Valmont Reports Fourth Quarter and Full-Year 2024 Results

Full-Year Revenue of $4.08 Billion, Record Diluted Earnings Per Share of $17.19, and Strong Operating Cash Flows of $573 Million

Valmont^® Industries, Inc. (NYSE:VMI), a global leader that provides products and solutions to support vital infrastructure and advance agricultural productivity, today reported financial results for the fourth quarter and fiscal year ended December 28, 2024.

President and Chief Executive Officer Avner M. Applbaum commented, "The fourth quarter capped off an outstanding year for Valmont as we continued executing our strategy. Both our Infrastructure and Agriculture segments achieved sales growth, and we expanded consolidated operating profit margins year-over-year through strategic pricing, improved operational efficiencies, and disciplined cost management. I want to thank the entire Valmont team for their dedication and hard work in delivering these strong results."

"Looking ahead to 2025, demand for our Infrastructure products and solutions will drive continued sales growth. In Agriculture, international sales, particularly large-scale projects, will help offset expected market softness in North America. Across both segments, we remain focused on commercial and operational excellence, leveraging our streamlined organization to deliver exceptional value to our customers and shareholders."

Fourth Quarter 2024 Highlights (all metrics compared to Fourth Quarter 2023 unless otherwise noted)

• Net sales increased 2.1% to $1.04 billion, compared to $1.02 billion
• Operating income increased to $120.0 million or 11.6% of net sales, compared to $63.5 million or 6.3% of net sales ($100.2 million or 9.9% adjusted¹ in 2023)
• Diluted earnings per share ("EPS") increased to $3.84, compared to $1.38 ($3.18 adjusted¹ in 2023)
• Operating cash flows increased 66.9% to $193.4 million, compared to $115.9 million
  • Cash and cash equivalents at the end of the fourth quarter were $164.3 million
• Invested $25.6 million in capital expenditures and returned $27.0 million to shareholders through share repurchases and dividends
• Moody's Ratings upgraded the Company's credit rating to Baa2

Full Year 2024 Highlights (all metrics compared to Full Year 2023 unless otherwise noted)

• Net sales decreased 2.4% to $4.08 billion, compared to $4.17 billion
  • Infrastructure sales of $3.0 billion were similar to prior year, while Agriculture sales declined 8.3%
• Operating income increased to $524.6 million or 12.9% of net sales, compared to $291.6 million or 7.0% of net sales ($473.2 million or 11.3% adjusted¹ in 2023)
• Diluted EPS increased to $17.19, compared to $6.78 ($14.98 adjusted¹ in 2023)
• Operating cash flows meaningfully increased 86.7% to $572.7 million, compared to $306.8 million, driven by strong net earnings and effective working capital management
  • Free cash flow¹ increased 134.9% to $493.2 million, compared to $210.0 million
• Invested $79.5 million in capital expenditures and returned $118.4 million to shareholders through share repurchases and dividends
• Deployed $393.0 million to fully repay the revolving credit facility balance, achieving a net leverage ratio¹ of 1.0
• Achieved return on invested capital¹ of 16.4%

Key Financial Metrics

Fourth Quarter 2024 Segment Review (all metrics compared to Fourth Quarter 2023 unless otherwise noted)

Infrastructure (73.3% of Net Sales)

Products and solutions to serve the infrastructure markets of utility, solar, lighting and transportation, and telecommunications, along with coatings services to protect metal products

Sales increased 2.1% to $763.6 million, compared to $748.3 million.

Utility sales grew 5.9%, driven by pricing excellence and a favorable product mix, with higher volumes of distribution and substation products, which more than offset steel index deflation. Telecommunications sales increased significantly, benefiting from a higher level of carrier spending in a stabilizing North American market. Solar sales declined significantly, primarily in North America, following the Company's strategic decision earlier in 2024 to exit certain low-margin projects.

Operating income increased to $122.0 million or 16.0% of net sales, compared to $82.6 million or 11.1% of net sales ($98.7 million or 13.2% adjusted¹ in 2023). This growth was driven by pricing excellence, a reduction in the cost of goods sold and higher volumes.

Agriculture (26.7% of Net Sales)

Center pivot and linear irrigation equipment components for agricultural markets, including aftermarket parts and tubular products, and advanced technology solutions for precision agriculture

Sales increased 2.3% to $278.0 million, compared to $271.6 million, despite a 2.3% unfavorable impact from foreign currency translation.

In North America, irrigation equipment volumes were slightly lower. Increased replacement sales, driven by severe weather events earlier in 2024, were offset by continued agriculture market softness due to lower grain prices. Internationally, sales were higher year-over-year, led by strong growth in the Europe, Middle East, and Africa ("EMEA") region, and slightly higher sales in Brazil amid a stabilizing market environment.

Operating income increased to $28.5 million or 10.3% of net sales, compared to $13.9 million or 5.2% of net sales ($27.8 million or 10.3% adjusted¹ in 2023), reflecting reduced SG&A expenses.

Providing 2025 Full-Year Financial Outlook and Key Assumptions

The Company is introducing its full-year 2025 financial outlook, including projected net sales and diluted earnings per share, and key assumptions for the year.

Key Assumptions

• Steel cost assumptions are aligned with futures markets as of February 14, 2025.
• Based on the Company's understanding of the recently announced China tariffs, and the steel and aluminum import tariffs introduced on February 10, 2025, these direct impacts have been factored into the 2025 outlook.
• The potential timing and impact of additional U.S. import tariffs, including a proposed 25% tariff on all imports from Mexico and Canada, as well as retaliatory actions by other countries, remains unclear and are not included in the 2025 outlook.

¹Please see Reg G reconciliation to GAAP measures at end of document

²Net earnings attributable to Valmont Industries, Inc. including change in redemption value of redeemable noncontrolling interests

³Q2 2024 included a tax benefit of approximately $3.0 million or $0.15 per share due to the reduction of a valuation allowance on a tax loss carryforward in a foreign subsidiary

A live audio discussion with Avner M. Applbaum, President and Chief Executive Officer, and Thomas Liguori, Executive Vice President and Chief Financial Officer, will take place on Tuesday, February 18, 2025 at 8:00 a.m. CT. The discussion can be accessed by telephone at +1 877.407.6184 or +1 201.389.0877 (no Conference ID needed) or via webcast at the following link: Valmont Industries 4Q and Full Year 2024 Earnings Conference Call. A slide presentation will be available for download on the Investors page of valmont.com during the webcast. A replay of the event will be accessible three hours after the call at the above link or by telephone at +1 877.660.6853 or +1 201.612.7415 using access code 13750342. The replay will be available until 10:59 p.m. CT on February 25, 2025.

About Valmont Industries, Inc.

For nearly 80 years, Valmont has been a global leader that provides products and solutions to support vital infrastructure and advance agricultural productivity. We are committed to customer-focused innovation that delivers lasting value. Learn more about how we're Conserving Resources. Improving Life.^® at valmont.com.

Concerning Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions made by management, considering its experience in the industries where Valmont operates, perceptions of historical trends, current conditions, expected future developments, and other relevant factors. It is important to note that these statements are not guarantees of future performance or results. They involve risks, uncertainties (some of which are beyond Valmont's control), and assumptions. While management believes these forward-looking statements are based on reasonable assumptions, numerous factors could cause actual results to differ materially from those anticipated. These factors include, among other things, risks described in Valmont's reports to the Securities and Exchange Commission ("SEC"), the Company's actual cash flows and net income, future economic and market circumstances, industry conditions, company performance and financial results, operational efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, geopolitical risks, and actions and policy changes by domestic and foreign governments. The Company cautions that any forward-looking statements in this release are made as of its publication date and does not undertake to update these statements, except as required by law.

Website and Social Media Disclosure

The Company uses its website and social media channels, as identified on its website, to distribute company information. Posts on these channels may contain material information. Therefore, investors should monitor these channels alongside the Company's press releases, SEC filings, and public conference calls and webcasts. The contents of the Company's website and social media channels are not considered part of this press release.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

USE OF NON-GAAP FINANCIAL MEASURES

Management utilizes non-GAAP financial measures to assess the Company's historical and prospective financial performance, evaluate operational profitability on a consistent basis, factor into executive compensation decisions, and enhance transparency for the investment community. These non-GAAP measures are intended to supplement, not replace, the Company's reported financial results prepared in accordance with GAAP. It is important to note that other companies may calculate these measures differently, which can limit their usefulness for comparison across organizations.

The following non-GAAP measures may be included in financial releases and other financial communications:

• Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net Earnings, and Adjusted Diluted EPS: These metrics provide meaningful supplemental insights into the Company's operating performance by excluding items that are not considered part of core operating results. This approach enhances comparability across reporting periods. Adjustments may include costs or benefits associated with acquisitions, expenses related to realignment or restructuring programs, goodwill or intangible asset impairment, significant expenses or benefits from changes in tax laws or rates, cumulative effects of changes in accounting standards, refinancing-related expenses, loss or gain from a partial or full settlement of the U.K. defined benefit pension plan obligation, losses from natural disasters, and other non-recurring items.
• Adjusted EBITDA: This metric is a key component of a financial ratio included in the covenants of our major debt agreements. It is calculated as net earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other adjustments as outlined in the applicable debt agreements. This metric offers investors and analysts valuable insights into the Company's core operating performance. Adjusted EBITDA margin is also used to evaluate profitability.
• Leverage Ratio: This ratio is calculated by taking the sum of interest-bearing debt, minus unrestricted cash in excess of $50.0 million (but not exceeding $500.0 million), and dividing it by Adjusted EBITDA. This is a key financial ratio included in the covenants of our major debt agreements and is calculated on a rolling four-fiscal-quarter basis.
• Free Cash Flow: Calculated as net cash provided by operating activities minus capital expenditures, free cash flow serves as an indicator of the Company's financial strength. However, this measure does not fully reflect the Company's ability to deploy cash freely, as it obligations such as debt repayments and other fixed commitments.
• Backlog: This operating measure is used to evaluate future potential sales revenue. An order is included in the backlog upon receipt of a customer purchase order or the execution of a sales order contract. Backlog is particularly relevant to the Infrastructure segment due to the longer-term nature of its projects. However, backlog is not a term defined under U.S. GAAP and does not measure contract profitability. It should not be viewed as the sole indicator of future revenue, as many projects with short lead times book-and-bill within the same reporting period and are not included in the backlog.
• Constant Currency: Defined as financial results adjusted for foreign currency translation impacts by translating current period and prior period activity using the same currency conversion rate. This approach is used for countries whose functional currency is not the U.S. dollar.
• ROIC: Return on invested capital ("ROIC") and adjusted ROIC are key operating ratios that enable investors to assess our operating performance relative to the investment needed to generate operating profit. ROIC is calculated as after-tax operating income divided by the average of beginning and ending invested capital. Adjusted ROIC is calculated as after-tax adjusted operating income divided by the average of beginning and ending invested capital. Invested capital represents total assets minus total liabilities (excluding interest-bearing debt and redeemable noncontrolling interests).