Valmont Industries is incorporated under the laws of State of Delaware and is headquartered in Omaha, Nebraska. The Company was founded in 1946 and went public in 1968. The Company’s common stock is registered and listed on the New York Stock Exchange under the ticker “VMI” since 2002. Earlier the Company was listed on the NASDAQ National Market.
The Company is a global manufacturer of fabricated metal components and products and one of the large manufacturers of concrete and metal tower and pole structures as well as mechanical irrigation systems. The Company’s tower and pole structures support power transmission lines and distribution equipment, outdoor traffic control and lighting fixtures, highway signboards, and wireless communications equipment. Valmont Industries’ mechanized irrigation equipments are used to deliver pesticides and fertilizers, and to water crops. The Company also offers metal coating solutions, which include painting, anodizing and galvanizing, and manufactures specialty tubing and pipe products.
Valmont Industries markets its products and solutions federal and state governments, telecommunications and utility companies, contractors, producers of fixtures for commercial lighting, and other general manufacturing industries. In 2006, nearly 24% of the Company’s sales were derived from markets or manufactured by the Company’s facilities located outside of North America.
The Company typically focuses following operational and expansion strategies:
• Gain further market share in existing product markets by differentiating the Company’s products through better customer service, innovating better technologies and maintaining high quality consistently.
• Enter new markets for existing offering both in terms of geographic expansion as well as finding new applications for existing products.
• Bring new products to the existing markets. For e.g., the Company developed structures for applications in tramway in Europe.
• Develop new offering for new markets
The Company has historically grown internally as well as through acquisitions. The Company’s acquisitions during the previous five years are as follows:
• In 2004, the Company acquired Newmark International, a producer of steel and concrete pole structures; acquired a fiberglass pole producer based in Colorado; and acquired a overhead sign structure producer in Delaware
• In 2006, the Company completed acquisition of a steel pole producer in Mexico
The Company has organized itself into five business segments: Engineered Support Structures Segment, Utility Support Structures Segment, Coatings Segment, Irrigation Segment, and Tubing Segment.
Financial Performance: The Company’s worldwide net sales increased 15.6% to $1281 million in 2006 from $1108 million in 2005 mainly contributed by higher sales volume and increase in sales price (as increase in material cost was passed on to the customers). All business segments witnessed increase in sales volume, particularly the Utility Support Structures, Irrigation and Engineered Support Structures segments. Valmont Industries’ operating profit increased 32.8% to $110.1 million in 2006 from $82.9 million in 2005. The Company’s operating profit margin improved to 8.6% in 2006 from 7.5% in 2005. The Company’s net income increased 57.3% to $61.5 million in 2006 from $39.1 million in 2005. Valmont Industries’ net income margin also increased to 4.8% in 2006 from 3.5% in 2005.
Engineered Support Structures Segment contributed 39.8% to the total net sales of the Company in 2006 down from 42.5% in 2005. Utility Support Structures Segment contributed 21.9% to the total net sales of the Company in 2006 up two basis points from 19.8% in 2005. Coatings Segment contributed 7.1% to the total net sales of the Company in 2006 up from 6.5% in 2005. Irrigation Segment contributed 24.4% to the total net sales of the Company in 2006 up from 23.5% in 2005. Tubing Segment contributed 5.8% to the total net sales of the Company in 2006 down from 6.5% in 2005. Other Segment contributed 1.1% to the total net sales of the Company in 2006 down from 1.3% in 2005.
Engineered Support Structures: The segment manufactures engineered metal components and structures primarily for the traffic and lighting and wireless communication sector and some international utility sectors. Engineered Support Structures segment generated net sales of $509.3 million in 2006, up 8.2 % from $470.7 million in 2005.
Utility Support Structures: The segment manufactures engineered concrete and steel structures for the North American utility sector. Utility Support Structures segment generated net sales of $280.8 million in 2006, an increase of 28.3 % from $218.9 million generated in 2005.
Coatings: The segment engages in anodizing, powder coating, painting and galvanizing processes. Coatings segment generated net sales of $90.4 million in 2006, an increase of 25.4% from $72.1 million generated in 2005.
Irrigation: The segment manufactures agricultural irrigation equipment and associated components and services. Irrigation segment generated net sales of $312.8 million in 2006, an increase of 20.1% from $260.4 million generated in 2005.
Tubing: The segment manufactures tubular products for industrial sectors. Tubing segment generated net sales of $73.9 million in 2006, an increase of 2.8% from $71.9 million generated in 2005.
The Company’s other businesses generated $14.1 million of net sales in 2006, same as in 2005.