Actionable news
0
All posts from Actionable news
Actionable news in VMI: VALMONT INDUSTRIES Inc,

Valmont Announces Third Quarter 2015 Results

OMAHA, Neb., Oct. 21, 2015 /PRNewswire/ -- Valmont Industries, Inc. (NYSE: VMI), a leading global provider of engineered products and services for infrastructure and mechanized irrigation equipment for agriculture, today reported third quarter results.

Highlights:

  • GAAP diluted EPS were $0.52 compared with $0.92 in 2014. Adjusted diluted EPS, before restructuring and impairment charges, were $1.39, as compared with $1.92 in 2014 before refinancing charges.
  • Revenues of $633 million were down 17% from 2014 with foreign exchange representing about half of the decline.
  • Operating income was $37 million ($61.0 million before charges); foreign exchange impact was $(6.0) million year-over-year. Operating income was 5.9% of net sales. Excluding restructuring and impairment charges, operating income was 9.6% of net sales, compared with 11.5% in 2014.
  • The previously announced restructuring initiative is proceeding as planned with overhead reductions, plant consolidations and other cost actions on track. Completion of most activities is expected by year-end; estimated annualized benefit has increased to $30 million from $19 million.
  • $8.8 million of pre-tax restructuring expense was recognized during the quarter. In addition, the annual impairment testing of trade names and goodwill resulted in pre-tax impairment charges of $15.2 million.
  • Repurchased 247,000 of Company shares during quarter for $27.2 million.
  • Completed acquisition of American Galvanizing on September 30.

Summarized Financial Info.

Third Quarter


Year-to-Date


13 Weeks Ended


39 Weeks Ended

($ in thousands, except per share data)

26-Sep-15


27-Sep-14


26-Sep-15


27-Sep-14

Net Sales

$ 632,575


$ 765,668


$1,985,096


$2,360,007

Operating Income - GAAP

37,012


87,803


148,695


291,427

Operating Income - Adjusted *

61,012


87,803


187,738


291,427

Net Earnings - GAAP

12,066


23,559


70,678


143,515

Net Earnings - Adjusted *

32,176


49,088


100,678


172,545









Diluted EPS - GAAP Earnings

$ 0.52


$ 0.92


$ 3.00


$ 5.43

Diluted EPS - Adjusted Earnings *

$ 1.39


$ 1.92


$ 4.28


$ 6.53









Average Shares Outstanding - Diluted

23,170


25,513


23,534


26,439









* Please see Reg. G reconciliation table on last page.






"The end-market challenges of weak agricultural commodity prices and reduced mining and energy driven demand, along with unfavorable currency translation, persisted during the quarter," said Mogens C. Bay, Valmont's Chairman and Chief Executive Officer. "Our goal in this environment remains to drive earnings improvement next year despite continued difficult market conditions. During the quarter, we continued our restructuring efforts and are on track to complete most initiatives by year-end. We now expect annualized cost savings from restructuring and cost reduction actions to approximate $30 million per year, compared to our prior expectations of $19 million in annualized savings."

Restructuring Plan Update

Third quarter progress on the Company's 2015 restructuring efforts entailed numerous actions to streamline management structure, consolidate production to lower cost facilities and reduce overhead. The major actions that took place during the quarter were as follows: In the Engineered Infrastructure Products Segment, overhead reductions occurred in all geographic regions, plant consolidations took place in access systems in Australia and a small facility in China was closed. In the Coatings segment, the idling of one Australian facility was completed.

The total restructuring costs incurred during the third quarter for the above actions, plus other restructuring activities, were $8.8 million pre-tax. The restructuring charges comprised of $5.5 million of cash expenses and $3.3 million of non-cash asset impairments. As part of the Company's annual impairment testing of intangible assets, during the third quarter, a pre-tax, non-cash impairment charge of $15.2 million was recorded on certain intangible assets, including a $10.2 million impairment of certain intangible assets in the Coatings Segment.

Third Quarter Segment Review

Engineered Infrastructure Products Segment (41% of 3rd Quarter Sales)

Engineered structures and components for global lighting and traffic, wireless communication, roadway safety, offshore structures and access systems applications.

Third quarter sales were $259.9 million, compared to $294.9 million in 2014, of which currency translation represented $30.0 million of the decline.

In North America, sales of lighting and traffic products increased due to the acquisition of Shakespeare, a composite structures manufacturer, in October, 2014. Wireless communication structure sales were lower due a major carrier's absence from the market.

In Europe, lighting and traffic structure sales declined slightly in local currency reflecting continued restraint in government investment in infrastructure due to general economic conditions in the region. Offshore structure sales were lower as investments in the energy sector were curtailed. A customer's delayed introduction of larger next-generation wind turbines also pushed out offshore structure deliveries into next year.

In the Asia-Pacific region, an increase in wireless communication structure sales benefitting from China's investment in its 4G wireless technology rollout was more than offset by engineered access system sales declines due to lower oil and gas investment in the region and a reduction of new investment in the Australian mining sector.

Operating income was $14.2 million, or 5.4% of segment sales, (9.1% before charges) compared with $33.2 million or 11.3% of segment sales in 2014, (included approximately $4.0 million reversal of a contingent purchase price provision related to the 2013 acquisition of Locker). Volume deleverage, impairment and restructuring charges and currency translation effects accounted for most the decline.

Utility Support Structures Segment (26% of 3rd Quarter Sales)
Steel and concrete structures for the global electric utility industry.

Sales of $164.7 million were 9% lower than 2014, due to the revenue impact of lower steel costs, modest volume declines and continued competitive pricing. International sales were comparable with last year.

In North America, utility investment in transmission this year, in some cases favored capital deployment to coal plant retirements required by the EPA.

Segment operating income declined to $14.5 million or 8.8% of segment sales, (9.5% excluding charges). Operating income as a percent of sales was 9.4% in 2014.

Coatings Segment (12% of 3rd Quarter Sales)
Global galvanizing, painting and anodizing services.

Global Coatings Segment sales of $76.2 million were 12% lower than last year. Sales declined in Australia due to reduced volumes...


More