SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the Fiscal Year Ended December 31, 1994
Commission File No. 0-3701
Valmont Industries, Inc.
------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 47-0351813
-------- ----------
(State or Other Jurisdiction (I.R.S. Employer Identification
of Incorporation or Organization) Number)
Valley, Nebraska 68064
---------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's Phone Number, Including Area Code: (402) 359-2201
Securities Registered Pursuant to Section 12(g) of the Act:
Valmont Industries, Inc. Common Stock
-------------------------------------
$1.00 Par Value - Traded NASDAQ Stock Market (Symbol VALM)
----------------------------------------------------------
(Title of Class)
----------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding twelve months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past ninety days. Yes X No
--- ---
At March 3, 1995 there were outstanding 11,545,385 common shares of the
Company. The aggregate market value of the voting stock held by non-
affiliates of the Company on March 3, 1995 was $141,420,000.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. [ X ]
Documents Incorporated by Reference
-----------------------------------
Portions of the Company's annual report to shareholders for the fiscal year
ended December 31, 1994 (the "Annual Report") are incorporated by reference
in Parts I and II, and portions of the Company's proxy statement for its
annual meeting of stockholders to be held on April 18, 1995 (the "Proxy
Statement") are incorporated by reference in Part III.
Page 1 of 96
--
Index to Exhibits, Page 13
--
PART I
------
Item 1. Business.
---------
(a) General Description of Business
Valmont Industries, Inc., a Delaware Corporation, (together with
its subsidiaries the "Company") is engaged in industrial products and
irrigation products businesses. The Industrial Products segment involves
the manufacture and distribution of engineered metal structures and lighting
ballasts. The Irrigation Products segment involves the manufacture and
distribution of agricultural irrigation equipment and related products. The
description of Valmont's businesses set forth on pages 4 through 11 of the
Company's Annual Report is incorporated herein by reference.
The Company entered the Irrigation Products market in 1953 from its
manufacturing location in Valley, Nebraska. The Industrial Products segment
began producing and marketing engineered metal structures as a result of
manufacturing support efforts for the irrigation business.
Valmont has grown internally and by acquisition. Valmont has
also divested certain businesses. Valmont's acquisitions include (i) an
expansion into the French steel and aluminum structures market in 1989 with
the acquisition of Sermeto, (ii) the acquisition in 1991 of Valmont Nederland
(formerly Nolte Mastenfabriek B.V.), a Dutch manufacturer of steel poles
structures, (iii) the acquisition in 1991 of an 80% interest in Lampadaires
Feralux, Inc., a Canadian producer of aluminum pole structures, and (iv) the
acquisition in 1994 of the assets of Energy Steel Corporation of Tulsa,
Oklahoma, a manufacturer of utility products. Divestitures include (i) the
sale in 1994 of the assets of Good-All Electric, Inc., a Colorado producer of
cathodic protection rectifiers, (ii) the 1993 sale of its investment in
Inacom Corp., a national microcomputer reseller business initially
established as a division of the Company, (iii) the 1993 exit of the steel
reinforcing bar business, and (iv) the 1989 divestiture of the Gate City
Steel service center business.
(b) Industry Segments
The Company classifies its operations into two business segments:
Industrial Products - The manufacture and distribution of engineered
metal structures and lighting ballasts.
Irrigation Products - manufacture and distribution of agricultural
irrigation equipment and related products.
The amounts of revenues, operating income (together with a
reconciliation to consolidated earnings before taxes and minority interest)
and identifiable assets attributable to each segment for each of the last
three years are set forth on pages 27 and 28 of the Annual Report and
incorporated herein by reference.
(c) Narrative Description of Business
Principal Products Produced and Services Rendered.
--------------------------------------------------
The information called for by this item is hereby incorporated by
reference to pages 4 through 11 in the Company's Annual Report.
2
Suppliers and Availability of Raw Materials.
--------------------------------------------
Hot rolled steel coil and other carbon steel products are the
primary raw materials utilized in the manufacture of finished products for
the Industrial Products and Irrigation Products segments. These essential
items are purchased from steel mills and steel service centers and are
readily available. In addition to steel, key elements of the ballast
manufacturing process are copper and aluminum wire. These items are
obtained from wire mills and are also readily available. It is not likely
that key raw materials would be unavailable for extended periods.
Patents, Licenses, Franchises and Concessions.
----------------------------------------------
Valmont has a number of patents for its irrigation and ballast
designs. The Company also has a number of registered trademarks. Management
believes the loss of any individual patent would not have a material adverse
affect on the financial condition of the Company.
Seasonal Factors in Business.
-----------------------------
Sales in the Company's irrigation segment can be somewhat seasonal
based upon the agricultural growing season.
Customers.
----------
The Company is not dependent for a material part of its business
upon a single customer, or upon very few customers, the loss of any one of
which would have a material adverse effect on the financial condition of
the Company.
Backlog.
--------
The backlog of orders for the principal products manufactured and
marketed was approximately $96.3 million at the end of the 1994 fiscal year
and $82.6 million at the close of 1993. It is anticipated that most of the
backlog of orders will be filled during fiscal year 1995. At year end, the
backlog by segment was as follows (dollar amounts in millions):
<TABLE>
<CAPTION>
Dec. 31, Dec. 25,
1994 1993
--------- ---------
<S> <C> <C>
Industrial Products $73.0 59.4
Irrigation Products 23.3 23.2
--------- ---------
$96.3 82.6
========= =========
</TABLE>
The Company begins 1995 with an order backlog that is more than 16%
higher than at the beginning of fiscal 1994. The metal structures and
lighting ballast backlogs at the beginning of 1995 account for all of the
backlog increase over the beginning of 1994, while the irrigation products
segment's beginning backlog is approximately equal to the that of 1994.
Competitive Conditions.
-----------------------
In the Industrial Products segment, Valmont is a major manufacturer
and supplier of engineered metal structures to the lighting, utility and
communication industries; the Company delivers a broad line of custom steel
tubing products and manufactures and distributes lighting ballasts. The
Irrigation Products segment involves the manufacture and distribution of
mechanized irrigation equipment for both the U.S. and international
3
markets. The Company believes it is the world's leading manufacturer of
mechanized irrigation systems. The key competitive strategy used by the
Company in each segment is one of high quality and service.
Research Activities.
--------------------
The information called for by this item is hereby incorporated by
reference to the following captioned paragraph (at the page indicated) in
the Company's Annual Report:
Page In
Annual
Paragraph Caption in Annual Report Report
---------------------------------- ------
RESEARCH AND DEVELOPMENT 27
Environmental Disclosure.
-------------------------
The Company is subject to various federal, state and local laws and
regulations pertaining to environmental protection and the discharge of
materials into the environment. Although the Company continues to incur
expenses and to make capital expenditures related to environmental
protection, it does not anticipate that future expenditures will materially
impact the financial condition of the Company.
Number of Employees.
--------------------
At December 31, 1994, the number of employees was 3,754.
Financial Information about Foreign Operations and Export Sales.
----------------------------------------------------------------
Valmont's international sales activity encompasses approximately
seventy foreign countries. The information called for by this item is
hereby incorporated by reference to the following captioned heading (at the
page indicated) in the Company's Annual Report:
Page In
Annual
Paragraph Caption in Annual Report Report
---------------------------------- ------
SUMMARY BY GEOGRAPHICAL AREA 28
Item 2. Properties.
-----------
The Company's primary plant and offices are located on a 352 acre
site near Valley, Nebraska, which is approximately twenty miles west of
Omaha, Nebraska. Of the total acres noted above, 336 are owned in fee.
The other 16 acres are leased on a yearly basis from the Union Pacific
Railroad Company, which serves the Company's primary plant, and which is
entitled to terminate the lease on a one-year notice in the event that the
land is required for railroad operations. The Valley, Nebraska location
is used in common as the primary facilities by Irrigation Products and
certain Industrial Products administrative and operating personnel. The
Industrial Products segment's other significant properties are three
locations in France and two locations for Valmont Electric. Valmont
Electric leases plant and office facilities in El Paso, Texas under long-term
agreement. Valmont Electric also owns a plant and office facilities in
Juarez, Mexico which are located on land held in trust under a long-term
agreement. In addition, the Company operates other facilities as set forth
on page 12 of the Company's Annual Report, which information is incorporated
herein by reference.
Item 3. Pending Legal Proceedings.
--------------------------
The Company is involved in a limited number of legal actions.
Management believes that the ultimate resolution of all pending litigation
will not have a material adverse effect on the Company's financial condition.
4
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
Not applicable.
Executive Officers of the Company
---------------------------------
The executive officers of the Company, their ages, positions held, and the
business experience of each during the past five years are, as follows:
Robert B. Daugherty, Age 73, Chairman of the Board and
Director of the Company continuously since March, 1947.
Mogens C. Bay, Age 46, President and Chief Executive Officer of
the Company since August, 1993 and Director of the Company since
October, 1993. From 1991 to August, 1993 served as President and
Chief Operating Officer of the Irrigation Division of the Company.
Prior to 1991 served as President and General Manager of the
International Division of the Company.
Gary L. Cavey, Age 46, President, North American Operations
Industrial and Construction Products since July, 1994. From 1985
to July, 1994 served as Vice President Marketing of Industrial and
Construction Products.
Vincent T. Corso, Age 47, Vice President - Operations since June,
1994. Previously served as Vice President - Corporate Manufacturing,
Emerson Electric from 1992 and Vice President of Operations for
Appleton Electric (a wholly owned subsidiary of Emerson Electric)
from 1987.
Thomas P. Egan, Jr., Age 46, Vice President, Corporate Counsel and
Secretary of the Company since 1984.
Joseph M. Goecke, Age 57, President and Chief Operating Officer -
Valmont Irrigation since August 1993. Vice President - Operations
of the Irrigation Division since 1991. Prior to 1991 served as
President and General Manager of the Domestic Irrigation Division
of the Company.
Lewis P. Hays, Age 53, President and Chief Operating Officer,
Industrial and Construction Products since 1985.
Terry J. McClain, Age 47, Vice President and Chief Financial Officer
of the Company since January, 1994. Vice President-Finance and
Accounting of the Irrigation Division since 1990.
E. Robert Meaney, Age 47, President and Chief Operating Officer -
Valmont International since February, 1994. Previously served as
President Directeur General, Continental Can France, S.A. from 1989
and General Manager Finance & Planning - International from 1986.
Howard G. Sachs, Age 52, President and Chief Operating Officer -
Valmont Electric, Inc. since October, 1993. Previously served
Honeywell Keyboard Division from 1987, and as Vice President and
General Manager from 1991 and Director of Manufacturing from 1988.
Brian C. Stanley, Age 52, Vice President - Investor Relations and
Controller of the Company since January, 1994. Vice President and
Treasurer of the Company since 1990.
Tom L. Whalen, Age 47, Vice President, Human Resources of the
Company since 1982.
5
PART II
-------
Item 5. Market for the Registrant's Common Stock and Related Stockholder
----------------------------------------------------------------
Matters.
--------
Item 6. Selected Financial Data.
------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
----------------------
The information called for by items 5, 6 and 7 is hereby incorporated
by reference to the following captioned paragraphs (at the pages indicated)
in the Company's Annual Report:
<TABLE>
<CAPTION>
Page(s) In
Annual
Item Caption in Annual Report Report
---- ------------------------ ------
<S> <C> <C>
5 Stock Trading 33
5 Stock Market Price and Dividends Declared 29
5 Approximate Number of Shareholders 14 - 15
5&6 Selected Eleven Year Financial Data 14 - 15
7 Management's Discussion and Analysis 16 - 19
</TABLE>
Item 8. Financial Statements and Supplementary Data.
--------------------------------------------
The financial statements called for by this item is hereby
incorporated by reference to the Company's Annual Report as set forth on
pages 20 through 28, together with the independent auditors' report on page
30. The supplemental quarterly financial information is incorporated herein
by reference to page 29 of the Company's Annual Report.
Item 9. Disagreements on Accounting and Financial Disclosure.
-----------------------------------------------------
None
PART III
--------
Item 10. Directors and Executive Officers of the Registrant.
---------------------------------------------------
Item 11. Executive Compensation.
-----------------------
Item 12. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Item 13. Certain Relationships and Related Transactions.
-----------------------------------------------
Except for the information relating to the executive officers
of the Company set forth in Part I of this 10-K Report, the information
called for by items 10, 11, 12 and 13 is hereby incorporated by reference
to pages 4 through 10 of the Company's Proxy Statement.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
----------------------------------------------------------------
(a) (1) (2) Financial Statements. See index to financial
statement schedules on page F-2.
(a) (3) Exhibits. See exhibit index, incorporated herein
by reference.
(b) Reports on Form 8-K. The Company did not file a
report on Form 8-K during the last quarter of the period covered by this
report.
6
VALMONT INDUSTRIES, INC.
AND SUBSIDIARIES
Financial Statement Schedules Supporting
Consolidated Financial Statements for Inclusion
in Annual Report (Form 10-K)
December 31, 1994, December 25, 1993
and December 26, 1992
(With Independent Auditors' Report Thereon)
7
PEAT MARWICK LLP (letterhead)
Two Central Park Plaza
Suite 1501
Omaha, NE 68102
233 South 13th Street, Suite 1600
Lincoln, NE 68508-2041
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Shareholders
Valmont Industries, Inc.:
Under date of February 16, 1995, we reported on the consolidated balance
sheets of Valmont Industries, Inc. and subsidiaries as of December 31, 1994
and December 25, 1993, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1994, as contained in the 1994 Annual Report to
Shareholders. These consolidated financial statements and our report
thereon are incorporated by reference in the Annual Report on Form 10-K for
the year 1994. In connection with our audits of the aforementioned
consolidated financial statements, we also have audited the related
supplementary notes and financial statement schedules as listed in the
accompanying index. These supplementary notes and financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these supplementary notes and
financial statement schedules based on our audits.
In our opinion, such supplementary notes and financial statement schedules,
when considered in relation to the basic consolidated financial statements
taken as a whole, present fairly in all material respects the information
set forth therein.
As described in Note 6 to the consolidated financial statements, the Company
adopted the provisions of the Statements of Financial Accounting Standards
No. 109, Accounting for Income Taxes, in fiscal 1993.
KPMG PEAT MARWICK LLP
Omaha, Nebraska
February 16, 1995
F-1
8
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Index to Consolidated Financial Statements and Financial Statement Schedules
Consolidated Financial Statements
The following consolidated financial statements of Valmont Industries, Inc.
and subsidiaries have been incorporated by reference to pages 20 to 30 of
the Company's Annual Report to Shareholders for the year ended December
31, 1994:
Independent Auditors' Report
Consolidated Balance Sheets - December 31, 1994 and December 25, 1993
Consolidated Statements of Operations - Three-Year Period Ended
December 31, 1994
Consolidated Statements of Shareholders' Equity - Three-Year Period Ended
December 31, 1994
Consolidated Statements of Cash Flows - Three-Year Period Ended
December 31, 1994
Notes to Consolidated Financial Statements - Three-Year Period
Ended December 31, 1994
Page
Financial Statement Schedules Supporting
Consolidated Financial Statements
SCHEDULE II - Valuation and Qualifying Accounts F-3
SCHEDULE XI - Statement Re: Computation of Per Share Earnings F-4
All other schedules have been omitted as the required information is
inapplicable or the information is included in the consolidated financial
statements or related notes. Separate financial statements of the
Registrant have been omitted because the Registrant meets the
requirements which permit omission.
F-2 9
Schedule II
-----------
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
(Dollars in thousands)
<TABLE>
<CAPTION>
Balance at Charged to Deductions Balance at
beginning profit and from close
of period loss reserves* of period
--------- ---- -------- ---------
<S> <C> <C> <C> <C>
Fifty-three weeks ended December 31, 1994-
Reserve deducted in balance sheet from
the asset to which it applies-
Allowance for doubtful receivables $2,605 908 715 2,798
===== ===== ===== =====
Fifty-two weeks ended December 25, 1993 -
Reserve deducted in balance sheet from
the asset to which it applies -
Allowance for doubtful receivables $3,070 1,043 1,508 2,605
===== ===== ===== =====
Fifty-two weeks ended December 26, 1992 -
Reserve deducted in balance sheet from
the asset to which it applies -
Allowance for doubtful receivables $3,804 674 1,408 3,070
===== ===== ===== =====
</TABLE>
*The deductions from reserves are net of recoveries.
F-3
10
Schedule XI
-----------
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Statement Re: Computation of Per Share Earnings
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Net earnings $16,119 4,993 13,212
====== ====== ======
Average number of shares outstanding:
Primary 11,665,004 11,670,299 11,582,855
Fully diluted 11,678,950 11,694,828 11,659,184
Earnings per share:
Primary $1.38 0.43 1.14
Fully diluted 1.38 0.43 1.13
</TABLE>
Earnings per share are determined by dividing net earnings by the weighted
number of shares outstanding and equivalent common shares from dilutive
stock options.
F-4
11
SIGNATURES
The Registrant. Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 24th day of
March, 1995.
Valmont Industries, Inc.
/s/ Mogens C. Bay
By ___________________________
Mogens C. Bay
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
Valmont Industries, Inc. and in the capacities indicated on the dates
indicated.
/s/Mogens C. Bay 3/24/95
__________________________ Director, President and __________
Mogens C. Bay Chief Executive Officer Date
(Principal Executive
Officer)
/s/Terry C. McClain 3/24/95
__________________________ Vice President and __________
Terry J. McClain Chief Financial Officer Date
(Principal Financial
Officer)
/s/Brian C. Stanley 3/24/95
__________________________ Vice President - Investor __________
Brian C. Stanley Relations & Controller Date
(Principal Accounting
Officer)
Robert B. Daugherty* John E. Jones*
Charles M. Harper* Thomas F. Madison*
Allen F. Jacobson* Walter Scott, Jr.*
Lloyd P. Johnson* Robert G. Wallace*
*Mogens C. Bay, by signing his name hereto, signs the Annual Report
on behalf of each of the directors indicated on this 24th day of March, 1995.
A Power of Attorney authorizing Mogens C. Bay to sign the Annual Report of
Form 10-K on behalf of each of the indicated directors of Valmont Industries,
Inc. has been filed herein as Exhibit 24.
/s/Mogens C. Bay
By ___________________________
Mogens C. Bay
Attorney-in-Fact
12
INDEX TO EXHIBITS
This Exhibit Index relates to exhibits filed as a part of
this Report. Numbers are assigned to exhibits in accordance with Item 601
of Regulation S-K. Page numbers relate to the pages in the sequential
numbering system where the exhibits can be found (for those exhibits which
are not incorporated by reference).
Exhibit 3(a) - The Company's Certificate of Incorporation, as amended..Page 14
Exhibit 3(b) - The Company's By-Laws, as amended. This document
was filed with the Company's Annual Report on
Form 10-K for the fiscal year ended December 28, 1991
and is incorporated herein by reference.
Exhibit 10(a) - The Company's 1983 Stock Option Plan. This document
was filed with the Company's Annual Report on
Form 10-K for the fiscal year ended December 26, 1992
and is incorporated herein by reference.
Exhibit 10(b) - The Company's 1988 Stock Plan and Amendments. This
document was filed with the Company's Annual Report
on Form 10-K for the fiscal year ended December 26, 1992
and is incorporated herein by reference.
Exhibit 10(c) - Valmont Industries, Inc. 1994 Incentive Bonus Plan.
This document was filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended September 24,
1994 and is incorporated herein by reference.
Exhibit 11 - Statement re: Computation of Per Share Earnings
included as Schedule XI of the Consolidated Supporting
Schedules herein.
Exhibit 13 - The Company's Annual Report to Shareholders
for its fiscal year ended December 31, 1994......................Page 56
Exhibit 18 - Letter re: Change in Accounting Principle................Page 92
Exhibit 21 - Subsidiaries of the Company...............................Page 93
Exhibit 23 - Consent of KPMG Peat Marwick..............................Page 94
Exhibit 24 - Power of Attorney.........................................Page 95
Exhibit 27 - Financial Data Schedule...................................Page 96
Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with
respect to Valmont Industries' long-term debt are not filed with this
Form 10-K. Valmont will furnish a copy of such long-term debt agreements
to the Securities and Exchange Commission upon request.
Management contracts and compensatory plans are set forth as exhibits
10(a), 10(b) and 10(c).
13
Exhibit 3(a)
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF VALMONT
INDUSTRIES, INC. FILED IN THIS OFFICE ON THE SECOND DAY OF
AUGUST, A.D. 1974, AT 10 O'CLOCK A.M.
Michael Harkins, Secretary of State
AUTHENTICATION: |2631674
DATE: 04/25/1990
14
ARTICLES OF INCORPORATION
OF
VALMONT INDUSTRIES, INC.
The undersigned, a natural person of the age of 21
years or more, acting as an incorporator of a corporation
under the General Corporation Law of the State of Delaware,
adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
NAME
----
The name of the corporation is Valmont Industries, Inc.
ARTICLE II
DURATION
---------
The period of the corporation's duration is perpetual.
ARTICLE III
PURPOSES
---------
The purposes for which this corporation is organized
are:
(a) To purchase, own, hold, sell, manage,
manufacture, produce, process, distribute, equip, install,
service, import, export, and otherwise deal in personal
property of whatsoever nature and kind, including but not
limited to: farm equipment and machinery, irrigation
systems and equipment, light poles, steel pipe, mechanical
tubing, tapered tubes and tubular products.
(b) To purchase, lease, acquire, hold, use, own,
improve, develop, rent, sell, mortgage, pledge, convey,
dispose of and exchange in any manner deemed expedient, real
and personal property, either or both, including equipment
and machinery of all types, or any rights, interests or
estates therein, as a part of the principal of the business
of the corporation, or in connection with the transaction of
the business of the corporation or incidental, necessary,
convenient or useful thereto.
15
(c) To make, develop, import, compound, purchase,
or otherwise act, deal in and deal with, use, sell,
exchange, export or otherwise dispose of protective coatings
and linings of every kind and character and to perform
contracting and engineering work and service incidental to
the conduct of such business.
(d) To purchase or otherwise acquire letters
patent, concessions, licenses, inventions, rights, and
privileges subject to royalty or otherwise and either
exclusive, nonexclusive or limited; or any part in any such
letters patent, concessions, licenses, inventions, rights,
and privileges either in the United States or in any other
part of the world. To sell, lease, or grant any patent
rights, concessions, licenses, inventions, rights or
privileges belonging to the company or which it may acquire
or any interest in the same.
(e) To register any patent or patents for any
invention or inventions or obtain exclusive or other
privileges in respect of the same, in any part of the world,
and to apply for, exercise, use or otherwise deal with any
patent rights, concessions, mono-policies or other rights or
privileges within the United States or in any other part of
the world.
(f) To purchase, acquire, apply for, secure,
hold, or own any and all copyrights, trademarks, trade
names, and distinctive marks; and to license, lease, or
otherwise authorize the use thereof by other persons, firms,
or corporations.
(g) To acquire by purchase, subscription,
contract or otherwise, and to hold, own, vote, sell,
exchange, mortgage, pledge or otherwise dispose of, or turn
to account or realize upon and generally deal in and with,
the stocks and securities of this corporation or any other
corporation or any political or corporate entity, including,
but not by way of limitation, securities issued by any
government, state, county, municipality, school district,
drainage district or any division or subdivision thereof,
and to do all things permitted by law for the preservation,
protection, improvement or enhancement of the value of such
stocks and securities or other obligations, including the
right to vote thereon.
(h) To endorse or guarantee the payment of the
principal and interest or dividends upon stocks, bonds,
obligations or other securities or evidences of
indebtedness, and to guarantee the performance of contracts
or other undertakings of any corporation, association,
syndicate, individual or others or of any country, nation or
governmental or political authority in which this
corporation may be or become interested.
16
(i) To lend money and extend credit, with or
without security, to any corporation, association,
syndicate, partnership, joint venture, individual or others.
(j) To cause to be formed, merged or reorganized
or liquidated, and to promote, take charge of, manage and
aid in any way permitted by law the formation, merger,
liquidation or reorganization of any corporation, joint
venture, combination, entity or association, domestic or
foreign.
(k) To purchase, lease, hire or otherwise
acquire, hold, own, construct, erect, improve, manage and
operate, and to aid and subscribe toward the acquisition,
construction or improvement of plants, mills, factories,
works, buildings, machinery, equipment, and facilities, and
any other property or appliances which may appertain to or
be useful in the conduct of the business of the corporation.
(l) To purchase or otherwise acquire or hold any
part of the good will, rights, property, and business of any
person, firm, association or corporation heretofore or
hereafter engaged in any business similar to the business
which the corporation has the power to conduct and to hold,
utilize, enjoy and in any manner dispose of the whole or any
part of the rights, property and business so acquired, and
to assume in connection therewith any liabilities of any
such person, firm, association or corporation.
(m) To issue shares of its stock of any class in
the manner permitted by law and to borrow or raise money for
any of the purposes of the corporation, and to issue bonds,
debentures, notes or other obligations of any nature and in
any manner permitted by law, for money so borrowed or in
payment for property purchased or for any other lawful
purposes, and to secure the payment thereof and of the
interest thereon by mortgage upon or pledge or conveyance or
assignment in trust of the whole or any part of the property
of this corporation, real or personal, including contract
rights, whether at the time owned or thereafter acquired;
and to sell, pledge, discount, or otherwise dispose of such
stock, bonds, notes or other obligations of the corporation
for any of its corporate purposes.
(n) To engage in any commercial, industrial,
agricultural or other type of enterprise calculated or
designed to be profitable for this corporation and in
conformity with the laws of the State of Delaware.
17
(o) To do everything necessary, proper, advisable
and convenient for the accomplishment of the purposes
hereinabove set forth and to do all other things incidental
thereto or connected therewith which are not forbidden by
the laws of the State of Delaware, or by these Articles of
Incorporation.
(p) To carry out all or any part of the aforesaid
purposes and to conduct its business in all or any of its
branches, and to maintain offices and agencies in any or all
states, territories, districts, colonies, possessions or
dependencies of the United States of America and in foreign
countries.
It is the intention that the objects and purposes
specified in the foregoing clauses of this Article shall not
be in any wise limited or restricted by reference to or
inference from the terms of any other clause of this or any
other Articles in these Articles of Incorporation, but that
the objects and purposes specified in each of the clauses of
this Article shall be regarded as independent objects and
purposes. It is also the intention that said clauses be
constructed both as purposes and powers; and generally, that
the corporation shall be authorized to exercise and enjoy
all other powers, rights, and privileges granted to or
conferred upon a corporation of this character by the laws
of the State of Delaware, and the enumeration of certain
powers as herein specified is not intended as exclusive of
or as waiver of any of the powers, rights or privileges
granted or conferred by the laws of said State, now or
hereinafter in force.
ARTICLE IV
AUTHORIZED SHARES
------------------
The capital stock of said corporation shall be Six
Million Dollars ($6,000,000.00) divided into five million
(5,000,000) shares of common stock of a par value of One
Dollar ($1.00) per share and one million (1,000,000) shares
of series preferred stock of a par value of One Dollar
($1.00) per share (hereinafter called the "series preferred
stock").
The designations, preferences and relative
participating optional or other special rights and
qualifications, limitations, restrictions, voting powers and
privileges of each class of the corporation's capital stock
shall be as follows:
I. SERIES PREFERRED STOCK
1. The series preferred stock may be issued in such
one or more series as shall from time to time be created and
authorized to be issued by the Board of Directors as
hereinafter provided:
18
(a) The Board of Directors is hereby expressly
authorized by resolution or resolutions from time to time
adopted providing for the issuance of series preferred stock
to the extent not fixed by the provisions hereinafter set
forth or otherwise provided by law, to determine that any
series of the series preferred stock shall be without voting
powers and to fix and state the voting powers full or
limited, if any, the designations, powers, preferences, and
relative participating optional or other special rights, if
any, of the shares of each series of series preferred stock
and the qualifications, limitations and restrictions thereof
including (but without limiting the generality of the
foregoing) any of the following with respect to which the
Board of Directors shall determine to make affirmative
provisions:
i) The number of shares to constitute such series and the
distinctive name and serial designation thereof;
ii) The annual dividend rate or rates and the date on
which the first dividend on shares of such series shall be
payable and all subsequent dividend payment dates;
iii) Whether dividends are to be cumulative or
noncumulative, the participating or other special rights, if
any, with respect to the payment of dividends and the date
from which dividends on all shares of such series issued
prior to the record date for the first dividend shall be
cumulative;
iv) Whether any series shall be subject to redemption and,
if so, the manner of redemption and the redemption price or
prices for such series which may consist of a redemption
price or scale of redemption prices applicable only to
redemption for a sinking fund (which term as used in this
clause shall include any fund or provision for the periodic
purchase or retirement of shares), and a different
redemption price or scale of redemption prices applicable to
any other redemption;
19
v) The amount or amounts of preferential or other payment
to which any series is entitled over any other series or
class or over the common stock on voluntary or involuntary
liquidation, dissolution or winding up;
vi) Whether or not the shares of such series shall be
subject to the operation of a purchase, retirement or
sinking funds, and if so, whether such purchase, retirement
or sinking funds shall be cumulative or noncumulative, the
extent to and the manner in which such funds shall be
applied to the purchase or redemption of the shares of such
series, for retirement or for other corporate purposes, and
the terms and provisions relative to the operation thereof
and the extent to which the charges therefor are to have
priority over the payment of dividends on any other series
or class or the common stock;
vii) The terms, if any, upon which shares of such series
shall be convertible into or exchangeable for or shall have
rights to purchase or other privileges to acquire shares of
stock of any other class or classes or of any other series
of the same or any other class or classes including the
price or prices or the rate or rates of conversion,
exchange, purchase or acquisition and the terms of
adjustment, if any;
viii) The limitations and restrictions, if any, to be
effective while any shares of such series are outstanding
upon the payment of dividends or making of other
distributions on and upon the purchase, redemption or other
acquisition of the common stock or any other series or class
or classes of stock of the corporation ranking junior to the
shares of such series either as to dividends or upon
liquidation;
ix) The conditions or restrictions, if any, upon the
creation of indebtedness of the corporation or upon the
issue of any additional stock (including additional shares
of such series or of any other series or of any other class,
ranking on a parity with or prior to the shares of such
series either as to dividends or upon liquidation.
20
2. Each share of each series of series preferred
stock shall have the same relative rights and be identical
in all respects with all the other shares of the same
series, except that shares of any one series issued at
different times may differ as to the dates, if any, from
which dividends thereon shall be cumulative. Except as
otherwise specified in this Article Fourth any series may
differ from any other series with respect to any one or more
of the voting powers, designations, powers, preferences and
relative, participating, optional and other special rights,
if any, and the qualifications, limitations and restrictions
thereof. Except where otherwise set forth in the resolution
or resolutions adopted by the Board of Directors providing
for the issue of any series of series preferred stock, the
number of shares comprising such series may be increased or
decreased (but not below the number of shares then
outstanding) from time to time by like action of the Board
of Directors.
3. Before any dividends on any other series or class
or classes of stock of the corporation ranking junior to any
series of the series preferred stock (other than dividends
payable in shares of any series or class or classes of stock
of the corporation ranking junior to such series of the
series preferred stock) shall be declared or paid or set
apart for payment, the holders of shares of such senior
series of series preferred stock shall be entitled to such
cash dividends, but only when and as declared by the Board
of Directors out of funds legally available therefor, as
they may be entitled to in accordance with the resolution or
resolutions adopted by the Board of Directors providing for
the issue of such series, payable on such dates as may be
fixed in such resolution or resolutions. Such dividends
shall be cumulative only if and to the extent set forth in
such resolution or resolutions.
4. In the event of any liquidation, dissolution or
winding up of the corporation, whether voluntary or
involuntary, before any payment or distribution of the
assets of the corporation shall be made to or set apart for
the holders of shares of any class or classes of stock of
the corporation ranking junior to the series preferred
stock, the holders of the shares of each series of the
series preferred stock shall be entitled to receive payment
of the amount per share fixed in the resolution or
resolutions adopted by the Board of Directors providing for
the issuance of the shares of such series, plus an amount
equal to all dividends accrued thereon to the date of final
distribution to such holders. If, upon any liquidation,
dissolution or winding up of the corporation, the assets of
the corporation, or proceeds thereof, distributable among
the holders of the shares of the series preferred stock
shall be insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall
be distributed among such holders ratably in accordance with
21
the respective amounts which would be payable on such shares if
all amounts payable thereon were paid in full unless
otherwise expressly provided in the resolution or
resolutions establishing any such series. For the purposes
of this paragraph, the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property
or assets of the corporation or a consolidation or merger of
the corporation with one or more corporations shall not be
deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary.
5. The term "junior stock", as used in relation to
the series preferred stock, shall mean the common stock and
any other class or series of stock of the corporation
hereafter authorized which by its term shall rank junior to
the series preferred stock as to dividends and as to the
distribution of assets on liquidation.
6. Before the corporation shall issue any shares of
series preferred stock of any series authorized as
hereinbefore provided, a certificate setting forth a copy of
the resolution or resolutions with respect to such series
adopted by the Board of Directors of the corporation
pursuant to the foregoing authority vested in said Board
shall be made, filed and recorded in accordance with the
then applicable requirements, if any, of the laws of the
State of Delaware, or, if no certificate is then so
required, such certificate shall be signed and acknowledged
on behalf of the corporation by its President or a Vice-
President and its corporate seal shall be affixed thereto
and attested by its Secretary or an Assistant Secretary and
such certificate shall be filed and kept on file at the
registered office of the corporation in the State of
Delaware and in such other place or places as the Board of
Directors shall designate.
7. Shares of any series of series preferred stock
which shall be issued and thereafter acquired by the
corporation through purchase, redemption, conversion or
otherwise, shall return to the status of authorized but
unissued series preferred stock of the same series unless
otherwise provided in the resolution or resolutions of the
Board of Directors. Unless otherwise provided in the
resolution or resolutions of the Board of Directors
providing for the issue thereof, the number of authorized
shares of stock of any such series may be increased or
decreased (but not below the number of shares thereof then
outstanding) by resolution or resolutions of the Board of
Directors and the filing of a certificate complying with the
requirements referred to in subparagraph 6. above. In case
the number of shares of any such series of series preferred
stock shall be decreased, the shares representing such
decrease shall, unless otherwise provided in the resolution
22
or resolutions of the Board of Directors providing for the
issuance thereof, resume the status of authorized but
unissued series preferred stock, undesignated as to series.
II. COMMON STOCK
1. Except as otherwise required by law and the
provisions of this certificate of incorporation and except
as provided by the resolution or resolutions of the Board of
Directors creating or amending any series of the series
preferred stock, the holders of the common stock of the
corporation shall possess full voting power for the election
of directors and for all other purposes and each holder
thereof shall be entitled to one vote for each share held by
such holder.
2. Subject to all of the rights of the series
preferred stock or any series thereof, the holders of the
common stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally
available therefor, dividends payable in cash, stock or
otherwise.
3. Upon any liquidation, dissolution or winding up of
the corporation, whether voluntary or involuntary, and after
the holders of the series preferred stock of each series
shall have been paid in full the amounts to which they
respectively shall be entitled, or a sum sufficient for such
payment in full shall have been set aside, the remaining net
assets of the corporation shall be distributed pro rata to
the holders of the common stock in accordance with their
respective rights and interest, to the exclusion of the
holders of the series preferred stock.
ARTICLE V
INITIAL REGISTERED OFFICE AND INITIAL REGISTERED AGENT
-------------------------------------------------------
The street address of the initial registered office of
the corporation is 100 West 10th Street, Wilmington, County
of New Castle, Delaware 19801. The name of its initial
registered agent at such address is The Corporation Trust
Company.
ARTICLE VI
INCORPORATOR
-------------
The name and address of the incorporate is:
Robert V. Dwyer, Jr. 1601 Woodmen Tower
Omaha, Nebraska 68102
23
ARTICLE VII
POWERS
-------
The following provisions are inserted for the
management of the business and for the conduct of the
affairs of the corporation, and it is expressly provided
that they are intended to be in furtherance and not in
limitation or exclusion of the powers conferred by the
statutes of the State of Delaware.
(a) The number of directors of the corporation
shall be fixed from time to time by, or in the manner
provided in, the By-Laws.
(b) The Board of Directors shall have power from
time to time to fix and to determine and vary the amount of
the working capital of the corporation and to direct and
determine the use and disposition of any surplus or net
profits over and above the capital as determined pursuant
to, and subject to, the provisions of the General
Corporation Law of Delaware; and in its discretion the Board
of Directors may use and apply any such surplus or
accumulated profits in purchasing or acquiring bonds,
debentures, notes, or other obligations or securities of the
corporation or shares of its own stock of any class so far
as may be permitted by law, to such extent and in such
manner and upon such terms as the Board of Directors shall
deem expedient, but any such bonds, debentures, notes,
obligations, securities or stock so purchased or acquired
(together with any stock or securities acquired in
satisfaction of a debt or otherwise), may be resold.
Nothing herein contained, however, shall be held to limit
the general power of the corporation to apply any other
funds or assets to the purchase or acquisition or retirement
of its stock, bonds, debentures, notes or other obligations
or securities.
(c) The Board of Directors, subject to the
applicable provisions of the General Corporation Law of
Delaware, may from time to time determine whether and to
what extent, and at what times and places and under what
conditions and regulations the accounts and books of the
corporation or any of them shall be open to the inspection
of the stockholders; and no stockholder shall have any right
to inspect any account, book or document of the corporation,
except as conferred by law or as authorized by the Board of
Directors or by resolution of the stockholders.
24
(d) The books of the corporation may be kept
within or without the State of Delaware at such place or
places as may be designated from time to time by the Board
of Directors. Elections of directors need not be by written
ballot unless the By-Laws of the corporation shall so
provide.
(e) The Board of Directors may authorized and
cause to be executed mortgages, deeds of trust, pledges and
liens upon the real and personal property of the
corporation, without limitation as to amount or otherwise.
(f) The Board of Directors may make, alter or
repeal the By-Laws of the corporation except as otherwise
provided therein.
(g) The Board of Directors may determine, from
time to time, the amount of compensation which shall be paid
to its members. The Board shall also have power, in its
discretion, to provide for and to pay directors rendering
unusual or exceptional services to the corporation special
compensation appropriate to the value of such services as
determined by the Board of Directors from time to time.
(h) In addition to the powers and authorities
hereinbefore or by statute expressly conferred upon it, the
Board of Directors is hereby empowered to exercise all such
powers and to do all such acts and things as may be
exercised or done by the corporation; subject, nevertheless,
to the provisions of the statutes of Delaware, of this
certificate of incorporation and of any By-Laws from time to
time made by the stockholders; provided, however, that no By-
Laws so made shall invalidate any prior act of the Board of
Directors which would have been valid if such By-Laws had
not been made.
ARTICLE VIII
COMPROMISE OR ARRANGEMENT
--------------------------
Whenever a compromise or arrangement is proposed
between the corporation and its creditors or any class of
them and/or between the corporation and its stockholders or
any class of them, any court of equitable jurisdiction
within the State of Delaware may, on the application in a
summary way of the corporation or of any creditor or
stockholder thereof, or on the application of any receiver
or receivers appointed for the corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or
25
on the application of trustees in dissolution or of any
receiver or receivers appointed for the corporation under
the provisions of Section 279 of Title 8 of the Delaware
Code order a meeting of the creditors or class of creditors,
and/or the stockholders or class of stockholders of the
corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of the corporation, as the case may be, agree
to any compromise or arrangement and to any reorganization
of the corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which
the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the corporation,
as the case may be, and also on the corporation.
ARTICLE IX
INDEMNIFICATION
-----------------
The corporation shall, to the extent required, and may,
to the extent permitted, by Section 145 of the Delaware
General Corporation Law, as amended from time to time,
indemnify and reimburse all persons whom it may indemnify
and reimburse pursuant thereto. Notwithstanding the
foregoing, the indemnification provided for in this Article
IX shall not be deemed exclusive of any other rights to
which those entitled to receive indemnification or
reimbursement hereunder may be entitled under any By-Law of
this corporation, agreement, vote or consent of stockholders
or disinterested directors or otherwise.
ARTICLE X
AMENDMENT
-----------
The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate
of incorporation in the manner now or hereafter prescribed
by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE XI
INITIAL BOARD OF DIRECTORS
----------------------------
The name and mailing address(es) of the persons who are
to serve as directors until the first annual meeting of
stockholders, or until their successors are elected and
qualify, are as follows:
26
Robert B. Daugherty 400 North Elmwood Road
Omaha, Nebraska 68132
Melvin A. Bannister 406 Shorewood Drive
Waterloo, Nebraska 68069
Paul Lienemann 8801 Capitol Avenue
Omaha, Nebraska 68114
Delmer L. Toebben 7520 Oakwood
Ralston, Nebraska 68051
Robert A. Wahl, Jr. 2940 South 101st Street
Omaha, Nebraska 68124
ROBERT V. DWYER, JR., INCORPORATOR
STATE OF NEBRASKA )
SS
COUNTY OF DOUGLAS )
Before me, the undersigned a Notary Public, in and for
the County and State aforesaid, personally came Robert V.
Dwyer, Jr., party to the foregoing Articles of
Incorporation, known to me personally to be such and he
acknowledged that he executed the foregoing Articles of
Incorporation and that the execution of the same was his
voluntary act and deed and that the facts stated therein are
true to the best of his knowledge and belief.
DATED July 19, 1974.
Virginia A. Bell
Notary Public
27
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF VALMONT
INDUSTRIES, INC. FILED IN THIS OFFICE ON THE FIFTH DAY OF
JUNE, A.D. 1975, AT 9 O'CLOCK A.M.
Michael Harkins, Secretary of State
AUTHENTICATION: |2631677
DATE: 04/25/1990
28
CERTIFICATE OF AMENDMENT
of the
ARTICLES OF INCORPORATION
of
VALMONT INDUSTRIES, INC.
A Delaware Corporation
Pursuant to Section 242 of the General Corporation Law
of the State of Delaware, Valmont Industries, Inc., a
corporation organized and existing under the laws of the
State of Delaware, hereby certifies:
FIRST: The Directors of the Corporation on March 21,
1975, declared it advisable that the company amend its
Articles of Incorporation in the manner set forth below and
directed that the consideration of the amendment be
considered by the stockholders at the next annual meeting of
the stockholders scheduled for April 25, 1975. Such meeting
of stockholders was held on April 25, 1975, at Valley,
Nebraska, pursuant to notice given in accordance with
Section 222 of the General Corporation Law of the State of
Delaware, which notice set forth the amendment in a brief
summary form. At the meeting of stockholders, a majority of
the outstanding stock entitled to vote on the amendment
voted in favor thereof and a majority of the outstanding
stock of each class entitled to vote upon the amendment
voted in favor thereof.
The following amendment has been duly adopted by the
stockholders of the corporation pursuant to the section set
out above:
ARTICLE IV
AUTHORIZED SHARES
-------------------
The capital stock of said corporation shall be Three
Million Five Hundred Thousand Dollars ($3,500,000.00)
divided into three million (3,000,000) shares of common
stock of a par value of One Dollar ($1.00) per share, and
five hundred thousand (500,000) shares of series preferred
stock of a par value of One Dollar ($1.00) per share
(hereinafter called the "series preferred stock").
The designations, preferences and relative
participating optional or other special rights and
qualifications, limitations, restrictions, voting powers and
privileges of each class of the corporation's capital stock
shall be as follows:
29
I. SERIES PREFERRED STOCK
1. The series preferred stock may be issued in such
one or more series as shall from time to time be created and
authorized to be issued by the Board of Directors as
hereinafter provided:
(a) The Board of Directors is hereby expressly
authorized by resolution or resolutions from time to time
adopted providing for the issuance of series preferred stock
to the extent not fixed by the provisions hereinafer set
forth or otherwise provided by law, to determine that any
series of the series preferred stock shall be without voting
powers and to fix and state the voting powers full or
limited, if any, the designations, powers, preferences, and
relative participating optional or other special rights, if
any, of the shares of each series or series preferred stock
and the qualifications, limitations and restrictions thereof
including (but without limiting the generality of the
foregoing) any of the following with respect to which the
Board of Directors shall determine to make affirmative
provisions:
(i) The number of shares to constitute such
series and the distinctive name and serial designation
thereof;
(ii) The annual dividend rate or rates and
the date on which the first dividend on shares of such
series shall be payable and all subsequent dividend payment
dates;
(iii) Whether dividends are to be cumulative
or noncumulative, the participating or other special rights,
if any, with respect to the payment of dividends and the
date from which dividends on all shares of such series
issued prior to the record date for the first dividend shall
be cumulative;
(iv) Whether any series shall be subject to
redemption and, if so, the manner of redemption and the
redemption price or prices for such series which may consist
of a redemption price or scale of redemption prices
applicable only to redemption for a sinking fund (which term
30
as used in this clause shall include any fund or provision
for the periodic purchase or retirement of shares), and a
different redemption price or scale of redemption prices
applicable to any other redemption;
(v) The amount or amounts of preferential or
other payment to which any series is entitled over any other
series or class or over the common stock on voluntary or
involuntary liquidation, dissolution or winding up;
(vi) Whether or not the shares of such series
shall be subject to the operation of a purchase, retirement
or sinking funds, and if so, whether such purchase,
retirement or sinking funds shall be cumulative or
noncumulative, the extent to and the manner in which such
funds shall be applied to the purchase or redemption of the
shares of such series, for retirement or for other corporate
purposes, and the terms and provisions relative to the
operation thereof and the extent to which the charges
therefor are to have priority over the repayment of
dividends on any other series or class or the common stock;
(vii) The terms, if any, upon which shares of
such series shall be convertible into or exchangeable for or
shall have rights to purchase or other privileges to acquire
shares of stock of any other class or classes or of any
other series of the same or any other class or classes
including the price or prices or the rate or rates of
conversion, exchange, purchase or acquisition and the terms
of adjustment, if any;
(viii) The limitations and restrictions, if
any, to be effective while any shares of such series are
outstanding upon the payment of dividends or making of other
distributions on and upon the purchase, redemption or other
acquisition of the common stock or any other series or class
or classes of stock of the corporation ranking junior to the
shares of such series either as to dividends or upon
liquidation;
(ix) The conditions or restrictions, if any,
upon the creation of indebtedness of the corporation or upon
31
the issue of any additional stock (including additional
shares of such series or of any other series or of any other
class, ranking on a parity with or prior to the shares of
such series either as to dividends or upon liquidation.
2. Each share of each series of series preferred
stock shall have the same relative rights and be identical
in all respects with all the other shares of the same
series, except that shares of any one series issued at
different times may differ as to the dates, if any, from
which dividends thereon shall be cumulative. Except as
otherwise specified in this ARTICLE IV, any series may
differ from any other series with respect to any one or more
of the voting powers, designations, powers, preferences and
relative, participating, optional and other special rights,
if any, and the qualifications, limitations and restrictions
thereof. Except where otherwise set forth in the resolution
or resolutions adopted by the Board of Directors providing
for the issue of any series of series preferred stock, the
number of shares comprising such series may be increased or
decreased (but not below the number of shares then
outstanding) from time to time by like action of the Board
of Directors.
3. Before any dividends on any other series or class
or classes of stock of the corporation ranking junior to any
series of the series preferred stock (other than dividends
payable in shares of any series or class or classes of stock
of the corporation ranking junior to such series of the
series preferred stock) shall be declared or paid or set
apart for payment, the holders of shares of such senior
series of series preferred stock shall be entitled to such
cash dividends, but only when and as declared by the Board
of Directors out of funds legally available therefor, as
they may be entitled to in accordance with the resolution or
resolutions adopted by the Board of Directors providing for
the issue of such series, payable on such dates as may be
fixed in such resolution or resolutions. Such dividends
shall be cumulative only if and to the extent set forth in
such resolution or resolutions.
4. In the event of any liquidation, dissolution or
winding up of the corporation, whether voluntary or
involuntary, before any payment or distribution of the
assets of the corporation shall be made to or set apart for
the holders of shares of any class or classes of stock of
the corporation ranking junior to the series preferred
stock, the holders of the shares of each series of the
series preferred stock shall be entitled to receive payment
of the amount per share fixed in the resolution or
resolutions adopted by the Board of Directors providing for
the issuance of the shares of such series, plus an amount
32
equal to all dividends accrued thereon to the date of final
distribution to such holders. If, upon any liquidation,
dissolution or winding up of the corporation, the assets of
the corporation, or proceeds thereof, distributable among
the holders of the shares of series preferred stock shall be
insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall
be distributed among such holders ratably in accordance with
the respective amounts which would be payable on such shares
if all amounts payable thereon were paid in full unless
otherwise expressly provided in the resolution or
resolutions establishing any such series. For the purposes
of this paragraph, the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property
or assets of the corporation or a consolidation or merger of
the corporation with one or more corporations shall not be
deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary.
5. The term "junior stock", as used in relation to
the series preferred stock, shall mean the common stock and
any other class or series of stock of the corporation
hereafter authorized which by its term shall rank junior to
the series preferred stock as to dividends and as to the
distribution of assets on liquidation.
6. Before the corporation shall issue any shares of
series preferred stock of any series authorized as
hereinbefore provided, a certificate setting forth a copy of
the resolution or resolutions with respect to such series
adopted by the Board of Directors of the corporation
pursuant to the foregoing authority vested in said Board
shall be made, filed and recorded in accordance with the
then applicable requirements, if any, of the laws of the
State of Delaware, or, if no certificate is then so
required, such certificate shall be signed and acknowledged
on behalf of the corporation by its President or a Vice
President and its corporate seal shall be affixed thereto
and attested by its Secretary or an Assistant Secretary and
such certificate shall be filed and kept on file at the
registered office of the corporation in the State of
Delaware and in such other place or places as the Board of
Directors shall designate.
7. Shares of any series of series preferred stock
which shall be issued and thereafter acquired by the
corporation through purchase, redemption, conversion or
otherwise, shall return to the status of authorized but
unissued series preferred stock of the same series unless
otherwise provided in the resolution or resolutions of the
Board of Directors. Unless otherwise provided in the
resolution or resolutions of the Board of Directors. Unless
otherwise provided in the resolution or resolutions of the
Board of Directors providing for the issue thereof, the
number of authorized shares of stock of any such series may
33
be increased or decreased (but not below the number of
shares thereof then outstanding) by resolution or
resolutions of the Board of Directors and the filing of a
certificate complying with the requirements referred to in
subparagraph 6 above. In case the number of shares of any
such series of series preferred stock shall be decreased,
the shares representing such decrease shall, unless
otherwise provided in the resolution or resolutions of the
Board of Directors providing for the issuance thereof,
resume the status of authorized but unissued series
preferred stock, undesignated as to series.
II. COMMON STOCK
1. Except as otherwise required by law and the
provisions of this certificate of incorporation and except
as provided by the resolution or resolutions of the Board of
Directors creating or amending any series of the series
preferred stock, the holders of the common stock of the
corporation shall possess full voting power for the election
of directors and for all other purposes and each holder
thereof shall be entitled to one vote for each share held by
such holder.
2. Subject to all of the rights of the series
preferred stock or any series thereof, the holders of the
common stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally
available therefor, dividends payable in cash, stock or
otherwise.
3. Upon any liquidation, dissolution or winding up of
the corporation, whether voluntary or involuntary, and after
the holders of the series preferred stock of each series
shall have been paid in full the amounts to which they
respectively shall be entitled, or a sum sufficient for such
payment in full shall have been set aside, the remaining net
assets of the corporation shall be distributed pro rata to
the holders of the common stock in accordance with their
respective rights and interest, to the exclusion of the
holders of the series preferred stock.
Robert B. Daugherty, President
Paul Lienemann, Secretary
STATE OF NEBRASKA)
ss
COUNTY OF DOUGLAS)
Before me, the undersigned, a Notary Public in and for
34
the County and State aforesaid, personally came Robert B.
Daugherty and Paul Lienemann, the parties designated above
as President and Secretary of Valmont Industries, Inc., and
personally known to me to be such, and they acknowledge that
they executed the foregoing Certificate of Amendment to the
Articles of Incorporation and that the execution of the same
was their voluntary act and deed and the facts stated
therein are true to the best of their knowledge and belief.
Dated this 7th day of May, 1975.
Virginia A. Bell
Notary Public
35
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF VALMONT
INDUSTRIES, INC. FILED IN THIS OFFICE ON THE TWENTY-FIFTH
DAY OF SEPTEMBER, A.D. 1981, AT 10 O'CLOCK A.M.
Michael Harkins, Secretary of State
AUTHENTICATION: |2631680
DATE: 04/25/1990
36
CERTIFICATE OF AMENDMENT
TO CERTIFICATE OF INCORPORATION
OF
VALMONT INDUSTRIES, INC.
Pursuant to Section 242 of the General Corporation Law
of the State of Delaware, Valmont Industries, Inc., a
corporation organized and existing under the laws of the
State of Delaware, does hereby certify:
FIRST: The Certificate of Incorporation for Valmont
Industries, Inc. has been filed in the office of the
Delaware Secretary of State.
SECOND: At a special meeting of the stockholders of
the company, held on September 23, 1981, an amendment to
Article IV of the Certificate of Incorporation was duly
adopted in accordance with the provisions of Section 242 of
the Delaware General Corporation law; the amendment so
adopted is set forth on Exhibit A attached hereto and by
this reference made a part hereof.
IN WITNESS WHEREOF, said Valmont Industries, Inc., a
Delaware corporation, has caused this Certificate to be
signed by its Chairman and its Secretary this 23rd day of
September, 1981.
Valmont Industries, Inc.
A Delaware Corporation
By
Robert B. Daugherty, Chairman
Attest:
J. Lee Salmans, Secretary
37
Exhibit A
ARTICLE IV
AUTHORIZED SHARES
-------------------
The capital stock of said corporation shall be six
million five hundred thousand dollars ($6,500,000) divided
into six million (6,000,000) shares of common stock of a par
value of one dollar ($1.00) per share, and five hundred
thousand (500,000) shares of series preferred stock of a par
value of one dollar ($1.00) per share (hereinafter called
the "series preferred stock").
The designations, preferences and relative
participating optional or other special rights and
qualifications, limitations, restrictions, voting powers and
privileges of each class of the corporation's capital stock
shall be as follows:
I. SERIES PREFERRED STOCK
1. The series preferred stock may be issued in such
one or more series as shall from time to time be created and
authorized to be issued by the Board of Directors as
hereinafter provided:
(a) The Board of Directors is hereby expressly
authorized by resolution or resolutions from time to time
adopted providing for the issuance of series preferred stock
to the extent not fixed by the provisions hereinafter set
forth or otherwise provided by law, to determine that any
series of the series preferred stock shall be without voting
powers and to fix and state the voting powers full or
limited, if any, the designations, powers, preferences and
relative participating optional or other special rights, if
any, of the shares of each series or series preferred stock
and the qualifications, limitations and restrictions thereof
including (but without limiting the generality of the
foregoing) any of the following with respect to which the
Board of Directors shall determine to make affirmative
provisions:
(i) The number of shares to constitute such
series and the distinctive name and serial designation
thereof;
38
(ii) The annual dividend rate or rates and
the date on which the first dividend on shares of such
series shall be payable and all subsequent dividend payment
dates;
(iii) Whether dividends are to be cumulative
or non-cumulative, the participating or other special
rights, if any, with respect to the payment of dividends and
the date from which dividends on all shares of such series
issued prior to the record date for the first dividend shall
be cumulative;
(iv) Whether any series shall be subject to
redemption and, if so, the manner of redemption and the
redemption price or prices for such series which may consist
of a redemption price or scale of redemption prices
applicable only to redemption for a sinking fund (which term
as used in this clause shall include any fund or provision
for the periodic purchase or retirement of shares), and a
different redemption price or scale of redemption prices
applicable to any other redemption;
(v) The amount or amounts of preferential or
other payment to which any series is entitled over any other
series or class or over the common stock on voluntary or
involuntary liquidation, dissolution or winding up;
(vi) Whether or not the shares of such series
shall be subject to the operation of a purchase, retirement
or sinking funds, and if so, whether such purchase,
retirement or sinking funds shall be cumulative or non-
cumulative, the extent to and the manner in which such funds
shall be applied to the purchase or redemption of the shares
of such series, for retirement or for other corporate
purposes, and the terms and provisions relative to the
operation thereof and the extent to which the charges
therefor are to have priority over the payment of dividends
on any other series or class or the common stock;
(vii) The terms, if any, upon which shares of
such series shall be convertible into or exchangeable for or
shall have rights to purchase or other privileges to acquire
shares of stock of any other class or classes or of any
other series of the same or any other class or classes
39
including the price or prices or the rate or rates of
conversion, exchange, purchase or acquisition and the terms
of adjustment, if any;
(viii) The limitations and restrictions, if
any, to be effective while any shares of such series are
outstanding upon the payment of dividends or making of other
distributions on and upon the purchase, redemption or other
acquisition of the common stock or any other series or class
or classes of stock of the corporation ranking junior to the
shares of such series either as to dividends or upon
liquidation;
(ix) The conditions or restrictions, if any,
upon the creation of indebtedness of the corporation or upon
the issue of any additional stock, including additional
shares of such series or of any other series or of any other
class, ranking on a parity with or prior to the shares of
such series either as to dividends or upon liquidation.
2. Each share of each series of series preferred
stock shall have the same relative rights and be identical
in all respects with all the other shares of the same
series, except that shares of any one series issued at
different times may differ as to the dates, if any, from
which dividends thereon shall be cumulative. Except as
otherwise specified in this ARTICLE IV, any series may
differ from any other series with respect to any one or more
of the voting powers, designations, powers, preferences and
relative, participating, optional and other special rights,
if any, and the qualifications, limitations and restrictions
thereof. Except where otherwise set forth in the resolution
or resolutions adopted by the Board of Directors providing
for the issue of any series of series preferred stock, the
number of shares comprising such series may be increased or
decreased (but not below the number of shares then
outstanding) from time to time by like action of the Board
of Directors.
3. Before any dividends on any other series or class
or classes of stock of the corporation ranking junior to any
series of the series preferred stock (other than dividends
payable in shares of any series or class or classes of stock
of the corporation ranking junior to such series of the
series preferred stock) shall be declared or paid or set
apart for payment, the holders of shares of such senior
series of series preferred stock shall be entitled to such
cash dividends, but only when and as therefor, as they may
be entitled to in accordance with the resolution or
resolutions adopted by the Board of Directors providing for
the issue of such series, payable on such dates as may be
fixed in such resolution or resolutions. Such dividends
40
shall be cumulative only if and to the extent set forth in
such resolution or resolutions.
4. In the event of any liquidation, dissolution or
winding up of the corporation, whether voluntary or
involuntary, before any payment or distribution of the
assets of the corporation shall be made to or set apart for
the holders of shares of any class or classes of stock of
the corporation ranking junior to the series preferred
stock, the holders of the shares of each series of the
series preferred stock shall be entitled to receive payment
of the amount per share fixed in the resolution or
resolutions adopted by the Board of Directors providing for
the issuance of the shares of such series, plus an amount
equal to all dividends, accrued thereon to the date of final
distribution to such holders. If, upon any liquidation,
dissolution or winding up of the corporation, the assets of
the corporation, or proceeds thereof, distributable among
the holders of the shares of series preferred stock shall be
insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall
be distributed among such holders ratably in accordance with
the respective amounts which would be payable on such shares
if all amounts payable thereon were paid in full unless
otherwise expressly provided in the resolution or
resolutions establishing any such series. For the purposes
of this paragraph, the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property
or assets of the corporation or a consolidation or merger of
the corporation with one or more corporations shall not be
deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary.
5. The term "junior stock", as used in relation to
the series preferred stock, shall mean the common stock and
any other class or series of stock of the corporation
hereinafter authorized which by its term shall rank junior
to the series preferred stock as to dividends and as to the
distribution of assets on liquidation.
6. Before the corporation shall issue any shares of
series preferred stock of any series authorized as
hereinbefore provided, a certificate setting forth a copy of
the resolution or resolutions with respect to such series
adopted by the Board of Directors of the corporation
pursuant to the foregoing authority vested in said Board
shall be made, filed and recorded in accordance with the
then applicable requirements, if any, of the laws of the
State of Delaware, or, if no certificate is then so
required, such certificate shall be signed and acknowledged
on behalf of the corporation by its President or Vice
President and its corporate seal shall be affixed thereto
and attested by its Secretary or an Assistant Secretary and
such certificate shall be filed and kept on file at the
registered office of the corporation in the State of
Delaware and in such other place or places as the Board of
Directors shall designate.
41
7. Shares of any series of series preferred stock
which shall be issued and thereafter acquired by the
corporation through purchase, redemption, conversion or
otherwise, shall return to the status of authorized but
unissued series preferred stock of the same series unless
otherwise provided in the resolution or resolutions of the
Board of Directors. Unless otherwise provided in the
resolution or resolutions of the Board of Directors
providing for the issue thereof, the number of authorized
shares of stock of any such series may be increased or
decreased (but not below the number of shares thereof then
outstanding) by resolution or resolutions of the Board of
Directors and the filing of a certificate complying with the
requirements referred to in subparagraph 6 above. In case
the number of shares of any such series of series preferred
stock shall be decreased, the shares representing such
decrease shall, unless otherwise provided in the resolution
or resolutions of the Board of Directors providing for the
issuance thereof, resume the status of authorized but
unissued series preferred stock, undesignated as to series.
II. COMMON STOCK
1. Except as otherwise required by law and the
provisions of this Certificate of Incorporation and except
as provided by the resolution or resolutions of the Board of
Directors creating or amending any series of the series
preferred stock, the holders of the common stock of the
corporation shall possess full voting power for the election
of directors and for all other purposes and each holder
thereof shall be entitled to one vote for each share held by
such holder.
2. Subject to all of the rights of the series
preferred stock or any series thereof, the holders of the
common stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally
available therefor, dividends payable in cash, stock or
otherwise.
3. Upon any liquidation, dissolution or winding up of
the corporation, whether voluntary or involuntary, and after
the holders of the series preferred stock of each series
shall have been paid in full the amounts to which they
respectively shall be entitled, or a sum sufficient for such
payment in full shall have been set aside, the remaining net
assets of the corporation shall be distributed pro rata to
the holders of the common stock in accordance with their
respective rights and interest, to the exclusion of the
holders of the series preferred stock.
42
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THAT THE ABOVE AND FOREGOING IS A
TRUE AND CORRECT COPY OF THE CERTIFICATE OF CHANGE OF
LOCATION OF REGISTERED OFFICE OF THE COMPANIES REPRESENTED
BY "THE CORPORATION TRUST COMPANY", AS IT APPLIES TO
"VALMONT INDUSTRIES, INC.." AS RECEIVED AND FILED IN THIS
OFFICE ON THE TWENTY-SEVENTH DAY OF JULY, A.D. 1984, AT 4:30
O'CLOCK P.M.
Michael Harkins, Secretary of State
AUTHENTICATION: 2631684
DATE: 04/25/1990
43
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF VALMONT
INDUSTRIES, INC. FILED IN THIS OFFICE ON THE SIXTH DAY OF
MAY, A.D. 1987, AT 10 O'CLOCK A.M.
Michael Harkins, Secretary of State
AUTHENTICATION: |2631685
DATE: 04/25/1990
44
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VALMONT INDUSTRIES, INC.
-----------------------------------
VALMONT INDUSTRIES, INC., a corporation organized and
existing under and by virtue of the General Corporation Law
of the State of Delaware, does hereby certify:
FIRST: That at a meeting of the Board of Directors of
VALMONT INDUSTRIES, INC., a resolution was duly adopted
setting forth a proposed Amendment to the Certificate of
Incorporation of said Corporation declaring said Amendment
to be advisable and calling a meeting of the stockholders of
said Corporation for consideration thereof. The resolution
setting forth the proposed Amendment is as follows:
"RESOLVED, that ARTICLE IX of the Certificate of
Incorporation entitled "Indemnification" be amended in its
entirety to read as set forth on Exhibit A attached hereto;
"FURTHER RESOLVED, that the Board of Directors declares
the advisability of adopting the foregoing Amendment to the
Corporation's Certificate of Incorporation and directs that
the Amendment be submitted to stockholders at the next
annual meeting."
SECOND: That thereafter, pursuant to resolution of its
Board of Directors, an annual meeting of the shareholders of
said Corporation was duly called and held, upon notice in
accordance with Section 222 of the General Corporation Law
of the State of Delaware on April 27, 1987, at which meeting
the necessary number of shares as required by statute were
voted in favor of the Amendment.
THIRD: That said Amendment was adopted in accordance
with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said VALMONT INDUSTRIES, INC. has
caused this Certificate to be signed by WILLIAM F. WELSH,
II, its President, and attested by THOMAS P. EGAN, JR., its
Secretary, this 27th day of April, 1987.
ATTEST: VALMONT INDUSTRIES,
INC.
THOMAS P. EGAN, JR. WILLIAM F. WELSH, II,
Secretary President
45
EXHIBIT A
-----------
ARTICLE IX
-----------
INDEMNIFICATION
-----------------
The Corporation shall, to the extent required, and may,
to the extent permitted, by Section 102 and Section 145 of
Delaware General Corporation Law as amended from time to
time, indemnify and reimburse all persons whom it may
indemnify and reimburse pursuant thereto. With respect to
acts or omissions occurring on or after April 27, 1987, no
director shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary
duty as a director, provided, however, that this provision
shall not eliminate or limit the liability of a director (i)
for any breach of the director's duty of loyalty to the
Corporation or its stockholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or
a knowing violation of law; (iii) under Section 174 of the
Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper
personal benefit.
Notwithstanding the foregoing, the indemnification
provided for in this ARTICLE IX shall not be deemed
exclusive of any other rights to which those entitled to
receive indemnification or reimbursement hereunder may be
entitled under any By-Law of this Corporation, agreement,
vote or consent of stockholders or disinterested directors
or otherwise.
46
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF VALMONT
INDUSTRIES, INC. FILED IN THIS OFFICE ON THE EIGHTH DAY OF
AUGUST, A.D. 1988, AT 12 O'CLOCK P.M.
Michael Harkins, Secretary of State
AUTHENTICATION: |2631689
DATE: 04/25/1990
47
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VALMONT INDUSTRIES, INC.
VALMONT INDUSTRIES, INC., a corporation organized and
existing under and by virtue of the General Corporation Law
of the State of Delaware, does hereby certify:
FIRST: That a meeting of the Board of Directors of
VALMONT INDUSTRIES, INC., a resolution was duly adopted
setting forth a proposed Amendment to the Certificate of
Incorporation of said Corporation declaring said Amendment
to be advisable and calling a meeting of the stockholders of
said Corporation for consideration thereof. The resolution
setting forth the proposed Amendment is as follows:
RESOLVED, that it is deemed advisable that the
first paragraph of Article IV of the Corporation's
Certificate of Incorporation be amended to read as follows:
The capital stock of said Corporation shall be
Twelve Million Five Hundred Thousand Dollars ($12,500,000)
divided into Twelve Million (12,000,000) shares of common
stock of a par value of One Dollar ($1.00) per share and
Five Hundred Thousand (500,000) shares of series preferred
stock of a par value of One Dollar ($1.00) per share
(hereinafter called the "series preferred stock").
SECOND: That thereafter, pursuant to resolution of its
Board of Directors, a special meeting of the stockholders of
said Corporation was duly called and held, upon notice in
accordance with Section 222 of the General Corporation Law
of the State of Delaware on August 8, 1988, at which meeting
the necessary number of shares as required by statute were
voted in favor of the Amendment.
THIRD: That said Amendment was adopted in accordance
with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
48
IN WITNESS WHEREOF, said VALMONT INDUSTRIES, INC. has
caused this Certificate to be signed by WILLIAM F. WELSH II,
its President, and attested by THOMAS P. EGAN, JR., its
Secretary, this 8th day of August, 1988.
VALMONT INDUSTRIES, INC.
BY:
WILLIAM F. WELSH II
President
ATTEST:
THOMAS P. EGAN, JR.
Secretary
49
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF VALMONT
INDUSTRIES, INC. FILED IN THIS OFFICE ON THE TWENTY-SEVENTH
DAY OF APRIL, A.D. 1990, AT 10 O'CLOCK A.M.
Michael Harkins, Secretary of State
AUTHENTICATION: |2635769
DATE: 04/27/1990
50
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VALMONT INDUSTRIES, INC.
VALMONT INDUSTRIES, INC., a corporation organized and
existing under and by virtue of the General Corporation Law
of the State of Delaware, does hereby certify:
FIRST: That at a meeting of the Board of Directors of
VALMONT INDUSTRIES, INC., a resolution was duly adopted
setting forth a proposed Amendment to the Certificate of
Incorporation of said Corporation declaring said Amendment
to be advisable and calling a meeting of the stockholders of
said Corporation for consideration thereof. The resolution
setting forth the proposed Amendment is as follows:
RESOLVED, that it is deemed advisable that the first
paragraph of Article IV of the Corporation's Certificate of
Incorporation be amended to read as follows:
The capital stock of said Corporation shall be Thirty
Six Million Five Hundred Thousand Dollars ($36,500,000.00)
divided into Thirty Six Million (36,000,000) shares of
common stock of a par value of One Dollar ($1.00) per share
and Five Hundred Thousand (500,000) shares of series
preferred stock of a par value of One Dollar ($1.00) per
share (hereinafter called the "series preferred stock").
SECOND: That thereafter, pursuant to resolution of its
Board of Directors, a special meeting of the stockholders of
said Corporation was duly called and held, upon notice in
accordance with Section 222 of the General Corporation Law
of the State of Delaware on April 23, 1990, at which meeting
the necessary number of shares as required by statute were
voted in favor of the Amendment.
THIRD: That said Amendment was adopted in accordance
with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
51
IN WITNESS WHEREOF, said VALMONT INDUSTRIES, INC. has
caused this Certificate to be signed by WILLIAM F. WELSH II,
its President, and attested by THOMAS P. EGAN, JR., its
Secretary, this 24th day of April, 1990.
VALMONT INDUSTRIES, INC.
BY:
WILLIAM F. WELSH II
President
ATTEST:
THOMAS P. EGAN, JR.
Secretary
52
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE
OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "VALMONT
INDUSTRIES, INC." FILED IN THIS OFFICE ON THE TWENTY-FIRST
DAY OF APRIL, A.D. 1993, AT 12 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED
TO NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
William T. Quillen, Secretary of State
AUTHENTICATION: *3867752
DATE: 04/21/1993
53
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VALMONT INDUSTRIES, INC.
VALMONT INDUSTRIES, INC., a corporation organized and
existing under and by virtue of the General Corporation Law
of the State of Delaware, does hereby certify:
FIRST: That at a meeting of the Board of Directors of
VALMONT INDUSTRIES, INC. a resolution was duly adopted
setting forth a proposed amendment to the Certificate of
Incorporation of said corporation declaring said amendment
to be advisable and calling for a meeting of the
stockholders of said corporation for consideration thereof.
The resolution setting forth the proposed amendment is as
follows:
"RESOLVED, that the Board of Directors declares it
advisable that the Company's Certificate of Incorporation be
amended by the addition of a new Article XII entitled
"Classified Board of Directors", such new Article XII to
read as set forth on Exhibit A attached hereto."
SECOND: That thereafter, pursuant to resolution of its
Board of Directors, an annual meeting of the stockholders of
said corporation was duly called and held upon notice in
accordance with Section 222 of the General Corporation Law
of the State of Delaware on April 20, 1993, at which meeting
the necessary number of shares as required by statute were
voted in favor of the amendment.
THIRD: That said amendment was duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said VALMONT INDUSTRIES, INC. has
caused this Certificate to be signed by WILLIAM F. WELSH II,
its President, and attested to by THOMAS P. EGAN, JR., its
Secretary, this 20th day of April, 1993.
ATTEST: VALMONT INDUSTRIES, INC.
THOMAS P. EGAN, JR. WILLIAM F. WELSH II
Secretary President
54
EXHIBIT A
----------
VALMONT CERTIFICATE OF INCORPORATION
--------------------------------------
ARTICLE XII
------------
CLASSIFIED BOARD OF DIRECTORS
------------------------------
Commencing with the annual election of directors by the
stockholders of the corporation in 1993, the directors of
the corporation shall be divided into three classes: Class
I, Class II and Class III, each such class, as nearly as
possible, to have the same number of directors. The term of
office of the initial Class I directors shall expire at the
annual election of directors by the stockholders of the
corporation in 1994, the term of office of the initial Class
II directors shall expire at the annual election of
directors by the stockholders of the corporation in 1995,
and the term of office of the initial Class III directors
shall expire at the annual election of directors by the
stockholders of the corporation in 1996; and in all cases as
to each director until such director's successor shall be
elected and shall qualify. At each annual election of the
directors by the stockholders of the corporation held after
1993, the number of directors equal to the number of
directors of the class whose term expires at the time of
such meeting (or, if less, the number of directors properly
nominated and qualified for election) shall be elected to
hold office until the third succeeding annual meeting of
stockholders after their election, or thereafter when their
respective successors in each case are elected by the
stockholders and qualify.
55
Exhibit 13
Outside front cover:
Valmont Industries, Inc.
Annual Report 1994
------------------
left half of page shows four photographs:
upper left: robotic welder
upper right: computerized welding process
lower left: pivot point of irrigation machine
lower right: metal light poles
right half of page shows Valmont logo
56
Inside front cover:
Words printed on top of a robotic welder photo:
Valmont is a global leader in producing engineered metal
structures for use in various applications, including
infrastructure development, construction and industrial products.
Valmont leads the world in mechanized agricultural
irrigation systems, enhancing food production while conserving
and protecting our natural water resources.
Valmont also produces a broad range of energy-efficient
lighting ballasts.
TABLE OF CONTENTS
Letter to Shareholders 2
Valmont Product Applications 4-11
Valmont Manufacturing Locations 12
Financial Review 13
57
Annual Report Page 1 - Financial Highlights
<TABLE>
Dollar amounts in millions, except per share data.
Amounts and graphs are from continuing operations,
before 1993 restructuring charge.
<CAPTION>
Operating Results 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Net Sales $471.7 438.8 424.7
Net Earnings 16.1 12.4 9.6
Earnings per share 1.38 1.06 0.83
Dividends per share 0.30 0.29 0.26
Financial Position
Shareholders' equity $127.5 113.4 111.3
Shareholders' equity
per share 11.04 9.83 9.74
Long-term debt as a
percent of invested
capital 23.9% 26.5% 36.5%
Operating Ratios
Gross profit as
a % of sales 23.4% 22.9% 22.9%
Operating income as
a % of sales 5.7% 5.5% 4.9%
Net earnings as
a % of sales 3.4% 2.8% 2.3%
Return on beginning
equity 14.2% 11.1% 9.5%
Year End Data
Shares outstanding
(000) 11,545 11,536 11,425
Approximate number
of shareholders 3,800 3,800 3,500
Number of employees 3,754 3,984 4,378
</TABLE>
GRAPHS . . . Top of page 1
<TABLE>
<CAPTION>
NET SALES 1992 1993 1994
<S> <C> <C> <C>
($ Millions) 425 439 472
EARNINGS PER SHARE
from continuing
operations $0.83 $1.06 $1.38
RETURN ON BEGINNING
EQUITY 9.5% 11.1% 14.2%
SHAREHOLDERS'
EQUITY PER SHARE $9.74 $9.83 $11.04
</TABLE>
GRAPHS . . . Bottom of page 1
<TABLE>
Irrigation Products Segment
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Net Sales
($Millions) 127 134 164
Operating Income
($ Millions) 11 14 18
Industrial Products
Segment
Net Sales
($Millions) 298 305 308
Operating Income
($ Millions) 16 15 19
</TABLE> 58
Annual Report Page 2 - Board of Directors
Photo of Valmont's Board of Directors lays on top of a faded photo of a
robotic welder.
Data on right side of photograph:
(from left to right)
Robert B. Daugherty
Chairman of the Board
Valmont Industries, Inc.
Director since 1947
Charles M. Harper1
Chairman of the Board and CEO
RJR Nabisco Holdings Corp. and
Chairman of the Board
Nabisco Holdings Corp.
Director since 1979
Lloyd P. Johnson1
Chairman of the Board
Norwest Corporation
Director since 1991
Robert G. Wallace2
Retired Executive
Vice President
Phillips Petroleum Co.
Director since 1984
Thomas F. Madison1
President, MLM Partners
Retired President - Markets
US West Communications
Director since 1987
Allen F. Jacobson1
Retired Chairman and CEO
3M Company
Director since 1976
Mogens C. Bay
President and CEO
Valmont Industries, Inc.
Director since 1993
John E. Jones2
President and CEO
CBI Industries
Director since 1993
Walter Scott, Jr.2
Chairman and President
Peter Kiewit Sons', Inc.
Director since 1981
1 Compensation Committee
2 Audit Committee
Annual Report Pages 2 and 3 - Letter To Our Shareholders
Page 2:
1994 was a good year at Valmont. Earnings were up 30% on
revenue growth of 7.5%. We leveraged our resources to produce
more sales and earnings from each dollar invested, and yet
continued to invest in new products, new equipment and new
facilities around the world. These investments are important for
our future growth. Although we are pleased with our results,
there is room for improvement and we expect further progress in
1995.
THE YEAR IN REVIEW
Industrial Products
Operating income in the industrial products segment was up 27%
over 1993 due to record performance in our various engineered
metal products businesses. The lighting ballast business
continued to under-perform and was not profitable; however we
made progress in this business by reducing operating costs and
cutting working capital by more than $20 million. We also made
investments in new product development.
Although overall sales in the industrial products segment were
flat, most of the products within the segment showed significant
growth and reached record sales levels. Offsetting this growth,
the lighting ballast business was purposely managed for margin
improvement, resulting in a reduction in total ballast sales.
Lastly, we had no sales from either Gate City Steel or Good-All
Electric, two businesses we exited in 1993.
The technology used in producing Valmont's metal structures is
59
Annual Report Page 3:
is recognized in the industry as being second to none. Our
manufacturing and scheduling flexibility enable us to produce
quality products for various applications. One major advantage
Valmont offers is the ability to meet customers' schedules
accurately and consistently. With thirteen plants around the
world and additional capacity scheduled to come on stream in
Asia, we are able to meet virtually any delivery schedule.
The Valmont metal structures business continues to present growth
opportunities worldwide. Already a leader in a competitive
market, we opened a new facility in Holland and acquired Energy
Steel Corporation of Tulsa, Oklahoma, a manufacturer of utility
products. We are building a new plant in Salt Lake City and have
initiated an expansion of our Brenham, Texas, facility. We also
signed a joint venture agreement to build a plant in Shanghai,
China.
The China plant will be our first investment in Asia. China is
the largest and fastest growing economy in the region. While the
business press tends to treat China with either euphoria or
despair, we believe that China presents enormous opportunities,
but is not an easy place to do business. We also believe a
relatively small investment is a prudent step for us to become
part of the Chinese economy. The Shanghai location will enable us
to serve other Asian markets as well.
Irrigation Products
Our irrigation products segment reached record levels of sales
and profits. We pioneered the mechanized irrigation industry
forty years ago and have been the clear market leader and
innovator ever since.
Segment sales grew by 22% and operating income by 26%. Three
years ago we re-engineered the irrigation business introducing
just-in-time manufacturing practices, concurrent engineering,
design for manufacturability and a team-based operating
philosophy. These changes are bringing positive results.
The North American demand for irrigation systems was extremely
strong in 1994, driven primarily by water conservation and water
quality concerns. New opportunities continue to increase as
growers switch from less efficient irrigation methods to our type
of equipment. This conversion accounts for over half of our
business today, with the balance divided between new irrigation
development and replacement of older systems. In addition, high
farm income, low interest rates, and relatively strong commodity
prices spurred sales.
Internationally, we are benefiting from the years spent
developing an extensive dealer network. Our international
business in 1994 was spread throughout the world, with no single
country or region being dominant.
This past year saw the introduction of several new products,
expanding our leadership position in electronic and computerized
controls. A new system structure, designed for manufacturability
as well as field strength, was successfully introduced.
Outlook
The underlying drivers behind all our businesses remain strong.
Global infrastructure development is presenting growth
opportunities for our many engineered metal structures. Light
pole and traffic signal structures support crime prevention and
traffic management. Cellular telephone and other wireless
communication networks require increased numbers of communication
towers. Strong capabilities in high performance custom tubing
and deregulation of the utility industry create additional
opportunities, and energy efficiency demands will continue to
expand the market for our electronic lighting ballasts. As the
world population grows and availability of clean water shrinks,
the demand increases for our irrigation systems.
In all Valmont businesses, success stems from an understanding of
customer needs. We meet those needs through fast and timely
delivery, superior application engineering and quality
manufacturing.
We continue to invest heavily in and rely on our most important
asset, the people of Valmont. Firm believers in continuous
education, we find that constant improvement of people's skills
helps bring about continuous improvement in our products, our
processes and our performance.
We continue to pursue acquisitions and joint ventures in our core
industries worldwide.
Although 1994 was a good year, we have every reason to believe we
will achieve earnings growth again in 1995.
Mogens C. Bay Robert B. Daugherty
President and Chairman of the Board
Chief Executive Officer
60
Annual Report Pages 4 and 5 - Valmont Product Applications
Annual Report Page 4:
(Photo - irrigation system)
Mechanized Irrigation Systems
Utilizing the latest in structural engineering and computer
controlled water application techniques, Valleyr mechanized
irrigation systems produce consistently higher yields while using
significantly less water than traditional flood irrigation. Using
less water also helps protect groundwater from potential chemical
contamination. Valmont founded the industry and continues to lead
it after 40 years.
(photo - light pole & traffic structure)
Lighting and Traffic Signal Structures
Valmont is a leader in the manufacture of a variety of metal
structures including poles used in highway applications.
Infrastructure development, road expansion and urban renovation
are taking place worldwide. Geographically dispersed
manufacturing facilities provide high quality products with just-
in-time delivery.
61
Annual Report Page 5
(photo - communication tower)
Communication Towers
Cellular telephones have become quite common around the world.
With every coverage area or "cell" requiring a pole or tower,
combined with the coming "Personal Communication Network", the
opportunities ahead for Valmont are significant.
(photo- Utility pole)
Utility Structures
Worldwide consumption of electrical energy continues to grow.
Additionally, many wooden and metal lattice structures erected in
the 1950's are being replaced with steel monopole designs for
better appearance, greater reliability and more efficient use of
space.
(photo - stacked tubing)
Custom Tubing
Valmont creates a wide array of different types, shapes and sizes
of tubular steel, all made to precise customer specifications.
Most of this tubing is used by other manufacturers as components
within finished products. Valmont manufacturing efficiencies
enable tubing products to meet customers' just-in-time
requirements.
(photo - boxes of ballasts)
Lighting Ballasts
Driven by energy conservation, the lighting ballast market is
undergoing an evolution from magnetic to electronic products.
Valmont produces a broad line of ballasts that include both
electronic and magnetic.
62
Annual Report Pages 6 and 7 - Valmont Industrial Products
Pole Structures
Record sales were achieved in 1994 by Valmont's metal poles
structure businesses. Infrastructure investment throughout North
America and Europe was the primary factor in the growth of demand
for lighting and traffic signal applications. The rapid expansion
of cellular telephone networks brought along a corresponding need
for communication towers. Utility companies are expanding their
service networks due to deregulation, requiring more transmission
structures.
Innovation, product quality, depth and breadth of product line,
process time and on-time delivery are some of the keys to
Valmont's success in producing these metal structures. Valmont
designs, manufactures and delivers quality products with high
performance coatings throughout the world.
Bar Graphs on Page 7
<TABLE>
Industrial Products Segment
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Net Sales
($Millions) 298 305 308
Operating Income
($Millions) 16 15* 19
*Before restructuring
charge
</TABLE>
Photograph captions (left to right)
photo - Barcelona stadium (page 6)
The world watched the Barcelona Olympic games with the help of
Valmont sports lighting structures.
photo - Target store poles
Utilizing a specialized protective powder coating, pole life and
appearance are enhanced.
63
Annual Report page 7
photo - France street poles
Form and function are both enhanced in these street lighting
structures in France.
photo - Church cellular tower
This church tower disguises cellular communication antennae.
photo - Monterrey utility poles
In addition to strength and durability, monopole utility
structures like these being installed in Monterrey, Mexico,
require less right-of-way space.
photo - Tree communication pole
This communication tower blends into the landscape without
distrubing the aesthetics of the surrounding area.
64
Annual Report Pages 8 and 9 - Valmont Industrial Products
Annual Report Page 8:
Custom Tubing and Lighting Ballasts
Valmont produces custom steel tubing for use in a wide range of
industrial and consumer products. Custom engineered to meet
precise specifications, virtually every shape, thickness, length
and finish imaginable are produced.
The extensive manufacturing capabilities of Valmont enable these
products to play a major role in other manufacturers' just-in-
time processes. A delivery commitment made by Valmont can be
relied upon for production scheduling.
At the same time, strict adherence to high quality standards
creates products that often exceed customer demands and
expectations.
The lighting ballast industry is undergoing a transition from
traditional magnetic ballasts to more energy-efficient electronic
ballasts. Energy savings is the primary force driving demand,
with many electric utility companies contributing through the
creation of special incentives for large facilities and
organizations to convert to electronics.
Over the past year, resources have gone into the development of
new ballasts designed to be more energy-efficient.
Photographs and captions from left to right
Annual Report Page 8:
photo - Optiwelder control panel
The patented Valmont Optiweld process manufactures products to
very exacting specifications.
photo - Coatings sample pieces
Valmont offers a wide range of high performance, custom steel
tubing.
65
Annual Report Page 9
photo - Brasco tubes after cutting (stacked)
Steel tubing is produced to customer requirements for use in the
manufacture of numerous products.
photo - mini van
Seat frames for mini vans are just one of the many specialized
steel tubing applications made for the automotive industry by
Valmont.
photo - Pressure Vessel
Valmont produces pressure vessels for use in petroleum and
chemical processes.
photo - 4 ballasts
Valmont offers a broad line of magnetic and energy-efficient
electronic ballasts.
photo - Ballast installation
Many companies are retrofitting with new, efficient electronic
ballasts to achieve energy savings.
66
Annual Report Pages 10 and 11 - Valmont Irrigation Products
Annual Report Page 10:
Mechanized Agricultural Irrigation
What was once an industry driven primarily by increased food
production is now being driven by water conservation and water
quality. That is the primary factor behind 1994 being a record
sales and operating income year for Valmont Irrigation.
With today's computerized controls and advanced technology,
growers can precisely control the amount of water being applied,
using up to 50% less water than traditional flood methods.
Valmont irrigation systems allow the grower to put the exact
amount of water needed by the crop into the root zone. This
eliminates excess water running off the end of the field or
leaching into the groundwater aquifer. Excess water from less
efficient irrigation methods can carry farm chemicals into the
water supply.
Another advantage of Valmont mechanized irrigation is the ability
to work in conjunction with modern farming practices. Traditional
flood irrigation will not work with conservation tillage, as the
debris left in the rows to combat erosion acts like dams,
stopping the water flow.
A new system structure and a family of modular, upgradeable
control panels were introduced in 1994.
Valmont continues to lead the industry with complete product line
marketed through a large, professional dealer organization
operating throughout the world.
67
Bar graphs on page 11
<TABLE>
Irrigation Products Segment
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Net Sales
($Millions) 127 134 164
Operating Income
($Millions) 11 14 18
</TABLE>
Photos and captions from left to right
Annual Report Page 10
photo - Robotic welder
This computer controlled robotic welder produces irrigation pipe
accurately and efficiently.
photo - Washington D.C. Pivot on Mall
The 40th anniversary of the founding of the mechanized irrigation
industry was celebrated at the international dealer sales meeting
in Washington D.C. held in September 1994.
Annual Report page 11
photo - CAMS panel/circuit board
The convenience of scheduling and remote management are made
possible through computerized controls. Valmont first introduced
this technology to the industry four years ago.
photo - Engineering/CAD
Irrigation system design combines the benefits of computer
technology with experienced structural and water application
engineers.
photo - Linear irrigation machine
Linear move irrigation systems travel down the length of the
field in a straight line. This type of system is suited to high
value land, specialty crops and certain soil types.
photo - Flood & drop insets
Computerized controls and advanced water application engineering
enable mechanized irrigation to use up to 50% less water than
traditional flood methods.
68
Annual Report Page 12 - Valmont Manufacturing Locations
This page shows a world map with the following Valmont locations
marked:
Corporate Headquarters
Valley, Nebraska U.S.A.
United States
Brenham, Texas
Elkhart, Indiana
El Paso, Texas
Salt Lake City, utah
Tulsa, Oklahoma
Valley, Nebraska
International
Charmeil, France
Cusset, France
Juarez, Mexico
Maarheeze, The Netherlands
Madrid, Spain
Rive-de-Gier, France
St. Hubert, Quebec, Canada
Under Construction
Shanghai, China
69
Valmont Annual Report Page 13 - 1994 Financial Review
Contents
Selected Eleven-Year Financial Data 14
Management's Discussion and Analysis 16
Consolidated Statements of Operations 20
Consolidated Balance Sheets 21
Consolidated Statements of Cash Flows 22
Consolidated Statements of Shareholders' Equity 23
Notes to Consolidated Financial Statements 24
Business Segment Information 28
Quarterly Financial Data 29
Independent Auditors' Report 30
Management's Report 31
Officers 32
Shareholder Information 33
70
Annual Report Pages 14 - 15 - Selected Eleven-Year Financial Data
Bar Graphs on page 14:
Working Capital ($ Millions)
1992: 63.9
1993: 82.3
1994: 80.9
Total Assets ($ Millions)
1992: 273
1993: 247
1994: 266
Number of Employees
1992: 4,378
1993: 3,984
1994: 3,754
<TABLE>
Table on pages 14 and 15
(Dollars in thousands, except per share amounts)
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Data:
Net sales $471,745 438,755 424,685 429,718 446,536 430,721 427,818 281,292 207,527 227,056 200,805
Earnings (loss)
from continuing
operations 16,119 5,266 9,648 (10,144) 10,075 16,056 11,665 5,086 (113) (2,316) 13,916
Earnings (loss)
from discontinued
operations -- 4,637 3,564 2,134 5,474 4,602 3,639 3,172 2,321 1,467 (725)
Cumulative effect
of accounting
change -- (4,910) -- -- -- -- -- -- -- -- --
------ ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net earnings (loss) $ 16,119 4,993 13,212 (8,010) 15,549 20,658 15,304 8,258 2,208 (849) 13,191
====== ====== ====== ======= ====== ====== ====== ====== ====== ====== ========
Depreciation and
amortization 10,371 10,313 12,105 10,820 9,489 7,304 7,498 6,777 5,739 5,811 4,517
Capital expenditures 22,988 16,284 7,903 11,415 19,743 16,998 9,261 7,204 6,304 5,932 9,450
Per Share Data:
Earnings (loss):
Continuing
operations $ 1.38 0.45 0.83 (0.88) 0.87 1.38 1.05 0.47 (0.01) (0.22) 1.32
Discontinued
operations -- 0.40 0.31 0.19 0.47 0.40 0.33 0.30 0.22 0.14 (0.07)
Cumulative effect
of accounting
change -- (0.42) -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net earnings (loss) $ 1.38 0.43 1.14 (0.69) 1.34 1.78 1.38 0.77 0.21 (0.08) 1.25
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Cash dividends $ 0.30 0.29 0.26 0.26 0.26 0.22 0.17 0.15 0.15 0.15 0.15
Shareholders'
equity 11.04 9.83 9.74 8.90 9.86 8.79 7.22 6.13 5.47 5.40 5.65
Financial Position:
Working capital $ 80,915 82,305 63,867 65,585 63,523 69,718 55,589 41,903 22,855 22,363 36,567
Property, plant
and equipment, net 86,383 72,831 75,740 82,164 79,610 70,286 51,600 52,469 40,424 40,347 37,859
Total assets 266,174 246,649 273,218 280,859 283,233 261,590 219,081 197,614 131,852 131,405 108,719
Long-term debt,
including current
installments 43,242 44,076 69,735 81,698 63,003 66,774 47,337 52,780 25,798 28,518 31,320
Shareholders'
equity 127,467 113,392 111,318 101,081 111,389 98,937 79,103 63,908 56,829 55,624 57,497
Invested capital 181,200 166,597 191,140 193,353 185,244 175,132 133,166 123,655 87,100 88,023 91,367
Key Financial
Measures:
Return on beginning
shareholders'
equity 14.2% 4.5% 13.1% (7.2)% 15.7% 26.1% 23.9% 14.5% 4.0% (1.5)% 28.9%
Return on invested
capital 10.8% 4.6% 9.2% (1.4)% 11.3% 15.3% 14.3% 9.6% 4.2% 0.7% 17.3%
Long-term debt as a
percent of invested
capital 23.9% 26.5% 36.5% 42.3% 34.0% 38.1% 35.5% 42.7% 29.6% 32.4% 34.3%
Year End Data:
Shares outstanding
(000) 11,545 11,536 11,425 11,360 11,297 11,256 10,964 10,424 10,396 10,308 10,176
Approx. # of
shareholders 3,800 3,800 3,500 3,500 2,800 1,600 1,500 1,100 1,150 1,360 1,400
Number of employees 3,754 3,984 4,378 4,320 4,369 4,137 3,458 3,496 1,643 1,767 1,829
</TABLE>
Per share amounts and number of shares reflect the two-for-one stock splits
in 1988 and 1989.
72
Annual Report Pages 16 - 19 - Management's Discussion and Analysis
Bar Graphs shown on page 16:
Gross Profit As A Percent of Net Sales
1992: 22.9%
1993: 22.9%
1994: 23.4%
Current Ratio
1992: 1.7
1993: 2.0
1994: 1.9
Capital Expenditures ($ Millions)
1992: 7.9
1993: 16.3
1994: 23.0
Text on page 16:
The following discussion and analysis provides information which
management believes is relevant to an assessment and
understanding of the Company's consolidated results of operations
and financial condition. This discussion should be read in
conjunction with the Consolidated Financial Statements and the
related Notes.
Results of Operations--1994 Compared to 1993
In 1994 net sales were $471.7 million, an increase of 7.5% over
the $438.8 million achieved for 1993. Sales for the Irrigation
Products segment for 1994 of $164.0 million were up 22.2% over
1993, as record North American sales more than offset weaker
export shipments. Improved demand was driven by an increased
focus on water conservation and water quality, increased net farm
income and relatively low interest rates. The conversion to
mechanized irrigation from less efficient methods and the
replacement of older center pivots with new Valley irrigation
systems contributed to the sales gain. Sales to international
markets for 1994 declined mainly from the reduction of sales to
the Saudi Arabian market and the absence in 1994 of large project
shipments.
Sales in the Industrial Products segment increased 1.0% in 1994
to $307.7 million from $304.9 million in 1993. The Industrial
Products segment reported significant sales growth for the North
American engineered metal structures businesses.
These sales gains, to a great extent, were offset by the absence
of sales from the steel reinforcing bar operations exited in 1993
and divestiture of the cathodic protection operation.
73
Text on page 17:
Sales in the ballast product line were purposely managed lower for margin
improvement. European metal structure sales in 1994 were
comparable to the levels attained in 1993 as economic conditions
in Europe improved in the second half of 1994.
Gross profit amounted to $110.3 million in 1994, an increase of
$9.8 million over the 1993 gross profit of $100.5 million. For
the year 1994 gross profit increased as sales volume increased.
As a percent of sales, gross profit was 23.4% for 1994 compared
to 22.9% in 1993. In 1994 gross profit improved in the
engineered metal structures businesses compared to 1993 as a
result of operating improvements. The gross profit percentage
decreased in 1994 in the irrigation and lighting ballast product
lines primarily as a result of lower market prices experienced in
the first half of 1994. The Company incurred a pretax
restructuring charge of $11.0 million in 1993 which reduced
operating income and is discussed under Results of Operations -
1993 Compared to 1992.
Selling, general and administrative (SG&A) expenses were $83.2
million for 1994 versus $76.5 million for 1993. As a percent of
sales SG&A was 17.6% in 1994 compared to 17.4% in 1993. The SG&A
increase in 1994 primarily resulted from increased sales
commissions and incentives and expanded marketing efforts
internationally.
For the year 1994, interest expense was $4.7 million compared to
1993 interest expense of $5.9 million. The decrease in 1994
results primarily from lower debt levels and lower interest rates
on variable rate debt.
The miscellaneous caption of other income (deductions) in the
consolidated statements of operations contains gains and losses
which are of an unusual or infrequent nature. The net
miscellaneous gain of $1.6 million in 1994 included $1.1 million
in gains from the sale and disposal of excess property.
For 1994 the effective tax rate was 35.3% which is lower than the
expected federal and state tax rate due to non-taxable interest
income and foreign sales corporation tax benefits. The effective
income tax rate for 1994 did not vary significantly from the
effective tax rate in 1993.
As a result of the aforementioned operating factors and general
business conditions, earnings from continuing operations
increased to $16.1 million in 1994 from $5.3 million in 1993.
Earnings per share from continuing operations were $1.38 for 1994
and $0.45 for 1993. For the year 1993, Valmont reported earnings
from discontinued operations of $4.6 million or $0.40 per share
and an accounting charge of $4.9 million or $0.42 per share. As
a result, Valmont's net earnings of $5.0 million or $0.43 per
share for 1993 differed from its earnings from continuing
operations.
Results of Operations--1993
Compared to 1992
Net sales of $438.8 million in 1993 were 3.3% higher than the
$424.7 million attained in 1992. The Irrigation Products segment
sales of $134.2 million in 1993 exceeded 1992 sales volume of
$127.0 million by 5.7%. Domestic irrigation sales in 1993 were
very strong in the last half of the year and accounted for more
than the overall sales increase. International irrigation sales
were lower than 1992 due to lower sales volumes in Saudi Arabia.
Shipments to other international markets increased during 1993 to
partially offset the sales decline in Saudi Arabia.
The Industrial Products segment reported 1993 sales volume of
$304.9 million, an increase of 2.3% over 1992 sales of $297.9
million. Increased demand for domestic pole structures, tubing
and energy-efficient lighting ballasts more than offset lower
sales in Europe and the loss of sales from the steel reinforcing
bar business that Valmont exited during 1993.
Gross profit amounted to $100.5 million in 1993, an increase of
$3.2 million over the 1992 gross profit of $97.3 million. Gross
profit increased as sales volume increased; and, as a percent of
sales, gross profit was 22.9% for both 1993 and 1992. Gross
profit in 1993 improved for the irrigation product line and was
stable for all of the Company's product lines except for ballasts
and transmission poles. The Industrial Products segment
reflected lower margins due to pricing pressure in the ballast
industry and lower margins on certain transmission pole orders.
Selling, general and administrative (SG&A) expenses in 1993 were
$76.5 million compared to $76.3 million in 1992. In 1993, SG&A
as a percent of sales was 17.4% compared to the prior year's
18.0%.
74
Text on Page 18:
In the fourth quarter of 1993 the Company completed its move of
the lighting ballast product line operation from Illinois to
Texas and Mexico and reported an $11.0 million pretax
restructuring charge. The primary cost associated with the
restructuring charge resulted from the decision that certain
equipment amounting to $8.2 million would not be relocated due to
the lighting ballast industry's transition from electro-magnetic
ballasts to electronic ballasts. In addition the Southwest
manufacturing facilities were structured to better serve the
industry change and the move resulted in a reduction of
approximately 450 employees. Severance costs of $1.3 million
were accrued for these employees who were terminated during the
fourth quarter or shortly after year end 1993. Costs associated
with the closing of the Illinois facility amounting to $1.0
million were also recorded. The $8.2 million write-off of assets
was a non-cash charge and will result in a decrease in future
depreciation charges of approximately $1.6 million per year.
For 1993 and 1992, interest expense was $5.9 million and $7.5
million, respectively. The decrease in 1993 primarily results
from lower debt levels as some of the proceeds from the sale of
the Company's investment in Inacom during 1993 were used to pay
down debt.
The effective tax rate for 1993 was 35.0% which is lower than the
expected federal and state tax rate due to non-taxable interest
income and foreign sales corporation tax benefits. The effective
income tax rate for 1993 did not vary significantly from the
effective tax rate in 1992.
As a result of the aforementioned operating factors, the
restructuring charge of $0.61 per share and general business
conditions, earnings from continuing operations decreased to $5.3
million in 1993 from $9.6 million in 1992. Earnings per share
from continuing operations were $0.45 and $0.83 for the years
1993 and 1992, respectively.
In 1993, the Company completed the sale of all of its investment
in Inacom Corp. Valmont sold 3,122,190 common shares of Inacom
in an underwritten public offering for $16.00 per share with the
net proceeds to Valmont amounting to $47.6 million. The sale
after deducting related expenses and taxes, produced a net gain
of $3.9 million, $0.34 per share. Valmont's share of Inacom's
1993 net earnings prior to the sale was $0.7 million, or $0.06
per share, which when combined with the gain from sale of this
investment, amounted to $4.6 million or $0.40 per share for 1993
in earnings from discontinued operations. As the Company's
interest in Inacom was sold in 1993, Valmont's share of Inacom's
net income for 1992 of $3.6 million or $0.31 per share is
reflected as earnings from discontinued operations.
Effective the beginning of fiscal 1993, Statement of Financial
Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes"
was adopted. The cumulative effect of adopting SFAS No. 109 at
the beginning of fiscal 1993, decreased 1993 net income by $4.9
million, $0.42 per share.
Net earnings resulting from continuing operations, discontinued
operations, and the cumulative effect of the adoption of SFAS No.
109 totaled $5.0 million or $0.43 per share, for 1993. Net
earnings for 1992 amounted to $13.2 million or $1.14 per share.
Liquidity and Capital Resources
Net working capital of $80.9 million at the end of 1994 was
generally comparable to net working capital of $82.3 million at
the end of 1993. As a result, the ratio of current assets to
current liabilities was 1.9:1 at the end of 1994 compared to
2.0:1 at the end of 1993.
Available short-term credit facilities through bank lines of
credit were $49.8 million at the end of 1994 compared to $55.8
million at the end of 1993. At the end of 1994, $48.0 million
was unused.
Valmont utilizes debt and the tax deductibility of interest to
lower its overall cost of capital and increase its return on
equity. The Company's objective is to maintain long-term debt as
a percent of invested capital in the range of 32% to 40%.
However, occasionally business conditions or opportunities may
warrant being temporarily outside this range. At the end of
1994, long-term debt as a percent of invested capital was 23.9%
as compared to 26.5% at the end of 1993. The Company is below
the lower limit of the range due to the sale of its investment in
Inacom Corp. in 1993 and subsequent principal payments on long-
term debt.
The Company believes cash flow from operations, credit facilities
available and the capital structure now in place will be adequate
for 1995 planned capital expenditures, dividends and other
financial commitments, and will allow the Company to pursue
opportunities to expand its markets and businesses.
Capital Expenditures
The Company invested $23.0 million in property, plant and
equipment in 1994, or a $6.7 million increase from the $16.3
million invested in 1993. Major additions included automated
pipe welding machinery, the completion of additional coating
facilities in Nebraska and a new plant facility in Holland.
These capital expenditures were made to improve customer service,
enhance productivity, expand market penetration and keep
equipment and facilities modern.
75
Text on page 19:
Outlook for 1995
The Company begins 1995 with an order backlog that is more than
16% higher than at the beginning of fiscal 1994. The metal
structures and lighting ballast backlogs at the beginning of 1995
account for all of the backlog increase over the beginning of
1994, while the irrigation products segment's beginning backlog
is approximately equal to the that of 1994.
The Irrigation Products segment anticipates a favorable worldwide
agricultural economy. Water conservation and water quality, were
major driving forces this past year in the U.S. market, and these
driving forces are expected to continue. New opportunities
continue to increase as growers switch from less efficient
irrigation methods to Valmont's mechanized irrigation systems.
This conversion is expected to continue to account for over half
of Valmont's irrigation business, with the balance divided
between new irrigation development and replacement of older
systems. Internationally, Valmont is benefiting from the years
spent developing an extensive dealer network. Valmont's
international business has spread throughout the world, with no
single country or region being dominant. Concerns about
depletion of the nation's aquifers, water quality issues, as well
as food production goals of various countries and the need to
provide the world's increasing population with food and fiber are
expected to contribute to the growth of markets for Valmont's
center pivot and linear move irrigation systems.
The Industrial Products segment in 1995 is anticipated to benefit
from global infrastructure development and the resulting demand
for metal structures. Cellular telephone and other wireless
communication networks require increased numbers of
communications towers. Our capabilities in high performance
specialty tubing and the deregulation of the utility industry
should create additional opportunities. During 1994, the Company
opened a new facility in Holland and acquired Energy Steel
Corporation of Tulsa, Oklahoma, a manufacturer of utility
products. Valmont is building a new plant in Salt Lake City and
has initiated an expansion of the Brenham, Texas facility.
Valmont has also signed a joint venture agreement to build a
light pole plant in Shanghai, China. Additionally, energy
efficiency demands are expected to bolster the expanding market
for electronic lighting ballasts.
The lighting ballast product line continues to underperform and
was not profitable in 1994. Valmont has made progress in this
business by reducing operating costs, cutting working capital
employed by more than $20 million and making investments in new
product development. These actions and further attention to the
cost structure are expected to improve the operating results in
1995.
In summary, management expects that the Company's performance
will improve in 1995. Management believes that the Company is
positioned for the current environmental and industrial climate.
The products the Company manufactures and distributes serve the
public demands for water conservation, water quality, energy
savings and infrastructure development and revitalization.
Management believes that Valmont's financial position, its cost
structure and strong commitment to continuously improve,
positions the Company to enhance its operating results in 1995
and beyond.
76
Annual Report Page 20
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
Three year period ended December 31, 1994
(Dollars in thousands, except per share amounts)
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Net sales $471,745 438,755 424,685
Cost of sales 361,438 338,207 327,359
------- ------- -------
Gross profit 110,307 100,548 97,326
Selling, general and
administrative expenses 83,230 76,465 76,336
Restructuring charges -- 10,961 --
------- ------- -------
Operating income 27,077 13,122 20,990
------- ------- -------
Other income (deductions):
Interest expense (4,672) (5,910) (7,535)
Interest income 879 805 688
Miscellaneous 1,635 84 639
------- ------- -------
(2,158) (5,021) (6,208)
------- ------- -------
Earnings from continuing
operations before
income taxes 24,919 8,101 14,782
------- ------- -------
Income taxes (benefit):
Current 5,500 4,706 4,100
Deferred 3,300 (1,871) 1,034
------- ------- -------
8,800 2,835 5,134
------- ------- -------
Earnings from continuing
operations 16,119 5,266 9,648
Earnings from discontinued
operations, net of tax -- 4,637 3,564
Cumulative effect of
accounting change -- (4,910) --
------- ------- -------
Net earnings $ 16,119 4,993 13,212
======= ======= =======
Earnings (loss) per share:
Continuing operations $ 1.38 0.45 0.83
Discontinued operations -- 0.40 0.31
Cumulative effect of
accounting change -- (0.42) --
------- ------- -------
Net earnings $ 1.38 0.43 1.14
======= ======= =======
Cash dividends per share $ 0.30 0.29 0.26
======= ======= =======
Weighted average number of common
and common equivalent shares
outstanding (000) 11,665 11,670 11,583
</TABLE>
See accompanying notes to consolidated financial statements.
77
Annual Report Page 21
<TABLE>
CONSOLIDATED BALANCE SHEETS
December 31, 1994 and December 25, 1993
(Dollars in thousands)
<CAPTION>
ASSETS 1994 1993
------------------------------------- ---------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 29,582 14,018
Receivables, less allowance for
doubtful receivables of $2,798 in
1994 and $2,605 in 1993 73,185 70,159
Deferred income taxes 7,149 9,740
Inventories 59,221 69,913
Prepaid expenses 1,867 1,942
------- -------
Total current assets 171,004 165,772
------- -------
Other assets:
Investments in nonconsolidated
affiliates 991 261
Other 7,796 7,785
------- -------
Total other assets 8,787 8,046
------- -------
Property, plant and equipment, at cost 180,390 160,414
Less accumulated depreciation and
amortization 94,007 87,583
------- -------
Net property, plant and equipment 86,383 72,831
------- -------
Total assets $266,174 246,649
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
---------------------------------------
Current liabilities:
Current installments of long-term debt $ 7,753 5,657
Notes payable to banks 1,693 3,414
Accounts payable 40,826 33,333
Accrued expenses 38,951 40,198
Dividends payable 866 865
------- -------
Total current liabilities 90,089 83,467
------- -------
Deferred income taxes 9,990 8,593
Long-term debt, excluding current
installments 35,489 38,419
Minority interest in consolidated
subsidiaries 501 536
Other noncurrent liabilities 2,638 2,242
Shareholders' equity:
Preferred stock of $1 par value.
Authorized 500,000 shares;
none issued -- --
Common stock of $1 par value.
Authorized 36,000,000 shares;
issued 12,000,000 shares 12,000 12,000
Additional paid-in capital 1,664 1,101
Retained earnings 112,532 99,880
Currency translation adjustment 2,001 557
------- -------
128,197 113,538
Less:
Cost of common shares in treasury-
454,745 in 1994 (463,602 in 1993) 648 29
Unearned restricted stock 82 117
------- -------
Total shareholders' equity 127,467 113,392
------- -------
Total liabilities and
shareholders' equity $266,174 246,649
======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
78
Annual Report Page 22
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three-year period ended December 31, 1994
(Dollars in thousands)
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Cash flows from operations:
Net earnings $16,119 4,993 13,212
Adjustments to reconcile net earnings to net
cash provided (used) by operations:
Depreciation and amortization 10,371 10,313 12,105
Restructuring -- 10,380 --
Earnings from discontinued operations -- (4,637) (3,564)
Cumulative effect of accounting change -- 4,910 --
Other adjustments (197) 301 248
Changes in assets and liabilities, net of
acquisitions:
Receivables (1,072) (5,902) 1,153
Inventories 11,346 (10,018) 6,850
Prepaid expenses 132 204 (397)
Accounts payable 6,368 61 (1,378)
Accrued expenses (1,809) (887) (3,558)
Other noncurrent liabilities 395 263 (2,988)
Income taxes 3,770 (12,090) 3,270
------------------------
Total adjustments 29,304 (7,102) 11,741
------------------------
Net cash provided (used) by
operations 45,423 (2,109) 24,953
------------------------
Cash flows from investing activities:
Purchase of property, plant and equipment (22,988)(16,284) (7,903)
Acquisitions (2,034) -- (598)
Proceeds from sale of Inacom -- 47,557 --
Additions to other assets (309) (1,500) (1,822)
Proceeds from sale, net of gain, of
property and equipment 2,582 2,573 1,526
Other, net 335 650 315
------------------------
Net cash provided by (used in)
investing activities (22,414) 32,996 (8,482)
------------------------
Cash flows from financing activities:
Net borrowings (repayments) under
short-term agreements (1,688) (1,980) 2,869
Proceeds from long-term borrowings 3,845 --- ---
Principal payments on long-term
obligations (5,802)(24,894)(11,258)
Dividends paid (3,467) (3,214) (2,964)
Proceeds from exercises under employee
stock plans 663 1,410 410
Purchase of common treasury shares (996) (938) (64)
------------------------
Net cash used in financing
activities (7,445)(29,616)(11,007)
------------------------
Net increase in cash and cash equivalents 15,564 1,271 5,464
Cash and cash equivalents-
beginning of year 14,018 12,747 7,283
------------------------
Cash and cash equivalents - end of year $29,582 14,018 12,747
========================
See accompanying notes to consolidated financial statements.
</TABLE>
79
Annual Report Page 23
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three year period ended December 31, 1994
(Dollars in thousands, except per share amounts)
<CAPTION>
Un-
Re- Cur- earned Total
Addt'l. tained rency Re- Share-
Common paid-in Earn- Trans- Treasury stricted holders'
stock capital ings lation Stock Stock equity
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 28, 1991 $12,000 421 87,997 2,029 (969) (397) 101,081
Net earnings -- -- 13,212 -- -- -- 13,212
Cash dividends
($.26 per share) -- -- (2,964) -- -- -- (2,964)
Currency translation
adjustment -- -- -- (590) -- -- (590)
Purchase of 4,109
common shares -- -- -- -- (64) -- (64)
Stock Options
exercised; 63,767
shares issued -- (390) (21) -- 821 -- 410
Stock awards;
5,000 shares issued
net of forfeitures -- (31) -- -- 67 197 233
------ ----- ------- ------ ----- ----- ------
Balance at
December 26, 1992 12,000 -- 98,224 1,439 (145) (200) 111,318
Net earnings -- -- 4,993 -- -- -- 4,993
Cash dividends
($.29 per share) -- -- (3,337) -- -- -- (3,337)
Currency translation
adjustment -- -- -- (882) -- -- (882)
Purchase of 52,504
common shares -- -- -- -- (938) -- (938)
Stock options
exercised; 157,299
shares issued -- 356 -- -- 1,054 -- 1,410
Tax benefit from
exercise of stock
options -- 600 -- -- -- -- 600
Stock awards; 7,000
shares issued -- 145 -- -- -- 83 228
------ ------ ------ ------ ----- ----- ------
Balance at
December 25, 1993 12,000 1,101 99,880 557 (29) (117) 113,392
Net earnings -- -- 16,119 -- -- -- 16,119
Cash dividends
($.30 per share) -- -- (3,467) -- -- -- (3,467)
Currency translation
adjustment -- -- -- 1,444 -- -- 1,444
Purchase of 62,718
common shares -- -- -- -- (996) -- (996)
Stock options
exercised; 64,575
shares issued -- 286 -- -- 377 -- 663
Tax benefit from
exercise of stock
options -- 173 -- -- -- -- 173
Stock awards;
7,000 shares
issued -- 104 -- -- -- 35 139
------ ----- ------ ------ ----- ----- -----
Balance at
December 31, 1994 $12,000 1,664 112,532 2,001 (648) (82) 127,467
======= ===== ======= ===== ===== ====== =======
See accompanying notes to consolidated financial statements.
</TABLE>
80
Annual Report Pages 24 - 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three-year period ended December 31, 1994
(Dollars in thousands, except per share amounts)
Bar Graphs on page 24:
Net Property, Plant and Equipment ($ Millions)
1992: 75.7
1993: 72.8
1994: 86.4
Long Term Debt as a Percent of Invested Capital
1992: 36.5%
1993: 26.5%
1994: 23.9%
Interest Expense ($ Millions)
1992: 7.5
1993: 5.9
1994: 4.7
Text on page 24:
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of
Valmont Industries, Inc. (the Company) and its majority-owned
subsidiaries. All significant intercompany items have been
eliminated.
During 1992, Valmont Industries, Inc. increased its ownership in
Sermeto, a manufacturing business located in France, from 96.7%
to 99.8%. In 1994, the Company acquired the assets of Energy
Steel Corporation of Tulsa, Oklahoma, a manufacturer of utility
products. Pro forma consolidated financial information is not
considered significant and has been omitted.
Inventories
At December 31, 1994 approximately 57% of inventory is valued at
the lower of cost on the basis of the last-in, first-out (LIFO)
dollar value method under the natural business unit concept or
market (net realizable value). As a result, it is not possible
to segregate inventory into its component values of raw material,
work in process and finished goods. All other inventory is
valued at the lower of first-in, first-out (FIFO) cost or market
(net realizable value). During 1994, the method of determining
the cost of inventories for the lighting ballast product line was
changed from the LIFO method to the FIFO method because the
company has experienced deflationary material inventory costs and
has enhanced the product design to reduce the material and labor
cost components of inventory. The effect of this change was
immaterial for all years presented.
The excess of replacement cost of inventories over the LIFO value
is approximately $10,600 and $9,500 at December 31, 1994 and
December 25, 1993, respectively.
Property, Plant and Equipment
Property, plant and equipment are stated at historical cost.
Depreciation and amortization are provided on the straight-line
method over the estimated useful lives of the respective assets.
81
Text on page 25:
Income Taxes
Effective the beginning of fiscal 1993, the Company adopted
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (SFAS 109). Under SFAS 109, the asset and
liability method is used to calculate deferred income taxes.
Deferred tax assets and liabilities are recognized on temporary
differences between financial statement and tax bases of assets
and liabilities using enacted tax rates. The effect that a
change in tax rates has on deferred tax assets and liabilities is
recognized in income in the period that includes the enactment
date.
The cumulative effect reported in the first quarter of adopting
SFAS 109 decreased 1993 net earnings by $4,910 ($.42 per share).
Prior years consolidated financial statements were not restated
under the method utilized.
Foreign Currency Translations
Results of operations for foreign subsidiaries are translated
using the average exchange rates during the period. The assets
and liabilities are translated at the exchange rates in effect on
the balance sheet date. Cumulative translation adjustments are
included as a separate component of shareholders' equity.
Earnings Per Share
Earnings per share are based on the weighted average number of
common shares outstanding and equivalent common shares from in-
the-money stock options. The difference between primary and
fully-diluted earnings per share is not material.
Miscellaneous
The Miscellaneous caption of "Other income (deductions)" in the
Consolidated Statements of Operations contains gains and losses
which are of an unusual or infrequent nature. Pretax gains from
disposal of excess property amounting to $1,092 were included in
1994. Included in 1992 was a pretax gain from the termination of
a subsidiary's defined benefit pension plan of $3,200 which was
offset by legal and other nonrecurring losses.
(2) CASH FLOW SUPPLEMENTARY INFORMATION
Cash equivalents on the Consolidated Balance Sheets amounting to
$21,541 at December 31, 1994 and $8,691 at December 25, 1993
consist of highly liquid instruments with maturities of three
months or less at the date of purchase and are stated at cost,
which approximates market. Income taxes paid including
discontinued operations, net of refunds, were $4,819, $14,514 and
$2,240 for the respective fiscal years 1994, 1993 and 1992.
Interest paid was $4,753, $6,192, and $7,739 for the respective
fiscal years 1994, 1993 and 1992.
(3) DISCONTINUED OPERATIONS AND INVESTMENT IN NONCONSOLIDATED
AFFILIATES
All of the Company's investment in Inacom Corp., which was
previously accounted for under the equity method of accounting as
an investment in nonconsolidated affiliate, was sold in 1993 in
an underwritten public offering. The Company received net cash
proceeds of $47,557 and realized a net gain after tax of $3,950.
The Company's share of Inacom net earnings prior to the public
offering were $687 in 1993 and $3,564 in 1992. All other
nonconsolidated affiliates are not material.
(4) PROPERTY, PLANT AND EQUIPMENT
<TABLE>
Property, plant and equipment at cost consists of the following:
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
Land and improvements $7,837 7,671
Buildings and improvements 47,609 45,538
Machinery and equipment 93,733 81,194
Transportation equipment 2,047 1,903
Office furniture and equipment 16,184 14,930
Construction in progress 12,980 9,178
------- -------
$180,390 160,414
======= =======
</TABLE>
Valmont also leases certain facilities, machinery, computer
equipment and transportation equipment under operating leases
with unexpired terms ranging from one to eight years. Rental
expense for operating leases amounted to $3,648, $3,263 and
$3,646 for fiscal 1994, 1993 and 1992, respectively.
<TABLE>
Minimum lease payments under operating leases expiring subsequent
to December 31, 1994 are:
<CAPTION>
Fiscal year ending
<C> <C>
1995 $1,900
1996 1,694
1997 1,590
1998 1,442
1999 1,247
Subsequent 2,342
-------
Total minimum lease payments $10,215
=======
</TABLE>
(5) BANK CREDIT ARRANGEMENTS
The company maintains various lines of credit for short-term
borrowings totaling $49,770. The interest rates charged on these
lines of credit relate to the banks' cost of funds. The unused
borrowings under the lines of credit were $48,077 at December 31,
1994. The lines of credit can be modified at any time at the
option of the banks. The Company pays facility fees of 1/8 to
3/8 of 1% (or equivalent balances) in connection with $28,000 of
its lines of credit, and pays no fees in connection with the
remaining lines of credit. The weighted average interest rate on
borrowings was 8.5% at December 31, 1994 and 6.7% at December 25,
1993.
82
Text on page 26:
(6) INCOME TAXES
As discussed in note 1, the Company adopted SFAS 109 effective in
1993. The cumulative effect of this change in accounting for
income taxes of $4,910 is determined as of December 27, 1992 and
is reported separately in the Consolidated Statement of
Operations for the year ended December 25, 1993. Prior years'
consolidated financial statements have not been restated.
<TABLE>
Total income tax expense was allocated as follows:
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Income from continuing operations $8,800 2,835 5,134
Discontinued operations -- 2,780 --
------------------------
$8,800 5,615 5,134
========================
</TABLE>
<TABLE>
Income tax expense (benefit) attributable to income from
continuing operations consists of:
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $3,857 3,797 2,322
State 374 380 523
Foreign 1,269 529 1,255
------- ------- -------
5,500 4,706 4,100
Deferred:
Federal 3,450 (1,443) 989
State 278 (186) 113
Foreign (428) (242) (68)
------- ------- -------
3,300 (1,871) 1,034
------- ------- -------
$8,800 2,835 5,134
======= ======= =======
</TABLE>
<TABLE>
The reconciliations of the statutory Federal income tax rate and
the effective tax rates follow:
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Statutory Federal income tax rate 35.0% 35.0% 34.0%
State income taxes, net of Federal
benefit 1.6% 1.6% 2.6%
Other (1.3)% (1.6)% (1.8)%
------- ------- -------
35.3% 35.0% 34.8%
======= ======= =======
</TABLE>
<TABLE>
Deferred income tax expense (benefit) results from the tax effect
of the following timing differences:
<CAPTION>
1992
----
<S> <C>
Depreciation 107
Lease transaction 175
Accrued expenses and valuations 1,140
Other (388)
-------
Deferred tax expense $1,034
=======
</TABLE>
<TABLE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and liabilities
at December 31, 1994, and December 25, 1993 are presented below:
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
Deferred tax assets:
Accrued expenses and allowances $11,470 14,311
Allowance for doubtful receivable 384 461
Inventory capitalization 665 540
------- -------
Total deferred tax assets 12,519 15,312
------- -------
Deferred tax liabilities:
Plant and equipment, primarily
due to depreciation 4,351 3,887
Lease transactions 1,850 1,923
Warranty accrual 1,373 1,416
Business combination adjustments 3,439 3,430
Other 4,347 3,509
------- -------
Total deferred tax
liabilities $15,360 14,165
------- -------
Net deferred tax assets
(liabilities) $(2,841) 1,147
======== =======
</TABLE>
No valuation allowance for deferred tax assets has been provided
since all tax benefits are more likely than not to be used to
offset future Federal taxable income.
(7) LONG-TERM DEBT
<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
9.40% to 12.77% promissory
notes, unsecured (a) $28,250 31,000
Promissory note, secured (b) 9,606 11,145
6.70% to 13.50% notes 5,386 1,931
-------- --------
Total long-term debt 43,242 44,076
Less current installments
of long-term debt 7,753 5,657
-------- --------
Long-term debt, excluding
current installments $35,489 38,419
======== ========
</TABLE>
(a) The promissory notes payable are due
in varying annual principal
installments through 2001. The notes
are subject to prepayment in whole or
in part with or without premium as
specified in the agreements.
(b) The promissory note totaling 51.4
million French francs is due in four
equal annual principal installments
through 1998. The interest rate on
the note is variable based on 6-month
PIBOR (Paris Interbank Offering Rate),
or can be fixed at the Company's
option. At December 31, 1994 the
effective interest rate was 6.9%. The
note is secured by the common stock of
Sermeto.
The agreements place certain restrictions on working capital,
capital expenditures, payment of dividends, purchase of Company
stock and additional borrowings. The amount of retained earnings
at December 31, 1994 not restricted as to payment of cash
dividends and purchase of the Company's capital stock under the
most restrictive provisions of the agreements was approximately
$23,000.
The minimum aggregate maturities of long-term debt for each of
the four years following 1995 are: $7,645, $7,346, $7,248, and
$4,890.
83
Text on page 27:
(8) EMPLOYEE STOCK PLANS
Stock plans approved by the shareholders provide that the
Compensation Committee of the Board of Directors may grant to
employees incentive stock options, nonqualified stock options,
stock appreciation rights, restricted stock awards, bargain
purchases of common stock, bonuses of common stock or any other
form of stock benefit. Options granted generally are exercisable
in three to six equal annual installments and expire from six to
ten years after issuance.
<TABLE>
The changes in the outstanding stock options during the three
years ended December 31, 1994 are summarized below:
<CAPTION>
Option Price
Shares Per Share Range
-------- ---------------
<S> <C> <C> <C>
Balance at
December 28, 1991 815,111 $3.91 - 24.25
Granted 389,609 15.00 - 18.25
Exercised (63,767) 3.91 - 10.56
Canceled (50,213) 5.91 - 24.25
-------- ----- -----
Balance at
December 26, 1992 1,090,740 3.91 - 24.25
Granted 15,000 14.75 - 19.50
Exercised (157,299) 3.91 - 18.50
Canceled (170,234) 5.91 - 24.25
-------- ----- -----
Balance at
December 25, 1993 778,207 5.41 - 24.25
Granted 152,000 14.75 - 18.25
Exercised (64,575) 5.41 - 12.00
Canceled (81,858) 10.56 - 24.25
-------- ----- -----
Balance at
December 31, 1994 783,774 5.91 - 18.50
======== =============
Options exercisable at
December 31, 1994 450,107 5.91 - 18.50
======== =============
</TABLE>
(9) EMPLOYEE RETIREMENT SAVINGS PLAN
Established under Internal Revenue Code Section 401(k), the
Valmont Employee Retirement Savings Plan is available to all
eligible employees. The Company makes an annual basic
contribution equal to $.25 on the dollar of the first 3% of each
participant's annual pay. In addition, participants can elect to
contribute up to 15% of annual pay, on a pre-tax and/or after-tax
basis. The Company will match $.50 to $.75 on the dollar of the
first 6% of the employee pre-tax contribution. The Company, at
the discretion of the Board of Directors, may also pay a
supplemental contribution of up to $.50 on the dollar of the
first 6% of the participants' pre-tax contributions. The 1994,
1993 and 1992 Company contributions amounted to approximately
$2,200, $2,300 and $2,600, respectively.
(10) RESEARCH AND DEVELOPMENT
The Company's accounting system does not accumulate all costs
incidental to research and development for new products or
improvements to existing products. It is estimated that the
research and development costs charged against earnings were
approximately $2,500 in 1994, $2,700 in 1993 and $2,600 in 1992.
(11) RESTRUCTURING CHARGES
During 1993 the Company incurred a $10,961 nonrecurring
restructuring charge ($7,125 or 61 cents per share after tax)
related to its lighting ballast subsidiary, Valmont Electric,
Inc. The charge was the result of finalizing the move of ballast
operations from Illinois to Texas as well as changes in the
ballast market. Write-offs of equipment no longer necessary,
severance accruals and other related costs were included in the
charge. At December 31, 1994, the Company maintains accrued
liabilities amounting to approximately $1,500 for restructuring
activities not yet complete.
(12) DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents, receivables,
accounts payable, notes payable to banks, and accrued expenses
approximates fair value because of the short maturity of these
instruments. The fair values of each of the Company's long-term
debt instruments are based on the amount of future cash flows
associated with each instrument discounted using the Company's
current borrowing rate for similar debt instruments of comparable
maturity. The fair value estimates are made at a specific point
in time and the underlying assumptions are subject to change
based on market conditions. At December 31, 1994 the carrying
amount of the Company's long-term debt is $43,242 with an
estimated fair value of $44,000.
(13) BUSINESS SEGMENTS
The Company's business activities are currently classified into
the following industry segments:
Industrial Products - The manufacture and distribution of
engineered metal structures and lighting ballasts.
Irrigation Products - The manufacture and distribution of
agricultural irrigation equipment and related products.
Financial information concerning the Company's business segments
is summarized on the following page and is considered an integral
part of this note.
84
Annual Report Page 28 - Business Segment Information
<TABLE>
Summary by Business Segments
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
NET SALES:
Industrial Products $307,715 304,928 297,907
Irrigation Products 164,030 134,219 126,965
Less intersegment sales 0 (392) (187)
-------- -------- --------
Total $471,745 438,755 424,685
======== ======== ========
OPERATING INCOME:
Industrial Products 19,036 4,069 15,545
Irrigation Products 17,742 14,059 11,472
-------- -------- --------
Total 36,778 18,128 27,017
GENERAL CORPORATE
EXPENSE, NET (9,701) (5,006) (6,027)
INTEREST EXPENSE, NET (3,793) (5,105) (6,847)
MISCELLANEOUS 1,635 84 639
-------- -------- --------
Earnings from continuing
operations before
income taxes $24,919 8,101 14,782
======== ======== ========
IDENTIFIABLE ASSETS:
Industrial Products 180,587 180,686 173,543
Irrigation Products 46,554 43,299 36,586
Corporate 39,033 22,664 63,089
-------- -------- --------
Total $266,174 246,649 273,218
======== ======== ========
CAPITAL EXPENDITURES:
Industrial Products 15,464 11,620 5,727
Irrigation Products 7,191 4,504 2,020
Corporate 333 160 156
-------- -------- --------
Total $22,988 16,284 7,903
======== ======== ========
DEPRECIATION AND
AMORTIZATION:
Industrial Products 7,397 7,389 9,133
Irrigation Products 2,173 1,903 1,981
Corporate 801 1,021 991
-------- -------- --------
Total $10,371 10,313 12,105
======== ======== ========
</TABLE>
<TABLE>
Summary by Geographical Area
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
NET SALES:
North America 411,287 375,110 342,689
Europe 50,940 49,708 51,739
Other 9,518 13,937 30,257
-------- -------- --------
Total $471,745 438,755 424,685
======== ======== ========
OPERATING INCOME:
North America 32,506 13,736 20,377
Europe 3,220 2,942 3,983
Other 1,052 1,450 2,657
-------- -------- --------
Total $36,778 18,128 27,017
======== ======== ========
IDENTIFIABLE ASSETS:
North America 203,840 192,379 220,418
Europe 62,334 54,270 52,800
-------- -------- --------
Total $266,174 246,649 273,218
======== ======== ========
</TABLE>
Total sales by business segment are to unaffiliated customers.
Net sales by geographical area is based on destination of sales.
Operating income by business segment is based on net sales less
identifiable operating expenses, and restructuring charges.
Operating income by geographical area is based on destination of
sales less appropriate expense allocations.
Corporate assets consist of cash, deferred and recoverable income
taxes, investment in nonconsolidated affiliates, and
administrative buildings and equipment. Identifiable assets by
geographical area are based on location of facilities.
85
<TABLE>
Annual Report Page 29 - Quarterly Financial Data (Unaudited)
(Dollars in thousands, exept per share amounts)
<CAPTION>
Net Earnings Stock
(Loss) From Stock Divi-
Continuing Net Earnings Market dends
Net Gross Operations (Loss) Price Dec-
Sales Profit Amount Share Amount Share High Low lared
----- ------ ------ ----- ------------ ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994
First $111,185 24,357 3,013 0.26 3,013 0.26 20.50 14.50 0.075
Second 121,967 27,574 4,323 0.37 4,323 0.37 17.00 13.50 0.075
Third 109,852 26,259 3,858 0.33 3,858 0.33 16.75 14.50 0.075
Fourth 128,741 32,117 4,925 0.42 4,925 0.42 17.50 15.75 0.075
______________________________________________________________________________
Year $471,745 110,307 16,119 1.38 16,119 1.38 20.50 13.50 0.300
______________________________________________________________________________
1993
First $106,909 25,342 2,801 0.24 (1,422)(0.12) 22.75 16.50 0.065
Second 115,979 26,510 3,830 0.33 8,113 0.69 21.75 14.75 0.075
Third 107,212 24,038 2,673 0.23 2,340 0.20 17.63 13.00 0.075
Fourth 108,655 24,658 (4,038) (0.35)(4,038)(0.35) 20.25 14.00 0.075
______________________________________________________________________________
Year $438,755 100,548 5,266 0.45 4,993 0.43 22.75 13.00 0.290
______________________________________________________________________________
1992
First $110,338 23,095 1,189 0.10 1,753 0.15 14.50 10.38 0.065
Second 115,923 25,928 3,238 0.28 4,058 0.35 14.25 10.50 0.065
Third 94,797 21,776 1,694 0.15 2,619 0.23 17.25 11.75 0.065
Fourth 103,627 26,527 3,527 0.30 4,782 0.41 18.75 16.25 0.065
______________________________________________________________________________
Year $424,685 97,326 9,648 0.83 13,212 1.14 18.75 10.38 0.260
______________________________________________________________________________
</TABLE>
Earnings per share are computed independently for each of the quarters.
Therefore, the sum of the quarterly earnings per share may not equal the
total for the year.
86
Annual Report Page 30 - Independent Auditors' Report
The Board of Directors
Valmont Industries, Inc.:
We have audited the consolidated balance sheets of Valmont
Industries, Inc. and Subsidiaries as of December 31, 1994 and
December 25, 1993 and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the
years in the three-year period ended December 31, 1994. These
consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Valmont Industries, Inc. and Subsidiaries as of
December 31, 1994 and December 25, 1993, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 1994, in conformity with
generally accepted accounting principles.
As described in Note 6 to the Consolidated Financial Statements,
the Company adopted the provisions of the Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" in
fiscal 1993.
Omaha, Nebraska
February 16, 1995
87
Annual Report Page 31 - Management's Report
The consolidated financial statements of Valmont Industries, Inc.
and Subsidiaries and the other information contained in the
Annual Report were prepared by and are the responsibility of
management. The statements have been prepared in accordance with
generally accepted accounting principles and necessarily include
amounts based on management's best estimates and judgments.
In fulfilling its responsibilities, management relies on a system
of internal controls which provide reasonable assurance that the
financial records are reliable for preparing financial statements
and for maintaining accountability of assets. Internal controls
are designed to reduce the risk that material errors or
irregularities in the financial statements may occur and not be
timely detected. These systems are augmented by written
policies, careful selection and training of qualified personnel,
an organizational structure providing division of
responsibilities and a program of financial, operational and
systems audits. The Company also has a business ethics policy
which requires employees to maintain high ethical standards in
the conduct of Company business.
The Audit Committee of the Board of Directors is responsible for
recommending to the Board, subject to ratification by
shareholders, the independent accounting firm to be retained each
year. The Audit Committee meets regularly, and when appropriate
separately, with the independent certified public accountants,
management and the internal auditors to review Company
performance. The independent certified public accountants,
internal auditors, and the Audit Committee have unrestricted
access to each other in the discharge of their responsibilities.
Mogens C. Bay
President and Chief Executive Officer
Terry J. McClain
Vice President and Chief Financial Officer
88
Annual Report Page 32 - Officers
Corporate Officers
Robert B. Daugherty
Chairman of the Board
Mogens C. Bay
President and
Chief Executive Officer
Terry J. McClain
Vice President
and Chief Financial Officer
Vincent T. Corso
Vice President - Operations
Thomas P. Egan, Jr.
Vice President - Corporate
Counsel and Secretary
Brian C. Stanley
Vice President - Investor Relations
& Controller
Mark E. Treinen
Vice President - Business Development
Tommy L. Whalen
Vice President - Human Resources
Division and Subsidiary Officers
Gary L. Cavey
President, North America Operations
Industrial and Construction Products
Joseph M. Goecke
President and
Chief Operating Officer
Valmont Irrigation
Lewis P. Hays
President and
Chief Operating Officer
Industrial and Construction Products
E. Robert Meaney
President and
Chief Operating Officer
Valmont International
Claude Rougier
President
Europe
Howard G. Sachs
President and
Chief Operating Officer
Valmont Electric, Inc.
89
Annual Report Page 33 - Shareholder Information
Corporate Headquarters
Valmont Industries, Inc.
P. O. Box 358
Valley, Nebraska 68064 U.S.A.
(402)359-2201
Independent Public Accountants
KPMG Peat Marwick LLP
Omaha, Nebraska
Outside Legal Counsel
McGrath, North, Mullin & Kratz, P.C.
Omaha, Nebraska
Stock Transfer Agent and Registrar
First National Bank of Omaha
Trust Department
One First National Center
Omaha, Nebraska 68102-1596
(402)341-0500
Notices regarding changes of address and inquires regarding lost
dividend checks, lost or stolen certificates and transfers of
stock, should be directed to the transfer agent.
Annual Meeting
The annual meeting of Valmont's shareholders will be held at 2:00
p.m. on Tuesday, April 18, 1995, at Joslyn Art Museum, 2200 Dodge
Street, Omaha, Nebraska.
Stock Trading
Valmont's common trades on The Nasdaq Stock Market under the symbol VALM.
Current share price and related information can be found in the financial
section of many daily newspapers.
Availability of 10-K Report
A copy of Valmont's Annual Report on Form 10-K for 1994 may be obtained
by calling or writing the Investor Relations Department, Valmont Industries,
Inc., P. O. Box 358, Valley, Nebraska 68064 U.S.A.
Phone: (402)359-2201;
Fax: (402)359-2848
Stock Held in "Street Name"
Valmont maintains a direct mailing list to ensure that shareholders with
stock held in broker accounts receive information on a timely basis.
If you would like your name added to this list, please direct your request to:
Investor Relations Department, Valmont Industries, Inc., P.O. Box 358,
Valley, Nebraska 68064 U.S.A.
Phone: (402)359-2201;
Fax: (402)359-2848
Shareholder and Investor Relations
Valmont maintains an active investor relations program to keep shareholders
and potential investors informed about the company. Comments and inquiries
are welcome and should be directed to the Investor Relations Department,
Valmont Industries, Inc., P.O. Box 358, Valley, Nebraska, 68064 U.S.A.
Phone: (402)359-2201;
Fax: (402)359-2848
Market Makers
The following firms make a market in Valmont Industries, Inc. as of
February 24, 1995:
Burns, Pauli & Company, Inc.
Dain Bosworth Inc.
Herzog, Heine, Geduld, Inc.
Huntleigh Securities Corporation
Kirkpatrick Pettis Inc.
Lehman Brothers Inc.
Mayer & Schweitzer, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc.
Troster Singer Corporation
90
Annual Report Back Cover:
2 photos that cover 2/3 of the cover:
left photo: vertical photo of 4 ballasts
right photo: metal transmission pole
1/3 of the right side of the cover: shows Valmont logo, Valmont Industries
Inc., Valley, Nebraska 68064 U.S.A.
91
Exhibit 18
KPMG Peat Marwick LLP (letterhead)
Two Central Park Plaza
Suite 1501
Omaha, NE 68102
233 South 13th Street, Suite 1600
Lincoln, NE 68508-2041
February 16, 1995
Valmont Industries, Inc.
Valley, Nebraska 68064
Gentlemen:
We have audited the consolidated balance sheets of Valmont
Industries, Inc. and subsidiaries (the Company) as of
December 31, 1994 and December 25, 1993, and the related
consolidated statements of operations, shareholders' equity
and cash flows for each of the years in the three-year
period ended December 31, 1994, and have reported thereon
under date of February 16, 1995. The aforementioned
consolidated financial statements and our audit report
thereon are included in the Company's annual report on Form
10-K for the year ended December 31, 1994. As stated in
Note 1 to those consolidated financial statements, the
Company changed its method of accounting for cost of
inventory costs on the lighting ballast product line from
the LIFO method to the FIFO method and states that the newly
adopted accounting principle is preferable in the
circumstances because the Company has experienced
deflationary material inventory costs and has enhanced the
product design to reduce the material and labor cost
components of inventory. In accordance with your request,
we have reviewed and discussed with Company officials the
circumstances and business judgment and planning upon which
the decision to make this change in the method of accounting
was based.
With regard to the aforementioned accounting change,
authoritative criteria have not been established for
evaluating the preferability of one acceptable method of
accounting over another acceptable method. However, for
purposes of Valmont Industries, Inc.'s compliance with the
requirements of the Securities and Exchange Commission, we
are furnishing this letter.
Based on our review and discussion, with reliance on
management's business judgment and planning, we concur that
the newly adopted method of accounting is preferable in the
Company's circumstances.
KPMG PEAT MARWICK LLP
92
Exhibit 21
SUBSIDIARIES OF VALMONT INDUSTRIES, INC.
----------------------------------------
State or Country
Name of Subsidiary of Incorporation
------------------ ----------------
American Lighting Standards
d/b/a Valmont/ALS Texas
Best-All Electric, Inc. Nebraska
CCC de Mexico, S.A. de C.V. Mexico
Gate City Steel Corporation Delaware
Lampadaires Feralux, Inc. Canada
NEUVALCO S.A. France
Valmont Nederland Holland
SERMETO S.A. France
SERMETO Iberica S.A. Spain
Shanghai Valmont SST, Co. Ltd. China
TUBALCO S.A. France
VBT, Inc. Delaware
Valmont DeEspana, S.A. Spain
Valmont Electric, Inc. Delaware
Valmont S.A. Spain
Valmont Industries (Asia-Pacific) Ltd. Hong Kong
Valmont Industries Holland B.V. Holland
Valmont International Corp. Texas
Valmont International Inc. U. S. Virgin Islands
Valmont Northwest, Inc. Nebraska
Valmont Polska Sp. zo.o Poland
Valmont Service Centers, Inc. Nebraska
Valmont World Trade, N.V. Netherlands Antilles
93
Exhibit 23
KPMG Peat Marwick LLP (letterhead)
Two Central Park Plaza Telephone 402-348-1450 Telefax 402-348-0152
Suite 1501
Omaha, NE 68102
233 South 13th Street Telephone 402-476-1216 Telefax 402-476-1944
Suite 1600
Lincoln, NE 68508-2041
ACCOUNTANTS' CONSENT
--------------------
The Board of Directors
Valmont Industries, Inc.:
We consent to incorporation by reference in this Registration Statement
(No. 33-21680) on Form S-8 and Registration Statement (No. 2-88663) on
Form S-8 of Valmont Industries, Inc. of our reports dated February 16, 1995
relating to the consolidated balance sheets of Valmont Industries, Inc. and
subsidiaries as of December 31, 1994 and December 25, 1993, and the related
consolidated statements of operations, shareholders' equity and cash flows
and related schedules for each of the years in the three-year period ended
December 31, 1994 which reports appear in or are incorporated by reference
in the December 31, 1994 Annual Report on Form 10-K of Valmont Industries,
Inc.
Our report refers to the Company's adoption of Financial Accounting Standards
No. 109, Accounting for Income Taxes, in fiscal 1993.
KPMG PEAT MARWICK LLP
Omaha, Nebraska
March 23, 1995
Exhibit 24
POWER OF ATTORNEY
-----------------
The undersigned Directors of Valmont Industries, Inc., a Delaware
corporation, hereby constitute and appoints Mogens C. Bay as attorney-in-
fact in their name, place and stead to execute Valmont's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, together with
any and all subsequent amendments thereof in their capacity as Director
and hereby ratify all that said attorney-in-fact may do by virtue thereof.
DATED this 27th day of February, 1995.
/s/Robert B. Daugherty, Director /s/John E. Jones, Director
----------------------------- -----------------------------
Robert B. Daugherty, Director John E. Jones, Director
/s/Charles M. Harper, Director /s/Thomas F. Madison, Director
----------------------------- -----------------------------
Charles M. Harper, Director Thomas F. Madison, Director
/s/Allen F. Jacobson, Director /s/Walter Scott, Jr., Director
----------------------------- -----------------------------
Allen F. Jacobson, Director Walter Scott, Jr., Director
/s/Lloyd P. Johnson, Director /s/Robert G. Wallace, Director
----------------------------- -----------------------------
Lloyd P. Johnson, Director Robert G. Wallace, Director
95
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS FINANCIAL DATA SCHEDULE IS FOR E.D.G.A.R. FILING PURPOSES ONLY.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 29582
<SECURITIES> 0
<RECEIVABLES> 73185
<ALLOWANCES> 0
<INVENTORY> 59221
<CURRENT-ASSETS> 171004
<PP&E> 180390
<DEPRECIATION> 94007
<TOTAL-ASSETS> 266174
<CURRENT-LIABILITIES> 90089
<BONDS> 35489
<COMMON> 12000
0
0
<OTHER-SE> 115467
<TOTAL-LIABILITY-AND-EQUITY> 266174
<SALES> 471745
<TOTAL-REVENUES> 471745
<CGS> 361438
<TOTAL-COSTS> 361438
<OTHER-EXPENSES> 83230
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4672
<INCOME-PRETAX> 24919
<INCOME-TAX> 8800
<INCOME-CONTINUING> 16119
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16119
<EPS-PRIMARY> 1.38
<EPS-DILUTED> 0
