SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 31, 1995
Date of Report (Date of earliest event reported)
Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-3701 47-0351813
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Valley, Nebraska 68064
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (402) 359-2201
Page 1
ITEM 2. ACQUISITION.
On July 31, 1995, Microflect Company Inc., an Oregon
corporation ("Microflect") became a wholly-owned subsidiary
of Valmont Industries, Inc., (the "Company"), a Delaware
corporation, pursuant to the terms of an agreement and Plan
of Merger (the "Merger") The Merger constituted a nontaxable
reorganization under Sections 368(a)(1)(a) and 368(a)(2)(E)
of the Internal Revenue Code of 1986 and will be accounted for
as a pooling of interests pursuant to APB 16.
Under the terms of the Merger, the Company exchanged
1,950,000 shares of its common stock for all issued and
outstanding shares of Microflect common stock held by
the three shareholders of Microflect. As of August 1, 1995
the Company has 13,504,546 common shares outstanding.
Microflect designs, manufactures and installs communication
structures, passive repeaters, waveguide supporting systems, and
components for the wireless communication market. Microflect's
additional product lines include the fabrication of specialty
grating and the distribution of industrial fasteners.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
A. Financial Statements of Business Acquired
The Company files herewith (i) audited financial
statements of Microflect for the year ended December 31,
1994, (ii) unaudited interim financial information
of Microflect as of June 30, 1995 and for the twenty-six
week period then ended, and (iii) certain pro forma
financial information of the Company and Microflect combined.
B. Exhibits
2.1. Agreement and Plan of Merger dated July 9,
1995 among Valmont Industries, Inc., Valmont Oregon, Inc.,
Microflect Company, Inc., George F. Kreitzberg, James S.
Kreitzberg and Richard A. Kreitzberg, incorporated herein
by reference to the Company's report on Form 8-K dated
July 9, 1995.
23. Consent of Boldt, Carlisle & Smith.
27. Amended Financial Data Schedule for
December 31, 1994
Page 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
VALMONT INDUSTRIES, INC.
August 14, 1995 By: /s/ Terry J. McClain
_______________________________
Terry J. McClain
Vice President and Chief
Financial Officer
Page 3
Audited Financial Statements of
Microflect Company Inc.
For the Year Ended December 31, 1994
MICROFLECT COMPANY, INC.
FINANCIAL STATEMENTS
Years Ended December 31, 1994 and 1993
MICROFLECT COMPANY, INC.
TABLE OF CONTENTS
Years Ended December 31, 1994 and 1993
Page
Independent Auditor's Report 1
Financial Statements
Balance Sheets 2,3
Statements of Income 4
Statements of Changes in Stockholders' Equity 5
Statements of Cash Flows 6,7
Notes to Financial Statements 8-12
Independent Auditor's Report
To the Board of Directors
MICROFLECT COMPANY, INC.
Salem, Oregon
We have audited the accompanying balance sheets of MICROFLECT
COMPANY, INC., (an Oregon corporation) as of December 31, 1994
and 1993, and the related statements of income, changes in
stockholders' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of MICROFLECT COMPANY, INC. as of December 31, 1994 and 1993, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
Boldt, Carlisle & Smith, LLC
Certified Public Accountants
March 18, 1995
FINANCIAL STATEMENTS
MICROFLECT COMPANY, INC.
BALANCE SHEETS
December 31, 1994 and 1993
ASSETS
1994 1993
----------- -----------
CURRENT ASSETS
Cash $ 546,439 $ 534,912
Trade receivables 4,849,683 3,792,540
Inventories 6,809,379 6,658,385
Unbilled construction and engineering costs 119,109 165,059
Other current assets 33,040 69,941
----------- -----------
Total current assets 12,357,650 11,220,837
----------- -----------
BUILDINGS AND EQUIPMENT 2,818,278 2,669,875
----------- -----------
OTHER ASSETS
Cash value of life insurance - net 511,603 453,281
Inventory - long-term contracts 1,328,284 85,578
Non-compete agreement - net 34,400 11,600
Goodwill 4,333 --
----------- -----------
Total other assets 1,878,620 550,459
----------- -----------
Total assets $17,054,548 $14,441,171
=========== ===========
See notes to financial statements
2
MICROFLECT COMPANY, INC.
BALANCE SHEETS (Continued)
December 31, 1994 and 1993
LIABILITIES AND STOCKHOLDERS' EQUITY
1994 1993
----------- -----------
CURRENT LIABILITIES
Accounts payable $ 907,214 $ 571,643
Accrued payroll and tax 1,166,789 1,064,461
Accrued profit sharing 319,405 779,928
Other current liabilities 44,106 27,441
Current portion of cash advances and billings
on long-term contracts 2,771,157 3,474,389
----------- -----------
Total current liabilities 5,208,671 5,917,862
----------- -----------
NON-CURRENT LIABILITIES
Cash advances and billings on long-term
contracts 1,692,337 --
----------- -----------
STOCKHOLDERS' EQUITY
Common stock - no par value, 2,000 shares
authorized, 1,020 shares issued and
outstanding 34,782 34,782
Additional paid-in capital 332,233 332,233
Retained earnings 9,786,525 8,156,294
----------- -----------
Total stockholders' equity 10,153,540 8,523,309
----------- -----------
Total liabilities and stockholders'
equity $17,054,548 $14,441,171
=========== ===========
See notes to financial statements
3
MICROFLECT COMPANY, INC.
STATEMENTS OF INCOME
Years ended December 31, 1994 and 1993
1994 1993
----------- -----------
Sales $ 30,616,275 $ 25,830,512
Cost of goods sold 19,320,037 17,103,344
----------- -----------
Gross profit 11,296,238 8,727,168
Selling, general and administrative expense 6,667,628 5,032,918
----------- -----------
Operating income 4,628,610 3,694,250
Other income and expense 22,447 76,765
----------- -----------
Income before income taxes 4,651,057 3,771,015
State income taxes 20,826 29,618
----------- -----------
Net income $ 4,630,231 $ 3,741,397
=========== ===========
See notes to financial statements
4
MICROFLECT COMPANY, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended December 31, 1994 and 1993
Additional Total
Common Paid-in Retained Stockholders'
Stock Capital Earnings Equity
------- --------- ---------- -----------
Balance, January 1, 1993 $34,782 $ 332,233 $6,814,897 $7,181,912
Add: Net income for 1993 -- -- 3,741,397 3,741,397
Deduct: Shareholder distributions -- -- (2,400,000) (2,400,000)
------- --------- ---------- ----------
Balance, December 31, 1993 34,782 332,233 8,156,294 8,523,309
Add: Net income for 1994 -- -- 4,630,231 4,630,231
Deduct: Shareholder distributions -- -- (3,000,000) (3,000,000)
------- --------- ---------- ----------
Balance, December 31, 1994 $34,782 $ 332,233 $9,786,525 $10,153,540
======= ========= ========== ===========
See notes to financial statements
5
MICROFLECT COMPANY, INC.
STATEMENTS OF CASH FLOWS
Years ended December 31, 1994 and 1993
1994 1993
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Sales to customers $ 30,548,237 $ 25,704,896
Interest received 53,853 26,225
Cost of goods and labor (20,093,082) (18,586,529)
Operating expenses (6,612,743) (4,293,711)
Interest paid (43,660) (35,946)
Income taxes paid (20,826) (29,618)
----------- -----------
Net cash provided by operating activities 3,831,779 2,785,317
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of assets 36,327 28,871
Cash purchase of building and equipment (763,257) (902,229)
Increase in cash value of life insurance (58,322) (34,827)
Cash purchase of non-compete agreement (30,000) --
Cash purchase of goodwill (5,000) --
----------- -----------
Net cash used in investing activities (820,252) (908,185)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Distribution of earnings (3,000,000) (2,400,000)
----------- -----------
NET INCREASE (DECREASE) IN CASH 11,527 (522,868)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 534,912 1,057,780
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 546,439 $ 534,912
=========== ===========
See notes to financial statements
6
MICROFLECT COMPANY, INC.
STATEMENTS OF CASH FLOWS (Continued)
Years ended December 31, 1994 and 1993
1994 1993
----------- -----------
NET INCOME $ 4,630,231 $ 3,741,397
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATIONS:
Amortization 7,867 3,200
Depreciation 647,322 594,160
Gain on sale of assets (8,869) (1,426)
Loss on sale of assets 11,710 3,955
(Increase) decrease in current assets:
Trade receivables (1,057,143) (188,106)
Inventories (1,393,700) (1,759,043)
Unbilled construction and engineering
costs 45,950 (83,886)
Other current assets 29,026 27,230
Increase (decrease) in current liabilities:
Accounts payable 271,810 (218,895)
Accrued payroll and tax 103,475 97,167
Accrued profit sharing (460,523) 532,864
Other current liabilities 15,518 (25,789)
Cash advances and billings on long-term
contracts 989,105 62,489
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 3,831,779 $ 2,785,317
=========== ===========
See notes to financial statements
7
MICROFLECT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
Years ended December 31, 1994 and 1993
1. Summary of significant accounting policies
Nature of Business
------------------
MICROFLECT COMPANY, INC. was incorporated in 1959. The
Company designs, fabricates, and installs microwave
communications antenna supporting structures, passive
repeater, and waveguide supporting systems. In addition to
its microwave tower business, the Company operates the
following divisions:
GRATING SPECIALTIES: This division fabricates and
warehouses various types of grating products.
INDUSTRIAL FASTENERS: This division purchases industrial
fasteners in bulk, and repackages these components for
resale. It also purchases and packages a portion of the
accessory hardware for towers, which are then transferred to
the microwave business for resale.
ZINC PLATING AND GALVANIZING: This division provides
mechanical plating and galvanizing services to Industrial
Fasteners as well as outside customers.
LENAY PRODUCTS: This division operates as a wholesale
distributor of industrial fasteners.
FASTENER SUPPLY: This division operates as a wholesale
distributor of industrial fasteners and was formed with the
purchase of assets from Fastener Supply, Inc. on May 1,
1994.
Inventories
-----------
Inventories are valued at the lower of cost or market. Costs
are determined substantially on a first-in, first-out method
and include material, labor and manufacturing overhead.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. Summary of significant accounting policies (continued)
Buildings and Equipment
-----------------------
Buildings and equipment are valued at cost. Major additions
and improvements are capitalized while replacements,
maintenance and repairs that do not improve or extend the
lives of the respective assets are expensed as incurred.
Depreciation is computed using the straight-line method over
the estimated useful lives of the assets for financial
reporting purposes and on the Accelerated and Modified
Accelerated Cost Recovery systems, which prescribe rates and
terms, for income tax purposes.
Cash and Cash Equivalents
-------------------------
For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, checking, savings and money
market accounts and any highly liquid debt instruments
purchased with a maturity of three months or less.
S Corporation - Income Tax Status
---------------------------------
The Company, with the consent of its shareholders, has elected
under the Internal Revenue Code to be an S Corporation.
Instead of corporation income taxes, the shareholders of an S
corporation are taxed on their proportionate share of the
Company's taxable income. Therefore, no provision or
liability for Federal income taxes has been included in the
financial statements.
Profit Sharing Plan
-------------------
The Company sponsors a defined contribution profit sharing
plan covering substantially all employees. Employees are
eligible to participate after completing one year of service.
Contributions to the plan are based on a percentage of covered
employees' salaries and determined by management annually.
Contributions for 194 and 1993 amounted to $781,771 and
$779,928, respectively.
Concentration of Credit Risks for Cash Held at Banks
----------------------------------------------------
The Company maintains all of its cash balances at one bank.
Accounts are insured by the Federal Deposit Insurance
Corporation up to $100,000.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Inventories
Inventories consist of the following:
1994 1993
------------ ------------
Raw materials $ 1,597,503 $ 1,564,040
Work in process 732,694 1,010,623
Finished goods 5,807,466 4,169,300
------------ ------------
$ 8,137,663 $ 6,743,963
The preceding is included in the accompanying balance sheet
under the
following captions:
Inventories $ 6,809,379 $ 6,658,385
Inventory - long-term contracts 1,328,284 85,578
------------ ------------
$ 8,137,663 $ 6,743,963
============ ============
3. Buildings and equipment
Buildings and equipment consist of the following:
Property improvements $ 263,257 $ 249,195
Buildings and improvements 1,076,657 1,046,002
Machinery and equipment 1,771,942 1,560,211
Trucks and autos 1,158,478 1,073,365
Construction equipment 342,005 341,781
Furniture and fixtures 477,426 356,585
Data processing equipment 1,688,485 1,604,253
------------ ------------
6,778,250 6,231,392
Less accumulated depreciation 3,959,972 3,561,517
------------ ------------
$ 2,818,278 $ 2,669,875
The statement of income reflects depreciation expense for 1994
and 1993 of $647,322 and $594,160, respectively.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Other assets
a. Cash Surrender Value of Life Insurance. The Company is the owner and
beneficiary of a number of insurance policies on the lives of its
shareholder/officers. The cash value is recorded net of policy loans.
b. Inventory - long-term contracts. Inventory in long-term contracts
represents raw material and work in progress that will not be
completed within the next twelve months.
c. Intangibles. The cost of the non-compete agreements and goodwill is
being amortized over five years using the straight-line method.
5. Cash advances - long-term contracts
The Company collects advance payments on long-term contracts. A portion
of these payments is reflected as a non-current liability because delivery
of the product will not take place within the next twelve months.
6. Unused financing commitments
At December 31, 1994 and 1993, the Company had $1,000,000 of unused lines
of credit with its bank to be drawn upon as needed, with interest at one
-half of one percent above the bank's prime rate.
7. Lease commitments
The Company leases land under several long-term leases. The leases for
monthly lease payments subject to renegotiation every fifth year. Leases
expire in years 1998 and 2000. The Company has the option to extend said
leases for two additional ten-year terms at the expiration of the lease
term. In addition, the Company leases several warehouses calling for
monthly lease payments. The leases are subject to renegotiation every
fifth year. Leases expire in 1995, 1996, and 1998. Total lease expense
charged to operations for 1994 and 1993 was $159,335 and $135,673,
respectively. Minimum lease payments for each of the next five years are
as follows:
1995 $ 183,034
1996 184,898
1997 173,380
1998 135,972
1999 137,508
---------
$ 814,792
=========
NOTES TO FINANCIAL STATEMENTS (Continued)
8. Business purchase
On December 1, 1993, the Company purchased assets of Willamette Screw and
Supply, an Oregon corporation located in Portland, Oregon. Assets
purchased consisted of all of the fastener inventory, warehouse and office
equipment.
On May 1, 1994, the Company purchased the assets of Fastener Supply, Inc.,
an Oregon corporation located in Portland, Oregon. Assets purchased
consisted of inventory, cash, accounts receivable, supplies, equipment, a
covenant not to compete, and goodwill.
9. Risk management
The Company provides health benefits to its employees and their dependents
through a self insurance program. The Company self-insures for health
insurance up to an annual maximum of $25,000 per insured up to a Company
aggregate of $260,000, and dental insurance up to an annual maximum of
$1,000 per insured. Insurance coverage over the annual maximum for health
benefits is provided through commercial insurance coverage.
Unaudited Interim Financial Information of
Microflect Company Inc.
For the period ended June 30, 1995
Page 1
MICROFLECT COMPANY, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
June 30, December 31,
ASSETS 1995 1994
----------------------------------------- ------- -------
Current assets:
Cash and cash equivalents $ 207 546
Receivables, net 5,651 4,969
Inventories 9,077 6,810
Prepaid expenses 98 33
------- -------
Total current assets 15,033 12,358
------- -------
Other assets 545 1,879
------- -------
Net property, plant and equipment 2,814 2,818
------- -------
Total assets $ 18,392 17,055
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
-----------------------------------------
Current liabilities:
Accounts and notes payable $ 4,827 3,679
Other current liabilities 2,744 1,530
------- -------
Total current liabilities 7,571 5,209
------- -------
Other noncurrent liabilities -- 1,692
Shareholders' equity:
Common stock of no par value.
Authorized 2,000 shares;
issued 1,020 shares 35 35
Additional paid-in capital 332 332
Retained earnings 10,454 9,787
------- -------
Total shareholders' equity 10,821 10,154
------- -------
Total liabilities and shareholders'
equity $ 18,392 17,055
======= =======
Page 2
MICROFLECT COMPANY, INC.
Condensed Consolidated Statements of Operations
For the Six Months Ended June 30, 1995 and June 30, 1994
(Dollars in thousands)
(Unaudited)
June 30, June 30,
1995 1994
------- -------
Net sales $ 18,068 13,554
Cost of sales 11,400 8,676
------- -------
Gross profit 6,668 4,878
Selling, general and administrative
expenses 3,880 2,973
------- -------
Operating income 2,788 1,905
Other (deductions) (3) (59)
------- -------
Earnings before income taxes 2,785 1,846
Income tax expense 17 11
------- -------
Net Earnings 2,768 1,835
======= =======
Page 3
MICROFLECT COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1995 and June 30, 1994
(Dollars in thousands)
(Unaudited)
June 30, June 30,
1995 1994
------- -------
Net cash provided (used) by operations $ 975 1,515
------- -------
Cash flows from investment activities:
Purchase of property, plant & equipment (419) (376)
Additions to other assets 6 (35)
------- -------
Net cash used in
investment activities (413) (411)
------- -------
Cash flows from financing activities:
Net borrowings under short-term agreements 1,200 400
Distributions to shareholders (2,101) (1,200)
------- -------
Net cash used in financing activities (901) (800)
------- -------
Net increase (decrease)in cash and
cash equivalents (339) 304
Cash and cash equivalents--beginning of
period 546 535
------- -------
Cash and cash equivalents--end of period $ 207 839
======= =======
Page 4
Certain Pro Forma Financial Information of
Valmont Industries, Inc. and Microflect Company Inc.
Combined
Page 1
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET - UNAUDITED
The following unaudited pro forma condensed balance sheet for
Valmont Industries, Inc. and subsidiaries is based on its
historical consolidated balance sheet as of December 31, 1994.
The pro forma condensed balance sheet gives effect to the merger
of Valmont Industries, Inc. and Microflect Company Inc. as if it
had occurred on December 26, 1992.
Valmont Valmont
Industries, Inc. Industries, Inc.
and Microflect Pro Forma
subsidiaries Company Inc. Pro Forma after
December 31, December 31, Adjustments Merger
ASSETS 1994 1994 ----------- December 31, 1994
----------------------------------------- ------- ------- -----------------
(Unaudited)
(Dollars in Thousands)
Current assets:
Cash and cash equivalents $ 29,582 546 30,128
Receivables, net 73,185 4,969 78,160
Deferred income taxes 7,149 -- 214 (a) 7,363
Inventories 59,221 6,810 66,031
Prepaid expenses 1,867 33 1,894
------- ------- ------- -------
Total current assets 171,004 12,358 214 183,576
------- ------- ------- -------
Other assets:
Investments in nonconsolidated affiliates 991 -- 991
Other 7,796 1,879 9,675
------- ------- ------- -------
Total other assets 8,787 1,879 10,666
------- ------- ------- -------
Net property, plant and equipment 86,383 2,818 89,201
------- ------- ------- -------
Total assets $ 266,174 17,055 214 283,443
======= ======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
-----------------------------------------
Current liabilities:
Accounts and notes payable $ 42,519 3,679 46,198
Other current liabilities 47,570 1,530 49,100
------- ------- ------- -------
Total current liabilities 90,089 5,209 95,298
------- ------- ------- -------
Deferred income taxes 9,990 -- 253 (a) 10,243
Long-term debt, excl. current installments 35,489 -- 35,489
Minority interest in consolidated
subsidiaries 501 501
Other noncurrent liabilities 2,638 1,692 4,330
Shareholders' equity:
Preferred stock of $1 par value.
Authorized 500,000 shares; none issued -- -- -- --
Common stock of $1 par value.
Authorized 36,000,000 shares;
issued 13,950,000 shares 12,000 35 1,915 (c) 13,950
Additional paid-in capital 1,664 332 2,289 (a,b,c) 4,285
Retained earnings 112,532 9,787 (4,243) (a,b) 118,076
Currency translation adjustment 2,001 -- 2,001
------- ------- ------- -------
Less: 128,197 10,154 (39) 138,312
Cost of 445,454 common shares in treasury 648 -- 648
Unearned restricted stock 82 -- 82
------- ------- ------- -------
Total shareholders' equity 127,467 10,154 (39) 137,582
------- ------- ------- -------
Total liabilities and shareholders'
equity $ 266,174 17,055 214 283,443
======= ======= ======= =======
Page 2
PRO FORMA CONDENSED STATEMENT OF EARNINGS - UNAUDITED
For the Year Ended December 31, 1994
The following unaudited pro forma condensed statement of earnings
for Valmont Industries, Inc. and subsidiaries has been prepared
from the historical consolidated results of operations of Valmont
Industries, Inc. and Microflect Company Inc. for the year ended
December 31, 1994.
Valmont Valmont
Industries, Inc. Industries, Inc.
and Microflect Pro Forma
Subsidiaries Company Inc. Pro Forma after Merger
Dec. 31, 1994 Dec. 31, 1994 Adjustments Dec. 31, 1994
---------- ---------- ---------- ----------
Net sales $ 471,745 30,616 (621) (d) 501,740
Cost of sales 361,438 19,320 (504) (d) 380,254
---------- ---------- ---------- ----------
Gross Profit 110,307 11,296 (117) 121,486
Selling, general and
administrative expenses 83,230 6,667 (90) (d) 89,807
---------- ---------- ---------- ----------
Operating income 27,077 4,629 (27) 31,679
---------- ---------- ---------- ----------
Other income (deductions):
Interest expense (4,672) -- (39) (d) (4,711)
Interest income 879 -- -- 879
Miscellaneous 1,635 22 66 (d) 1,723
---------- ---------- ---------- ----------
Earnings before income taxes 24,919 4,651 -- 29,570
---------- ---------- ---------- ----------
Income tax expense:
Current 5,500 21 1,884 (a) 7,405
Deferred 3,300 -- (22) (a) 3,278
---------- ---------- ---------- ----------
8,800 21 1,862 10,683
---------- ---------- ---------- ----------
Earnings from continuing
operations $ 16,119 4,630 (1,862) 18,887
========== ========== ========== ==========
Earnings per share from
continuing operations $ 1.38 -- .01 1.39
---------- ---------- ---------- ----------
Cash dividends per share $ .30 -- -- .30
========== ========== ========== ==========
Weighted average number of
shares of common stock
outstanding (000 omitted) 11,665 -- 1,950 13,615
========== ========== ========== ==========
Page 3
PRO FORMA CONDENSED STATEMENT OF EARNINGS - UNAUDITED
For the Year Ended December 30, 1993
The following unaudited pro forma condensed statement of earnings
for Valmont Industries, Inc. and subsidiaries has been prepared
from the historical consolidated results of operations of Valmont
Industries, Inc. and Microflect Company Inc. for the year ended
December 30, 1993.
Valmont Valmont
Industries, Inc. Industries, Inc.
and Microflect Pro Forma
Subsidiaries Company Inc. Pro Forma after Merger
Dec. 30, 1993 Dec. 30, 1993 Adjustments Dec. 30, 1993
---------- ---------- ---------- ----------
Net sales $ 438,755 25,831 (312) (d) 464,274
Cost of sales 338,207 17,104 (809) (d) 354,502
---------- ---------- ---------- ----------
Gross Profit 100,548 8,727 497 109,772
Selling, general and
administrative expenses 76,465 5,033 545 (d) 82,043
Restructuring charges 10,961 -- -- 10,961
---------- ---------- ---------- ----------
Operating income 13,122 3,694 (48) (d) 16,768
---------- ---------- ---------- ----------
Other income (deductions):
Interest expense (5,910) -- -- (5,910)
Interest income 805 -- -- 805
Miscellaneous 84 77 48 209
---------- ---------- ---------- ----------
Earnings before income taxes 8,101 3,771 -- 11,872
---------- ---------- ---------- ----------
Income tax expense:
Current 4,706 30 1,466 (a) 6,202
Deferred (1,871) -- (10) (a) (1,881)
---------- ---------- ---------- ----------
2,835 30 1,456 4,321
---------- ---------- ---------- ----------
Earnings from continuing
operations $ 5,266 3,741 (1,456) 7,551
========== ========== ========== ==========
Earnings per share from
continuing operations $ .45 -- .10 .55
---------- ---------- ---------- ----------
Cash dividends per share $ .29 -- -- .29
========== ========== ========== ==========
Weighted average number of
shares of common stock
outstanding (000 omitted) 11,670 -- 1,950 13,620
========== ========== ========== ==========
Page 4
PRO FORMA CONDENSED STATEMENT OF EARNINGS - UNAUDITED
For the Year Ended December 26, 1992
The following unaudited pro forma condensed statement of earnings
for Valmont Industries, Inc. and subsidiaries has been prepared
from the historical consolidated results of operations of Valmont
Industries, Inc. and Microflect Company Inc. for the year ended
December 26, 1992.
Valmont Valmont
Industries, Inc. Industries, Inc.
and Microflect Pro Forma
Subsidiaries Company Inc. Pro Forma after Merger
Dec. 26, 1992 Dec. 26, 1992 Adjustments Dec. 26, 1992
---------- ---------- ---------- ----------
Net sales $ 424,685 21,191 (395) (d) 445,481
Cost of sales 327,359 13,909 (1,230) (d) 340,038
---------- ---------- ---------- ----------
Gross Profit 97,326 7,282 835 105,443
Selling, general and
administrative expenses 76,336 4,076 892 (d) 81,304
---------- ---------- ---------- ----------
Operating income 20,990 3,206 (57) 24,139
---------- ---------- ---------- ----------
Other income (deductions):
Interest expense (7,535) -- -- (7,535)
Interest income 688 -- -- 688
Miscellaneous 639 58 57 (d) 754
---------- ---------- ---------- ----------
Earnings before income taxes 14,782 3,264 -- 18,046
---------- ---------- ---------- ----------
Income tax expense:
Current 4,100 12 1,281 (a) 5,393
Deferred 1,034 0 (52) (a) 982
---------- ---------- ---------- ----------
5,134 12 1,229 6,375
---------- ---------- ---------- ----------
Earnings from continuing
operations $ 9,648 3,252 (1,229) 11,671
========== ========== ========== ==========
Earnings per share from
continuing operations $ .83 -- .03 .86
---------- ---------- ---------- ----------
Cash dividends per share $ .26 -- -- .26
========== ========== ========== ==========
Weighted average number of
shares of common stock
outstanding (000 omitted) 11,583 -- 1,950 13,533
========== ========== ========== ==========
Page 5
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET - UNAUDITED
The following unaudited pro forma condensed balance sheet for
Valmont Industries, Inc. and subsidiaries is based on its
historical consolidated balance sheet as of July 1, 1995. The
pro forma condensed balance sheet gives effect to the merger of
Valmont Industries, Inc. and Microflect Company Inc. as if it had
occurred on December 26, 1992.
Valmont Valmont
Industries, Inc. Industries, Inc.
and Microflect Pro Forma
subsidiaries Company Inc. Pro Forma after
July 1, June 30, Adjustments Merger
ASSETS 1995 1995 ----------- July 1, 1995
----------------------------------------- ------- ------- -----------------
(Unaudited)
(Dollars in Thousands)
Current assets:
Cash and cash equivalents $ 18,631 207 18,838
Receivables, net 78,427 5,651 84,078
Deferred income taxes 7,189 -- 282 (a) 7,471
Inventories 66,663 9,077 (1,328) (d) 74,412
Prepaid expenses 1,695 98 1,793
------- ------- ------- -------
Total current assets 172,605 15,033 (1,046) 186,592
------- ------- ------- -------
Other assets:
Investments in nonconsolidated affiliates 991 -- 991
Other 7,362 545 1,328 (d) 9,235
------- ------- ------- -------
Total other assets 8,353 545 1,328 10,226
------- ------- ------- -------
Net property, plant and equipment 99,197 2,814 102,011
------- ------- ------- -------
Total assets $ 280,155 18,392 282 298,829
======= ======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
-----------------------------------------
Current liabilities:
Accounts and notes payable $ 43,409 3,135 46,544
Other current liabilities 47,416 2,744 50,160
------- ------- ------- -------
Total current liabilities 90,825 7,571 96,704
------- ------- ------- -------
Deferred income taxes 11,479 -- 281 (a) 11,760
Long-term debt, excl. current installments 34,458 -- 34,458
Minority interest in consolidated
subsidiaries 2,127 -- 2,127
Other noncurrent liabilities 2,745 -- 2,745
Shareholders' equity:
Preferred stock of $1 par value.
Authorized 500,000 shares; none issued -- -- -- --
Common stock of $1 par value.
Authorized 36,000,000 shares;
issued 13,950,000 shares 12,000 35 1,915 (c) 13,950
Additional paid-in capital 1,749 332 2,996 (a,b,c) 5,077
Retained earnings 121,427 10,454 (4,910) (a,b) 126,971
Currency translation adjustment 3,916 -- 3,916
------- ------- ------- -------
Less: 139,092 10,821 1 149,914
Cost of 445,454 common shares in treasury 500 -- 500
Unearned restricted stock 71 -- 71
------- ------- ------- -------
Total shareholders' equity 138,521 10,821 1 149,343
------- ------- ------- -------
Total liabilities and shareholders'
equity $ 280,155 18,392 282 298,829
======= ======= ======= =======
Page 6
PRO FORMA CONDENSED STATEMENT OF EARNINGS - UNAUDITED
For the Period Ended July 1, 1995
The following unaudited pro forma condensed statement of earnings
for Valmont Industries, Inc. and subsidiaries has been prepared
from the historical consolidated results of operations of Valmont
Industries, Inc. for the period ended July 1, 1995. The pro
forma condensed statement of earnings presents the income and
expenses of Valmont and Microflect as if the Merger had occurred
on December 26, 1992.
Valmont Valmont
Industries, Inc. Industries, Inc.
and Microflect Pro Forma
Subsidiaries Company Pro Forma after Merger
July 1, 1995 June 30, 1995 Adjustments July 1, 1995
---------- ---------- ---------- ----------
Net sales $ 258,298 18,068 (725) (d) 275,641
Cost of sales 194,920 11,400 (504) (d) 205,816
---------- ---------- ---------- ----------
Gross Profit 63,378 6,668 (221) 69,825
Selling, general and
administrative expenses 44,858 3,880 (229) (d) 48,509
---------- ---------- ---------- ----------
Operating income 18,520 2,788 8 21,316
---------- ---------- ---------- ----------
Other income (deductions):
Interest expense (2,126) -- (55) (d) (2,181)
Interest income 275 -- -- 275
Miscellaneous (194) (3) 47 (d) (150)
---------- ---------- ---------- ----------
Earnings before income taxes 16,475 2,785 -- 19,260
---------- ---------- ---------- ----------
Income tax expense:
Current 4,596 17 1,073 (a) 5,686
Deferred 1,251 0 (62) (a) 1,189
---------- ---------- ---------- ----------
5,847 17 1,011 6,875
---------- ---------- ---------- ----------
Earnings from continuing
operations $ 10,628 2,768 (1,011) 12,385
========== ========== ========== ==========
Earnings per share from
continuing operations $ .91 -- -- .91
---------- ---------- ---------- ----------
Cash dividends per share $ .15 -- -- .15
========== ========== ========== ==========
Weighted average number of
shares of common stock
outstanding (000 omitted) 11,721 -- 1,950 13,671
========== ========== ========== ==========
Page 7
PRO FORMA CONDENSED STATEMENT OF EARNINGS - UNAUDITED
For the Period Ended June 25, 1994
The following unaudited pro forma condensed statement of earnings
for Valmont Industries, Inc. and subsidiaries has been prepared
from the historical consolidated results of operations of Valmont
Industries, Inc. for the period ended June 25, 1994. The pro
forma condensed statement of earnings presents the income and
expenses of Valmont and Microflect as if the Merger had occurred
on December 26, 1992.
Valmont Valmont
Industries, Inc. Industries, Inc.
and Microflect Pro Forma
Subsidiaries Company Inc. Pro Forma after Merger
June 25, 1994 June 30, 1994 Adjustments June 25, 1995
---------- ---------- ---------- ----------
Net sales $ 233,152 13,554 (379) (d) 246,327
Cost of sales 181,221 8,676 (418) (d) 189,479
---------- ---------- ---------- ----------
Gross Profit 51,931 4,878 39 56,848
Selling, general and
administrative expenses 38,249 2,973 79 (d) 41,301
---------- ---------- ---------- ----------
Operating income 13,682 1,905 (40) 15,547
---------- ---------- ---------- ----------
Other income (deductions):
Interest expense (2,575) -- (33) (d) (2,608)
Interest income 250 -- -- 250
Miscellaneous 334 (59) 73 (d) 348
---------- ---------- ---------- ----------
Earnings before income taxes 11,691 1,846 -- 13,537
---------- ---------- ---------- ----------
Income tax expense:
Current 2,792 11 707 (a) 3,510
Deferred 1,563 -- (12) (a) 1,551
---------- ---------- ---------- ----------
4,355 11 695 5,061
---------- ---------- ---------- ----------
Earnings from continuing
operations $ 7,336 1,835 (695) 8,476
========== ========== ========== ==========
Earnings per share from
continuing operations $ .63 -- (.01) .62
---------- ---------- ---------- ----------
Cash dividends per share $ .15 -- -- .15
========== ========== ========== ==========
Weighted average number of
shares of common stock
outstanding (000 omitted) 11,678 -- 1,950 13,628
========== ========== ========== ==========
Page 8
Notes to Pro Forma Unaudited Financial Statements
(Dollars in thousands)
(Unaudited)
1. Condensed Pro Forma Consolidated Financial Statements
-----------------------------------------------------
The Merger with Microflect was accounted for as a pooling of
interests and, accordingly the Company's pro forma financial
statements include the accounts and operations of Microflect for
all periods presented. Prior to the combination, Microflect was
a Subchapter S Corporation and included no federal taxes in its
financial statements since its income was taxed at the
shareholder level. Microflect made regular cash distributions to
its shareholders sufficient to meet their tax liabilities. Upon
termination of S-Corporation status on July 31, 1995, the
undistributed S-Corporation retained earnings were reclassified
to additional paid-in capital. Additionally, Microflect
established deferred income taxes for the cumulative differences
in the timing of reporting certain items for financial statement
and income tax purposes. These deferred taxes related primarily
to depreciation and capitalization costs of inventory.
Reclassification entries have been made to the Microflect's
statement of earnings to conform net sales, cost of goods sold,
selling, general and administrative expenses and other income to
Valmont's classifications on its statement of earnings.
The following adjustments were made on the pro forma financial
statements:
(a) Income taxes were recorded to reflect the current and
deferred taxes. The tax expense recorded by year follows:
1994 1993 1992
------- ------- -------
Current $ 1,884 1,466 1,281
Deferred (22) (10) (52)
------- ------- -------
Total 1,862 1,456 1,229
======= ======= =======
Cumulative deferred tax receivables/payables have been
recorded on the accompanying balance sheets.
(b) Subchapter S retained earnings have been reclassified
to additional paid-in capital.
(c) These entries reflect the issuance of Valmont's common
stock of 1,950,000 shares and the elimination in
consolidation of Microflect's
common stock.
(d) Reclassification entries to conform to Valmont's
classifications.
2. Earnings Per Share
------------------
Earnings per share are based on the weighted average number
of common shares outstanding and equivalent common shares
from dilutive stock options. The equivalent shares from the
transaction of July 31, 1995, has been used in the restated
earnings per share on the pro forma financial statements.
Page 9