisting of many smaller, privately held companies competing on price and established customer relationships. Our strategy for this product line focuses on delivering high-quality coating finishes, superior service, and timely delivery of coated products. In the Solar product line, we primarily compete with other mid-sized market participants.
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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.
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Our competitive edge lies in our service quality and our ability to integrate solutions from our Utility product line, enabling us to deliver comprehensive full-grid solutions. This integration allows us to offer complete, end-to-end solutions, distinguishing us from competitors that focus solely on a single product offering.
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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.
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Utility and Solar products are typically sold directly to electrical utilities, developers, or energy providers, though some transactions are facilitated through commissioned sales agents. 4 Table of Contents Due to the high cost of freight, our galvanizing services are generally limited to a radius of about 300 to 500 miles.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAccordingly, our foreign business operations and our foreign sales and profits are subject to the following potential risks: ● 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.
Biggest changeConsequently, our foreign business operations, sales, and profits will continue to be subject to the following risks: ● political and economic instability, which may reduce the value of or lead to the loss of our investment; ● economic recessions in key markets, potentially decreasing international sales; ● natural disasters and public health crises that could disrupt our workforce, manufacturing operations, and sales; ● increased costs and challenges related to staffing and managing international operations, impacting both profitability and reporting functions; ● potential violations of local laws or unauthorized management actions that could harm our competitive position or financial performance; ● difficulty enforcing intellectual property rights, including patents on our manufacturing machinery, poles, and irrigation designs, outside the U.S.; ● rising tariffs, export controls, taxes, and other trade barriers, which may reduce sales and profitability; and ● acts of war or terrorism.
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.
Increases in the selling prices of our products may not fully recover higher commodity costs and generally lag increases in these costs. Consequently, an increase in commodity prices will increase our operating costs and likely reduce our profitability.
The following factors increase the cost and reduce the availability of these commodities: ● 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.
The following factors increase the cost and reduce the availability of these commodities: ● increased demand, which occurs when we and other industries require greater quantities of these commodities, which can result in higher prices and longer lead times to receive them from suppliers; ● lower production levels of these commodities, due to reduced production capacities or shortages of materials needed to produce them (such as coke and scrap steel for the production of steel), which could result in reduced supplies, higher costs for us, and increased lead times; ● increased costs of major inputs, such as scrap steel, coke, iron ore, and energy; ● fluctuations in foreign exchange rates, which can impact the relative cost of these commodities, which may affect the cost effectiveness of imported materials and limit our options for acquiring them; and ● international trade disputes, import duties, tariffs, and quotas, as we import some steel and aluminum components and products for various product lines.
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 are sensitive to market conditions in the industries where the ultimate consumers of our products operate. In some cases, these industries 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.
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.
Rising steel prices, as seen 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 time between the release of a customer’s purchase order and the manufacturing of the product can span several months.
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.
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, which have experienced significant downturns that have adversely impacted our sales in the past and may do so again in the future.
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.
Successful cyberattacks or other security incidents could result in the loss of key innovations, such as artificial intelligence or Internet of Things technologies; loss of access to critical data or systems through ransomware, crypto mining, or destructive attacks; and business delays or service disruptions.
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 fiscal 2024, our sales to the U.S. electric utility industry were over $1.0 billion. Utilities may defer purchases of our products by reducing capital expenditures for reasons such as unfavorable regulatory environments, a slow U.S. economy, or financing constraints.
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.
While these measures are designed to prevent, detect, respond to, and mitigate unauthorized activity, there is no guarantee they will be sufficient to prevent or mitigate the risks of a cyberattack—whether directly targeting our systems or through third-party service providers—or to enable us to detect, report, or respond in a timely and effective manner.
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.
If demand for utility structures weakens due to reduced or delayed spending on electrical generation and transmission projects, our sales and operating income are likely to decrease. The end-users of our mechanized irrigation equipment are farmers. Economic changes within the agriculture industry, particularly fluctuations in farm income, can impact sales of these products.
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.
Steel is particularly significant for our Utility product line, where the cost of steel has accounted for approximately 50% of 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 $110.0 million for the fiscal year ended December 28, 2024.
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.
Some of our foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety products primarily for non-U.S. markets and license certain guardrail design patents to third parties. Currently, U.S. product liability lawsuits have been filed against companies that manufacture and install specific guardrail products, some of which involve a foreign subsidiary due to its design patent.
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.
The restrictions and covenants in our debt agreements may limit our ability to secure future financing, make necessary capital expenditures, withstand a downturn in our business or the economy, or conduct essential corporate activities. These covenants could prevent us from capitalizing on emerging business opportunities.
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.
Even if we are liable in future lawsuits, the costs of defending such actions may be significant and could exceed the coverage limits or remain uncovered by our insurance policies. Design patent litigation related to guardrails could reduce demand for these products and increase litigation risk.
Our level of indebtedness could have important consequences, including: ● 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; ● 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; ● 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.
Failure to comply with debt covenants and other requirements, including financial and restructuring terms, could result in a default under our debt agreements. ● A substantial portion of our cash flow from operations will be used to make interest and principal payments, limiting the funds available for operations, working capital, capital expenditures, expansion, and other corporate purposes, including future acquisitions that could benefit our business. ● Our ability to secure additional financing in the future may be hindered. ● We may be more highly leveraged than our competitors, placing us at a competitive disadvantage. ● Our flexibility in responding to changes in our business and industry may be constrained. ● Our level of leverage may make us more vulnerable in the event of a downturn in our business, industry, or the broader economy.
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.
Failure to successfully commercialize or protect our intellectual property rights may materially impact our business, financial condition, and operating results. The commercialization and protection of our patents, trademarks, trade secrets, copyrights, proprietary processes, and other technologies are essential to maintaining our competitive position. We rely on patents, trademarks, trade secrets, copyrights, and contractual restrictions to safeguard our intellectual property.
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.
Regulatory and business developments related to climate change could adversely affect our operations and the demand for our products. We closely monitor scientific discussions and legislative developments regarding climate change, including proposed regulations, to assess their potential impact on our business.
Changes in actuarial assumptions, including future discount, inflation, and interest rates, investment returns, and mortality rates may increase the 14 Table of Contents 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.
Changes in actuarial assumptions, such as discount rates, inflation, interest rates, investment returns, and mortality projections, could increase the Plan’s underfunded position, requiring higher contributions to cover liabilities. ● The U.K. government regulates the Plan, and its trustees represent the interests of covered workers.
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.
Future acquisitions may present significant challenges for our management, requiring considerable time and resources to integrate key aspects of the acquired business, such as management, employees, information systems, accounting controls, personnel, and administrative functions, into Valmont.
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.
Cyberattacks are becoming increasingly sophisticated and pose significant risks to the security of our information technology systems and networks. If these systems are breached, it could severely affect the confidentiality, availability, and integrity of our data.
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.
Because these products are primarily used in infrastructure projects, sales are closely tied to construction activity, which has historically been cyclical.
Actions of this nature could have a material adverse effect on our results of operations and financial condition in any given period. 11 Table of Contents 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.
For further discussion on economic and business risks, including interest rates, foreign currency exchange rates, and commodity prices, please refer to the “Market Risk” section within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report.
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.
As our operations involve transferring data across international borders, we must comply with complex and stringent standards to protect both business and personal data, including in the U.S. and European Union countries. Our risk management strategy focuses on maintaining and protecting the confidentiality, integrity, and availability of information for both our business and customers.
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.
Repatriating funds to meet U.S. cash needs could be subject to legal restrictions, tax liabilities, or contractual limitations. Additionally, as we use cash for acquisitions and other purposes, these factors could have a material adverse effect on our business, financial condition, results of operations, cash flows, and future prospects.
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. 12 Table of Contents We could incur substantial costs as the result of violations of, or liabilities under, environmental laws.
While we have a compliance program designed to mitigate the risk of violations, any breach of these laws could result in criminal or civil penalties, damage to our reputation, and a negative impact on our business, financial condition, and operations. We could incur substantial costs due to violations of, or liabilities under, environmental laws.
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.
Because our Consolidated Financial Statements are denominated in U.S. dollars, fluctuations in exchange rates between the U.S. dollar and these currencies will continue to impact our reported earnings. A weaker U.S. dollar enhances our reported earnings by increasing the value of foreign revenues, whereas a stronger U.S. dollar has the opposite effect.
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.
Similarly, rapid decreases in steel prices can result in reduced operating margins in our Utility businesses due to long production lead times. Demand for our infrastructure products, including coating services, is highly dependent on overall infrastructure spending. We manufacture and distribute engineered infrastructure products for lighting, traffic, utility, and other specialty applications. Our Coatings product line serves various construction‑related industries.
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.
Under the current agreement with the Plan trustees, we are obligated to provide annual funding of approximately £13.1 million ($16.7 million) to address the funding shortfall at the time of acquisition, along with an additional approximately £1.9 million ($2.5 million) for administrative expenses.
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.
The current economic uncertainty in the U.S. and Europe may negatively affect our business. In our L&T product line, some lighting structure sales depend on new residential and commercial developments. When construction in these sectors slows, our light pole sales may decline.
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.
Our Agriculture products are covered by warranty provisions, some of which extend over several years. If widespread product reliability issues occur with certain components, we may face substantial costs to address the situation. Our operations could be adversely affected if our information technology systems and networks are compromised or subjected to cyberattacks.
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.
Although this funding obligation was factored into the acquisition price of Delta, the Plan’s funding status may still have adverse effects on the combined company, including: ● U.K. laws and regulations typically require the Plan trustees to agree on a new funding plan every three years, with the most recent plan established in fiscal 2022.
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.
A breach of any of these covenants would constitute a default under the relevant debt agreement. If not waived, this could trigger immediate repayment obligations under that agreement and potentially accelerate repayment requirements under other agreements. If this occurs, the debt would become immediately due and payable.
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.
As of December 28, 2024, we had a total of $757.9 million in outstanding indebtedness, of which $2.9 million matures within the next five fiscal years. Additionally, as of December 28, 2024, we had $799.8 million in borrowing capacity under our revolving credit facility. We occasionally borrow funds for business acquisitions and share repurchases.
Steel prices for both hot rolled coil and plate can also decrease substantially in a given period, which occurred, for example, 10 Table of Contents in the fourth quarter of fiscal 2021 and through much of fiscal 2022.
Since some sales in the Infrastructure segment are fixed-price contracts, rapid increases in steel costs likely result in lower operating income. Steel prices for both hot-rolled coil and plate can also decrease substantially in a given period, as occurred in the fourth quarter of fiscal 2021 and much of fiscal 2022.
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; ● interest rate increases, which increase the cost of construction financing; and ● adverse weather conditions, which slow construction activity.
Several factors can impact construction activity and, consequently, our sales, including: ● weakness in the general economy, which may reduce tax revenues and limit funds available for construction; ● interest rate increases, which raise the cost of construction financing; and ● adverse weather conditions, which can delay or slow construction activity.
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.
We may struggle to fully integrate and streamline overlapping functions, and even if we do succeed, the process may be more costly than initially anticipated. Additionally, integrating our product offerings with those of acquired businesses may prove difficult, and we may not be able to improve our collective product offering as expected.
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.
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 galvanizing most of our steel products. Our facilities consume large amounts of natural gas for heating and processing tanks in our galvanizing operations.
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.
These incidents could lead to legal risks, fines, penalties, negative publicity, theft, modification or destruction of proprietary information, defective products, production downtimes, and operational disruptions.
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.
We sell our products in many countries worldwide, with approximately 30% of our fiscal 2024 net sales occurring outside the U.S. These sales are often conducted in foreign currencies, primarily the Australian dollar, Brazilian real, Chinese renminbi, and euro.
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.
We maintain a significant manufacturing presence in Australia, Brazil, Europe, and Mexico—regions affected by U.S. trade policies, including tariffs on a broad range of imports, as well as retaliatory measures from foreign governments, particularly China.
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.
These liabilities could be costly to defend or resolve and may be substantial, potentially having a material adverse effect on our business, results, and liquidity. We may incur significant warranty or contract management costs. In our Infrastructure segment, we manufacture large electrical transmission structures, which are often highly engineered for large, complex contracts.
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.
Future regulatory changes may also require significant expenditures for compliance. Some of our facilities have operated for many years, during which we, and prior operators, have generated, used, handled, and disposed of hazardous materials. Contaminants have been detected at certain current and former sites, primarily linked to historical operations.
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.
We may not have the funds to pay all such debt or to obtain sufficient financing to refinance it. Even if financing is available, the terms may not be favorable. 13 Table of Contents As of December 28, 2024, we had $164.3 million in cash and cash equivalents. Approximately 83% of our consolidated cash balance is held outside the U.S.
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.
If they emerge with reduced debt obligations, they may be able to operate at lower prices, putting pressure on our margins. Some customers have also shifted manufacturing or sourcing operations overseas, negatively impacting our sales of galvanizing services. To remain competitive, we must invest in manufacturing, product development, and customer service.
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.
At times, we may need to adjust pricing, particularly for customers in struggling industries. However, we cannot guarantee our competitive position in all markets. 14 Table of Contents We may not achieve the improved operating results we anticipate from future acquisitions, and we may face difficulties integrating the acquired businesses or inherit significant liabilities associated with them.
From time to time, lower levels of farm income resulted in reduced demand for our mechanized irrigation and tubing products. Farm income decreases when 9 Table of Contents commodity prices, acreage planted, crop yields, government subsidies, and export levels decrease.
Lower levels of farm income have, at times, led to reduced demand for our mechanized irrigation and tubing products. Farm income decreases when commodity prices, acreage planted, crop yields, government subsidies, and export levels decline. Additionally, weather conditions—potentially worsened by climate change, such as extreme drought—can limit water availability for irrigation and influence farmers’ purchasing decisions.
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.
These fluctuations could be material and adversely affect our overall financial condition, results of operations, and liquidity. 9 Table of Contents Changes in prices and reduced availability of key commodities such as steel, aluminum, zinc, natural gas, and fuel may increase our operating costs, likely reducing our net sales and profitability.
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.
We rely on an information security program that includes a wide range of cybersecurity measures. More details about these measures can be found in Part I, Item 1C of this report.
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.
Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act, and other similar regulations. These laws generally prohibit companies and their intermediaries from offering improper payments or anything of value to influence government officials or private individuals to gain a business advantage, regardless of local customs or legality. Global enforcement of anti-corruption laws has increased significantly in recent years.
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.
Currency fluctuations have affected our financial performance in the past and may continue to do so in future periods. Additionally, when local currencies strengthen, the cost of imported goods decreases, potentially affecting our ability to compete profitably in domestic markets. We also face risks from foreign exchange controls and currency devaluations.
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.
We assumed an underfunded pension liability as part of the fiscal 2010 acquisition of Delta Ltd., which may require increased funding and impose restrictions on excess cash usage. Delta Ltd. sponsors a U.K. defined benefit pension plan (the “Plan”), which, as of December 28, 2024, covered approximately 5,150 former employees, either inactive or retired.
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.
We have also experienced cyclical demand for products sold to the wireless communications industry. Sales of wireless structures and components to wireless carriers and build-to-suit companies that serve the industry have historically been cyclical. These customers may reduce spending on new capacity to focus on cash flow and capital management.
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.
These matters can be costly to defend, divert management’s attention, require payment of damages, or restrict our business operations. From time to time, we face disputes, with and without merit, that may result in significant costs and divert management’s focus and resources, even if the dispute does not proceed to litigation. The outcomes of complex legal proceedings are inherently uncertain.
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.
Under certain circumstances, regulations could trigger an immediate funding obligation significantly greater than the asset recognized for accounting purposes as of December 28, 2024. This obligation, calculated based on the cost of purchasing annuities to cover liabilities, could impact our ability to finance business growth or meet other financial commitments.
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.
Department of Agriculture forecasted U.S. net farm income for 2025 to be $180.1 billion, an increase of $41.0 billion (or 29.5%) compared to 2024. This rise is primarily due to an increase in direct government support payments, partially offset by lower cash receipts from corn and soybeans.
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.
However, our ability to successfully commercialize these rights, particularly for emerging technologies, depends on applying the right business strategies. Our intellectual property protections may be challenged, invalidated, circumvented, or deemed unenforceable. Third parties may infringe upon or misappropriate our rights, and enforcing them could lead to significant, unrecoverable litigation costs.
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 the competitive structure of the wireless industry, due to industry consolidation or reorganization, may disrupt the capital plans of wireless carriers as they reassess their networks. Due to the cyclical nature of these markets, we have experienced, and may continue to experience, significant fluctuations in sales and operating income for a substantial portion of our product offerings.
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 regularly explore opportunities to acquire businesses that align with our core competencies, some of which may be material to us. We expect these acquisitions to result in better operating performance than we would otherwise achieve. However, we cannot guarantee that this expectation will be realized for any given acquisition.
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.
At times, our borrowings have been significant, with the majority of our interest‑bearing debt incurred by U.S. entities. Rising interest rates have increased our borrowing costs. Our level of indebtedness may have significant consequences, including: ● Our ability to meet obligations under our debt agreements could be impacted.
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.
As a result, we face the risk of losing foreign investments or experiencing a significant decline in sales and profits due to the challenges of operating in foreign markets. Failure to comply with anti-corruption laws could result in fines, criminal penalties, and harm to our business. We are subject to anti-corruption laws, including the U.S.
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. 16 Table of Contents
Non-compliance could damage our reputation and further expose our operations and customers to significant risks. Climate change also presents physical risks, such as the increased frequency of severe weather events and rising sea levels, which could disrupt operations at our manufacturing facilities. These events may cause unforeseen disruptions of systems, equipment, or overall operations.
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.
Our facilities and operations are subject to both U.S. and international environmental laws and regulations, including those governing air and water pollution, hazardous waste management and disposal, and contamination cleanup. Noncompliance with these laws or permit requirements could result in fines, civil or criminal penalties, third-party claims for property damage or personal injury, and investigation or remediation costs.
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.
We believe recent volatility stems from increased global steel production and shifting consumption patterns, particularly in fast-growing economies like 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 L&T and Utility businesses.
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. 13 Table of Contents 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.
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, respond to changes in our operations, comply with debt covenants, and make debt payments.
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.
In the U.S., certain regions are considering policies that may restrict water use for irrigation. These factors could prompt farmers to delay capital expenditures for farm equipment, potentially slowing or even reversing growth in irrigation equipment and tubing sales. In February 2025, the U.S.
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.
Additionally, we have occasionally been identified as a potentially responsible party under Superfund or similar state laws. While we are not aware of any contaminated sites not accounted for in our Consolidated Financial Statements for known obligations, unforeseen contamination discoveries or additional cleanup requirements could result in liabilities beyond our current provisions.
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.
Higher energy and nitrogen-based fertilizer costs, driven by rising oil and natural gas prices, increase farmers’ operating expenses. Furthermore, uncertainty regarding future government agricultural policies may lead to indecision among farmers. Changes in government farm support programs, financing aids, and irrigation water use policies can influence the demand for our irrigation equipment.
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.
Failure to effectively commercialize or protect our intellectual property could materially harm our business, financial condition, and operating results. 12 Table of Contents We have been, and may continue to be, involved in litigation or threatened litigation, the outcomes of which can be difficult to predict.
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 Plan has no active employee members. As of December 28, 2024, the Plan was overfunded by approximately £37.0 million ($46.5 million) for accounting purposes.
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.
These competitors range from international and national manufacturers to local ones, some of which may have greater financial, manufacturing, marketing, and technical resources, or deeper penetration and familiarity with specific geographic markets. Additionally, certain competitors, particularly in our Utility and Telecommunications product lines, have sought bankruptcy protection in recent years.
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.
These contracts may include terms that penalize us for late delivery, leading to consequential and compensatory damages. Occasionally, product quality issues may arise on large utility structure orders, resulting in significant costs. Additionally, our Infrastructure segment includes structures for a variety of applications such as outdoor lighting, traffic, and wireless communication.
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.
Legal and Regulatory Risks Our operations are subject to trade policies, tariffs, and trade agreements, and any further changes could adversely affect our business, potentially leading to a decline in sales and profits or the loss of certain foreign investments. As a global manufacturing company, we operate over 80 manufacturing plants across six continents.
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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.
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Additionally, we use gasoline and diesel fuel to transport raw materials to our locations and deliver finished goods to our customers. The markets for these commodities can be volatile.
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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.
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Additionally, an economic downturn in Europe, Australia, or China could reduce demand if customers in these regions face credit challenges. 10 Table of Contents Our Infrastructure segment, particularly for lighting, transportation, and highway safety products, relies heavily on government funding. U.S. federal funding initiatives, such as the IIJA and IRA, bolster long-term demand for our products.
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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.
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However, the timing and distribution of federal infrastructure funds remain uncertain. Infrastructure spending may also decline due to factors beyond our control, including budget constraints, reduced tax revenues, and legislative delays affecting appropriations. We are subject to currency fluctuations from our international sales, which can negatively impact our reported earnings.
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The markets for these commodities can be volatile.
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Foreign exchange controls may limit currency conversion and restrict our ability to transfer funds from international subsidiaries. Currency devaluations can reduce the value of funds held in the affected currency. Such actions could materially and adversely impact our results of operations and financial condition in any given period.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur 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.
Biggest changeThe Board has delegated risk oversight of 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 overseeing investments in tools, resources, and processes that enables the continued maturity of our cybersecurity program.
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.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Our information security program covers a wide range of cybersecurity activities, with the primary objective of maintaining the confidentiality, integrity, and availability of information for both 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.
Our risk mitigation processes include a cybersecurity incident response plan, which is regularly exercised through tabletop exercises, security awareness training with attack simulations to reinforce the training, cybersecurity risk assessments integrated with technology acquisition processes, and the utilization of third-party partnerships for threat intelligence, incident response and escalation, and attack surface monitoring.
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.
The program’s operating model is based on the General Data Protection Regulation, adjusted to meet specific local requirements. This scalable model manages strategic, operational, legal, compliance, and financial risks and benefits, and utilizes 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.
Our membership in the Data Privacy Board, a group comprised of some of the world’s largest companies with the mission of engaging in confidential, leader-level discussions, offers opportunities for unbiased benchmarking and support from peers across various industries. We continue to build privacy resilience across international operating environments.
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.
Team members supporting our information security program possess relevant educational backgrounds and industry experience. Our CEO, Chief Financial Officer, and Audit Committee receive regular reports from our Director of Security on the Company’s risk and compliance with cybersecurity matters, including data privacy, incidents, industry trends, and the prevention, detection, mitigation, and remediation of cyber incidents.
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.
We collaborate with third-party vendors to enhance our processes against unauthorized access to our network, computers, programs, and data. Risk is inherent in risk management and cybersecurity strategy.
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.
We implement policies and practices to mitigate risks to organizational data and operational processes. 16 Table of Contents Our Global Data Privacy Program continues to align with environmental, social, and corporate governance standards, taking into account both the risks and benefits of privacy-driven spending.
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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.
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We measure our security performance using the International Organization for Standardization 27001 Framework and Enterprise Risk Management strategies.
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See “Our operations could be adversely affected if our information technology systems and networks are compromised or targeted by cyberattacks” under Risk Factors in Part I, Item 1A of this report, which we incorporate here by reference. Governance The Board of Directors has oversight responsibility for cyber risks affecting the Company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur principal operating locations by reportable segment are listed below. 17 Table of Contents 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.
Biggest changeInfrastructure segment North American manufacturing operations are located in the following U.S. states, along with operations in Canada and Mexico: Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, New Jersey, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia.
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 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 these facilities are owned by us, and we believe that our manufacturing capabilities and capacities are adequate to effectively serve our customers.
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.
The largest operations are in Valley, Nebraska; Brenham, Texas; Tulsa, Oklahoma; and Monterrey, Mexico, all of which are owned facilities. We also have communication component distribution locations in California, Colorado, Florida, Georgia, Indiana, Maryland, Nevada, New York, Oregon, and Texas.
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.
ITEM 2. PROPERTIES Our corporate headquarters are located in Omaha, Nebraska, and the facility is leased through fiscal 2046. It houses the majority of our executive offices, reportable segment business units, and administrative functions. Additionally, we maintain a management headquarters in Sydney, Australia. Most of our significant manufacturing locations are owned or are subject to long-term renewable leases.
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 international operations are located 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 concentrated 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.
Our principal manufacturing operations serving international markets are in Uberaba, Brazil; Dubai, United Arab Emirates; and Shandong, China. All facilities are owned, except for China, which is leased. Operations in the Other segment, which were divested in fiscal 2022, were located in Denmark. 17 Table of Contents
Our capital spending programs consist of investment for replacement, achieving operational efficiencies, and expanding capacities where needed.
Our capital spending programs focus on investments for replacement, achieving operational efficiencies, and expanding capacities where necessary. Our principal operating locations by reportable segment are listed below.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 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.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are not a party to any material legal proceedings, nor are any of our properties subject to such proceedings. From time to time, we are involved in routine litigation incidental to our business operations. For further information regarding legal proceedings, please refer to Note 17 to the Consolidated Financial Statements included in this report.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeSenior 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.
Biggest changeServed as Senior Vice President of Operations and Global Supply at Pentair, a water treatment company, from 2017 to June 2020. J. Timothy Donahue , age 60 Group President of Infrastructure since July 2023. Served as Executive Vice President of Corporate and Business Development from January 2023 to July 2023.
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.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following are the names, ages, positions, and business experiences over the last five years of our current executive officers: Avner M. Applbaum , age 53 President and Chief Executive Officer since July 2023.
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 Table of Contents PART II
Ellen S. Dasher , age 55 Vice President of Global Taxation since December 2015. R. Andrew Massey , age 55 Vice President, Chief Legal Officer, and Corporate Secretary since July 2006. ​ 18 Table of Contents PART II
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.
Previously, Senior Vice President and Finance Business Partner of Global Operations from June 2022 to July 2023, and Senior Vice President and Controller from June 2014 to June 2022. Renee L. Campbell , age 55 Senior Vice President of Investor Relations and Treasurer since February 2022.
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.
Served as Executive Vice President and Chief Financial Officer from March 2020 to July 2023. Previously, Chief Financial Officer and Chief Operating Officer at Double E Group, an equipment manufacturer, from 2017 to March 2020. Thomas Liguori , age 66 Executive Vice President and Chief Financial Officer since August 2024.
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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.
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Served as Chief Financial Officer at Fortna, Inc., a supply chain optimization and automation company, from December 2022 to March 2024. Previously, Chief Financial Officer at Avnet, Inc., a global technology distributor and solutions provider, from 2018 to September 2022. Diane M. Larkin , age 60 Executive Vice President of Global Operations since June 2020.
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Previously, President of Global Engineered Support Structures from December 2019 to January 2023. Darryl Matthews , age 56 Group President of Agriculture since September 2024. Served as Senior Vice President of Natural Resources and Autonomy at Trimble, Inc., a company that provides integrated technology solutions for the agriculture, construction, and infrastructure industries, from September 2015 to December 2023. Timothy P.
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Francis , age 48 Chief Accounting Officer since September 2024. Served as Interim Chief Financial Officer from July 2023 to August 2024 and Interim Chief Accounting Officer from December 2023 to August 2024.
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Served as Vice President of Investor Relations and Corporate Communications from October 2017 to February 2022. Jennifer Paisley , age 47 Senior Vice President of Human Resources since August 2024. Served as Vice President of Total Rewards and HR Operations from September 2020 to August 2024. Previously, Senior Director of HR Operations and Benefits from January 2019 to September 2020.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchase of Equity Securities By the Issuer and Affiliated Purchasers ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ Approximate Dollar ​ ​ Total ​ ​ ​ ​ as Part of ​ Value of ​ ​ Number ​ Average ​ Publicly ​ Shares that May Yet ​ ​ of Shares ​ Price Paid ​ Announced Plans ​ Be Purchased Period Purchased per Share or Programs Under the Program (1) October 1, 2023 to October 28, 2023 — ​ $ — — ​ $ 314,724,000 October 29, 2023 to December 2, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Accelerated Share Repurchase ​ 240,120 ​ 211.69 240,120 ​ 263,883,000 November 2023 Accelerated Share Repurchase (2) ​ 438,917 ​ ​ (2) ​ 438,917 ​ ​ 143,883,000 December 3, 2023 to December 30, 2023 35,000 ​ 222.11 35,000 ​ 136,108,000 Total 714,037 ​ $ 250.15 714,037 ​ $ 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.
Biggest changePurchases of Equity Securities By the Issuer and Affiliated Purchasers ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of ​ Approximate dollar ​ ​ ​ ​ ​ ​ ​ shares purchased ​ value of shares that ​ ​ Total number ​ Average ​ as part of publicly ​ may yet be purchased ​ ​ of shares ​ price paid ​ announced plans ​ under the plans Period purchased per share or programs or programs (1) September 29, 2024 to October 26, 2024 — ​ $ — — ​ $ 81,039,000 October 27, 2024 to November 30, 2024 37,011 ​ ​ 339.30 37,011 ​ ​ 68,480,000 December 1, 2024 to December 28, 2024 6,990 ​ 349.04 6,990 ​ 66,039,000 Total 44,001 ​ $ 340.85 44,001 ​ $ 66,039,000 (1) In May 2014, we announced a capital allocation philosophy that included a share repurchase program.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 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.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the New York Stock Exchange under the ticker symbol “VMI.” Holders As of December 28, 2024, we had approximately 98,900 shareholders of common stock. Dividends Cash dividends on our common stock are paid quarterly.
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 Table of Contents
The Inflation Reduction Act of 2022, enacted on August 16, 2022, introduced a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. As of December 28, 2024 and December 30, 2023, the excise tax accrued totaled $0.6 million and $2.8 million, respectively. ​ 19 Table of Contents
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.
In February 2023, the Board increased the program by an additional $400.0 million, bringing the total authorization to $1,400.0 million, with no expiration date. As of December 28, 2024, we have repurchased 8,235,697 shares for approximately $1,334.0 million under this 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.
The Board of Directors initially authorized the purchase of up to $500.0 million of the Company’s outstanding common stock over a twelve-month period at prevailing market prices, either through open market or privately negotiated transactions. The Board expanded this authorization in February 2015 and October 2018, each time adding $250.0 million with no expiration date.
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.
In fiscal 2024, we paid a total of $48.4 million in dividends, compared to $49.5 million in fiscal 2023. The Board of Directors determines whether to declare dividends, including their timing and amount, based on the Company’s financial condition and other relevant factors. We currently anticipate continuing to pay dividends at levels consistent with historical distributions.
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.
Subsequent to year end, on February 18, 2025, we announced the Board of Directors increased the amount authorized under the program by an additional $700.0 million, with no stated expiration date.
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(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.
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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.
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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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDiscussions 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 Table of Contents General ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ ​ ​ December 30, ​ December 31, ​ Percent ​ ​ December 25, ​ Percent ​ Dollars in millions, except per share amounts ​ 2023 ​ 2022 ​ Change ​ ​ 2021 ​ Change ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 4,174.6 ​ $ 4,345.2 (3.9) % ​ $ 3,501.6 24.1 % Gross profit ​ 1,236.0 ​ 1,126.3 9.8 % ​ 883.9 27.4 % as a percent of net sales ​ 29.6 % 25.9 % ​ ​ 25.2 % ​ Selling, general, and administrative expenses ​ 768.4 ​ 693.0 10.9 % ​ 590.6 17.3 % as a percent of net sales ​ 18.4 % 15.9 % ​ ​ 16.9 % ​ Impairment of goodwill and intangible assets ​ ​ 140.8 ​ — NM ​ ​ 6.5 NM ​ Realignment charges ​ ​ 35.2 ​ — NM ​ ​ — NM ​ Operating income ​ 291.6 ​ 433.3 (32.7) % ​ 286.8 51.1 % as a percent of net sales ​ 7.0 % 10.0 % ​ ​ 8.2 % ​ Net interest expense ​ 50.6 ​ 45.5 11.2 % ​ 41.4 9.9 % Effective tax rate ​ 38.1 % 29.9 % ​ ​ 23.6 % ​ Net earnings attrib. to Valmont Industries, Inc. ​ 150.8 ​ 250.9 (39.9) % ​ 195.6 28.3 % Diluted earnings per share ​ $ 6.78 ​ $ 11.62 (41.7) % ​ $ 9.10 27.7 % Infrastructure ​ ​ ​ ​ ​ Net sales ​ $ 2,999.6 ​ $ 2,909.7 3.1 % ​ $ 2,361.5 23.2 % Gross profit ​ 842.1 ​ 736.6 14.3 % ​ 603.6 22.0 % Selling, general, and administrative expenses ​ 424.9 ​ 382.1 11.2 % ​ 330.0 15.8 % Impairment of goodwill and intangible assets ​ ​ 3.6 ​ — NM ​ ​ — NM ​ Realignment charges ​ ​ 17.3 ​ — NM ​ ​ — NM ​ Operating income ​ 396.3 ​ 354.5 11.8 % ​ 273.6 29.6 % Agriculture ​ ​ ​ ​ ​ ​ Net sales ​ $ 1,175.0 ​ $ 1,335.3 (12.0) % ​ $ 1,017.1 31.3 % Gross profit ​ 393.9 ​ 381.8 3.2 % ​ 297.7 28.2 % Selling, general, and administrative expenses ​ 230.7 ​ 202.5 13.9 % ​ 160.6 26.1 % Impairment of goodwill and intangible assets ​ ​ 137.2 ​ — NM ​ ​ — NM ​ Realignment charges ​ ​ 9.1 ​ — NM ​ ​ — NM ​ Operating income ​ 16.9 ​ 179.3 (90.6) % ​ 137.1 30.8 % Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ — ​ $ 100.2 ​ NM ​ ​ $ 123.0 ​ (18.5) % Gross profit (loss) ​ ​ — ​ ​ 7.9 ​ NM ​ ​ ​ (18.2) ​ NM ​ Selling, general, and administrative expenses ​ ​ — ​ ​ 5.6 ​ NM ​ ​ ​ 15.5 ​ (63.9) % Impairment of goodwill and intangible assets ​ ​ — ​ ​ — ​ NM ​ ​ ​ 6.5 ​ NM ​ Operating income (loss) ​ ​ — ​ ​ 2.3 ​ NM ​ ​ ​ (40.2) ​ NM ​ Corporate ​ ​ ​ ​ ​ Gross profit ​ $ — ​ $ — NM ​ ​ $ 0.8 NM ​ Selling, general, and administrative expenses ​ 112.8 ​ 102.8 9.7 % ​ 84.5 21.7 % Realignment charges ​ ​ 8.8 ​ — NM ​ ​ — NM ​ Operating loss ​ (121.6) ​ (102.8) 18.3 % ​ (83.7) 22.8 % NM = not meaningful ​ 21 Table of Contents 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.
Biggest changeDiscussions regarding fiscal 2022 and associated comparisons, which 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 30, 2023. ​ 20 Table of Contents FISCAL 2024 COMPARED WITH FISCAL 2023 Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ ​ December 28, ​ December 30, ​ Percent Dollars in thousands, except per-share amounts ​ 2024 ​ 2023 ​ Change Consolidated ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 4,075,034 ​ $ 4,174,598 (2.4%) Gross profit ​ 1,241,212 ​ 1,236,034 0.4% as a percentage of net sales ​ 30.5% ​ 29.6% ​ Selling, general, and administrative expenses ​ 716,628 ​ 768,423 ​ (6.7%) as a percentage of net sales ​ 17.6% ​ 18.4% ​ Impairment of goodwill and other intangible assets ​ ​ — ​ 140,844 ​ NM Realignment charges ​ ​ — ​ 35,210 ​ NM Operating income ​ 524,584 ​ 291,557 ​ 79.9% as a percentage of net sales ​ 12.9% ​ 7.0% ​ Net interest expense ​ 51,539 ​ 50,578 ​ 1.9% Effective tax rate ​ 25.2% ​ 38.1% ​ Net earnings attributable to Valmont Industries, Inc. ​ 348,259 ​ 150,849 ​ 130.9% Diluted earnings per share ​ $ 17.19 ​ $ 6.78 ​ 153.5% Infrastructure ​ ​ ​ Net sales ​ $ 2,998,381 ​ $ 2,999,637 ​ (0.0%) Gross profit ​ 903,736 ​ 842,081 ​ 7.3% as a percentage of net sales ​ ​ 30.1% ​ ​ 28.1% ​ ​ Selling, general, and administrative expenses ​ 406,596 ​ 424,997 ​ (4.3%) as a percentage of net sales ​ ​ 13.6% ​ ​ 14.2% ​ ​ Impairment of goodwill and other intangible assets ​ ​ — ​ 3,571 ​ NM Realignment charges ​ ​ — ​ 17,260 ​ NM Operating income ​ 497,140 ​ 396,253 ​ 25.5% as a percentage of net sales ​ ​ 16.6% ​ ​ 13.2% ​ ​ Agriculture ​ ​ ​ ​ Net sales ​ $ 1,076,653 ​ $ 1,174,961 ​ (8.4%) Gross profit ​ 337,476 ​ 393,953 ​ (14.3%) as a percentage of net sales ​ ​ 31.3% ​ ​ 33.5% ​ ​ Selling, general, and administrative expenses ​ 199,140 ​ 230,729 ​ (13.7%) as a percentage of net sales ​ ​ 18.5% ​ ​ 19.6% ​ ​ Impairment of goodwill and other intangible assets ​ ​ — ​ 137,273 ​ NM Realignment charges ​ ​ — ​ 9,101 ​ NM Operating income ​ 138,336 ​ 16,850 ​ 721.0% as a percentage of net sales ​ ​ 12.8% ​ ​ 1.4% ​ ​ Corporate ​ ​ ​ ​ ​ ​ Selling, general, and administrative expenses ​ $ 110,892 ​ $ 112,697 ​ (1.6%) Realignment charges ​ ​ — ​ 8,849 ​ NM Operating loss ​ (110,892) ​ (121,546) ​ (8.8%) NM = not meaningful Overview, Including Items Impacting Comparability ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollars in thousands Infrastructure ​ Agriculture Total Net sales - fiscal 2023 ​ $ 2,999,637 ​ $ 1,174,961 ​ $ 4,174,598 Volume ​ (55,453) ​ (48,082) ​ (103,535) Pricing and mix ​ 62,430 ​ (63,942) ​ (1,512) Acquisition ​ — ​ 27,396 ​ 27,396 Divestiture ​ ​ (2,292) ​ ​ (1,068) ​ ​ (3,360) Currency translation ​ (5,941) ​ (12,612) ​ (18,553) Net sales - fiscal 2024 ​ $ 2,998,381 ​ $ 1,076,653 ​ $ 4,075,034 On a consolidated basis, net sales decreased in fiscal 2024, as compared to fiscal 2023, primarily due to lower net sales in the Agriculture segment, while net sales in the Infrastructure segment remained relatively flat.
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 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 of $6.4 million from the divestiture of Torrent Engineering and Equipment Company, LLC, net of cash divested, and proceeds of $7.5 million from property damage insurance claims.
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.
In fiscal 2018, we began using hot-rolled steel coil derivative contracts on a limited basis to help mitigate the impact of rising steel prices on our operating income.
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 the loss on the divestiture was 29.9%. 2 The adjusted effective tax rate for fiscal 2023 excluded the effects of the impairment of goodwill and other intangible 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 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 defined as 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-recurring non-cash charges or gains, subject to certain limitations (“Adjusted EBITDA”).
The effective tax rate including these items was 38.1%. 3 The 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.
The effective tax rate including these items was 38.1%. 3 The Company does not include adjustments for the Prospera subsidiary 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 goodwill and other intangible assets and realignment activities completed during the fourth quarter of fiscal 2023.
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.
The interest rate on our borrowings will be, at our option, either: (a) term Secured Overnight Financing Rate (“SOFR”), based on a one-, three-, or six-month period, plus a 10-basis-point adjustment and a spread of 100 to 162.5 basis points, depending on our senior unsecured long-term debt credit rating 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, or ● term SOFR (based on a one-month period) plus 100 basis points, plus, in each case, 0 to 62.5 basis points, depending on our credit rating; or (c) daily simple SOFR plus a 10-basis-point adjustment and a spread of 100 to 162.5 basis points, depending on our credit rating.
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”).
These senior notes are jointly, severally, fully, and unconditionally guaranteed—subject to certain customary release provisions, including the sale of the subsidiary guarantor or 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 serves as the Issuer of the notes and consolidates all Guarantors.
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.
Leverage Ratio – The leverage ratio is calculated by taking the sum of interest-bearing debt, minus unrestricted cash in excess of $50.0 million (but not exceeding $500.0 million), and dividing it by Adjusted EBITDA.
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.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward ‑ Looking Statements Management’s discussion and analysis, along with other sections of this annual report, contain forward‑looking statements as defined by the Private Securities Litigation Reform Act of 1995.
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.
As a non-GAAP measure, Adjusted EBITDA 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. It also should not be interpreted as an indicator of operating performance or liquidity.
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.
These 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, anticipated future developments, and other factors deemed to be relevant. However, these statements are not guarantees of future performance or results.
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.
As of December 28, 2024, the Company had one outstanding fixed-for-fixed cross currency swap (“CCS”) agreement. This swap exchanges U.S. dollar principal and interest payments on a portion of the Company’s 5.00% senior unsecured notes due in fiscal 2044 for euro-denominated payments.
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.
Participation in the program is entirely voluntary for suppliers and does not affect our payment terms, amounts, timing, or liquidity. We have no economic interest in a supplier’s decision to participate.
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 financial information for the Issuer and Guarantors is presented on a combined basis, with intercompany balances and transactions between the Issuer and Guarantors eliminated.
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.
These factors include, among others, risk factors described in the Company’s reports to the SEC, as well as future economic and market conditions, industry trends, Company performance and financial results, operational efficiencies, availability and pricing of raw materials, availability and market acceptance of new products, product pricing, domestic and international competition, and actions or policy changes by domestic and foreign governments.
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.
We retain the option to repurchase these notes by paying a make-whole premium. Both tranches are guaranteed by certain subsidiaries. Revolving Credit Facility Our revolving credit facility, managed by JPMorgan Chase Bank, N.A., as Administrative Agent, has a maturity date of October 18, 2026.
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.
Guarantor Summarized Financial Information This information is provided in compliance with Rule 3-10 and Rule 13-01 of Regulation S-X, relating to our two tranches of senior unsecured notes.
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.
They are subject to risks, uncertainties (some beyond the Company’s control), and various assumptions. Management believes these forward‑looking statements are based on reasonable assumptions. However, many factors could cause actual financial results to differ materially from expectations.
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. ​ ​ ​ ​ ​ ​ ​ ​ December 30, December 31, Dollars in millions ​ 2023 ​ 2022 Australian dollar ​ $ 6.9 ​ $ 4.3 Brazilian real ​ 18.8 ​ 11.8 British pound ​ 17.2 ​ 17.5 Canadian dollar ​ 4.0 ​ 3.8 Chinese renminbi ​ 5.6 ​ 6.0 Euro ​ 9.5 ​ 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.
The following table shows the change in the recorded value of our most significant investments as of December 28, 2024 and December 30, 2023, assuming a hypothetical 10% change in the value of the U.S. dollar. 32 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ December 28, December 30, Dollars in millions ​ 2024 ​ 2023 Australian dollar ​ $ 1.9 ​ $ 6.9 Brazilian real ​ 13.4 ​ 18.8 British pound ​ 25.6 ​ 17.2 Canadian dollar ​ 4.8 ​ 4.0 Chinese renminbi ​ 5.4 ​ 5.6 Euro ​ 13.2 ​ 9.5 Commodity Risk: Hot-rolled steel coil is a key input for both of our segments except the Coatings product line.
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.
Financing activities in fiscal 2023 included $400.8 million in borrowings of on the revolving credit facility and short-term notes, offset by $168.8 million in principal payments of on our long-term debt and short-term borrowings, $49.5 million in dividend payments, $345.3 million in stock repurchases, and $12.9 million in net activity from stock option and incentive plans, including related tax 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.
The CCS was initiated in fiscal 2024 to mitigate foreign currency risk associated with our euro investments and to reduce interest expenses. The notional amount of the euro CCS is $80.0 million, and it matures in fiscal 2029.
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.
The continuous transfer of control to the customer is evidenced by either contractual termination clauses or rights to payment for work performed to date, plus a reasonable profit, as the products do not have alternative uses to us. For these products, revenue is recognized over time based on progress toward completion of the performance obligation.
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.
Our enterprise resource planning system tracks the total incurred costs and production hours to date, along with the estimated hours to complete. Previously, our offshore wind energy structures business (divested in fiscal 2022) recognized revenue using the cost-to-cost measure of progress, which is based on the ratio of incurred costs to total estimated costs.
The Issuer’s or Guarantors’ amounts due from, amounts due to, and transactions with non-guarantor subsidiaries are separately disclosed. 29 Table of Contents Combined financial information for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 30, ​ December 31, ​ December 25, Dollars in thousands ​ 2023 2022 2021 Net sales ​ $ 2,713,928 ​ $ 2,876,425 ​ $ 2,139,427 Gross profit ​ 756,966 ​ 695,211 ​ 574,128 Operating income ​ 255,401 ​ 268,142 ​ 208,041 Net earnings ​ 134,831 ​ 167,114 ​ 120,655 Net earnings attributable to Valmont Industries, Inc. ​ 133,300 ​ 167,220 ​ 120,458 Combined financial information as of December 30, 2023 and December 31, 2022 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 30, ​ December 31, Dollars in thousands ​ 2023 2022 Current assets ​ $ 777,539 ​ $ 769,263 Non-current assets ​ 872,016 ​ 925,088 Current liabilities ​ 361,211 ​ 459,961 Non-current liabilities ​ 1,436,131 ​ 1,189,548 Redeemable noncontrolling interests ​ 10,518 ​ 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.
Any amounts due to or from the Issuer or Guarantors, as well as transactions with non-guarantor subsidiaries, are disclosed separately. 28 Table of Contents The combined financial information for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 28, ​ December 30, ​ December 31, Dollars in thousands ​ 2024 2023 2022 Net sales ​ $ 2,753,999 ​ $ 2,713,928 ​ $ 2,876,425 Gross profit ​ 828,055 ​ 756,966 ​ 695,211 Operating income ​ 354,719 ​ 255,401 ​ 268,142 Net earnings ​ 220,790 ​ 134,831 ​ 167,114 Net earnings attributable to Valmont Industries, Inc. ​ 220,790 ​ 133,300 ​ 167,220 The combined financial information as of December 28, 2024 and December 30, 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 28, ​ December 30, Dollars in thousands ​ 2024 2023 Current assets ​ $ 805,713 ​ $ 777,539 Non-current assets ​ 835,197 ​ 872,016 Current liabilities ​ 470,652 ​ 361,211 Non-current liabilities ​ 1,091,773 ​ 1,436,131 Redeemable noncontrolling interests ​ — ​ 10,518 As of December 28, 2024 and December 30, 2023, non-current assets included a receivable from non-guarantor subsidiaries of $90,938 and $136,904, respectively.
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.
Obligations under this 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.
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 Table of Contents The calculation of these ratios for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 30, ​ December 31, ​ December 25, Dollars in thousands ​ 2023 ​ 2022 ​ 2021 Operating income ​ $ 291,557 ​ ​ $ 433,249 ​ ​ $ 286,785 ​ Adjusted effective tax rate 1 ​ 38.1 % ​ 27.7 % ​ 23.6 % Tax effect on operating income ​ (111,124) ​ ​ (119,872) ​ ​ (67,681) ​ After-tax operating income ​ $ 180,433 ​ ​ $ 313,377 ​ ​ $ 219,104 ​ Average invested capital ​ $ 2,504,474 ​ ​ $ 2,437,232 ​ ​ $ 2,176,577 ​ Return on invested capital ​ 7.2 % ​ 12.9 % ​ 10.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 291,557 ​ ​ $ 433,249 ​ ​ $ 286,785 ​ Impairment of long-lived assets ​ ​ 140,844 ​ ​ ​ — ​ ​ ​ 27,911 ​ Realignment charges ​ ​ 35,210 ​ ​ ​ — ​ ​ ​ 4,052 ​ Other non-recurring charges ​ ​ 5,626 ​ ​ ​ — ​ ​ ​ — ​ Prospera intangible asset amortization 3 ​ ​ — ​ ​ ​ 6,580 ​ ​ ​ 3,396 ​ Prospera stock-based compensation 3 ​ ​ — ​ ​ ​ 9,896 ​ ​ ​ 5,240 ​ Write-off of a receivable ​ ​ — ​ ​ ​ — ​ ​ ​ 5,545 ​ Acquisition diligence ​ ​ — ​ ​ ​ — ​ ​ ​ 1,120 ​ Adjusted operating income ​ $ 473,237 ​ ​ $ 449,725 ​ ​ $ 334,049 ​ Adjusted effective tax rate 1,2 ​ 25.9 % ​ 27.7 % ​ 23.6 % Tax effect on adjusted operating income ​ (122,665) ​ ​ (124,431) ​ ​ (78,836) ​ After-tax adjusted operating income ​ $ 350,572 ​ ​ $ 325,294 ​ ​ $ 255,213 ​ Average invested capital ​ $ 2,504,474 ​ ​ $ 2,437,232 ​ ​ $ 2,176,577 ​ Adjusted return on invested capital ​ 14.0 % ​ 13.3 % ​ 11.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 3,477,448 ​ ​ $ 3,556,996 ​ ​ $ 3,447,249 ​ Less: Defined benefit pension asset ​ ​ (15,404) ​ ​ ​ (24,216) ​ ​ ​ — ​ Less: Accounts payable ​ (358,311) ​ ​ (360,312) ​ ​ (347,841) ​ Less: Accrued expenses ​ (277,764) ​ ​ (248,320) ​ ​ (253,330) ​ Less: Contract liabilities ​ (70,978) ​ ​ (172,915) ​ ​ (135,746) ​ Less: Income taxes payable ​ — ​ ​ (3,664) ​ ​ — ​ Less: Dividends payable ​ (12,125) ​ ​ (11,742) ​ ​ (10,616) ​ Less: Deferred income taxes ​ (21,205) ​ ​ (41,091) ​ ​ (47,849) ​ Less: Operating lease liabilities ​ (162,743) ​ ​ (155,469) ​ ​ (147,759) ​ Less: Deferred compensation ​ (32,623) ​ ​ (30,316) ​ ​ (35,373) ​ Less: Defined benefit pension liability ​ — ​ ​ — ​ ​ (536) ​ Less: Other non-current liabilities ​ (12,818) ​ ​ (13,480) ​ ​ (89,207) ​ Total invested capital ​ $ 2,513,477 ​ ​ $ 2,495,471 ​ ​ $ 2,378,992 ​ Beginning invested capital ​ $ 2,495,471 ​ ​ $ 2,378,992 ​ ​ $ 1,974,162 ​ Average invested capital ​ $ 2,504,474 ​ ​ $ 2,437,232 ​ ​ $ 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 following table shows how invested capital, ROIC, and Adjusted ROIC are calculated from our Consolidated Statements of Earnings and our Consolidated Balance Sheets. 29 Table of Contents The calculation of these ratios for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 28, ​ December 30, ​ December 31, Dollars in thousands ​ 2024 ​ 2023 ​ 2022 Operating income ​ $ 524,584 ​ $ 291,557 ​ $ 433,249 Tax rate ​ 25.2% ​ 38.1% ​ 27.7% Tax effect on operating income ​ (132,050) ​ (111,124) ​ (119,872) After-tax operating income ​ $ 392,534 ​ $ 180,433 ​ $ 313,377 Average invested capital ​ $ 2,396,436 ​ $ 2,504,474 ​ $ 2,437,232 Return on invested capital ​ 16.4% ​ 7.2% ​ 12.9% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 524,584 ​ $ 291,557 ​ $ 433,249 Impairment of goodwill and other intangible assets ​ ​ — ​ ​ 140,844 ​ ​ — Realignment charges ​ ​ — ​ ​ 35,210 ​ ​ — Other non-recurring charges ​ ​ — ​ ​ 5,626 ​ ​ — Prospera intangible asset amortization 3 ​ ​ — ​ ​ — ​ ​ 6,580 Prospera stock-based compensation 3 ​ ​ — ​ ​ — ​ ​ 9,896 Adjusted operating income ​ $ 524,584 ​ $ 473,237 ​ $ 449,725 Adjusted effective tax rate 1,2 ​ 25.2% ​ 25.9% ​ 27.7% Tax effect on adjusted operating income ​ (132,050) ​ (122,665) ​ (124,431) After-tax adjusted operating income ​ $ 392,534 ​ $ 350,572 ​ $ 325,294 Average invested capital ​ $ 2,396,436 ​ $ 2,504,474 ​ $ 2,437,232 Adjusted return on invested capital ​ 16.4% ​ 14.0% ​ 13.3% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 3,329,972 ​ $ 3,477,448 ​ $ 3,556,996 Less: Defined benefit pension asset ​ ​ (46,520) ​ ​ (15,404) ​ ​ (24,216) Less: Accounts payable ​ (372,197) ​ (358,311) ​ (360,312) Less: Accrued expenses ​ (275,407) ​ (277,764) ​ (248,320) Less: Contract liabilities ​ (126,932) ​ (70,978) ​ (172,915) Less: Income taxes payable ​ (22,509) ​ — ​ (3,664) Less: Dividends payable ​ (12,019) ​ (12,125) ​ (11,742) Less: Deferred income taxes ​ (6,344) ​ (21,205) ​ (41,091) Less: Operating lease liabilities ​ (134,534) ​ (162,743) ​ (155,469) Less: Deferred compensation ​ (33,302) ​ (32,623) ​ (30,316) Less: Other non-current liabilities ​ (20,813) ​ (12,818) ​ (13,480) Total invested capital ​ $ 2,279,395 ​ $ 2,513,477 ​ $ 2,495,471 Beginning invested capital ​ $ 2,513,477 ​ $ 2,495,471 ​ $ 2,378,992 Average invested capital ​ $ 2,396,436 ​ $ 2,504,474 ​ $ 2,437,232 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.
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.
In fiscal 2024 and fiscal 2023, we entered into diesel fuel option contracts that qualified as cash flow hedges. These contracts help stabilize cash flows amid fluctuating diesel fuel costs charged by carriers.
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.
Consolidated operating income increased in fiscal 2024, as compared to fiscal 2023, primarily due to the impairment of certain goodwill and intangible assets totaling $140.8 million and realignment charges totaling $35.2 million in fiscal 2023. The increase was further supported by lower SG&A resulting from the Realignment Program and increased gross profit.
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.
The following discussion and analysis provide information that management considers relevant for assessing and understanding 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 primarily discusses fiscal 2024 and fiscal 2023, including year-over-year comparisons.
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.
If our assumptions about the realizability of slow-moving or obsolete inventory prove to be overly optimistic, we may be required to record additional inventory write-downs. Income Taxes We maintain valuation allowances to adjust deferred tax assets to amounts that we anticipate are more likely than not to be realized.
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.
Agriculture segment operating income increased in fiscal 2024, as compared to fiscal 2023, primarily due to a $137.3 million impairment of certain goodwill and other intangible assets in fiscal 2023. This increase was partially offset by lower sales volumes and decreased gross profit.
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.
In assessing the need for these allowances, we consider anticipated future taxable income and tax-planning strategies. If we determine that a deferred tax asset is not expected to be fully realized, we increase the valuation allowance, which reduces net earnings in that period.
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.
Income Tax Expense Our effective income tax rate in fiscal 2024 and fiscal 2023 was 25.2% and 38.1%, respectively. In fiscal 2024, the effective tax rate was the result of changes in the geographical mix of earnings. In fiscal 2023, the higher effective tax rate was the result of goodwill impairment charges for which no tax benefits were recorded.
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.
We actively monitor the global economy for potential factors that could impact the operating results of our reporting units. Should adverse conditions arise, we will conduct an impairment test for any affected reporting units prior to our annual testing.
An impairment of $17.3 million was recognized within the Agriculture segment. 35 Table of Contents Inventories Inventories are valued at the lower of cost, determined on a first-in, first-out basis, or net realizable value.
We determined the asset’s carrying value exceeded its total undiscounted estimated future cash flows. As a result, we recognized a $17.3 million impairment within the Agriculture segment. Inventories Inventories are valued at the lower of cost, determined on a first-in, first-out basis, or net realizable value.
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.
As of December 28, 2024, we had approximately $56.2 million in deferred tax assets related to tax credits and loss carryforwards, with a valuation allowance of $38.8 million, including $7.0 million for capital loss carryforwards that are unlikely to be realized.
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.
As of December 28, 2024, we had open option contracts with a notional amount of $0.6 million for the total purchase of 2,604,000 gallons of diesel fuel from December 2024 to June 2026. CRITICAL ACCOUNTING ESTIMATES The accounting policies described below involve significant judgments and estimates that are used in preparing our Consolidated Financial Statements.
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.
This ratio is a key component of the covenants in our major debt agreements, which stipulate that the ratio must not exceed 3.50 (or 3.75 after certain material acquisitions), calculated on a rolling four-fiscal-quarter basis. If we violate these covenants, we could face increased financing costs or be required to repay debt before its maturity date.
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.
Foreign Exchange Risk: Our exposure to transactions in currencies other than an entity’s functional currency is minimal. Consequently, potential exchange losses on future earnings, fair value, and cash flows are not material. However, we are exposed to investment risks related to our foreign operations. To manage these risks, we occasionally enter into foreign currency contracts.
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.
Senior Unsecured Notes As of December 28, 2024, our senior unsecured notes consisted of: ● $450.0 million face value ($434.0 million carrying value) notes at an interest rate of 5.00% per annum, maturing in October 2044. ● $305.0 million face value ($295.4 million carrying value) notes at an interest rate of 5.25% per annum, maturing in October 2054.
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 Table of Contents 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 Income / Expenses (Including Gain (Loss) on Deferred Compensation Investments) Amounts in “Gain (loss) on deferred compensation investments” 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.
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.
We assess the value of our inventory regularly and write down slow-moving or obsolete inventory. The write-down is calculated as the difference between the carrying value and our estimate of the reduced value. This estimate takes into account potential future uses of the inventory, the likelihood of selling overstocked inventory, and expected selling prices.
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.
To manage these risks, we employ strategies such as implementing fixed-price purchase contracts with our vendors to stabilize our purchasing costs and raising sales prices where feasible. Additionally, we use natural gas swap contracts on a limited basis to help offset the impact of rising natural gas prices on our operating income.
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.
Due to steel price volatility, we use derivative financial instruments to mitigate commodity price risks, particularly for fixed-price orders. In both fiscal 2024 and fiscal 2023, we entered into forward contracts and swaps for hot-rolled steel coil that qualified as cash flow hedges. These contracts help manage variability in cash flows from future steel purchases.
The following table summarizes current and long-term material cash requirements as of December 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Next 12 ​ ​ ​ ​ ​ Dollars in millions Months Thereafter Total Long‑term debt ​ $ 0.7 ​ $ 1,134.2 ​ $ 1,134.9 Interest 1 ​ 57.7 ​ 901.3 ​ 959.0 Pension plan contributions ​ 16.7 ​ 200.2 ​ 216.9 Operating leases ​ 27.9 ​ 222.4 ​ 250.3 Total contractual cash obligations ​ $ 103.0 ​ $ 2,458.1 ​ $ 2,561.1 1 Interest expense amount assumes that long-term debt will be held to maturity.
The following table outlines our material cash requirements, both current and long-term, as of December 28, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Next 12 ​ ​ ​ ​ ​ Dollars in millions Months Thereafter Total Long‑term debt ​ $ 0.7 ​ $ 755.6 ​ $ 756.3 Interest 1 ​ 38.6 ​ 882.8 ​ 921.4 Pension plan contributions ​ 16.7 ​ 197.6 ​ 214.3 Operating leases ​ 29.0 ​ 184.1 ​ 213.1 Total contractual cash obligations ​ $ 85.0 ​ $ 2,020.1 ​ $ 2,105.1 1 Interest expense amount assumes that long-term debt will be held to maturity.
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.
As of December 28, 2024 and December 30, 2023, our accounts payable in the Consolidated Balance Sheets included $45.6 million and $41.9 million, respectively, related to obligations under this program. Sources of Financing As of December 28, 2024, our available debt financing primarily included senior unsecured notes and a revolving credit facility.
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.
For the fiscal year ended December 28, 2024, a hypothetical 20% change in steel prices could have impacted net sales in this product line by approximately $110.0 million, assuming a similar sales mix. Similarly, natural gas prices have been highly volatile in recent years.
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.
Our bank credit agreements include a financial covenant that limits total interest-bearing debt to no more than 3.50 times Adjusted EBITDA (or 3.75 times Adjusted EBITDA following certain material acquisitions), calculated on a rolling four-fiscal-quarter basis.
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.
For the fiscal 2024 annual goodwill impairment test, we estimated the fair value of the twelve reporting units with recorded goodwill using a discounted cash flow model. This model factors in projected after-tax cash flows from operations, net of capital expenditures, discounted to their present value.
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.
Natural gas is another significant commodity used in our manufacturing processes, particularly in our Coatings product line, where it is used to heat tanks for the hot-dipped galvanizing process. Due to the volatility of natural gas prices, we mitigate this risk through derivative financial instruments.
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.
For our Utility and Telecommunications products, revenue is recognized using an input-based method, where total production hours incurred to date are measured as a percentage of the total estimated hours for the order. The completion percentage is applied to the total contract revenue and estimated costs to calculate revenue, cost of goods sold, and gross profit.
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.
The ultimate effect will depend on the magnitude and duration of the tariffs, and we are actively assessing options to mitigate any potential impact. 22 Table of Contents We continue to monitor other macroeconomic and geopolitical uncertainties that have impacted or may impact our business, including inflationary cost pressures, supply chain disruptions, currency fluctuations against the U.S. dollar, changing interest rates, ongoing international conflicts, and labor shortages.
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 revolving credit facility requires us to maintain a financial leverage ratio of 3.50 or lower, measured as of the last day of each fiscal quarter. A temporary increase to 3.75 is permitted for the four fiscal quarters following a material acquisition.
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.
Conversely, if we later determine that all or part of a net deferred tax asset is realizable, reducing the valuation allowance would increase net earnings for that period.
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.
Additionally, we perform sensitivity analyses to assess the impact of changes in key assumptions, such as discount rates and cash flow forecasts, on the valuation of the reporting units. 33 Table of Contents For fiscal 2024, no reporting units had a fair value lower than their carrying value.
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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 30, ​ December 31, ​ December 25, Dollars in thousands ​ 2023 2022 2021 Net cash flows provided by operating activities ​ $ 306,775 ​ $ 326,265 ​ $ 65,938 Net cash flows used in investing activities ​ (115,281) ​ (132,080) ​ (417,308) Net cash flows provided by (used in) financing activities ​ (176,405) ​ (181,905) ​ 133,500 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.
Additionally, as of December 28, 2024, we had liabilities of $1.6 million for foreign withholding taxes and $0.5 million for U.S. state income taxes. 27 Table of Contents Cash Flows The table below summarizes our cash flow information for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 28, ​ December 30, ​ December 31, Dollars in thousands ​ 2024 2023 2022 Net cash flows from operating activities ​ $ 572,678 ​ $ 306,775 ​ $ 326,265 Net cash flows from investing activities ​ (78,878) ​ (115,281) ​ (132,080) Net cash flows from financing activities ​ (522,560) ​ (176,405) ​ (181,905) Operating Cash Flows and Working Capital – Cash provided by operating activities totaled $572.7 million in fiscal 2024, compared to $306.8 million in fiscal 2023.
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.
As of December 28, 2024, we had open forward contracts and swaps with a notional amount of $13.5 million, covering the purchase of 17,000 short tons between January 2025 and September 2025.
ROIC and Adjusted ROIC, as presented, may not be comparable to similarly titled measures of other companies. 31 Table of Contents 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.
ROIC and Adjusted ROIC, as presented, may not be directly comparable to similarly titled measures used by other companies. Adjusted EBITDA – Adjusted EBITDA is a key financial metric we use to assess our maximum borrowing capacity.
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.
Additionally, the agreements allow adjustments for non-cash stock-based compensation and non-recurring non-cash charges or gains, subject to certain limitations, which are factored into the calculation of Adjusted EBITDA. Failure to comply with this financial covenant may result in higher financing costs or early debt repayment requirements.
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.
Favorable factors in the Infrastructure segment, including steel deflation, strong commercial execution, and effective pricing strategies, were partially offset by lower volumes and pricing in the Agriculture segment, particularly in Brazil. 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”).
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.
In fiscal 2023, however, one trade name’s carrying value exceeded its fair value, resulting in a $1.7 million impairment within the Infrastructure segment. Additionally, in the third quarter of fiscal 2023, due to identified impairment indicators, we tested the recoverability of an amortizing proprietary technology intangible asset related to the Prospera subsidiary, which is part of the Agriculture segment.
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.
In the second quarter of fiscal 2023, we divested Torrent Engineering and Equipment Company, LLC, an Indiana-based integrator of prepackaged pump stations previously included in the Agriculture segment, resulting in a gain of $3.0 million recorded in “Other income (expenses)” in the Consolidated Statements of Earnings.
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.
Risk Management We are exposed to several principal market risks, including fluctuations in interest rates, foreign currency exchange rates, and commodity prices. To mitigate these risks, we selectively use derivative financial instruments. However, we do not use derivatives for trading purposes. Interest Rate Risk: As of December 28, 2024, most our interest‑bearing debt was fixed rate.
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.
Selected Financial Measures We are providing the following financial measures for the Company: Return on Invested Capital – Return on invested capital (“ROIC”) and Adjusted ROIC are key operating ratios that enable investors to assess our operating performance relative to the investment needed to generate operating profit. These measures are also utilized to determine management incentives.
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.
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.
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.
Customary events of default may trigger the acceleration of obligations, subject to grace periods where applicable. As of December 28, 2024, we were in compliance with all covenants related to these debt agreements. For detailed calculations of Adjusted EBITDA and the leverage ratio, please refer to the “Selected Financial Measures” section.
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.
Other items included in “Other income (expenses)” were pension expenses along with losses related to the sales of George Industries and the extractive business in the fourth quarter of fiscal 2024 totaling approximately $4.5 million. Pension expense was $0.6 million and $0.2 million in fiscal 2024 and 2023, respectively.
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.
This decline was due to lower sales volumes caused by continued softness in the lighting market, the timing of transportation projects, and an unfavorable currency translation effect totaling approximately $1.9 million. Coatings product line sales decreased slightly in fiscal 2024, as compared to fiscal 2023, primarily due to lower sales volumes in international markets.
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.
As of December 28, 2024 and December 30, 2023, non-current liabilities included a payable to non-guarantor subsidiaries of $243,465 and $216,633, respectively.
The calculation of Adjusted EBITDA for the fiscal year ended December 30, 2023 was as follows: ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 30, Dollars in thousands ​ 2023 Net cash flows provided by operating activities ​ $ 306,775 Interest expense ​ 56,808 Income tax expense ​ 90,121 Impairment of long-lived assets ​ (140,844) Deferred income tax benefit ​ 18,649 Redeemable noncontrolling interests ​ 5,937 Defined benefit pension plan cost ​ (249) Contribution to defined benefit pension plan ​ 17,345 Changes in assets and liabilities, net of acquisitions ​ 80,561 Other ​ 602 EBITDA ​ 435,705 Impairment of long-lived assets ​ 140,844 Realignment charges ​ ​ 35,210 Proforma acquisition adjustment ​ ​ 5,152 Adjusted EBITDA ​ $ 616,911 ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 30, Dollars in thousands ​ 2023 Net earnings attributable to Valmont Industries, Inc. ​ $ 150,849 Interest expense ​ 56,808 Income tax expense ​ 90,121 Depreciation and amortization expense ​ 98,708 Stock-based compensation ​ 39,219 EBITDA ​ ​ 435,705 Impairment of long-lived assets ​ ​ 140,844 Realignment charges ​ ​ 35,210 Proforma acquisition adjustment ​ ​ 5,152 Adjusted EBITDA ​ $ 616,911 Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.
The calculation of Adjusted EBITDA for the fiscal year ended December 28, 2024 was as follows: ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 28, Dollars in thousands ​ 2024 Net cash flows from operating activities ​ $ 572,678 Interest expense ​ 58,722 Income tax expense ​ 117,978 Deferred income taxes ​ 24,655 Redeemable noncontrolling interests ​ (2,365) Net periodic pension cost ​ (640) Contribution to defined benefit pension plan ​ 19,599 Changes in assets and liabilities ​ (128,232) Other ​ (12,172) Proforma divestitures adjustment ​ ​ (2,346) Adjusted EBITDA ​ $ 647,877 ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 28, Dollars in thousands ​ 2024 Net earnings attributable to Valmont Industries, Inc. ​ $ 348,259 Interest expense ​ 58,722 Income tax expense ​ 117,978 Depreciation and amortization ​ 95,395 Stock-based compensation ​ 29,869 Proforma divestitures adjustment ​ ​ (2,346) Adjusted EBITDA ​ $ 647,877 Adjusted EBITDA, as presented, may not be directly comparable to similarly titled measures used by other companies.
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 Table of Contents We incurred severance and other employee benefit costs totaling $9.1 million within the Agriculture segment in fiscal 2023 related to the Realignment Program.
Furthermore, in fiscal 2023, we incurred $9.1 million in severance costs within the Agriculture segment related to the Realignment Program. Corporate Corporate SG&A decreased in fiscal 2024, as compared to fiscal 2023, primarily due to lower compensation costs resulting from the Realignment Program in fiscal 2023, as well as reduced incentive expenses.
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.
Our policy is to hedge 0% to 75% of our U.S. natural gas needs for the next 6 to 24 months using swaps tied to New York Mercantile Exchange futures. These swaps are designed to reduce the impact of sudden and significant increases in natural gas prices on our earnings.
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.
However, for certain Telecommunications structures contracts where we lack the right to payment for work completed, revenue is instead recognized at the time of shipment. The method for measuring progress toward completion requires judgment.
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.
ROIC is calculated by dividing after-tax operating income by the average of beginning and ending invested capital. Adjusted ROIC is calculated as after-tax operating income, adjusted for certain non-recurring charges or gains. The adjusted figure is then divided by the average of beginning and ending invested capital to determine Adjusted ROIC.
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.
We are not obligated to make any repurchases and may discontinue the program at any time.
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.
Additionally, as the earnings of our non-U.S. subsidiaries (in which we own more than 50%) are not considered indefinitely reinvested, we have recorded a deferred tax liability of $2.1 million, representing taxes to be incurred upon repatriation of these earnings.
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.
We use the relief-from-royalty method to value these assets, calculating the potential royalty a third party might pay to use the trade name, which is then discounted to present value and tax-effected. For fiscal 2024, the fair value of our trade names exceeded their carrying value.
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.
The facility includes a financial covenant that may limit 26 Table of Contents additional borrowing. As of December 28, 2024, we could borrow $799.8 million under the facility, after accounting for $0.2 million in standby letters of credit related to certain insurance obligations.
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.
Management relies on assumptions and estimates regarding manufacturing labor, materials, overhead, and burden recovery rates at each production facility. Production typically completes within three months once it begins, with profitability on open production orders reviewed monthly. We apply the practical expedient to omit disclosures for performance obligations expected to be completed within one year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 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 Table of Contents
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this item 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. ​ 35 Table of Contents

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