Valmont Industries (VMI) 10-Q 2010 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
ý	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 27, 2010
Or
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                             to

Commission file number 1-31429

Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	47-0351813 (I.R.S. Employer Identification No.)
One Valmont Plaza, Omaha, Nebraska (Address of principal executive offices)	68154-5215 (Zip Code)

402-963-1000
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

        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 ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

26,324,409

Outstanding shares of common stock as of April 21, 2010

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Operations for the thirteen weeks ended March 27, 2010 and March 28, 2009		3
	Condensed Consolidated Balance Sheets as of March 27, 2010 and December 26, 2009		4
	Condensed Consolidated Statements of Cash Flows for the thirteen weeks ended March 27, 2010 and March 28, 2009		5
	Condensed Consolidated Statements of Shareholders' Equity for the thirteen weeks ended March 27, 2010 and March 28, 2009		6
	Notes to Condensed Consolidated Financial Statements		7-21
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		22-28
Item 3.	Quantitative and Qualitative Disclosure about Market Risk		29
Item 4.	Controls and Procedures		29
PART II. OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		30
Item 5.	Other Information		30
Item 6.	Exhibits		30
Signatures			31

2

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

		Thirteen Weeks Ended
		March 27, 2010			March 28, 2009
Net sales		$	367,402		$	455,154
Cost of sales			266,672			326,838
	Gross profit		100,730			128,316
Selling, general and administrative expenses			69,080			69,997
	Operating income		31,650			58,319
Other income (expenses):
	Interest expense		(5,962	)		(4,284	)
	Interest income		356			332
	Other		(77	)		(1,798	)
			(5,683	)		(5,750	)
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries			25,967			52,569
Income tax expense:
	Current		6,706			12,300
	Deferred		2,740			4,955
			9,446			17,255
Earnings before equity in earnings of nonconsolidated subsidiaries			16,521			35,314
Equity in earnings of nonconsolidated subsidiaries			114			566
	Net earnings		16,635			35,880
Less: Earnings attributable to noncontrolling interests			(172	)		(16	)
	Net earnings attributable to Valmont Industries, Inc.	$	16,463		$	35,864
Earnings per share attributable to Valmont Industries, Inc.—Basic		$	0.63		$	1.38
Earnings per share attributable to Valmont Industries, Inc.—Diluted		$	0.62		$	1.37
Cash dividends per share		$	0.15		$	0.13
Weighted average number of shares of common stock outstanding— Basic (000 omitted)			26,031			25,902
Weighted average number of shares of common stock outstanding— Diluted (000 omitted)			26,419			26,225

See accompanying notes to condensed consolidated financial statements.

3

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

			March 27, 2010			December 26, 2009
ASSETS
Current assets:
	Cash and cash equivalents		$	109,987		$	180,786
	Restricted cash			264,000			—
	Receivables, net			256,672			259,521
	Inventories			211,679			210,611
	Prepaid expenses			20,333			22,143
	Refundable and deferred income taxes			38,104			42,361
		Total current assets		900,775			715,422
Property, plant and equipment, at cost				671,460			675,446
	Less accumulated depreciation and amortization			394,832			392,358
		Net property, plant and equipment		276,628			283,088
Goodwill				177,443			178,320
Other intangible assets, net				93,914			96,378
Other assets				29,019			28,961
		Total assets	$	1,477,779		$	1,302,169
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current installments of long-term debt		$	281		$	231
	Notes payable to banks			10,442			11,900
	Accounts payable			114,319			118,210
	Accrued employee compensation and benefits			48,402			66,611
	Accrued expenses			57,607			55,921
	Dividends payable			3,947			3,944
		Total current liabilities		234,998			256,817
Deferred income taxes				49,577			49,281
Long-term debt, excluding current installments				351,127			160,251
Other noncurrent liabilities				29,061			27,513
Shareholders' equity:
	Preferred stock
		Authorized 500,000 shares; none issued		—			—
	Common stock of $1 par value
		Authorized 75,000,000 shares; 27,900,000 issued		27,900			27,900
	Retained earnings			780,414			767,398
	Accumulated other comprehensive income			10,338			16,953
	Treasury stock			(25,776	)		(25,990	)
		Total Valmont Industries, Inc. shareholders' equity		792,876			786,261
	Noncontrolling interest in consolidated subsidiaries			20,140			22,046
		Total shareholders'equity		813,016			808,307
		Total liabilities and shareholders' equity	$	1,477,779		$	1,302,169

See accompanying notes to condensed consolidated financial statements.

4

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

					Thirteen Weeks Ended
					March 27, 2010			March 28, 2009
Cash flows from operations:
	Net earnings				$	16,635		$	35,880
	Adjustments to reconcile net earnings to net cash flow from operations:
		Depreciation and amortization				11,209			10,835
		Stock-based compensation				1,599			1,499
		Loss on sales of property, plant and equipment				64			121
		Equity in earnings of nonconsolidated subsidiaries				(114	)		(566	)
		Deferred income taxes				2,740			4,955
		Other				20			709
		Changes in assets and liabilities, before acquisitions:
			Receivables			(345	)		4.341
			Inventories			(2,796	)		(5,596	)
			Prepaid expenses			1,463			(1,167	)
			Accounts payable			(2,131	)		(902	)
			Accrued expenses			(10,748	)		(16,672	)
			Other noncurrent liabilities			(160	)		1,515
			Income taxes payable/refundable			1,832			2,526
				Net cash flows from operations		19,268			37,478
Cash flows from investing activities:
	Purchase of property, plant and equipment					(4,555	)		(14,042	)
	Proceeds from sale of assets					96			22
	Acquisitions					(7,460	)		—
	Cash restricted for acquisitions					(264,000	)		—
	Dividends to noncontrolling interests					(295	)		(195	)
	Other, net					2,547			(2,263	)
				Net cash flows from investing activities		(273,667	)		(16,478	)
Cash flows from financing activities:
	Net payments under short-term agreements					(1,458	)		(5,709	)
	Proceeds from long-term borrowings					191,000			72
	Principal payments on long-term obligations					(39	)		(6,313	)
	Dividends paid					(3,944	)		(3,402	)
	Proceeds from exercises under stock plans					1,803			1,394
	Excess tax benefits from stock option exercises					1,010			855
	Purchase of treasury shares					(877	)		—
	Purchase of common treasury shares—stock plan exercises					(1,595	)		(140	)
				Net cash flows from financing activities		185,900			(13,243	)
Effect of exchange rate changes on cash and cash equivalents						(2,300	)		(502	)
Net change in cash and cash equivalents						(70,799	)		7,255
Cash and cash equivalents—beginning of year						180,786			68,567
Cash and cash equivalents—end of period					$	109,987		$	75,822

See accompanying notes to condensed consolidated financial statements.

5

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Dollars in thousands)

(Unaudited)

			Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock			Noncontrolling interest in consolidated subsidiaries			Total shareholders' equity
Balance at December 27, 2008			$	27,900	$	—		$	624,254		$	(533	)	$	(27,490	)	$	16,845		$	640,976
Comprehensive income:
	Net earnings			—		—			35,864			—			—			16			35,880
	Currency translation adjustment			—		—			—			(2,572	)		—			(590	)		(3,162	)
		Total comprehensive income		—		—			—			—			—			—			32,718
Cash dividends ($0.13 per share)				—		—			(3,412	)		—			—			—			(3,412	)
Dividends to noncontrolling interests				—		—			—			—			—			(195	)		(195	)
Acquisitions				—		—			—			—			—
Stock plan exercises; 2,747 shares purchased				—		—			—			—			(140	)		—			(140	)
Stock options exercised; 67,849 shares issued				—		(2,354	)		2,613			—			610			—			869
Tax benefit from exercise of stock options				—		855			—			—			—			—			855
Stock option expense						1,020			—			—			—			—			1,020
Stock awards; 9,746 shares issued				—		479			—			—			436			—			915
Balance at March 28, 2009			$	27,900	$	—		$	659,319		$	(3,105	)	$	(26,584	)	$	16,076		$	673,606
Balance at December 26, 2009			$	27,900	$	—		$	767,398		$	16,953		$	(25,990	)	$	22,046		$	808,307
Comprehensive income:
	Net earnings			—		—			16,463			—			—			172			16,635
	Currency translation adjustment			—		—			—			(6,615	)		—			(263	)		(6,878	)
		Total comprehensive income		—		—			—			—			—			—			9,757
Cash dividends ($0.15 per share)				—		—			(3,947	)		—			—			—			(3,947	)
Dividends to noncontrolling interests				—		—			—			—			—			(295	)		(295	)
Purchase of noncontrolling interest				—		(1,875	)		—			—			—			(1,520	)		(3,395	)
Purchase of 12,351 treasury shares				—		—			—			—			(877	)		—			(877	)
Stock plan exercises; 44,088 shares issued				—		(733	)		500			—			2,036			—			1,803
Stock plan exercises; 22,317 shares purchased				—		—			—			—			(1,595	)		—			(1,595	)
Tax benefit from exercise of stock options				—		1,010			—			—			—			—			1,010
Stock option expense				—		1,228			—			—			—			—			1,228
Stock awards; 9,088 shares issued				—		370			—			—			650			—			1,020
Balance at March 27, 2010			$	27,900	$	—		$	780,414		$	10,338		$	(25,776	)	$	20,140		$	813,016

See accompanying notes to condensed consolidated financial statements.

6

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies

Condensed Consolidated Financial Statements

        The Condensed Consolidated Balance Sheet as of March 27, 2010, the Condensed Consolidated Statements of Operations for the thirteen week periods ended March 27, 2010 and March 28, 2009, the Condensed Consolidated Statements of Cash Flows and Shareholders' Equity for the thirteen 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 March 27, 2010 and for all periods presented.

        Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America 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 Annual Report on Form 10-K for the fiscal year ended December 26, 2009. 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 26, 2009. The results of operations for the period ended March 27, 2010 are not necessarily indicative of the operating results for the full year.

Subsequent Events

        On April 8, 2010, the Company issued $300.0 million of senior unsecured notes at a coupon interest rate of 6.625% per annum. The proceeds of the notes offering are to be used for the Delta acquisition. In the event that the Delta acquisition is not completed, the proceeds of the notes offering will be used for general corporate purposes, including debt repayment.

Restricted Cash

        At March 27, 2010, the Company had $264,000 of restricted cash on deposit related the proposed acquisition of ordinary shares of Delta plc (Delta). If the proposed acquisition is completed, the restriction will be removed and the cash used as part of the funding of the acquisition. If the acquisition is not completed, the restriction will be removed and the cash will be available to the Company for general corporate purposes.

Inventories

        At March 27, 2010, approximately 46.5% of inventory is valued at the lower of cost, determined on the last-in, first-out (LIFO) method, or market. All other inventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods. The excess of replacement cost of inventories over the LIFO value was approximately $43,000 and $39,500 at March 27, 2010 and December 26, 2009, respectively.

7

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

        Inventories consisted of the following:

	March 27, 2010		December 26, 2009
Raw materials and purchased parts	$	113,752	$	112,911
Work-in-process		20,484		20,217
Finished goods and manufactured goods		120,458		117,032
Subtotal		254,694		250,160
LIFO reserve		43,015		39,549
Net inventory	$	211,679	$	210,611

Long-term debt

        At March 27, 2010, the Company had $191.0 in outstanding borrowings under its revolving credit agreement, at a weighted average annual interest rate of 1.33%, not including facility fees. These outstanding borrowings were associated with the funding requirements related to the proposed Delta acquisition. The revolving credit agreement has a termination date of October 16, 2013 and contains certain financial covenants that may limit the Company's additional borrowing capability under the agreement. At March 27, 2010, the Company had the ability to borrow an additional $64 million under this facility. Subsequent to the issuance of $300 million in senior unsecured notes in April 2010, borrowings under the revolving credit agreement were reduced to $85.0 million.

Stock Plans

        The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Compensation Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, non-vested stock awards and bonuses of common stock. At March 27, 2010, 1,130,445 shares of common stock remained available for issuance under the plans. Shares and options issued and available are subject to changes in capitalization.

        Under the plans, the exercise price of each option equals the market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three to six years or on the fifth anniversary of the grant. Expiration of grants is from six to ten years from the date of grant. The Company recorded $1,228 and $1,020 of compensation expense (included in selling, general and administrative expenses) in the quarters ended March 27, 2010 and March 28, 2009, respectively, related to stock options. The associated tax benefits recorded were $472 and $393, respectively.

Fair Value

        The Company applies the provisions of Accounting Standards Codification 820,Fair Value Measurements ("ASC 820") which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820,

8

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

        ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

•

Level 1: Quoted market prices in active markets for identical assets or liabilities.

•

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

•

Level 3: Unobservable inputs that are not corroborated by market data.

        The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

        Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.

        Trading Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification 320,Accounting for Certain Investments in Debt and Equity Securities, considering the employee's ability to change investment allocation of their deferred compensation at any time. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.

				Fair Value Measurement Using:
		Carrying Value March 27, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
	Trading Securities	$	17,361	$	17,361	$	—	$	—

				Fair Value Measurement Using:
		Carrying Value December 26, 2009		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
	Trading Securities	$	15,653	$	15,653	$	—	$	—

9

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Pronouncements

        In fiscal 2010, the Company implemented the provisions of updated ASC Topic 860,Transfers and Servicing, which significantly changed the accounting for transfers of financial assets. The update to ASC 860 eliminated the qualifying special purpose entity ("QSPE") concept, established conditions for reporting a transfer of a portion of a financial asset as a sale, clarified the financial-asset derecognition criteria, revised how interests retained by the transferor in a sale of financial assets initially are measured, and removed the guaranteed mortgage securitization recharacterization provisions. The implementation of this new accounting guidance had no impact on the Company's condensed consolidated financial statements for the fiscal period ended March 27, 2010.

2. Proposed Acquisition of Delta plc

        On March 10, 2010, the Company commenced a cash offer for all of the issued and to be issued ordinary share capital of Delta, plc. ("Delta") a public limited company incorporated in Great Britain, and listed on the London Stock Exchange (LSE: DLTA). The offer is 185 pence in cash for each Delta share, valuing the entire existing ordinary share capital of Delta at approximately £284.5 million, or approximately $439.0 million based on an average exchange rate of $1.543 / £. To manage the foreign exchange risk associated with the offer, the Company executed a forward foreign exchange contract with a multinational bank, whereby, if the acquisition is completed, the required British pound sterling would be delivered to the Company at a fixed exchange rate of $1.543/£ to complete the acquisition. If the acquisition is not completed, the contract will be terminated at no cost to the Company. Delta has manufacturing operations employing over 2,500 people in Australia, Asia, South Africa and the United States. Delta's businesses include engineered steel products, galvanizing services and manganese materials. The Company intends to finance the offer with the net proceeds from an April 2010 sale of $300 million of senior notes at an interest rate of 6.625% per annum and alternative funding sources, including the Company's existing borrowing arrangements. The transaction is subject to the satisfaction of customary closing conditions, including Delta shareholder acceptance. If the closing conditions are satisfied, the Company expects to close the transaction in the second quarter.

        In the first quarter of 2010, certain expenses were incurred that were associated with the proposed Delta acquisition. These expenses included:

•

SG&A expenses of $2.2 million related to acquisition costs, including costs associated with our review of Delta's operations and financial statements. These costs, under applicable accounting standards, are required to be recorded as expenses as incurred.

•

Interest expenses aggregating $2.8 million related to fees and expenses to establish the bridge loan and borrowing costs incurred in relation to the $181 million borrowed under our revolving credit agreement.

        The after-tax impact of these expenses on the Company net earnings for the quarter ended March 27, 2010 was approximately $3.4 million.

10

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

3. Goodwill and Intangible Assets

        The Company's annual impairment testing of goodwill and intangible assets was performed during the third quarter of 2009. As a result of that testing, it was determined the goodwill and other intangible assets on the Company's Condensed Consolidated Balance Sheet were not impaired. The Company continues to monitor changes in the global economy that could impact future operating results of its reporting units and related components.

Amortized Intangible Assets

        The components of amortized intangible assets at March 27, 2010 and December 26, 2009 were as follows:

	As of March 27, 2010
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	96,925	$	29,332	14 years
Proprietary Software & Database		2,627		2,469	6 years
Patents & Proprietary Technology		3,464		1,338	13 years
Non-compete Agreements		1,680		877	6 years
	$	104,696	$	34,016

	As of December 26, 2009
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	97,289	$	27,559	14 years
Proprietary Software & Database		2,627		2,434	6 years
Patents & Proprietary Technology		3,466		1,257	13 years
Non-compete Agreements		1,704		823	6 years
	$	105,086	$	32,073

        Amortization expense for intangible assets during the first quarter of 2010 and 2009 was $2,040 and $2,045, respectively. Estimated amortization expense related to amortized intangible assets is as follows:

	Estimated Amortization Expense
2010	$	8,084
2011		7,820
2012		7,772
2013		6,876
2014		6,452

11

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

3. Goodwill and Intangible Assets (Continued)

        The useful lives assigned to finite-lived intangible assets included consideration of factors such as the Company's past and expected experience related to customer retention rates, the remaining legal or contractual life of the underlying arrangement that resulted in the recognition of the intangible asset and the Company's expected use of the intangible asset.

Non-amortized intangible assets

        Intangible assets with indefinite lives are not amortized. The carrying values of trade names at March 27, 2010 and December 26, 2009 were as follows:

	March 27, 2010		December 26, 2009
PiRod	$	4,750	$	4,750
Newmark		11,111		11,111
Tehomet		1,254		1,347
West Coast		2,410		2,356
Site Pro		1,800		1,800
Stainton		1,266		1,358
Other		643		643
	$	23,234	$	23,365

        The Company's trade names were tested for impairment separately from goodwill in the third quarter of 2009. The values of the trade names were determined using the relief-from-royalty method. Based on this evaluation, the Company determined that its trade names were not impaired.

        In its determination of these intangible assets as indefinite-lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory, technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to maintain the value of the intangible asset. The Company expects that these intangible assets will maintain their value indefinitely. Accordingly, these assets are not amortized.

Goodwill

        The carrying amount of goodwill as of March 27, 2010 was as follows:

	Engineered Support Structures Segment			Utility Support Structures Segment		Coatings Segment		Irrigation Segment		Total
Balance December 26, 2009	$	55,338		$	77,141	$	43,777	$	2,064	$	178,320
Foreign currency translation		(877	)		—		—		—		(877	)
Balance March 27, 2010	$	54,461		$	77,141	$	43,777	$	2,064	$	177,443

12

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

4. 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) for the thirteen weeks ended were as follows:

	March 27, 2010		March 28, 2009
Interest	$	2,856	$	2,120
Income taxes		3,833		9,889

5. Earnings Per Share

        The following table reconciles Basic and Diluted earnings per share (EPS):

		Basic EPS		Dilutive Effect of Stock Options			Diluted EPS
Thirteen weeks ended March 27, 2010:
	Net earnings attributable to Valmont Industries, Inc.	$	16,463		—		$	16,463
	Shares outstanding		26,031		388			26,419
	Per share amount	$	0.63	$	(0.01	)	$	0.62
Thirteen weeks ended March 28, 2009:
	Net earnings attributable to Valmont Industries, Inc.	$	35,864		—		$	35,864
	Shares outstanding		25,902		323			26,225
	Per share amount	$	1.38	$	(0.01	)	$	1.37

        At March 27, 2010 there were 44,767 of outstanding stock options with exercise prices exceeding the market price of common stock that were therefore excluded from the computation of fully diluted shares earnings per share for the thirteen weeks ended March 27, 2010. At March 28, 2009 there were 641,370 of outstanding stock options with exercise prices exceeding the market price of common stock that were therefore excluded from the computation of fully diluted shares earnings per share for the thirteen weeks ended March 28, 2009.

6. Business Segments

        The Company aggregates its operating segments into four reportable segments. Aggregation is based on similarity of operating segments as to economic characteristics, products, production processes, types or classes of customer and the methods of distribution. Net corporate expense is net of certain service-related expenses that are allocated to business units generally based on employee headcounts and sales dollars.

13

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Business Segments (Continued)

        Reportable segments are as follows:

        ENGINEERED SUPPORT STRUCTURES:    This segment consists of the manufacture of engineered metal structures and components for the lighting and traffic and wireless communication industries worldwide and for other specialty applications;

        UTILITY SUPPORT STRUCTURES:    This segment consists of the manufacture of engineered steel and concrete structures for the global utility industry;

        COATINGS:    This segment consists of galvanizing, anodizing and powder coating services; and

        IRRIGATION:    This segment consists of the manufacture of agricultural irrigation equipment and related parts and services.

        In addition to these four reportable segments, the Company has other businesses that individually are not more than 10% of consolidated sales. These businesses, which include the manufacture of tubular products and the distribution of industrial fasteners, are reported in the "Other" category.

        In the fourth quarter of 2009, the Company reorganized its management structure and redefined its Utility segment to include Utility support structure activities on a global basis. Previously, sales of utility support structures outside of North America were reported as part of the ESS segment. This management structure change should help the Company better serve the global utility support structure market. Information presented for 2009 has been reclassified to conform to the 2010 presentation.

14

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

6. Business Segments (Continued)

        The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance of its business segments based upon operating income and invested capital. The Company does not allocate interest expense, non-operating income and deductions, or income taxes to its business segments.

				Thirteen Weeks Ended
				March 27, 2010			March 28, 2009
Sales:
	Engineered Support Structures segment:
		Lighting & Traffic		$	88,111		$	103,103
		Communication Structures			18,895			32,933
			Engineered Support Structures segment		107,006			136,036
	Utility Support Structures segment:
		Steel			99,073			148,572
		Concrete			14,155			35,388
			Utility Support Structures segment		113,228			183,960
	Coatings segment				27,930			30,012
	Irrigation segment				108,639			103,062
	Other				22,289			19,321
		Total			379,092			472,391
Intersegment Sales:
	Engineered Support Structures				1,102			5,677
	Utility Support Structures				299			558
	Coatings				5,764			6,143
	Irrigation				3			5
	Other				4,522			4,854
		Total			11,690			17,237
Net Sales:
	Engineered Support Structures segment				105,904			130,359
	Utility Support Structures segment				112,929			183,402
	Coatings segment				22,166			23,869
	Irrigation segment				108,636			103,057
	Other				17,767			14,467
		Total		$	367,402		$	455,154
Operating Income (Loss):
	Engineered Support Structures segment			$	2,611		$	6,422
	Utility Support Structures segment				14,706			40,475
	Coatings segment				4,532			5,991
	Irrigation segment				15,398			11,970
	Other				4,264			3,603
	Net corporate expense				(9,861	)		(10,142	)
		Total		$	31,650		$	58,319

15

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

7. Guarantor/Non-Guarantor Financial Information

        On May 4, 2004, the Company completed a $150,000,000 offering of 6⁷/8% Senior Subordinated Notes. The Notes are guaranteed, jointly, severally, fully and unconditionally, on a senior subordinated basis by certain of the Company's current and future direct and indirect domestic subsidiaries (collectively the "Guarantors"), excluding its other current domestic and foreign subsidiaries which do not guarantee the debt (collectively referred to as the "Non-Guarantors"). All Guarantors are 100% owned by the parent company.

        Condensed consolidated financial information for the Company ("Parent"), the Guarantor subsidiaries and the Non-Guarantor subsidiaries is as follows:

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirteen Weeks Ended March 27, 2010

		Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales		$	199,088		$	64,464		$	131,492		$	(27,642	)	$	367,402
Cost of sales			147,273			48,929			98,543			(28,073	)		266,672
	Gross profit		51,815			15,535			32,949			431			100,730
Selling, general and administrative expenses			35,692			11,433			21,955			—			69,080
	Operating income		16,123			4,102			10,994			431			31,650
Other income (expenses):
	Interest expense		(5,754	)		—			(208	)		—			(5,962	)
	Interest income		11			—			345			—			356
	Other		158			25			(260	)		—			(77	)
			(5,585	)		25			(123	)		—			(5,683	)
Earnings before income taxes and equity in earnings/(losses) of nonconsolidated subsidiaries			10,538			4,127			10,871			431			25,967
Income tax expense (benefit):
	Current		2,803			1,594			2,309			—			6,706
	Deferred		1,585			(29	)		1,184			—			2,740
			4,388			1,565			3,493			—			9,446
Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			6,150			2,562			7,378			431			16,521
Equity in earnings/(losses) of nonconsolidated subsidiaries			10,313			—			—			(10,199	)		114
Net Earnings			16,463			2,562			7,378			(9,768	)		16,635
Less: Earnings attributable to noncontrolling interests			—			—			(172	)		—			(172	)
	Net Earnings attributable to Valmont Industries, Inc.	$	16,463		$	2,562		$	7,206		$	(9,768	)	$	16,463

16

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

7. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirteen Weeks Ended March 28, 2009

		Parent			Guarantors			Non- Guarantors			Eliminations			Total
Net sales		$	253,559		$	120,670		$	124,749		$	(43,824	)	$	455,154
Cost of sales			185,751			91,433			94,655			(45,001	)		326,838
	Gross profit		67,808			29,237			30,094			1,177			128,316
Selling, general and administrative expenses			37,770			14,037			18,190			—			69,997
	Operating income		30,038			15,200			11,904			1,177			58,319
Other income (expenses):
	Interest expense		(3,963	)		(7	)		(314	)		—			(4,284	)
	Interest income		7			1			324			—			332
	Other		(152	)		63			(1,709	)		—			(1,798	)
			(4,108	)		57			(1,699	)		—			(5,750	)
Earnings before income taxes and equity in earnings/(losses) of nonconsolidated subsidiaries			25,930			15,257			10,205			1,177			52,569
Income tax expense (benefit):
	Current		5,403			5,764			1,133			—			12,300
	Deferred		3,631			(121	)		1,445			—			4,955
			9,034			5,643			2,578			—			17,255
Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			16,896			9,614			7,627			1,177			35,314
Equity in earnings/(losses) of nonconsolidated subsidiaries			17,791			—			—			(17,225	)		566
Net Earnings			34,687			9,614			7,627			(16,048	)		35,880
Less: Earnings attributable to noncontrolling interests			—			—			(16	)		—			(16	)
	Net Earnings attributable to Valmont Industries, Inc.	$	34,687		$	9,614		$	7,611		$	(16,048	)	$	35,864

17

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

7. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS
March 27, 2010

			Parent			Guarantors		Non-Guarantors			Eliminations			Total
ASSETS
Current assets:
	Cash and cash equivalents		$	15,205		$	717	$	94,065			—		$	109,987
	Restricted cash			264,000			—		—			—			264,000
	Receivables, net			88,059			40,221		128,392			—			256,672
	Inventories			78,222			39,622		93,835			—			211,679
	Prepaid expenses			3,551			511		16,271			—			20,333
	Refundable and deferred income taxes			22,640			7,400		8,064			—			38,104
		Total current assets		471,677			88,471		340,627			—			900,775
Property, plant and equipment, at cost				409,955			94,134		167,371			—			671,460
	Less accumulated depreciation and amortization			261,344			45,905		87,583			—			394,832
		Net property, plant and equipment		148,611			48,229		79,788			—			276,628
Goodwill				20,108			107,542		49,793			—			177,443
Other intangible assets				944			72,817		20,153			—			93,914
Investment in subsidiaries and intercompany accounts				670,234			81,900		(25,306	)		(726,828	)		—
Other assets				24,407			—		4,612			—			29,019
		Total assets	$	1,335,981		$	398,959	$	469,667		$	(726,828	)	$	1,477,779
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current installments of long-term debt		$	187			—	$	94			—		$	281
	Notes payable to banks			—			10		10,432			—			10,442
	Accounts payable			38,036			10,964		65,319			—			114,319
	Accrued expenses			55,409			10,282		40,318			—			106,009
	Dividends payable			3,947			—		—			—			3,947
		Total current liabilities		97,579			21,256		116,163			—			234,998
Deferred income taxes				32,160			9,870		7,547			—			49,577
Long-term debt, excluding current installments				350,698			—		429			—			351,127
Other noncurrent liabilities				25,547			—		3,514			—			29,061
Commitments and contingencies				—			—		—			—			—
Shareholders' equity:
	Common stock of $1 par value			27,900			14,249		3,494			(17,743	)		27,900
	Additional paid-in capital			—			181,542		141,766			(323,308	)		—
	Retained earnings			827,873			172,042		165,854			(385,355	)		780,414
	Accumulated other comprehensive income			—			—		10,338			—			10,338
	Treasury stock			(25,776	)		—		—			—			(25,776	)
		Total Valmont Industries, Inc. shareholders' equity		829,997			367,833		472,688			(726,406	)		792,876
Noncontrolling interest in consolidated subsidiaries				—			—		20,562			(422	)		20,140
	Total shareholders' equity			829,997			367,833		493,250			(726,828	)		813,016
	Total liabilities and shareholders' equity		$	1,335,981		$	398,959	$	469,667		$	(726,828	)	$	1,477,779

18

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

7. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS
December 26, 2009

			Parent			Guarantors		Non-Guarantors			Eliminations			Total
ASSETS
Current assets:
	Cash and cash equivalents		$	82,017		$	1,666	$	97,103			—		$	180,786
	Receivables, net			75,202			48,655		135,664			—			259,521
	Inventories			77,708			42,822		90,081			—			210,611
	Prepaid expenses			3,309			455		18,379			—			22,143
	Refundable and deferred income taxes			26,306			7,120		8,935			—			42,361
		Total current assets		264,542			100,718		350,162			—			715,422
Property, plant and equipment, at cost				408,411			94,139		172,896			—			675,446
	Less accumulated depreciation and amortization			257,632			44,272		90,454			—			392,358
		Net property, plant and equipment		150,779			49,867		82,442			—			283,088
Goodwill				20,108			107,542		50,670			—			178,320
Other intangible assets				985			74,319		21,074			—			96,378
Investment in subsidiaries and intercompany accounts				672,135			73,905		(34,722	)		(711,318	)		—
Other assets				22,705			—		6,256			—			28,961
		Total assets		1,131,254			406,351		475,882			(711,318	)		1,302,169
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current installments of long-term debt		$	187			—	$	44			—		$	231
	Notes payable to banks			—			13		11,887			—			11,900
	Accounts payable			36,608			13,611		67,991			—			118,210
	Accrued expenses			61,129			17,836		43,567			—			122,532
	Dividends payable			3,944			—		—			—			3,944
		Total current liabilities		101,868			31,460		123,489			—			256,817
Deferred income taxes				32,389			9,620		7,272			—			49,281
Long-term debt, excluding current installments				159,698			—		553			—			160,251
Other noncurrent liabilities				23,739			—		3,774			—			27,513
Commitments and contingencies				—			—		—			—			—
Shareholders' equity:
	Common stock of $1 par value			27,900			14,249		3,494			(17,743	)		27,900
	Additional paid-in capital			—			181,542		139,577			(321,119	)		—
	Retained earnings			811,650			169,480		158,724			(372,205	)		767,398
	Accumulated other comprehensive income			—			—		16,953			—			16,953
	Treasury stock			(25,990	)		—		—			—			(25,990	)
		Total Valmont Industries, Inc shareholders' equity		813,560			365,271		318,748			(711,318	)		786,261
Noncontrolling interest in consolidated subsidiaries				—			—		22,046			—			22,046
	Total shareholders' equity			813,560			365,271		340,794			(711,318	)		808,307
	Total liabilities and shareholders' equity		$	1,131,254		$	406,351	$	475,882		$	(711,318	)	$	1,302,169

19

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

7. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirteen Weeks Ended March 27, 2010

						Parent			Guarantors			Non- Guarantors			Eliminations			Total
Cash flows from operations:
	Net earnings					$	16,635		$	2,562		$	7,550		$	(10,112	)	$	16,635
		Adjustments to reconcile net earnings to net cash flow from operations:
			Depreciation				4,988			3,183			3,038			—			11,209
			Stock-based compensation				1,599			—			—			—			1,599
			Loss on sales of property, plant and equipment				8			—			56			—			64
			Equity in losses of nonconsolidated subsidiaries				(114	)		—			—			—			(114	)
			Deferred income taxes				1,585			(29	)		1,184			—			2,740
			Other adjustments				—			—			20			—			20
			Changes in assets and liabilities:
				Receivables			(12,826	)		8,433			4,048			—			(345	)
				Inventories			(514	)		3,200			(5,482	)		—			(2,796	)
				Prepaid expenses			(243	)		(55	)		1,761			—			1,463
				Accounts payable			1,429			(2,647	)		(913	)		—			(2,131	)
				Accrued expenses			(5,071	)		(7,554	)		1,877			—			(10,748	)
				Other noncurrent liabilities			111			—			(271	)		—			(160	)
				Income taxes payable/refundable			1,851			—			(19	)		—			1,832
					Net cash flows from operations		9,438			7,093			12,849			(10,112	)		19,268
Cash flows from investing activities:
	Purchase of property, plant and equipment						(2,605	)		(48	)		(1,902	)		—			(4,555	)
	Proceeds from sale of property and equipment						—			3			93			—			96
	Acquisitions, net of cash acquired						—			—			(7,460	)		—			(7,460	)
	Cash restricted for acquisitions						(264,000	)		—			—			—			(264,000	)
	Dividends to minority interests						—			—			(295	)		—			(295	)
	Other, net						2,958			(7,997	)		(2,526	)		10,112			2,547
					Net cash flows from investing activities		(263,647	)		(8,042	)		(12,090	)		10,112			(273,667	)
Cash flows from financing activities:
	Net repayments under short-term agreements						—			—			(1,458	)		—			(1,458	)
	Proceeds from long-term borrowings						191,000			—			—			—			191,000
	Principal payments on long-term obligations						—			—			(39	)		—			(39	)
	Dividends paid						(3,944	)		—			—			—			(3,944	)
	Proceeds from exercises under stock plans						1,803			—			—			—			1,803
	Excess tax benefits from stock option exercises						1,010			—			—			—			1,010
	Purchase of treasury shares						(877	)		—			—			—			(877	)
	Purchase of common treasury shares—stock plan exercises						(1,595	)		—			—			—			(1,595	)
					Net cash flows from financing activities		187,397			—			(1,497	)		—			185,900
Effect of exchange rate changes on cash and cash equivalents							—			—			(2,300	)		—			(2,300	)
Net change in cash and cash equivalents							(66,812	)		(949	)		(3,038	)		—			(70,799	)
Cash and cash equivalents—beginning of year							82,017			1,666			97,103			—			180,786
Cash and cash equivalents—end of period						$	15,205		$	717		$	94,065		$	—		$	109,987

20

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

7. Guarantor/Non-Guarantor Financial Information (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirteen Weeks Ended March 28, 2009

					Parent			Guarantors			Non- Guarantors			Eliminations			Total
Cash flows from operations:
	Net earnings				$	34,687		$	9,614		$	7,627		$	(16,048	)	$	35,880
	Adjustments to reconcile net earnings to
		net cash flow from operations:
		Depreciation				4,528			3,153			3,154			—			10,835
		Stock-based compensation				1,499			—			—			—			1,499
		Loss on sales of property, plant and equipment				(3	)		48			76			—			121
		Equity in losses of nonconsolidated subsidiaries				(566	)		—			—			—			(566	)
		Deferred income taxes				3,631			(121	)		1,445			—			4,955
		Other adjustments				(525	)		—			1,234			—			709
		Changes in assets and liabilities:
			Receivables			(8,191	)		(8,634	)		21,166			—			4,341
			Inventories			(7,852	)		4,492			(2,236	)		—			(5,596	)
			Prepaid expenses			(25	)		(484	)		(658	)		—			(1,167	)
			Accounts payable			9,138			(3,703	)		(6,337	)		—			(902	)
			Accrued expenses			(10,853	)		(4,032	)		(1,787	)		—			(16,672	)
			Other noncurrent liabilities			1,695			—			(180	)		—			1,515
			Income taxes payable/refundable			4,236			—			(1,710	)		—			2,526
				Net cash flows from operations		31,399			333			21,794			(16,048	)		37,478
Cash flows from investing activities:
	Purchase of property, plant and equipment					(6,391	)		(2,687	)		(4,964	)		—			(14,042	)
	Proceeds from sale of property and equipment					6			—			16			—			22
	Dividends to minority interests					—			—			(195	)		—			(195	)
	Other, net					(11,226	)		2,380			(9,465	)		16,048			(2,263	)
				Net cash flows from investing activities		(17,611	)		(307	)		(14,608	)		16,048			(16,478	)
Cash flows from financing activities:
	Net repayments under short-term agreements					—			(3	)		(5,706	)		—			(5,709	)
	Proceeds from long-term borrowings					—			3			69			—			72
	Principal payments on long-term obligations					(6,175	)		(9	)		(129	)		—			(6,313	)
	Dividends paid					(3,402	)		—			—			—			(3,402	)
	Proceeds from exercises under stock plans					1,394			—			—			—			1,394
	Excess tax benefits from stock option exercises					855			—			—			—			855
	Purchase of common treasury shares					(140	)		—			—			—			(140	)
				Net cash flows from financing activities		(7,468	)		(9	)		(5,766	)		—			(13,243	)
Effect of exchange rate changes on cash and cash equivalents						—			—			(502	)		—			(502	)
Net change in cash and cash equivalents						6,320			17			918			—			7,255
Cash and cash equivalents—beginning of year						18,989			1,503			48,075			—			68,567
Cash and cash equivalents—end of period					$	25,309		$	1,520		$	48,993		$	—		$	75,822

21

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 within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which the Company operates, as well as management's perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions. Many factors could affect the Company's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include, among other things, risk factors described from time to time in the Company's reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments.

        This discussion should be read in conjunction with the financial statements and the notes thereto, and the management's discussion and analysis, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 2009. We aggregate our businesses into four reportable segments. See Note 7 to the Condensed Consolidated Financial Statements.

        In the fourth quarter of 2009, we reorganized our Utility Support Structures reporting structure to include oversight of sales and operating income of utility structures on a world-wide basis. Accordingly, we have changed our segment reporting to match our internal reporting structure. Previously, sales and operating profit associated with utility support structure sales outside of North America were included in the Engineered Support Structures segment. Financial information for 2009 has been reclassified to conform to the 2010 presentation.

22

Dollars in thousands, except per share amounts

			Thirteen Weeks Ended
			March 27, 2010			March 28, 2009			% Increase (Decrease)
Consolidated
	Net sales		$	367,402		$	455,154			-19.3	%
	Gross profit			100,730			128,316			-21.5	%
		as a percent of sales		27.4	%		28.2	%
	SG&A expense			69,080			69,997			-0.1	%
		as a percent of sales		18.8	%		15.4	%
	Operating income			31,650			58,319			-45.7	%
		as a percent of sales		8.6	%		12.8	%
	Net interest expense			5,606			3,952			41.9	%
	Effective tax rate			36.4	%		32.8	%
	Net earnings attributable to Valmont Industries, Inc.			16,463			35,864			-54.1	%
	Earnings per share attributable to Valmont Industries, Inc—diluted		$	0.62		$	1.37			-54.7	%
Engineered Support Structures segment
	Net sales		$	105,904		$	130,359			-18.8	%
	Gross profit			27,904			31,884			-12.5	%
	SG&A expense			25,293			25,462			-0.7	%
	Operating income			2,611			6,422			-59.3	%
Utility Support Structures segment
	Net sales		$	112,929		$	183,402			-38.4	%
	Gross profit			30,474			56,993			-46.5	%
	SG&A expense			15,768			16,518			-4.5	%
	Operating income			14,706			40,475			-63.7	%
Coatings segment
	Net sales		$	22,166		$	23,869			-7.1	%
	Gross profit			7,657			9,479			-19.2	%
	SG&A expense			3,125			3,488			-10.4	%
	Operating income			4,532			5,991			-24.4	%
Irrigation segment
	Net sales		$	108,636		$	103,057			5.4	%
	Gross profit			28,377			24,216			17.2	%
	SG&A expense			12,979			12,246			6.0	%
	Operating income			15,398			11,970			28.6	%
Other
	Net sales		$	17,767		$	14,467			22.8	%
	Gross profit			6,186			5,727			8.0	%
	SG&A expense			1,922			2,124			-9.5	%
	Operating income			4,264			3,603			18.3	%
Net Corporate expense
	Gross profit			132		$	17			NM
	SG&A expense			9,993			10,159			-1.6	%
	Operating loss			(9,861	)		(10,142	)		-2.8	%

NM

=    Not meaningful

Overview

        On a consolidated basis, the sales decrease in the first quarter of fiscal 2010, as compared with 2009, was mainly due to a combination of lower sales unit volumes and lower average selling prices.

23

These decreases were offset somewhat by currency translation effects (approximately $8.4 million), as the U.S. dollar, on average, was weaker in relation to the euro, Brazilian real and South Africa rand in the first quarter of 2010, as compared with the same period in 2009. For the company as a whole our 2010 sales unit volumes were approximately 11% lower than 2009. On a reportable segment basis, we realized a significant sales unit volume decrease in the Utility Support Structures ("Utility"), Engineered Support Structures (ESS) and Coatings segments. These decreases were somewhat offset by increased unit sales volumes in the Irrigation segment. Lower unit sales prices and unfavorable sales mix also contributed the lower net sales recorded in the first quarter of 2010, as compared with 2009. Sales price decreases in 2010, as compared with 2009, resulted from a combination of weaker sales demand in most of our businesses and falling steel prices throughout much of 2009.

        The gross profit margin (gross profit as a percent of sales) in the first quarter of 2010 was slightly lower than 2009. We were able to maintain gross profit margins to some extent due to cost control and productivity measures in our manufacturing facilities and lower average steel unit costs in 2010, as compared with 2009.

        Selling, general and administrative (SG&A) spending in the first quarter of 2010 was comparable to 2009. SG&A expense increases in 2010 included approximately $2.2 million of expenses incurred as part of the proposed Delta acquisition and approximately $1.2 million due to currency translation. These increases were more than offset by lower employee incentive expenses in 2010, as compared with 2009 (approximately $2.9 million), and lower sales commissions related to lower net sales in 2010, as compared with 2009 (approximately $1.0 million).

        On a reportable segment basis, all segments except the Irrigation segment reported lower operating income in 2010, as compared with 2009.

        The increase in net interest expense in the first quarter of 2010, as compared with 2009, was due to approximately $2.8 million bank fees and borrowing costs incurred related to the Delta acquisition. Aside from the impact of the proposed Delta acquisition, net interest expense was lower in 2010, as compared with 2009, due to average lower borrowing levels in 2010, as compared with 2009. "Other" expense was lower in 2010, as compared with 2009, mainly due to foreign currency transaction losses incurred in 2009 that did not repeat in 2010.

        The increase in the effective income tax rate in the first quarter of 2010, as compared with the same period in 2009, was due to a combination of lower tax credits in 2010, the non-deductibility of a portion of the Delta acquisition expenses incurred in 2010 and the benefit of the reduction of income tax contingencies realized in the first quarter of 2009. Our cash flows provided by operations were approximately $19.3 million in the first quarter of 2010, as compared with $37.5 million in the first quarter of 2009. Lower net earnings in 2010, as compared with 2009, was the main reason for the lower operating cash flow in 2010.

Proposed acquisition of Delta plc

        On March 4, 2010, we made an offer to acquire all the ordinary shares of Delta plc ("Delta"), a public company traded on the London Stock exchange under the symbol "DLTA". The offer price was £1.85 per ordinary share, with a total estimated purchase price of $439 million, based on an average exchange rate of $1.543/£. To manage the foreign exchange risk associated with the offer, we executed a forward foreign exchange contract with a multinational bank, whereby, if the acquisition is completed, the required British pound sterling would be delivered to us at a fixed exchange rate of $1.543/£ to complete the acquisition. If the acquisition is not completed, the contract will be terminated at no cost to us. In accordance with takeover rules in the United Kingdom, we established funding for the purchase price and related acquisition costs by a combination of $264 million in restricted cash (comprised of cash balances of $83 million and $181 million in borrowings under our revolving credit agreement) and a $200 million bank bridge loan commitment. In April 2010, we issued $300 million of

24

senior unsecured notes, terminated the bridge loan and reduced our revolving credit agreement borrowings to approximately $85 million.

        In the first quarter of 2010, certain expenses were incurred in our condensed consolidated statement of operations that were associated with the proposed Delta acquisition. These expenses included:

•

SG&A expenses of $2.2 million related to acquisition costs, including costs associated with our review of Delta's operations and financial statements. These costs, under applicable accounting standards, are required to be recorded as expenses as incurred.

•

Interest expenses aggregating $2.8 million related to fees and expenses to establish the bridge loan and borrowing costs incurred in relation to the $181 million borrowed under our revolving credit agreement.

        The after-tax impact of these expenses on our net income for the quarter ended March 27, 2010 was approximately $3.4 million.

Engineered Support Structures (ESS) segment

        The decrease in net sales in the first quarter of 2010, as compared with the same period in 2009, was mainly due to lower sales volumes in both the lighting and communication structures product lines. In the Lighting product line in North America, sales were lower in both the transportation and commercial markets. In the transportation market, sales were hampered by the lack of a long-term federal highway funding legislation and state budget deficits. While legislation was passed late in the quarter to extend the current program to the end of 2010, there was no related impact to 2010 sales. We believe the lack of long-term funding legislation does not give the various states ample visibility to implement long-term initiatives. Furthermore, highway spending sponsored under the federal program requires the various states to provide part of required funding. Many states are in budget deficits and may constrain their ability to access federal matching funds to implement roadway projects. The commercial lighting market remains weak, due to continued softness in the commercial construction market. In Europe, sales were modestly lower in 2010, as compared with 2009, due to economic weakness in most of our markets and, to some extent, less favorable weather conditions across the continent. Lighting structure sales in China, while a relatively small portion of global lighting sales, improved in 2010, as compared with 2009, due to increased sales efforts.

        Sales in the communication structures product line were lower in 2010, as compared with 2009, in both North America and China. In North America, general slowness in the wireless communication market, severe winter weather conditions and our exit from the sign structure market all contributed to lower sales this year. In China, sales of wireless communication structures likewise were lower in 2010, as compared with 2009. In 2010, annual supply contracts with the various carriers are being settled later than in the past and we believe there is some continuing coordination of the wireless networks in China that is impacting network development at this time.

        Operating income in the ESS segment was lower in the first quarter of 2010, as compared with 2009, due mainly to lower sales volumes in the segment. The impact of lower sales on operating profit was mitigated to an extent by lower material costs in 2010, as compared with 2009, and factory operational improvements. SG&A expenses were lower in 2010, as compared with 2009, due to various cost containment actions in the segment this year.

Utility Support Structures (USS) segment

        In the USS segment, the sales decrease in 2010, as compared with 2009, was due to the combination of lower sales unit volumes in the U.S. and lower average unit selling prices. The record sales performance realized in 2009 was in part related to the large backlog at the end of the 2008 fiscal

25

year, which was the result of substantial order intake in the last half of 2008. At the end of fiscal 2009, our sales order backlog was less than half of the year-end 2008 backlog. During 2009 and continuing into 2010, the economic recession in the U.S. resulted in a drop in electricity demand. Accordingly, our customers reduced their purchases of structures and delayed scheduled projects. In addition, price competition became more significant, especially in light of falling steel prices throughout most of 2009. In international markets, sales in the first quarter of 2010 improved over 2009, the result of increased project sales into new markets and improved sales volumes in China.

        The decrease in operating income in 2010, as compared with 2009, was a result of lower sales volumes, lower average selling prices and an unfavorable sales mix. The decrease in SG&A expenses primarily resulted from lower employee incentives (approximately $1.6 million) in 2010, as compared with 2009, due to lower operating income this year.

Coatings segment

        The decrease in Coatings segment sales in 2010, as compared with 2009, resulted mainly from lower sales unit volumes in our galvanizing operations, especially intersegment sales to the ESS and USS segments. Galvanizing unit volumes in 2010 were lower than 2009 by approximately 10%, as demand for galvanizing services in our market areas continued to be impacted by weak industrial demand.

        Operating income in the Coatings segment was lower in 2010, as compared with 2009, due to lower galvanizing volumes and rising zinc costs that were not recovered through sales price increases. SG&A expenses for the segment in 2010 were comparable with 2009.

Irrigation segment

        Irrigation segment net sales improved in 2010, as compared with 2009, due to stronger sales volumes in North America and currency translation effects on international sales (approximately $3.4 million). In North America, we believe improved demand for irrigation equipment in 2010 over a weak 2009 resulted from improvement in grower sentiment and expected net farm income. North American sales of service parts in 2010 lagged 2009, which we believe were due to poor winter weather conditions. In international markets, sales unit volumes were slightly lower in 2010, as compared with 2009, due mainly to lower multi-system project sales in 2010, offset somewhat by stronger market conditions in Latin America and Argentina.

        Operating income for the segment improved in 2010 over 2009, due to improved sales unit volumes in North America, lower raw material prices and a stronger international sales mix. SG&A expenses increased mainly due to the costs associated with business development activities.

Other

        This unit mainly includes our industrial tubing and fasteners operations. The increase in sales and operating income in 2010, as compared with 2009, primarily was due to improved sales demand for tubing products.

Net corporate expense

        Net corporate expense decreased in the first quarter of 2010 as compared with the first quarter of 2009. Expense decreases associated with lower employee incentive accruals (approximately $2.1 million) and other discretionary cost reductions were somewhat offset by expenses incurred related to the proposed acquisition of Delta.

26

Liquidity and Capital Resources

Cash Flows

        Working Capital and Operating Cash Flows—Net working capital was $665.7 million at March 27, 2010, as compared with $458.6 million at December 26, 2009. The increase in net working capital in 2010 mainly resulted from $181.0 million in additional borrowing under our revolving credit agreement related to the proposed Delta acquisition that is reflected in our cash balances at March 27, 2010. Operating cash flow was $19.3 million for the thirteen week period ended March 27, 2010, as compared with $37.5 million for the same period in 2009. The decrease in operating cash flow in 2010 mainly was the result of lower net earnings 2010, as compared with 2009. Accounts receivable turnover in the first quarter of 2010 was comparable with the same period in 2009.

        Investing Cash Flows—Capital spending during the thirteen weeks ended March 27, 2010 was $4.6 million, as compared with $14.0 million for the same period in 2009. We expect our capital spending for the 2010 fiscal year to be approximately $50 million. Investing cash flows for fiscal 2010 included $264.0 million of restricted cash associated with the proposed acquisition of Delta. Investing cash flows for 2010 also include an aggregate of approximately $7.5 million associated with increasing our ownership interest in West Coast Engineering, Ltd. from 70% to 80% and the additional purchase price paid to the former shareholders of Stainton related to the performance of the operation after its acquisition in November 2008.

        Financing Cash Flows—Our total interest-bearing debt increased from $172.4 million at December 26, 2009 to $361.8 million as of March 27, 2010. The increase in borrowings in the first quarter of 2010 was predominantly associated with borrowings under our revolving credit agreement to establish the required escrow funding associated with the Delta acquisition.

Sources of Financing and Capital

        We have historically funded our growth, capital spending and acquisitions through a combination of operating cash flows and debt financing. We have an internal long-term objective to maintain long-term debt as a percent of invested capital at or below 40%. At March 27, 2010, our long-term debt to invested capital ratio was 28.0%, as compared with 15.2% at December 26, 2009. Subject to our level of acquisition activity and steel industry operating conditions (which could affect the levels of inventory we need to fulfill customer commitments), we plan to maintain this ratio below 40% in 2010.

        Our debt financing at March 27, 2010 consisted primarily of long-term debt. We also maintain certain short-term bank lines of credit totaling $37.9 million, $33.0 million of which was unused at March 27, 2010. Our long-term debt principally consists of:

•

$150 million of senior subordinated notes that bear interest at 6.875% per annum and are due in May 2014. We are allowed to repurchase the notes at specified prepayment premiums. These notes are guaranteed by certain of our U.S. subsidiaries.

•

$280 million revolving credit agreement with a group of banks. We may increase the credit facility by up to an additional $100 million at any time, subject to participating banks increasing the amount of their lending commitments. The interest rate on our borrowings will be, at our option, either:



(a)

LIBOR (based on a 1, 2, 3 or 6 month interest period, as selected by us) plus 125 to 200 basis points (inclusive of facility fees), depending on our ratio of debt to earnings before taxes, interest, depreciation and amortization (EBITDA), or;



(b)

the higher of

27

•

The higher of (a) the prime lending rate and (b) the Federal Funds rate plus 50 basis points plus in each case, 25 to 100 basis points (inclusive of facility fees), depending on our ratio of debt to EBITDA, or

•

LIBOR (based on a 1 week interest period) plus 125 to 200 basis points (inclusive of facility fees), depending on our ratio of debt to EBITDA

        In April 2010, we issued $300 million of senior unsecured notes that bear interest at 6.625% per annum and mature on April 20, 2020. The proceeds of the notes are anticipated to be used toward the purchase of the outstanding ordinary shares of Delta. In the event that the Delta acquisition is not completed, the proceeds of the notes will be used for general corporate purposes, including debt repayment.

        At March 27, 2010, we had $191.0 in outstanding borrowings under the revolving credit agreement, at a weighted average annual interest rate of 1.33%, not including facility fees. These outstanding borrowings were associated with funding requirements related to the proposed Delta acquisition. The revolving credit agreement has a termination date of October 16, 2013 and contains certain financial covenants that may limit our additional borrowing capability under the agreement. At March 27, 2010, we had the ability to borrow an additional $64 million under this facility. Subsequent to the issuance of our senior unsecured notes in April 2010, our borrowings under our revolving credit agreement were reduced to $85.0 million.

        These debt agreements contain covenants that require us to maintain certain coverage ratios and may limit us with respect to certain business activities, including capital expenditures. Our key debt covenants are that interest-bearing debt is not to exceed 3.75x EBITDA of the prior four quarters and that our EBITDA over our prior four quarters must be at least 2.50x our interest expense over the same period. At March 27, 2010, we were in compliance with all covenants related to these debt agreements.

        Our businesses are cyclical, but we have diversity in our markets, from a product, customer and a geographical standpoint. We have demonstrated the ability to effectively manage through business cycles and maintain liquidity. We have consistently generated operating cash flows in excess of our capital expenditures. Based on our available credit facilities, recent issuance of senior unsecured notes and our history of positive operational cash flows, we believe that we have adequate liquidity to meet our needs.

Financial Obligations and Financial Commitments

        Other than our additional borrowings under our revolving credit agreement related to the Delta offer and the contingent forward foreign exchange contract in place associated with the proposed Delta acquisition, there have been no material changes to our financial obligations and financial commitments as described beginning on page 37 in our Form 10-K for the year ended December 26, 2009.

Off Balance Sheet Arrangements

        There have been no changes in our off balance sheet arrangements as described on page 37 in our Form 10-K for the fiscal year ended December 26, 2009.

Critical Accounting Policies

        There have been no changes in our critical accounting policies during the quarter ended March 27, 2010. We described these policies on pages 39-41 in our Form 10-K for fiscal year ended December 26, 2009.

28

Item 3.    Quantitative and Qualitative Disclosure about Market Risk

        There were no material changes in the company's market risk during the quarter ended March 27, 2010. For additional information, refer to the section "Risk Management" beginning on page 38 in our Form 10-K for the fiscal year ended December 26, 2009.

Item 4.    Controls and Procedures

        The Company carried out an evaluation under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 is (1) accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.

        No changes in the Company's internal control over financial reporting occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

29

PART II. OTHER INFORMATION

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

		(a)		(b)		(c)		(d)
Period		Total Number of Shares Purchased		Average Price paid per share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
December 27, 2009 to January 23, 2010			—		—		—		—
January 24, 2010 to February 27, 2010			20,809	$	70.68		—		—
February 28, 2010 to March 27, 2010			1,508	$	82.31		—		—
	Total		22,317	$	71.47		—		—

        During the first quarter, the only shares reflected above were those delivered to the Company by employees as part of stock option exercises, either to cover the purchase price of the option or the related taxes payable by the employee as part of the option exercise. The price paid per share was the market price at the date of exercise.

Item 5.    Other Information

        Valmont's annual meeting of stockholders was held on April 27, 2010. The stockholders elected three directors to serve three-year terms and ratified the appointment of Deloitte & Touche LLP to audit the Company's financial statements for fiscal 2010. For the annual meeting there were 26,300,415 shares outstanding and eligible to vote of which 23,481,342 were present at the meeting in person or by proxy. The tabulation for each matter voted upon at the meeting was as follows:

        Election of Directors:

	For		Withheld		Broker Non-Votes
Dr. Stephen R. Lewis, Jr.		22,114,347		169,834		1,197,161
Kaj den Daas		21,805,054		479,127		1,197,161

        Proposal to ratify the appointment of Deloitte & Touche LLP as independent auditors for fiscal 2010:

For	23,109,837
Against	223,456
Abstain	148,049

Item 6.    Exhibits

(a)

Exhibits

Exhibit No.		Description
	4.1	Supplemental Indenture dated as of March 3, 2010 to Indenture dated as of May 4, 2004 between Valmont, the subsidiary guarantors named therein, and Wells Fargo Bank, National Association as Trustee.
	31.1	Section 302 Certificate of Chief Executive Officer
	31.2	Section 302 Certificate of Chief Financial Officer
	32.1	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer

30

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.

	VALMONT INDUSTRIES, INC. (Registrant)
	/s/ TERRY J. MCCLAIN Terry J. McClain Senior Vice President and Chief Financial Officer (Principal Financial Officer)
Dated this 27th day of April, 2010.

31

Index of Exhibits

Exhibit No.		Description
	4.1	Supplemental Indenture dated as of March 3, 2010 to Indenture dated as of May 4, 2004 between Valmont, the subsidiary guarantors named therein, and Wells Fargo Bank, National Association as Trustee.
	31.1	Section 302 Certificate of Chief Executive Officer
	31.2	Section 302 Certificate of Chief Financial Officer
	32.1	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer

32