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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 23, 2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER: 0-3701
------------------------
VALMONT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 47-0351813
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE VALMONT PLAZA, OMAHA, NEBRASKA 68154-5215
(Address of principal executive offices) (Zip Code)
402-963-1000
(Registrant's telephone number, including area code)
COMMON STOCK $1.00 PAR VALUE NASDAQ (SYMBOL VALM)
Title of Class Name of each
exchange
on which registered
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 /X/ No / /
23,267,098
Outstanding Common Shares as of October 19, 2000
Index is located on page 2.
Total number of pages 12.
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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements:
Consolidated Statements of Operations for the thirteen and
thirty-nine weeks ended September 23, 2000 and September
25, 1999.................................................. 3
Consolidated Balance Sheets as of September 23, 2000 and
December 25, 1999......................................... 4
Consolidated Statements of Cash Flows for the thirty-nine
weeks ended September 23, 2000 and September 25, 1999..... 5
Notes to Consolidated Financial Statements.................. 6-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 9-11
Item 3. Quantitative and Qualitative Disclosure about Market Risk... 12
PART II. OTHER INFORMATION
Item 5. Other Information........................................... 12
Item 6. Exhibits and Reports on Form 8-K............................ 12
SIGNATURES............................................................ 12
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 THIRTY-NINE WEEKS ENDED
------------------------ ------------------------
SEPT. 23, SEPT. 25, SEPT. 23, SEPT. 25,
2000 1999 2000 1999
--------- --------- --------- ---------
Net sales......................................... $191,664 $138,848 $595,554 $456,010
Cost of sales..................................... 140,589 98,845 437,337 332,015
-------- -------- -------- --------
Gross profit.................................... 51,075 40,003 158,217 123,995
Selling, general and administrative expenses...... 35,191 29,092 107,839 88,939
-------- -------- -------- --------
Operating income.................................. 15,884 10,911 50,378 35,056
-------- -------- -------- --------
Other income (deductions):
Interest expense................................ (4,559) (1,944) (11,668) (5,805)
Interest income................................. 368 118 717 537
Miscellaneous................................... (859) 7 (2,199) (633)
-------- -------- -------- --------
(5,050) (1,819) (13,150) (5,901)
-------- -------- -------- --------
Earnings before income taxes.................... 10,834 9,092 37,228 29,155
-------- -------- -------- --------
Income tax expense:
Current......................................... 3,200 4,100 14,900 13,000
Deferred........................................ 750 (700) (1,150) (2,200)
-------- -------- -------- --------
3,950 3,400 13,750 10,800
-------- -------- -------- --------
Net Earnings.................................... $ 6,884 $ 5,692 $ 23,478 $ 18,355
======== ======== ======== ========
Earnings per share:
Basic......................................... $ 0.30 $ 0.24 $ 1.01 $ 0.75
======== ======== ======== ========
Diluted....................................... $ 0.29 $ 0.23 $ 0.99 $ 0.75
======== ======== ======== ========
Cash dividends per share........................ $ 0.065 $ 0.065 $ 0.195 $ 0.195
======== ======== ======== ========
Weighted average number of shares of
common stock outstanding (000 omitted).......... 23,251 24,209 23,267 24,345
======== ======== ======== ========
Weighted average number of shares of
common stock outstanding plus dilutive
potential common shares (000 omitted)........... 23,862 24,505 23,765 24,612
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
3
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
SEPTEMBER 23, DECEMBER 25,
2000 1999
------------- ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents................................. $ 9,147 $ 14,936
Receivables............................................... 141,170 106,844
Inventories............................................... 132,079 85,383
Prepaid expenses.......................................... 6,565 4,784
Refundable and deferred income taxes...................... 10,027 8,086
-------- --------
Total current assets.................................. 298,988 220,033
-------- --------
Property, plant and equipment, at cost...................... 375,225 326,451
Less accumulated depreciation and amortization............ 171,159 152,531
-------- --------
Net property, plant and equipment..................... 204,066 173,920
-------- --------
Goodwill and other assets................................... 64,036 25,382
-------- --------
Total assets.......................................... $567,090 $419,335
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt.................... $ 3,196 $ 4,372
Notes payable to banks.................................... 37,157 18,834
Accounts payable.......................................... 60,783 46,753
Accrued expenses.......................................... 57,234 49,962
Dividends payable......................................... 1,512 1,524
-------- --------
Total current liabilities............................. 159,882 121,445
-------- --------
Deferred income taxes....................................... 11,900 11,109
Long-term debt, excl. current installments.................. 199,726 104,250
Minority interest in consolidated subsidiaries.............. 8,589 7,302
Other noncurrent liabilities................................ 4,494 4,741
Shareholders' equity:
Preferred stock........................................... -- --
Common stock of $1 par value.............................. 27,900 27,900
Additional paid-in capital................................ 850 1,043
Retained earnings......................................... 239,453 220,506
Accumulated other comprehensive income.................... (10,437) (5,113)
Treasury stock............................................ (75,247) (73,808)
Unearned restricted stock................................. (20) (40)
-------- --------
Total shareholders' equity............................ 182,499 170,488
-------- --------
Total liabilities and shareholders' equity............ $567,090 $419,335
======== ========
See accompanying notes to consolidated financial statements.
4
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THIRTY-NINE WEEKS ENDED
------------------------
SEPT. 23, SEPT. 25,
2000 1999
--------- ---------
Net cash provided (used) by operations...................... $ (9,012) $ 52,010
-------- --------
Cash flows from investing activities:
Purchase of property, plant & equipment................... (33,831) (31,004)
Acquisitions.............................................. (61,342) (2,854)
Proceeds from sale of property and equipment.............. 248 114
Proceeds from investment by minority shareholder.......... -- 1,374
Proceeds from sale of nonconsolidated affiliate........... -- 8,294
Changes in investment in other assets..................... (942) (316)
Other, net................................................ (798) (2,460)
-------- --------
Net cash used in investing activities................... (96,665) (26,852)
-------- --------
Cash flows from financing activities:
Net borrowings (repayments) under short-term agreements... 18,097 (2,497)
Proceeds from long-term borrowings........................ 103,201 25,206
Principal payments on long-term obligations............... (14,342) (29,565)
Dividends paid............................................ (4,547) (4,769)
Proceeds from exercises under stock plans................. 1,088 381
Purchase of common treasury shares:
Stock repurchase program................................ (2,322) (7,494)
Stock plan exercises.................................... (805) (508)
-------- --------
Net cash provided (used) by financing activities........ 100,370 (19,246)
-------- --------
Effect of exchange rate changes on cash and and cash
equivalents............................................... (482) (674)
-------- --------
Net (decrease) increase in cash and cash equivalents...... (5,789) 5,238
Cash and cash equivalents--beginning of period.............. 14,936 7,580
-------- --------
Cash and cash equivalents--end of period.................... $ 9,147 $ 12,818
======== ========
See accompanying notes to consolidated financial statements.
5
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Condensed Consolidated Balance Sheet as of September 23, 2000 and the
Condensed Consolidated Statements of Operations for the thirteen and thirty-nine
week periods ended September 23, 2000 and September 25, 1999 and the Condensed
Consolidated Statements of Cash Flows for the thirty-nine 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
September 23, 2000 and for all periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
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 December 25, 1999 Annual Report to
Shareholders. 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 25, 1999. The results of
operations for the period ended September 23, 2000 are not necessarily
indicative of the operating results for the full year.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements." This Bulletin becomes effective no later than the fourth quarter of
the fiscal year beginning after December 15, 1999. Adoption of SAB 101 is not
expected to have a significant effect on the Company's consolidated results of
operations, financial position, or cash flows.
2. USE OF ESTIMATES
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these condensed combined financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
3. 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) were as follows for the
thirty-nine weeks ended:
SEPT. 23, SEPT. 25,
2000 1999
--------- ---------
Interest.................................................. $10,509 $ 5,694
Income Taxes.............................................. 16,597 14,140
6
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
4. EARNINGS PER SHARE
The following table provides a reconciliation between basic and diluted
earnings per share:
BASIC DILUTIVE EFFECT DILUTED
EPS OF STOCK OPTIONS EPS
-------- ---------------- --------
1999:
Thirteen weeks ended September 25, 1999:
Net earnings............................ $ 5,692 -- $ 5,692
Shares outstanding...................... 24,209 296 24,505
Per share amount........................ $ 0.24 -- $ 0.23
Thirty-nine weeks ended September 25,
1999:
Net earnings............................ $18,355 -- $18,355
Shares outstanding...................... 24,345 267 24,612
Per share amount........................ $ 0.75 -- $ 0.75
2000:
Thirteen weeks ended September 23, 2000:
Net earnings............................ $ 6,884 -- $ 6,884
Shares outstanding...................... 23,251 611 23,862
Per share amount........................ $ 0.30 -- $ 0.29
Thirty-nine weeks ended September 23,
2000:
Net earnings............................ $23,478 -- $23,478
Shares outstanding...................... 23,267 498 23,765
Per share amount........................ $ 1.01 -- $ 0.99
5. COMPREHENSIVE INCOME
Results of operations for foreign subsidiaries are translated using the
average exchange rates during the period. Assets and liabilities are translated
at the exchange rates in effect on the balance sheet dates. These translation
adjustments are the Company's only component of other comprehensive income.
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
--------------------- -----------------------
SEPT. 23, SEPT. 25, SEPT. 23, SEPT. 25,
2000 1999 2000 1999
--------- --------- ---------- ----------
Net earnings........................ $ 6,884 $ 5,692 $ 23,478 $ 18,355
Currency translation adjustments.... (2,598) (1,084) (5,324) (5,135)
-------- -------- -------- --------
Total comprehensive income........ $ 4,286 $ 4,608 $ 18,154 $ 13,220
======== ======== ======== ========
6. TREASURY STOCK
During 1998, the Board of Directors authorized management to repurchase up
to 5.4 million shares of the Company's common stock. Repurchased shares are
recorded as "Treasury Stock" and result in a reduction of "Shareholders'
Equity." When treasury shares are reissued, the Company uses the last-in,
first-out method, and the difference between the repurchase cost and reissuance
price is charged or credited to "Additional Paid-In Capital." As of
September 23, 2000, a total of 4.7 million shares had been purchased for $77,787
including 140,000 shares during 2000 at a cost of $2,322.
7
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
7. BUSINESS SEGMENTS
The Company has two reportable segments:
IRRIGATION: This segment consists of the manufacture and distribution of
agricultural irrigation equipment, tubular products and related parts and
services, and
INFRASTRUCTURE: This segment includes the manufacture and distribution of
engineered metal structures and coating services for the lighting, utility and
wireless communications industries.
In addition to these two reportable segments, the Company has other
businesses that individually are not more than 10% of consolidated sales,
profit, or assets.
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
--------------------- -----------------------
SEPT. 23, SEPT. 25, SEPT. 23, SEPT. 25,
2000 1999 2000 1999
--------- --------- ---------- ----------
Sales:
Irrigation........................ $ 69,531 $ 47,158 $245,047 $193,210
Infrastructure.................... 121,126 87,285 347,558 250,689
Other............................. 6,750 6,609 20,019 21,932
-------- -------- -------- --------
197,407 141,052 612,624 465,831
Intersegment Sales:
Irrigation........................ $ 3,461 $ 521 $ 7,718 $ 2,183
Infrastructure.................... 1,252 1,390 5,820 5,673
Other............................. 1,030 293 3,532 1,965
-------- -------- -------- --------
5,743 2,204 17,070 9,821
Net Sales:
Irrigation........................ $ 66,070 $ 46,637 $237,329 $191,027
Infrastructure.................... 119,874 85,895 341,738 245,016
Other............................. 5,720 6,316 16,487 19,967
-------- -------- -------- --------
Consolidated net sales.......... $191,664 $138,848 $595,554 $456,010
======== ======== ======== ========
Operating Income
Irrigation operations............. $ 4,903 $ 2,660 $ 23,457 $ 20,854
Gain on sale of investment........ -- -- -- 2,823
-------- -------- -------- --------
Total Irrigation................ 4,903 2,660 23,457 23,677
-------- -------- -------- --------
Infrastructure operations......... 10,585 8,249 26,206 13,128
Impairment charge................. -- -- -- (2,431)
-------- -------- -------- --------
Total Infrastructure............ 10,585 8,249 26,206 10,697
-------- -------- -------- --------
Other............................. 396 2 715 682
-------- -------- -------- --------
Total........................... $ 15,884 $ 10,911 $ 50,378 $ 35,056
======== ======== ======== ========
8
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. 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
which reflect management's current view and estimates of future economic and
market circumstances, industry conditions, company performance and financial
results. The statements are based on many assumptions and factors including
operating efficiencies, availability and price of raw materials, availability
and market acceptance of new products, product pricing, domestic and
international competitive environments, actions and policy changes of domestic
and foreign governments and other risks described from time to time in the
Company's reports to the Securities and Exchange Commission. Any changes in such
assumptions or factors could produce significantly different results.
RESULTS OF OPERATIONS
CONSOLIDATED
Net sales for the third quarter of 2000 were $191.7 million, an increase of
38.0% from $138.8 million over the same period last year. For the thirty-nine
week period ended September 23, 2000, net sales were $595.6 million, an increase
of $139.5 million, or 30.6% over the $456.0 million reported for the thirty-nine
week period ended September 25, 1999. Sales increases were realized in both the
irrigation and infrastructure segments and were due to growth in base business
sales and acquisitions completed this year.
Gross profit margin was 26.6% for the thirteen week period ended
September 23, 2000, compared with 28.8% for the period ended September 25, 1999.
For the thirty-nine week periods ended September 23, 2000, and September 25,
1999, gross profit margins were 26.6% and 27.2%, respectively. For the thirteen
weeks ended September 23, 2000, selling, general and administrative expenses
("SG&A") as a percentage of net sales decreased from 21.0% to 18.4% when
compared with the period ended September 25, 1999. For the thirty-nine weeks
ended September 23, 2000, SG&A as a percentage of net sales decreased from 19.5%
to 18.1% from the period ended September 25, 1999. The declines in the gross
profit and SG&A percentages were due in part to the businesses acquired in 2000,
which experienced lower gross profit and SG&A percentages than the remainder of
the Company's operations. Overall, these acquired businesses are positive
contributors to operating income. Gross profit margins also were affected by raw
material price increases, which were not completely recovered by cost reductions
and sales price increases. The Company also realized SG&A expense leverage due
to growth in its existing businesses. Operating income for the third quarter of
2000 was $15.9 million, an increase of $5.0 million from $10.9 million reported
for the same period in 1999, resulting in a percentage increase of 45.6%.
Operating income for the thirty-nine weeks ended September 23, 2000 was
$50.4 million, a 43.7% increase from the $35.1 million reported for the period
ended September 25, 1999.
Net interest expense was $4.2 million for the third quarter of 2000 which
was up from the $1.8 million incurred for the same period in 1999. For the
thirty-nine weeks ended September 23, 2000, net interest expense was
$11.0 million, an increase of $5.7 million from the $5.3 million reported for
the period ended September 25, 1999. These increases reflect higher
interest-bearing debt levels and interest rates in 2000.
The effective tax rate for the third quarter in 2000 decreased to 36.5% from
37.4% for the third quarter in 1999. The Company received tax benefits from
increased international taxable income during the third quarter of 2000 compared
to the same period in 1999. The effective tax rate for the
9
thirty-nine week period ended September 23, 2000 was 36.9% compared with 37.0%
for the period ended September 25, 1999.
Net earnings for the quarter ended September 23, 2000 increased 20.9% to
$6.9 million from $5.7 million reported for the 1999 third quarter. For the
thirty-nine weeks ended September 23, 2000, net earnings were $23.5 million, a
$5.1 million or 27.9% increase over the period ended September 25, 1999. Diluted
earnings per share for the third quarter of 2000 increased 26.1% to $0.29
compared with $0.23 reported for the same period in 1999. For the thirty-nine
weeks ended September 23, 2000, diluted earnings per share were $0.99, an
increase of 32.0% from the $0.75 reported for the period ended September 25,
1999.
IRRIGATION SEGMENT
The Irrigation segment net sales for the third quarter were $66.1 million,
an increase of $19.4 million or 41.7% compared with net sales of $46.6 million
reported for the same period in 1999. Operating income increased 84.3% in the
third quarter, from $2.7 million in 1999 to $4.9 million in 2000. For the
thirty-nine weeks ended September 23, 2000, net sales increased $46.3 million or
24.2% from the $191.0 million reported for the thirty-nine weeks ended
September 25, 1999. Operating income for the thirty-nine weeks ended
September 23, 2000 was $23.5 million, a decrease of $0.2 million from the
thirty-nine weeks ended September 25, 1999. Included in 1999 operating income
was a $2.8 million gain from the sale of an investment. Increased customer
attention to water conservation and efforts by farmers to improve productivity
and reduce labor costs contributed to the sales increase. The sales increase was
also aided by the effect of government support programs on farm income and
dryness in some growing regions. The increase in year-to-date sales in 2000 was
also impacted by acquisitions made in 1999. The increase in year-to-date
operating income in relation to the sales increase was lower due to increased
costs of raw materials and start-up expenses associated with the Company's new
manufacturing plant in McCook, Nebraska.
Internationally, strong markets in South America, South Africa, the Middle
East and Europe in 2000, despite a strong U.S. dollar, contributed to increased
sales and operating income in the irrigation segment for both the thirteen and
thirty-nine weeks ended September 23, 2000. Sales of tubular products for the
thirteen and thirty-nine periods ended September 23, 2000 increased from the
same periods in 1999 due to improved markets for the company's products and an
acquisition made during the second quarter of 2000.
INFRASTRUCTURE SEGMENT
Net sales for the third quarter in the Infrastructure segment increased
39.6% to $119.9 million in 2000 from $85.9 million in 1999. For the thirty-nine
week period ended September 23, 2000, net sales were $341.7 million, an increase
of $96.7 million or 39.5% over the $245.0 million reported for the thirty-nine
weeks ended September 25, 1999. Sales increased in all product lines.
Domestically, lighting and traffic sales continued to increase due to higher
levels of government highway spending and the acquisition of an aluminum pole
plant in early 2000. Capacity and distribution additions by electric utility
consumers in a deregulating industry continued to drive sales increases in
utility poles and structures. Sales of communication poles, towers and
components were up domestically due to an increased activity level in the
build-out of wireless communications networks. In Europe, sales were up in local
currency terms, particularly in France, where strong pre-election demand from
local municipalities for lighting products boosted sales. In China, lighting
sales were down, but utility and communication sales improved over last year.
The Infrastructure segment reported operating income of $10.6 million in the
third quarter of 2000 compared with operating income of $8.2 million for the
same period in 1999. For the thirty-nine week period ended September 23, 2000,
operating income increased $15.5 million to $26.2 million from the
10
$10.7 million reported for the period ended September 25, 1999. Year-to-date
operating income in 1999 included an impairment charge of $2.4 million to adjust
the asset values and record severance costs related to a reduction in size of a
communication tower facility in France. The substantial increase in operating
income in the Infrastructure segment was the result of the sales volume
increases, ongoing efforts to reduce costs and improve productivity, and
acquisitions completed in 2000.
LIQUIDITY AND CAPITAL RESOURCES
Net working capital at September 23, 2000 was $139.1 million compared with
$98.6 million at December 25, 1999. The ratio of current assets to current
liabilities was 1.9:1 at September 23, 2000, versus 1.8:1 at December 25, 1999.
The Company's capital expenditure program is directed towards growth,
improving productivity and keeping facilities modern and safe. Expenditures for
property, plant and equipment for the thirty-nine week period ended
September 23, 2000, were approximately $33.8 million. In addition to those
expenditures an additional $61.3 million was spent for newly acquired coatings
facilities in Illinois, Minnesota, California and Iowa; the purchase of a
minority interest in an irrigation distribution business in Argentina; the
acquisition of the assets of an aluminum pole manufacturer in Minnesota; the
acquisition of a tubing business in Nebraska; and a minority interest investment
in a joint venture in Mexico. Depreciation and amortization totaled
$22.5 million for the thirty-nine weeks ended September 23, 2000, compared with
$15.6 million for the thirty-nine weeks ended September 25, 1999.
Available short-term credit facilities through bank lines of credit were
$55 million at September 23, 2000, compared with $50 million at December 25,
1999. On September 23, 2000, approximately $24.1 million was unused.
At September 23, 2000, long-term debt as a percent of invested capital was
45.3% compared with 33.8% at December 25, 1999. The increased debt level was the
result of acquisitions, capital expenditures and increased working capital
needs. Cash used by operating activities was $9.0 million for the thirty-nine
weeks ended September 23, 2000 and cash provided from operating activities was
$52.0 for the thirty-nine week period ended September 25, 1999. The reduction of
operating cash flows was mainly the result of higher working capital levels as
compared to 1999. Increased sales and sales backlogs in both segments were the
primary reasons for increases in inventory and receivables as compared with
1999. During the thirty-nine weeks ended September 23, 2000, the Company
repurchased 140,000 shares for $2.3 million.
Long-term debt as a percent of capital exceeds the Company's stated
objective of 40% at this time due to acquisition activity and growth of existing
businesses. The Company believes its operations have the long-term cash
generating capabilities and available credit facilities to service debt, finance
planned capital expenditures, dividends, and other financial commitments, as
well as to take advantage of opportunities to expand its markets and businesses.
11
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
There have been no material changes in the company's market risk during the
thirty-nine weeks ended September 23, 2000. For additional information, refer to
page 36 of the Company's Annual Report to Stockholders, incorporated by
reference into the Company's annual report on Form 10-K for the fiscal year
ended December 25, 1999.
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On September 11, 2000, the Company's Board of Directors authorized a
quarterly cash dividend of 6.5 cents per share, payable October 16, 2000, to
stockholders of record September 29, 2000. The indicated annual dividend rate is
26.0 cents per share.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-k during the past fiscal quarter.
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
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (PRINCIPAL
FINANCIAL OFFICER)
Dated this 31st day of October, 2000.
12