FULL YEAR: VALMONT'S REVENUES DOWN 4%, EARNINGS UP 11%
Feb. 23, 2017
Source: Valmont Industries news release
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Fourth Quarter Highlights:
Revenues increased 6% due to improved volumes in the Engineered Support Structures, Utility Support Structures and Energy and Mining Segments
GAAP operating income increased $73.1 million and adjusted operating income1 increased 27%, or $13.6 million; all segments realized improved profitability except Coatings
GAAP diluted earnings per share (EPS) were $3.10 compared to a loss of $1.34 in 2015 and adjusted diluted EPS1 were $1.61 and $1.35 in 2016 and 2015, respectively
Q4 included two non-cash, non-recurring transactions with positive effect; the removal of a contingent liability and an increase in deferred tax assets related to a legal entity reorganization
Total Year Highlights:
Full-year revenues declined 4% mostly due to the revenue impact of lower cost steel in the Utility Support Structures Segment and foreign exchange translation
GAAP operating income increased $111.8 million and adjusted operating income1 increased 8%, or $18.4 million
GAAP diluted EPS were $7.63, compared to $1.71 last year and adjusted diluted EPS1 were $6.42, compared to last year's $5.63, up 14%
The Company completed its announced restructuring plans and incurred $12.4 million of pre-tax restructuring expense in 2016; total savings realized from restructuring actions approximate $22 million
The Company repurchased 441,000 shares for $53.8 million; $132 million remains on the current authorization
"We are pleased with our revenue growth in the fourth quarter," said Mogens C. Bay, Valmont's Chairman and Chief Executive Officer. "Utility Support Structures Segment sales benefited from a stronger North American market. The Engineered Support Structures and Energy and Mining Segments had double-digit revenue gains. Coatings Segment sales equaled last year, as internal utility volumes offset lower external demand. Irrigation Segment sales were equivalent to last year, with modestly lower North American and improved international sales.
"For the fourth quarter, GAAP operating income was 8.3% of sales, and 9.4% on an adjusted basis1. For the year, GAAP operating income was 9.7% of sales, and 10.1% on an adjusted basis."
Irrigation Segment (20% of Sales)
Agricultural irrigation equipment, parts, services and tubular products.
Global sales of $136.6 million were similar to last year. In North America, sales declined modestly. International sales rose, led by a stronger Latin American market. Tubing sales were similar to last year.
Operating income was higher at $17.1 million, or 12.5% of sales ($17.5 million and 12.8% adjusted1) compared to $8.3 million, or 6.0% of sales in 2015 ($16.2 million and 11.8% adjusted). The improvement in operating income was largely due to the contribution of stronger international results and lower SG&A.