<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(MARK ONE)
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE QUARTERLY PERIOD ENDED JUNE 24, 2000
OR
<TABLE>
<C> <S>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER: 0-3701
------------------------
VALMONT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 47-0351813
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE VALMONT PLAZA, OMAHA, NEBRASKA 68154-5215
(Address of principal executive offices) (Zip Code)
</TABLE>
402-963-1000
(Registrant's telephone number, including area code)
<TABLE>
<S> <C>
COMMON STOCK $1.00 PAR VALUE NASDAQ (SYMBOL VALM)
Title of Class Name of each
exchange
on which registered
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
23,239,221
Outstanding Common Shares as of July 20, 2000
Index is located on page 2.
Total number of pages 14.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements:
Consolidated Statements of Operations for the thirteen and
twenty-six weeks ended June 24, 2000 and June 26, 1999.... 3
Consolidated Balance Sheets as of June 24, 2000 and December
25, 1999.................................................. 4
Consolidated Statements of Cash Flows for the twenty-six
weeks ended June 24, 2000 and June 26, 1999............... 5
Notes to Consolidated Financial Statements.................. 6-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 9-11
Item 3. Quantitative and Qualitative Disclosure about Market Risk... 12
PART II. OTHER INFORMATION
Item 5. Other Information........................................... 13
Item 6. Exhibits and Reports on Form 8-K............................ 13
SIGNATURES............................................................ 14
</TABLE>
2
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
--------------------- -----------------------
JUNE 24, JUNE 26, JUNE 24, JUNE 26,
2000 1999 2000 1999
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales........................................... $215,525 $162,759 $403,890 $317,162
Cost of sales....................................... 158,284 119,165 296,748 233,170
-------- -------- -------- --------
Gross profit...................................... 57,241 43,594 107,142 83,992
Selling, general and administrative expenses........ 37,999 30,364 72,648 59,847
-------- -------- -------- --------
Operating income.................................. 19,242 13,230 34,494 24,145
-------- -------- -------- --------
Other income (deductions):
Interest expense.................................. (3,964) (1,956) (7,109) (3,861)
Interest income................................... 214 189 349 419
Miscellaneous..................................... (1,127) (561) (1,340) (640)
-------- -------- -------- --------
(4,877) (2,328) (8,100) (4,082)
-------- -------- -------- --------
Earnings before income taxes...................... 14,365 10,902 26,394 20,063
-------- -------- -------- --------
Income tax expense:
Current........................................... 6,600 3,400 11,700 8,900
Deferred.......................................... (1,300) 600 (1,900) (1,500)
-------- -------- -------- --------
5,300 4,000 9,800 7,400
-------- -------- -------- --------
Net Earnings...................................... $ 9,065 $ 6,902 $ 16,594 $ 12,663
======== ======== ======== ========
Earnings per share:
Basic........................................... $ 0.39 $ 0.28 $ 0.71 $ 0.52
======== ======== ======== ========
Diluted......................................... $ 0.38 $ 0.28 $ 0.70 $ 0.51
======== ======== ======== ========
Cash dividends per share.......................... $ 0.065 $ 0.065 $ 0.13 $ 0.13
======== ======== ======== ========
Weighted average number of shares of
common stock outstanding (000 omitted)............ 23,233 24,237 23,275 24,412
======== ======== ======== ========
Weighted average number of shares of
common stock outstanding plus dilutive
potential common shares (000 omitted)............. 23,740 24,425 23,696 24,602
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 24, DECEMBER 25,
2000 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 9,488 $ 14,936
Receivables............................................... 134,244 106,844
Inventories............................................... 119,763 85,383
Prepaid expenses.......................................... 6,730 4,784
Refundable and deferred income taxes...................... 10,233 8,086
-------- --------
Total current assets.................................. 280,458 220,033
-------- --------
Property, plant and equipment, at cost...................... 373,326 326,451
Less accumulated depreciation and amortization............ 171,636 152,531
-------- --------
Net property, plant and equipment..................... 201,690 173,920
-------- --------
Goodwill and other assets................................... 60,099 25,382
-------- --------
Total assets.......................................... $542,247 $419,335
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt.................... $ 4,506 $ 4,372
Notes payable to banks.................................... 50,769 18,834
Accounts payable.......................................... 60,828 46,753
Accrued expenses.......................................... 55,331 49,962
Dividends payable......................................... 1,511 1,524
-------- --------
Total current liabilities............................. 172,945 121,445
-------- --------
Deferred income taxes....................................... 11,355 11,109
Long-term debt, excl. current installments.................. 165,900 104,250
Minority interest in consolidated subsidiaries.............. 8,152 7,302
Other noncurrent liabilities................................ 4,500 4,741
Shareholders' equity:
Preferred stock........................................... -- --
Common stock of $1 par value.............................. 27,900 27,900
Additional paid-in capital................................ 1,003 1,043
Retained earnings......................................... 234,080 220,506
Accumulated other comprehensive income.................... (7,839) (5,113)
Treasury stock............................................ (75,723) (73,808)
Unearned restricted stock................................. (26) (40)
-------- --------
Total shareholders' equity............................ 179,395 170,488
-------- --------
Total liabilities and shareholders' equity............ $542,247 $419,335
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
-----------------------
JUNE 24, JUNE 26,
2000 1999
--------- -----------
<S> <C> <C>
Net cash provided (used) by operations...................... $ (7,159) $ 39,542
-------- --------
Cash flows from investing activities:
Purchase of property, plant & equipment................... (22,577) (24,601)
Acquisitions.............................................. (56,218) (2,854)
Proceeds from sale of property and equipment.............. 152 114
Proceeds from investment by minority shareholder.......... -- 1,374
Proceeds from sale of nonconsolidated affiliate........... -- 8,294
Changes in investment in other assets..................... (1,011) (501)
Other, net................................................ (1,381) (739)
-------- --------
Net cash used in investing activities................... (81,035) (18,913)
-------- --------
Cash flows from financing activities:
Net borrowings (repayments) under short-term agreements... 31,194 (6,936)
Proceeds from long-term borrowings........................ 68,709 187
Principal payments on long-term obligations............... (11,609) (2,537)
Dividends paid............................................ (3,035) (3,196)
Proceeds from exercises under stock plans................. 544 381
Purchase of common treasury shares:
Stock repurchase program................................ (2,322) (7,236)
Stock plan exercises.................................... (449) (338)
-------- --------
Net cash provided (used) by financing activities........ 83,032 (19,675)
-------- --------
Effect of exchange rate changes on cash and cash
equivalents............................................... (286) (755)
-------- --------
Net (decrease) increase in cash and cash equivalents.... (5,448) 199
Cash and cash equivalents--beginning of period.............. 14,936 7,580
-------- --------
Cash and cash equivalents--end of period.................... $ 9,488 $ 7,779
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Condensed Consolidated Balance Sheet as of June 24, 2000 and the
Condensed Consolidated Statements of Operations for the thirteen and twenty-six
week periods ended June 24, 2000 and June 26, 1999 and the Condensed
Consolidated Statements of Cash Flows for the twenty-six week periods then ended
have been prepared by the Company, without audit. In the opinion of management,
all necessary adjustments (which include normal recurring adjustments) have been
made to present fairly the financial statements as of June 24, 2000 and for all
periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These Condensed Consolidated Financial
Statements should be read in conjunction with the financial statements and notes
thereto included in the Company's December 25, 1999 Annual Report to
Shareholders. The accounting policies and methods of computation followed in
these interim financial statements are the same as those followed in the
financial statements for the year ended December 25, 1999. The results of
operations for the period ended June 24, 2000 are not necessarily indicative of
the operating results for the full year.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements." This Bulletin becomes effective no later than the fourth quarter of
the fiscal year beginning after December 15, 1999. Adoption of SAB 101 is not
expected to have a significant effect on the Company's consolidated results of
operations, financial position, or cash flows.
2. USE OF ESTIMATES
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these condensed combined financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
3. CASH FLOWS
The Company considers all highly liquid temporary cash investments purchased
with a maturity of three months or less to be cash equivalents. Cash payments
for interest and income taxes (net of refunds) were as follows for the
twenty-six weeks ended:
<TABLE>
<CAPTION>
JUNE 24, JUNE 26,
2000 1999
-------- --------
<S> <C> <C>
Interest................................................ $ 6,085 $ 3,744
Income Taxes............................................ 10,807 8,455
</TABLE>
6
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
4. EARNINGS PER SHARE
The following table provides a reconciliation between basic and diluted
earnings per share:
<TABLE>
<CAPTION>
BASIC DILUTIVE EFFECT DILUTED
EPS OF STOCK OPTIONS EPS
-------- ----------------- --------
<S> <C> <C> <C>
1999:
Thirteen weeks ended June 26, 1999:
Net earnings....................... $ 6,902 -- $ 6,902
Shares outstanding................. 24,237 188 24,425
Per share amount................... $ 0.28 -- $ 0.28
Twenty-six weeks ended June 26, 1999:
Net earnings....................... $12,663 -- $12,663
Shares outstanding................. 24,412 190 24,602
Per share amount................... $ 0.52 -- $ 0.51
2000:
Thirteen weeks ended June 24, 2000:
Net earnings....................... $ 9,065 -- $ 9,065
Shares outstanding................. 23,233 507 23,740
Per share amount................... $ 0.39 -- $ 0.38
Twenty-six weeks ended June 24, 2000:
Net earnings....................... $16,594 -- $16,594
Shares outstanding................. 23,275 421 23,696
Per share amount................... $ 0.71 -- $ 0.70
</TABLE>
5. COMPREHENSIVE INCOME
Results of operations for foreign subsidiaries are translated using the
average exchange rates during the period. Assets and liabilities are translated
at the exchange rates in effect on the balance sheet dates. These translation
adjustments are the Company's only component of other comprehensive income.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
--------------------- -----------------------
JUNE 24, JUNE 26, JUNE 24, JUNE 26,
2000 1999 2000 1999
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net earnings.................... $ 9,065 $ 6,902 $16,594 $12,663
Currency translation
adjustments................... (2,445) (785) (2,726) (4,051)
------- ------- ------- -------
Total comprehensive income.... $ 6,620 $ 6,117 $13,868 $ 8,612
======= ======= ======= =======
</TABLE>
6. TREASURY STOCK
During 1998, the Board of Directors authorized management to repurchase up
to 5.4 million shares of the Company's common stock. Repurchased shares are
recorded as "Treasury Stock" and result in a reduction of "Shareholders'
Equity." When treasury shares are reissued, the Company uses the last-in,
first-out method, and the difference between the repurchase cost and reissuance
price is charged or credited to "Additional Paid-In Capital." As of June 24,
2000, a total of 4.7 million shares had been purchased for $77,787 including
140,000 shares during 2000 at a cost of $2,322.
7
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
7. BUSINESS SEGMENTS
The Company has two reportable segments:
IRRIGATION: This segment consists of the manufacture and distribution of
agricultural irrigation equipment, tubular products and related parts and
services, and
INFRASTRUCTURE: This segment includes the manufacture and distribution of
engineered metal structures and coating services for the lighting, utility and
wireless communications industries.
In addition to these two reportable segments, the Company has other
businesses that individually are not more than 10% of consolidated sales,
profit, or assets.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
--------------------- -----------------------
JUNE 24, JUNE 26, JUNE 24, JUNE 26,
2000 1999 2000 1999
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Sales:
Irrigation..................... $ 97,775 $ 74,680 $175,516 $146,052
Infrastructure................. 117,101 84,526 226,432 163,404
Other.......................... 6,732 7,392 13,269 15,323
-------- -------- -------- --------
221,608 166,598 415,217 324,779
Intersegment Sales:
Irrigation..................... $ 2,601 $ 972 $ 4,257 $ 1,662
Infrastructure................. 2,113 1,648 4,568 4,283
Other.......................... 1,369 1,219 2,502 1,672
-------- -------- -------- --------
6,083 3,839 11,327 7,617
Net Sales:
Irrigation..................... $ 95,174 $ 73,708 $171,259 $144,390
Infrastructure................. 114,988 82,878 221,864 159,121
Other.......................... 5,363 6,173 10,767 13,651
-------- -------- -------- --------
Consolidated net sales....... $215,525 $162,759 $403,890 $317,162
======== ======== ======== ========
Operating Income
Irrigation operations.......... $ 10,976 $ 8,533 $ 18,554 $ 18,194
Gain on sale of investment..... -- -- -- 2,823
-------- -------- -------- --------
Total Irrigation............. 10,976 8,533 18,554 21,017
-------- -------- -------- --------
Infrastructure operations...... 8,186 4,483 15,621 4,879
Impairment charge.............. -- -- -- (2,431)
-------- -------- -------- --------
Total Infrastructure......... 8,186 4,483 15,621 2,448
-------- -------- -------- --------
Other.......................... 80 214 319 680
-------- -------- -------- --------
Total........................ $ 19,242 $ 13,230 $ 34,494 $ 24,145
======== ======== ======== ========
</TABLE>
8
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's discussion and analysis contains forward looking statements
which reflect management's current view and estimates of future economic and
market circumstances, industry conditions, company performance and financial
results. The statements are based on many assumptions and factors including
operating efficiencies, availability and price of raw materials, availability
and market acceptance of new products, product pricing, domestic and
international competitive environments, actions and policy changes of domestic
and foreign governments and other risks described from time to time in the
Company's reports to the Securities and Exchange Commission. Any changes in such
assumptions or factors could produce significantly different results.
RESULTS OF OPERATIONS
CONSOLIDATED
Net sales for the second quarter of 2000 were $215.5 million, an increase of
32.4% from $162.8 million for the same period last year. For the twenty-six week
period ended June 24, 2000, net sales were $403.9 million, an increase of
$86.7 million, or 27.3% over the $317.2 million reported for the twenty-six week
period ended June 26, 1999. Sales increases were realized in both the irrigation
and infrastructure segments.
Gross profit margin was 26.6% for the thirteen week period ended June 24,
2000, compared with 26.8% for the period ended June 26, 1999. For the twenty-six
week periods ended June 24, 2000 and June 26, 1999, gross profit margins were
26.5%. Gross profit margins were essentially unchanged, as sales price
increases, cost reductions and other efficiency improvements helped offset raw
material price increases. For the thirteen weeks ended June 24, 2000, selling,
general and administrative expenses ("SG&A") as a percentage of net sales
decreased from 18.7% to 17.6% when compared with the period ended June 26, 1999.
For the twenty-six weeks ended June 24, 2000, SG&A as a percentage of net sales
decreased from 18.9% to 18.0% from the period ended June 26, 1999. The SG&A
percentage decreases were due to SG&A expense controls and continued focus on
cost reductions. Operating income for the first quarter of 2000 was
$19.2 million, an increase of $6.0 million from $13.2 million reported for the
same period in 1999, resulting in a percentage increase of 45.4%. Operating
income for the twenty-six weeks ended June 24, 2000 was $34.5 million, a 42.9%
increase from the $24.1 million reported for the same period ended June 26,
1999.
Net interest expense was $3.8 million for the second quarter of 2000 which
is up from the $1.8 million incurred for the same period in 1999. For the
twenty-six weeks ended June 24, 2000, net interest expense was $6.8 million, an
increase of $3.3 million from the $3.4 million reported for the period ended
June 26, 1999. These increases reflect higher interest-bearing debt levels and
interest rates in 2000. Increased state and local taxes resulted in the
effective tax rate being increased for the second quarter in 2000 to 36.9% up
from 36.7% for the second quarter in 1999. The effective tax rate for the
twenty-six week period ended June 24, 2000 was 37.1% compared with 36.9% for the
period ended June 26, 1999.
Net earnings for the quarter ended June 24, 2000 increased 31.3% to
$9.1 million from $6.9 million reported for the 1999 second quarter. For the
twenty-six weeks ended June 24, 2000, net earnings were $16.6 million, a
$3.9 million (31.0%) increase over the period ended June 24, 1999. Diluted
earnings per share for the second quarter of 2000 increased 35.7% to $0.38
compared with $0.28 reported for the same period in 1999. For the twenty-six
weeks ended June 24, 2000, diluted earnings per share were $0.70, an increase of
37.3% from the $0.51 reported for the period ended June 26, 1999.
9
<PAGE>
IRRIGATION SEGMENT
The Irrigation segment net sales for the second quarter were $95.2 million,
an increase of $21.5 million (29.1%) compared with net sales of $73.7 million
reported for the same period in 1999. Operating income increased 28.6% in the
second quarter, from $8.5 million in 1999 to $11.0 million in 2000. For the
twenty-six weeks ended June 24, 2000, net sales increased $26.9 million (18.6%)
from the $144.4 million reported for the twenty-six weeks ended June 26, 1999.
Operating income for the twenty-six weeks ended June 24, 2000 was
$18.6 million, a decrease of $2.5 million from the twenty-six weeks ended
June 26, 1999. Included in 1999 operating income was a $2.8 million gain from
the sale of an investment. Domestically, a strong finish to the 2000 spring
irrigation sales season helped to increase second quarter sales. This sales
increase was aided in part by government support programs and dryness in some
U.S. growing regions during the planting season. The increase in year-to-date
sales in 2000 was also impacted by acquisitions made in 1999. The increase in
year-to-date operating income in relation to the sales increase was lower due to
increased costs of raw materials and start-up expenses associated with the
Company's new manufacturing plant in McCook, Nebraska.
Internationally, strong markets in South America and Africa in 2000, despite
a strong U.S. dollar, also contributed to increased sales and operating income
in the irrigation segment for both the thirteen and twenty-six weeks ended
June 24, 2000. Sales in Europe were tempered due to low crop prices and the
strong U.S. dollar. Sales of tubular products for the thirteen and twenty-six
periods ended June 24, 2000 increased from the same periods in 1999.
INFRASTRUCTURE SEGMENT
Net sales for the second quarter in the Infrastructure segment increased
38.7% to $115.0 million in 2000 from $82.9 million in 1999. For the twenty-six
week period ended June 24, 2000, net sales were $221.9 million, an increase of
$62.7 million or 39.4% over the $159.1 million reported for the twenty-six weeks
ended June 26, 1999. Sales increased in all product lines. Domestically,
lighting and traffic sales increased due to higher levels of government
spending, a strong general construction economy, and the acquisition of an
aluminum pole plant in early 2000. Capacity and distribution needs by electric
utility consumers in a deregulating industry continued to drive sales increases
in utility poles and structures. Sales of communication poles, towers and
components were up domestically due to an increased activity level in the
build-out of wireless communications networks. Internationally, the Company's
plant in China showed increased net sales in utility and communication pole
sales. In Europe, sales were up in local currency terms. Sales of protective
coatings services increased due to sales growth in existing locations and the
acquisition of four facilities this year.
The Infrastructure segment reported operating income of $8.2 million in the
second quarter of 2000 compared with operating income of $4.5 million for the
same period in 1999. For the twenty-six week period ended June 24, 2000,
operating income increased $13.2 million to $15.6 million from the $2.4 million
reported for the period ended June 26, 1999. Year-to-date operating income in
1999 included an impairment charge of $2.4 million to adjust the asset values
and record severance costs related to a reduction in size of a communication
tower facility in France.
The substantial increase in operating income in the Infrastructure segment
was the result of the sales volume increases, ongoing efforts to reduce costs
and improve productivity, and acquisitions completed in 2000.
LIQUIDITY AND CAPITAL RESOURCES
Net working capital at June 24, 2000 was $107.5 million compared with
$98.6 million at December 25, 1999. The ratio of current assets to current
liabilities was 1.6:1 at June 24, 2000, versus 1.8:1 at December 25, 1999.
The Company's capital expenditure program is directed towards growth,
improving productivity and keeping facilities modern and safe. Expenditures for
property, plant and equipment for the twenty-six week
10
<PAGE>
period ended June 24, 2000, were approximately $22.6 million. In addition to
those expenditures an additional $56.2 million was spent for newly acquired
coatings facilities in Illinois, Minnesota, California and Iowa; the purchase of
a minority interest in an irrigation distribution business in Argentina; the
acquisition of the assets of an aluminum pole manufacturer in Minnesota; and the
acquisition of a tubing business in Nebraska.
During the twenty-six weeks ended June 24, 2000, the Company repurchased
140,000 shares for $2.3 million. Depreciation and amortization totaled
$14.9 million for the first half of 2000 compared with $10.5 million a year ago.
Available short-term credit facilities through bank lines of credit were
$55 million at June 24, 2000, compared with $50 million at December 25, 1999. On
June 24, 2000, approximately $9.0 million was unused.
The Company's growth has been financed through a combination of cash
provided from operations and debt financing. The Company's objective is to
maintain long-term debt as a percent of invested capital below 40%. At June 24,
2000, long-term debt as a percent of invested capital was 40.1% compared with
33.8% at December 25, 1999. The increased debt level was the result of
acquisitions, capital expenditures and share repurchases. Cash used by operating
activities was $7.2 million for the twenty-six weeks ended June 24, 2000 and
cash provided from operating activities was $39.5 for the twenty-six week period
ended June 26, 1999. The reduction of operating cash flows was mainly the result
of higher working capital levels as compared to 1999. Increased sales and sales
backlogs in both segments were the primary reasons for increases in inventory
and receivables as compared with 1999.
The Company believes cash flow from operations, available credit facilities,
and the capital structure now in place will be adequate for 2000 planned capital
expenditures, dividends, additional share repurchases and other financial
commitments, as well as to take advantage of opportunities to expand its markets
and businesses.
11
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
There have been no material changes in the company's market risk during the
twenty-six weeks ended June 24, 2000. For additional information, refer to page
36 of the Company's Annual Report to Stockholders, incorporated by reference
into the Company's annual report on Form 10-K for the fiscal year ended
December 25, 1999.
12
<PAGE>
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On April 26, 2000, the Company's Board of Directors authorized a quarterly
cash dividend of 6.5 cents per share, payable July 14, 2000, to stockholders of
record June 30, 2000. The indicated annual dividend rate is 26 cents per share.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-k during the past fiscal quarter.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf and by the
undersigned hereunto duly authorized.
<TABLE>
<S> <C>
VALMONT INDUSTRIES, INC.
(Registrant)
/s/ TERRY J. MCCLAIN
-------------------------------------------
Terry J. McClain
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (PRINCIPAL
FINANCIAL OFFICER)
</TABLE>
Dated this 1st day of August, 2000.
14
