VMI - Earnings call transcript Q2 2020 | Valmont Industries, Inc.

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Operator

Hello, and welcome to the Valmont Industries Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. Its now my pleasure to introduce your host, Renee Campbell, Vice President, Investor Relations and Corporate Communication. Ms. ahead. go please Campbell,

Renee Campbell

outlook. replay live is in presentation. today's accompany at the on or will presentation our outlined on that Executive Steve turn the the and our on webcast and Applbaum, business forward-looking also Avner to Good the and to President is earnings our our update, welcome call. which download summary call closing review today's call. an days. this two be President a Kaniewski. will of Francis, second Please Officer; Steve next Kevin. Financial and discussion disclosure end will Chief and quarter This second note and seven Controller. long-term a Officer to call and of Valmont provide This quarter strategy brief A Officer, today's Kaniewski, slide of Tim page from Avner followed Executive from remarks Chief be XXXX now statements, discussion With A Slide available quarter of the business like Vice and commentary Vice morning, you, President for to to Chief President and available third for applies webcast of conference today's will and second Senior by COVID-XX will on our with full Investors and financial Industries read are the this would at Q&A. our provide It Executive I results, subject Corporate Steve. be quarter performance, call Thank me over call will the outlook on Steve is on valmont.com. morning, update

Steve Kaniewski

Good Renee. thank for morning us. you everyone you Thank joining and

XX,XXX of only customers, families. flexible global have remain proud crisis, of understanding of some their our I'm results, and efforts flexibility leaned by we the I'm for keep of been very solid core their start to employees and during additional on quarter and been we values of cases. our agility pandemic through safe of aware unprecedented and while three of stakeholders emerge. pandemic indoor and months ways Since closures last themselves grateful how and couple And comments. COVID-XX They've a to international like positive also a with reviewing have results. to company Since extraordinary the the teams there our worked cases ongoing in to our to hard globally we for these few of despite us. the held When to employees I'd worked thanking disruptions their second financial adapting to guide beginning resiliency to want start as working a our quickly and strong care facilities. managing workforce. new quarter. were pandemic, ago, demonstrated our suppliers Before this were our have our I They've times. operational our challenges our communicating, beginning call just their normal of by then tirelessly earnings during deliver this this extremely routines and taking have customers, to

recovered. are of either those who infection fully less a all tested that employees or current happy recovering of than half workforce. have percent the rate our I'm Although report remains a total to have our positive

million million summarize second excluding last or to to of $XXX.X to operations With Importantly, significant compared our recap of million, of the directly presentation. turn on X.X% sales the had decline our let disruption quarter me we've to $XX.X year, Net four slide no a of virus. that, to-date, segment attributed manage by expected we segments, were and due growth better-than-expected segment to successfully Overall, was the unfavorable impacts coding all industrial profitability more COVID-XX Strong support utility sales the as currency flat. offset in across pricing weaker and impacts, sales performance. than both operational structure in demand. were revenue lower $XX

were the to shutdowns. Sales Turning lighting products lower sales ramp. Globally, in driven excluding benefiting to million, outs $XXX.X to last of X.X% led year. more by drive North traffic project products and transportation that to as build flat sales unfavorable and starting to exit gain our and of large sales last and starting X% demand year-over-year compared certain sales a to America, Europe, revenue. lines, markets, XG in ongoing compared American in UK growth beginning in driven investments as grew We XG to pandemic Carrier to in state as and strategic products Project continued are engineered demand a primarily North traction are year, by the cell than also impacts well factory of quarter decision from Systems last year, with decline support communication product currency governments compared strengthen small and delivered markets. to from Access local structures, spending our segments by impacts. of contribute solid wireless mostly

Turning towers. announced of strategic year. grid. the North international pleased of at billion Sales XX.X% Sales markets, of A also American highlight to strong global the to transmission lattice market. strengthen to all utility structures products driven Locweld, with nearly were compared and $XX last in result the growth last Canadian support structures, million of investments by types, we $XXX to and American capacity for leader last with global for approximately transmission that order ongoing Volume including sales solar offshore year. across additions steel partnership year. quarter, remains our and of the $XXX.X million a amid large that trackers a North structured includes market end I'm increase of structures operations backlog the wind flat grew significantly was lattice

expertise service Production companies provide this structures, facility the exclusive fourth order flexibility enhance most in both for manufacturing quarter of the XXXX. subcontractor commence of greater lattice is quality benefit revenue recognized will combined Our to India will for customers XXXX with levels. supply and throughout from in an Locweld, and

million year of were decreased compared impacts XX.X% lower External as $XX sales to Moving to end due closures. COVID-XX facility last to temporary to expected. volumes and customers coatings,

irrigation, year. segment $XXX.X declined of to last sales to Moving compared million X%

regions another flat. tubing sales of International demand America, negative impacts, Excluding were down sales than sales by In X.X%, by currency organically were and offset of driven record pricing unfavorable sales impact. more across North and industrial Very were currency higher quarter steel in led to currency. a products lower by sales lower irrigation Brazil grew strong all offset costs. sales local

canceled This the to Agrishow, that remains farm attend sees disruptions we strong. Brazil, caused largest learned the agricultural due which market about past Brazil, May, have COVID-XX from would impacts While the annual pandemic. growers in in XXX,XXX be show

and virtual serve roundtables. exclusive As creatively leading demonstrating local two our share. and in believe has historically this own you position organize this market We This and industry, their commitment significant irrigation of our of millions weeks, show as webinars know, received. generated was first affirms to the spanning to grow number orders cancellation, the a customers a our Upon nearly team of many market including leader, of show orders. the virtual learning

advance two we acquisitions acquisitions technology adjacent focus a as like a have our small, have to take that I strategies would and strategic market ours. slide to recent of five, been communicated but few to growth the several leadership. strategic Turning of highlight past over years, minutes

First, agricultural a solutions provider solbras, we Brazilian purchased in majority energy unique of for the stake solar the market.

market Our through to provide power solar expand the Valley growers. us will for a dealer first strategy their network services to globally, our strength of offering

generation distributed unmatched and/or the commitment Africa, solutions to Going East and offer important and Expanding in offer is markets to the our are environmental for and furthering solutions developing not optimize product supporting Valmont pivots generation Middle farm to ESG impacts Solar data monitoring innovative in of market industry. grid These an where viable. sustainability options solutions, us and as also principles. allows a this sources and play over are other can efficiency to role reducing growers communities, solution electrical operations, we other lacking powering time, the that into the now equipment provide

building. plant. satellite just tests future We capturing benefiting also night, expanded devices our of our an from problem XXX,XXX. on through lower technology machines, drone, we ecosystem, to customers this number to Valmont. began now Valley from solutions you is management a focused connected detect in to a six and These With Recently, this Tech in this partner More we're are Valley market. cost more I've are PrecisionKing, acquired remain quarters. at extremely details Tech of a are located both to updating mounted sensing monitoring Ag in share grew field the of key sensors pivot Insights, to process acquisitions welcome And would sensors we our U.S. commercial We prior the we significantly monitoring states. the profile. subscription the These the with months we that goal $XX to or more service emphasis and sales machine. been the assets center four Prospera service. in a of With to collect growers data imagery meters global provides on teams transform larger issues, using appendix I'm acquisition, ahead than value technology and grower Examples remote Together you to on high areas of alerts year XX to fields million has detection of imagery like approximately greater to aerial shown about roadmap to with Intelligence company have excited now spoken than much X sensors provide advanced that million. XXXX forward strategic based solutions. it growers these look conducting our quarters, schedule. to and for based the than provide and an on slides acres, I XXX to-date, add and crop And artificial resolution feedback In the that And investments bolt-ons that monitor milestone crop XX day to Technologies, our the recently for already images crop our to positive. service irrigation few autonomous health can remediation. presentation. in Ag Using reached on

with the an collaboration world a strong attribute which now the education help products. six Importantly, our for business will and taken is to to network, as we of COVID-XX. we've to specific I of dealer impacts we've mitigate slide before, critical these class adoption to on and our market here turn update success technology very grower said actions

the processes and areas. in safe procedures one employees all remain in vigilant be distancing our safety foremost, to and to and We continues of of our work priority. number our First facilities adhering

to possible these and where have of the point infections, factories individuals have who We teams facilities. from becoming employees our of limit for work the remote operational. our continued prevented are We policy servicing keeping across company, the a manufacturing our our vector health measured customers well our believe and our number our steps for and are factories have administration at our being backbone grateful

to that all closely government lower agencies. manufacturing Most with we economic a as reminder considered facilities Turning that employee conditions security that pre in to And input and are impact and pandemic in pleased monitor were regular pandemic the work standpoint, serve and sectors support markets are by continued continue and stable are closed we infrastructure potential the food temporarily report solutions there expect levels. of continue slide to longer they resumed recognize we term in our the headwinds that products have availability seven, future. global we global could And our macro as our defined facilities operations critical market to businesses operations to patterns. improved our costs, essential, customer that turnover. since teams began. We a have From labor many

is speak year. will continue we assess closely slide are eight, footprint, the and to more balance last we the across outlined in capital the Across the profiles to vary changed we until clear. third continue business portfolio, as our impacts assumptions segments quarter risk of from impact have since indications the The the expenses the the to call. last discretionary spending basis to Turning our Avner and COVID pandemic not quarter, of later quarter, the which and manage and our to for

and are cycles, As can market carefully for the business different withstand need actions to challenges. our our diversified is plan experienced business scenarios in with that adjustments We teams different portfolio confident and third financial that, quarter second be outlook. to quarter as dictate. over and execute review made turn will a for the now accordingly conditions to Avner I update With and our call will

Avner Applbaum

Steve. And good you, morning, Thank everyone.

my Valmont. want I begin, quarter I opening Before few CFO about as a to for first remarks make

connecting Over the with the on to teams, management to becoming knowledgeable, experienced organization the clear IT time the drivers, Valmont learning It's finance in XX up to has a executive organization team. our been strategic businesses. with spending getting days, And digitally and finance colleagues. partner excited and to past our meeting I'm speed that a very the I've talented lead business true team

We opportunities, including free of utilizing data the and well to centers in strength, as more strategic quarters. shareholder transform a maximizing partners practices, to value. capital. business return can the cash technology, coming of around believe future lean as excited look sharing working have of with and and our forward advanced I we a drive enablers, I'm invested lot and with improving for developing details services, excellence initiatives combination finance that optimizing you on accelerating robust function to shared and capital,

second in that income results on and XXXX. exclude method in disclosure Reg release results. accounting comparison comments and for inventory XXXX per which purposes, quarter in for to the at Please the outlined to G of was references earnings of appendix. the as Moving beginning focus LIFO the fiscal will My also share, the note discontinued operating press presentation adjusted

Turning XX. slide to

X% of our comparable income sales, three compared coding or profitability of grew segment. performance operating in lower segments last the offset quarter on $XX.X year Second sales, largest X.X% million, solid and to

approximately share of Second year. grew XX% quarter, diluted last earnings to compared per $X

to on net which a COVID-XX we share. approximately or $X.X quarter, related impacts, incurred million basis totaled per incremental the expenses $X.XX During

an comparable to on basis rate tax year. last quarter XX% adjusted Second of was

Turning primarily X% India to in operating we pleased points margins. very international slide In the or markets. markets, XX the strong of support North with Valmont in of increased effects and XX discipline in France segment. On last million, pricing structures, and engineered year. closures, of volumes continued basis income sales the over were $XX.X American Overall, facility impacted

the we quarter on companies the restructuring noted executed are across on presentation. This in the XX actions planned details and slide

product operating we in other and incurred Specifically million and trade charges the going expenses Access supply associated with forward. install name offering, goodwill non-core recorded System, impairment an of which exiting reduce and costs $XX.X non cash, will

of charges, and was these second comparable to Excluding compared the quarter quarter the XXXX. second first half improved profitability to

XXX $XX.X of XX% of improved support operating to volumes, income structure last the better and XX. basis year. drove In profitability slide over utility points Moving operational the performance, Stronger segment, earnings businesses of a improvement. or million, sales increased quality into international

the $XX.X sales coding year. Turning lower points last than to In or of of slide segment, operating XX% basis million, XXX XX. income was

and to As closures deleverage. volumes led with from expected lower impacts operating temporary COVID, facility associated economic

compared by increased irrigation Moving income XX.X% Profitability operating to slide points volume. million, segment, XX. of sales year. of the $XX.X was sales or XX basis and led higher improvement to In last pricing

improvement cash in flows compared XX. slide XX% a last quarter, on this to flow $XX.X to-date delivered cash year year. cash to to We flow million solid operating leading of Turning operating

times, management cost working results, environment. with these especially is relentless focus raw uncertain stable during a more material along delivering on Our capital

greater will an I optimizing opening As forward. my going in free mentioned flow focus remarks, be cash even

Turning to in opportunities, The slide and was on optimal is summary remained liquidity. Capital while capital strategically to-date shown focused this spending growth XX. investing $XX year deployment. ensuring million in future we quarter

strategic $XX with ending two and dividends, $XXX of acquisitions, $X to billion shareholders approximately cash. capital through for quarter, the we of quarter deployed During million return million approximately this

XX $XX which to million. for sheet We our to XXXX, million balance spending are expected recalibrated slide to range now Moving highlights. between capital for plans $XX

$XXX we Early million aggressively amid to liquidity in quarter, $XX and sufficient investments down credit on to revolving of ensure second continue pandemic. facility million internally. the manage drew the strategic spend prioritize uncertainty our We

strong a we favorable amount cash As result repaid of in flow this quarter. full and business performance, the during

range within with and strong maturities debt of debt is times adjusted In sheet a leverage X.X EBITDA long our balance significant our two remain ratio a until time. of desired term and half Our half total to no one to of XXXX.

this Let operating slide. of X% sales outlook financial assumptions Net XX between estimated this slide sales, assumptions key and for with income $XXX Key our million quarter. for to metric update are me to including and net X% now margins to excluding summarized restructuring supporting any between $XXX an turn are on outlook, activities. million be to this

In North to our market wireless visibility engineered both structures, and lighting remain XX. The support and in transportation slide communication Turning and yielding backlog current components structures traffic good solid. third for quarter sales. America term trends is to long

states, year pandemic than lower be some U.S. beyond compared are visibility down two quarter market within the could similar decision timing. reopening shipments. condition. to combination sales of recent harder we for wireless international quarter expected However, dollar. to markets right economic predict receipts of business revenues Further, expected which XXXX state's to effects this to this as and be and clear the to to to in of to quarters communication and Sales year, strong impact both ongoing less the due first slightly timing is order that given the due to the are of continue last lower future from Access reverse but are a size tax System

our Third is compared gradually outlook. been profitability to adjusted for to quarter and second this XXXX results, quarter accounted expected this improve line has for product in

correlate is to levels. which compared Moving good activity deliver last capacity Northern changes of In and volume. providing lever received expect to level, large Europe operations will to to remain and expected coding, to in quarter. to project our increase sales. current order XX% higher industrial production support to demand Coding due includes utility third and and sales we are most with the the economic to solar to revenue segment, year, prior the strong additions structure visibility the approximately benefit transmission backlog quarter, tend the the Segment global muted

Moving to irrigation.

sales weakness and are ethanol farm due all is international business continue especially the has near challenging income the not can reminder, of third levels to seasonality. dollar and in prices Continued net expected soybeans. demand best the indicator the market, expected, But term, agriculture A projects of around of is that commodity improve historically compared and strong segment. sales. year uncertainty lower this normal in impact this quarter quarterly U.S. been to the rest timing corn for to metric quarter

Finally, flow deferment operating working additional U.S. With of payments The our that, over are now by Steve. to we estimates. management. included expect driven third estimated in third tax will emphasis solid on capital cash quarter into cash quarter I turn call the back flow

Steve Kaniewski

Thank you, Avner.

to XX. Moving slide

quarter, development last business drivers and on associated some shown. across level expected support markets infrastructure remain recessions government funding the have transportation stated our fundamental initiatives as past investment we As of is in In engineering market intact. structures, stimulus lighting and

have wireless already used high elevated to nearly speed structures states there. advocating environments. additional are bring generally I'm connectivity households, current are stimulus of In We farms for to the XX Project and particularly implemented diverse infrastructure packages communication group that investments and sector and XG that increasing will internet work, together market Broadband into Coalition. Europe, pandemic and need the and carriers accelerate This and private rural components, increases in areas. fuel Connection rural school-at-home announcements or fund Growth in drive to American proposed to The announce in investment businesses joined excited public recent infrastructure brings stakeholders in as areas. of all recently encouraged XXXX, has Valmont number for critical XX an demand wireless are road which expected projects. to tax highway supporting XXXX, are

this communication this hardening grid economic benefit As that demand robust products, many greatly renewable ongoing solution necessity general a demonstrates In need provider communities backlog wireless of irrigation solutions, will the investment. our technology and utility, energy and initiative both and independent of trends. for

life increasing the drivers And of general the drive remain activity. actively trends fighting term of business industrial need that the coatings solid, closely preservation the extend economies will number follows as are long steel to Our products infrastructure corrosion over in globally. production the and cost of The and critical irrigation. of economic

that generation meet agricultural resources are to of increasing optimization development, Our markets, support term government's The the drivers for helped of products security needs and sustainable supporting demand business. for of efforts the populations and food and for technology for world. water a international opportunities just long production and power to support growers demand farms conservation management and the including increased our few farm food projects. infrastructure for around inputs creates land supplying water large In growing

as is to shipments quickly employees have challenges the anticipated of and safety is performance of on strong our traditions agility and our our of always our We the a local manage diversity and alternate in At summary, predict with and XX XX, in ensure our first the and of different very operate ability change. and health one chains. our workforce. factors. We Valmont, to strong protection say to to of to success on countries timing of playing protocols many In supply implementing be keys reinforcing languages. cultures, But of global continue and we our can slide well business. through responded work pipeline a hard project to half this We testament based uncertainty team, the year through the arrangements, communities

thing will Our no even we means one is core value day, the do every when integrity watching. of right

our We to bring social and be demonstrating to and continue that our our including build to commitment diverse to excellence, commitment and an community, environmental upon we the inclusive value workforce.

now not to short term the disruptions challenges, the crisis. are from have and back once changed, turn COVID-XX to through change the our over not Renee. to we enduring I create businesses While get the will call of drivers long expected continue current business term

Renee Campbell

at the Steve. you questions. time, up Thank may you, this open for Kevin, call

Operator

and session. moment question questions. while be One now pull [Operator we conducting for We'll Instructions] please answer Certainly. your

coming from question first Moore today is from Our Chris CJS Securities.

line live. is now Your

Chris Moore

Congratulations. guys. Hey, good morning,

Steve Kaniewski

morning. good Chris,

Chris Moore

in QX be morning. margins. is to X.X%. Midpoint margin, for about start are maybe likely Adjusted QX? you Yes, margins talk bit margin where X.X%. Maybe the just just operating lower could is a in operating Good QX with

Steve Kaniewski

Yes. Chris this is Steve.

point to of driver. is the kind some at that. historically that a color we the looked to low our number in irrigation. for such When Just And as profit put one year models, this is

was that factors into of that took one the So consideration. we

is utility, The segment has second slowdown. still back the that to the profitable other most in is of profile revenue also our than some is some steam then market. which market there economic markets -- bit have fact And more international margin the quarter. tends And our from lower to coatings traction gain little coming a from that this just the North American

Chris Moore

Got forward? The switch million little Locweld. bit just it. Very structure or that kind see maybe talk margins partner impact it more lattice helpful. moving them with just a how And I gears. on forward? that any about $XX I'm can have moving of when order, Does you Maybe partnership you with

Steve Kaniewski

Yes.

the based world. So of markets Canada, one Locweld in in the is the lattice Quebec which largest of to Province structure be tends

a base. cost us real And have break work helps relationships for a to out to so, And as them of lower can that into. combination customer that bring not the their the always easiest otherwise good with there And it's they are alternative to We them. serve India.

lattice. look should again, margins. are it the as type profile, necessarily margin But monopole world are lattice to all provide around the a we as not of XX% relatively margins, from expand as market, lattice good So good which globally structures the

growth couple we utilization India a us high good plant avenue of years ago. real a purchased provides that our and in for it So

Chris Moore

I'll Very helpful. back queue. guys. it. jump in Thanks, Got

Steve Kaniewski

Thanks.

Operator

Thank you.

today Brent from question coming Davidson. is Our Thielman next D.A. from

is live. Your now line

Brent Thielman

Great. Thank you. morning. Good

Steve Kaniewski

Good morning, Brent.

Brent Thielman

around more around it. the actions discipline of around your that of maybe there? that concern seeing Anything question really you a broader of Steve, by just competitors, kind about globe a your and just you're you operations, that pricing causes talk

Steve Kaniewski

decrease back But commitment we want zinc, that It price seen what even And leader. is are the give and segment-to-segment. time we will though you robust. the varies our is steel the off some of of be I at let's to They just some steel, say, have own back that. tell in markets would from competitors

delivering, get And we're many there's so, to disciplined so a stay not upon we steel based counterproductive. let's market, markets, erosion with products price particularly the of anything be the inputs, softer there's any are softer that a seen materials, other kind raw the a around challenges to to markets. based to in that scale, We've the of fact going that's -- seems large not our zinc and engineered other say, market price very on many price so because going

So seen order-by-order be couple larger the The get players of there market behaving. bit are on But way we've to the discipline to players you good a tend exception order, most generally, discontinuity price. the pretty that the with maybe I tends a here way. basis people a and little more of think in

Brent Thielman

the larger irrigation what any for around have the talk of Thanks you maybe international then And Okay. visibility that. projects and of over the like guess next I you or prospects or kind looks that months? could to just about sort the you XX outlook

Steve Kaniewski

Yes.

in have a of with in timing, we've pipeline before, to activity strong mentioned U.S. open has dollar The us. because very strong a good the of potential been security order markets LCs really to up capital these orders. they have But food the driver raise We some international in impact project can internationally. issue

As international on, and we that's mentioned, we saw our growth in else everything markets, organic despite particularly strong. of Brazil all going

increased. some nature over good of uncertain, piece East Africa, in, Europe, pretty looks definitely of developed the the So and let's will look markets, but level the next is between year. we as out Middle project it the Again, the as organic timing base be as just say, the project Eastern well the

Brent Thielman

Thank you. great. Okay,

Steve Kaniewski

Thanks Brent.

Operator

you. Thank

Joe coming from is today Blair. question next from Akin William Our

Your line live. is now

Joe Akin

Drab today. Joe question. This for Brian on Hi. my is Good morning. for Thanks taking

Steve Kaniewski

Joe. morning, Good

Joe Akin

about lattice broadly First, if just I you your business, order, partnership. on business of I the more and talk little structures in that on is a was bit you was what just that the traction Locweld could kind and wondering wondering touched strategy there?

Steve Kaniewski

Yes. The us couple structure of has the lattice type an years. emphasis the for business, last been globally, predominant over being

time takes over build in and have in to purchased portfolio little India, facility the We area. two lattice a it years ago, a

North of is the give use so lattice the Locweld in America. to of project, and projects that So providers now dominant large China of outside world structures is of bidding one And for nice itself. most other We're lattice a strategically a in be from China -- in around for called us us we one tends can located perspective. the a library India does India it things the that cost

of market. provide the monopole we partnership help that good really and the Locweld so, outside them help And a and, very us, just feel growth will us for platform

Joe Akin

That's really gears is this helpful. quarter? on for Did all what European ship timing going work order potential Thanks. order. there update us that the switching begin further with that to Can that any is? you on the customer large And forward? And for at then transmission that

Steve Kaniewski

Yes.

was no there in shipments second quarter. the So

shipping will year. next and customer. this the We half across of of be interconnections projects It big for on of is a the alternative These large year half are back into energy first Europe.

And there some thereafter. follow potentials so are on

on the So shipments, there's quality, timing strong for definitely our we us to with have of work. ability follow good execution, feel good some

Joe Akin

it. taking my for Thanks Got questions.

Steve Kaniewski

Thank you.

Operator

City coming Capital. next today Thank from from question you. [Operator is John Instructions] Kansas Our Braatz

Your is live. line

John Braatz

Morning, Steve.

Steve Kaniewski

Good morning, John.

John Braatz

because COVID-XX. wasn't and of budgets their it? of really of There laid COVID-XX lot furloughed cost at and That a in reductions Steve, really companies the face so people that lot was of Is necessarily case on. the a people off case? weren't this slashed the Valmont,

Steve Kaniewski

quantify there it additional $X.X our We impact quarter. with the in That of was tried correct. to costs. million kind the That's

for about as people our was retention frontline Some being some a We'll distancing, we drag bonuses quarter majority quarter $X.X in through of personnel. that to rare million forward have probably handful we look just about of a quarantined per of PP&E, the contact internationally But of shut the down. plants generally, they for that with exception had worked of as we others. come with

So those, have we we operating profit. didn't didn't have revenue, the the

We also cost. didn't the have

kind as as But online. the of comes not self-correct lay pandemic. of did they a result back So anybody off everything we

our of let's profiles expected budgetary say, kind we were forecast demand Our be. our where and to within of

not there's to there's some But that's been costs. any have not need replaced. maybe been attrition, slash to So

John Braatz

Okay.

mentioned you you the to approach we it do budget, get states, tighter sense of you're state get Okay. year, think the When states, local And end and a state then as and tighter. you going might the probably budgets, and impact to might get infrastructure have and next budgets better of tighter spending, might the to sense highway a on? When on do going what's so think that in spending, area? as on year that so we happen these you secondly,

Steve Kaniewski

the Well, specific the money COVID. level, time the be result effects that federal At allocate to say How infrastructure election, be spend. from really they're a the of budget a think for that the going we isn't going to I was of would about going they're would now would boom, market as be States, on an of to as cycles, large state still us. Texas, example, is to based level, an kind then and patchwork based it's impact It reopen, COVID way. a other going on a to the states. of in starting after the

hard see Florida, still there. real these clarity it's so, transportation California, markets. And to are big

we then is that that a that and up. as now are tell intake allocating and approving hard that what to projects weeks side we've the And get to our the it's order really it's based related if seen or fundamentals And couple working on a are simply may that funds. people weeks couple get we down there's are on so,

we outlook around before So duration to really at into level, obviously have the some probably and the I first quarter bailouts get of things some clarity see get budgetary But bit a state a hopefully, it'll little quarter on, third between as transportation based we'll I more federal of things just goes year good and that. spend. think the think, on be settled particularly next

John Braatz

Yep.

right. Okay. you, Thank Steve. All

Operator

you. Thank

Our Nathan Stifel. coming next from today question from Jones is

now live. is line Your

Adam Farley

Adam from is on Farley Nathan. This morning. Good

Steve Kaniewski

Good Adam. morning,

Adam Farley

morning. Good

that? million to to the half you home flip -- was distancing, that on from the that learning any social drag on from productivity? Are guys be then impacted addition are in in there or anything drive from you that, And any your side, up manufacturing facilities? like anything Following may work gains like getting productivity ways

Steve Kaniewski

the additional food in some around are from of less, how productivity to million some people just quarantining that probably within that really different to some We've have around organizations. PP&E, there. out to just definitely across seen as time as we for is half many to come gains it we real call things broaden well have less We meetings, travel that things facilities, Yes. seeing that. spend that more macro The just having people service the be would

been it's quarter look number both same over gains at So benchmark anticipating the third that as perspective, had slightly, productive from the pandemic quarter the pretty time at but and vaccine quarter. good decrease second a quarter. very productivity productivity a may to least a first seeing But And until comes out. the and we've from we we

a blocking gains agile we forward. and but tackling, pop So in productivity, not lean and type of just necessarily simple, look as

Adam Farley

And the commentary. then, switching Okay. XG over to

positive. pretty So I'm

cellular more might any anything on mentioned think any I networks. accelerating can quantified? from there you investment be If you think other on spend, it's or home Do there pulling you some forward people XG? color work

Steve Kaniewski

carriers pulling it's investments. These wouldn't allocate investment. their planned is What kind are of mostly done I forward have it Yes. say that the has any had to coverage.

be sticking not probably kinds bring you on going polls. those home, center, to rural home of than done school business in would the the And it areas. that home They're exactly our into help can't from city downtown the is because tend connections. The the to are broadband areas. only cover that rural speeds people more at done to more towers a As run fiber type to to work concentrated the would and being you tend XG because The has more to initiative same. suburban areas, way

reaffirmed itself of how XG in that and out. the the investment in rolls a of demand be kind same we pandemic But around the we've profile of the most think players So large by the industry. seen the will change will way

Adam Farley

my you Thank taking for questions.

Steve Kaniewski

Adam. Thanks,

Adam Farley

Thank you.

Operator

our question for answer further you, to we any closing of to end reached Thank management or comments. back session. like floor the turn I'd over

Renee Campbell

Thank for joining us you today.

playback look for next with speaking seven today's forward call or We website for again the by mentioned, to will be on you phone As our days. available next quarter.

Operator

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a thank your may participation lines you for time at your We You this disconnect and day. have wonderful today.

Valmont Industries (VMI) 23 Jul 202020 Q2 Earnings call transcript