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Our sales to the U.S.
−Removed: electric utility industry were over $600 million in 2020 and 2019.
+Added: electric utility industry were over $750 million in 2021.
Purchases of our products are deferrable to the extent that utilities may reduce capital expenditures for reasons such as unfavorable regulatory environments, a slow U.S.
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Department of Agriculture (the “USDA”) estimated U.S.
−Removed: 2020 net farm income to be $119.6 billion, up 41.3 percent from the USDA’s final U.S.
+Added: 2021 net farm income to be $116.8 billion, an increase of 23 percent from the USDA’s estimated U.S.
2020 net farm income of $94.8 billion.
+Added: The increase is primarily related to an increase in cash receipts from crops and livestock that is offsetting a portion of the decrease in government support payments.
+Added: If estimates hold, U.S.
+Added: net farm income in 2021 will be the highest level since 2013.
We have also experienced cyclical demand for those of our products that we sell to the wireless communications industry.
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Consequently, an increase in these commodities will increase our operating costs and likely reduce our profitability.
−Removed: Rising steel prices in 2018 put pressure on gross profit margins, especially in our Engineered Support Structures segment.
−Removed: The elapsed time between the quotation of a sales order and the manufacturing of the product ordered can be several months.
+Added: Rising steel prices in 2021 put pressure on gross profit margins, especially in our Utility Support Structures segment.
+Added: The elapsed time between the release of a customer's purchase order and the manufacturing of the product ordered can be several months.
As some of the sales in the Engineered Support Structures and Utility Support Structures segments are fixed price contracts, rapid increases in steel costs likely will result in lower operating income.
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In the same respect, rapid decreases in the price of steel can also result in reduced operating margins in our utility businesses due to the long production lead times.
−Removed: Demand for our infrastructure products and coating services is highly dependent upon the overall level of infrastructure spending.
+Added: Demand for our infrastructure products including coating services is highly dependent upon the overall level of infrastructure spending.
We manufacture and distribute engineered infrastructure products for lighting and traffic, utility and other specialty applications.
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COVID-19 has impacted and is expected to continue to impact our business, including the supply chain, product demand, logistics, and facility operations and the duration, unknown at this time, of the challenges associated with the virus may result in significant adverse effects on our business, financial condition and results of operations.
−Removed: On March 11, 2020 the World Health Organization declared COVID-19 outbreak a pandemic, and the virus continues to significantly impact all geographical areas in which we operate.
−Removed: A myriad of international, national and local measures have been implemented by governments and businesses to address the virus and slow its outbreak, including shelter in place orders and similar restrictions, restrictions on business operations, closure of borders and other measures having negative economic effects.
−Removed: Our businesses support critical infrastructure sectors as defined by the Department of Homeland Security (CISA.gov) and similar global agencies.
−Removed: These sectors are deemed vital, such that their incapacitation would have a debilitating effect on security, national economic security, national public health or safety or any combination thereof.
COVID-19 impacted and may continue to impact our business, including the normal operations of our facilities, overall demand for our products, changes to supply chain availability and costs, logistics delays, including temporary closures as may be mandated or otherwise made necessary by governmental authorities, and any additional carryover of economic effects.
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We have implemented domestic and international travel restrictions for our employees, and thousands of our employees are expected to continue to work remotely through the height of this pandemic.
+Added: Our businesses support critical infrastructure sectors as defined by the Department of Homeland Security (CISA.gov) and similar global agencies.
+Added: These sectors are deemed vital, such that their incapacitation would have a debilitating effect on security, national economic security, national public health or safety or any combination thereof.
The duration of the virus outbreak continues to be evaluated by governments and experts and as a consequence we cannot at this time determine the overall ultimate impact on the Company.
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The duration, unknown at this time, of the challenges associated with the virus may result in significant adverse effects on our business, financial condition, and results of operations.
+Added: In addition to the discussion above of Economic and Business Risks, please see our further discussion on interest rates, foreign currency exchange rates and commodity prices included in “MARKET RISK” within "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in Part II, Item 7 in this report.
Legal and Regulatory Risks
−Removed: Design patent litigation related to guardrails could reduce demand for such products and raise litigation risk.
−Removed: Certain of the Company’s foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety products, primarily for sale in non-U.S.
−Removed: markets, and license certain design patents related to guardrails to third parties.
−Removed: There are currently domestic U.S.
−Removed: product liability lawsuits against some companies that manufacture and install certain guardrail products.
−Removed: Such lawsuits, some of which have at times involved a foreign subsidiary based on its design patent, could lead to a decline in demand for such products or approval for use of such products by government purchasers both domestically and internationally, and potentially raise litigation risk for foreign subsidiaries and negatively impact their sales and license fees.
We may lose some of our foreign investment or our foreign sales and profits may decline because of risks of doing business in foreign markets, including trade relations and tariffs.
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At December 25, 2021, we operated over 80 manufacturing plants, located on six continents, and sold our products in more than 100 countries.
−Removed: In 2020, approximately 32% of our net sales were either sold in markets or produced by our manufacturing plants outside of North America.
+Added: In 2021, approximately 34% of our net sales were either sold in markets or produced by our manufacturing plants outside of North America (primarily the United States, Canada, and Mexico).
We have operations in geographic markets that have recently experienced political instability, such as the Middle East, and economic uncertainty, such as Western Europe, and health issues, such as the outbreak and spread of coronavirus in China.
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As a result, we may lose some of our foreign investment or our foreign sales and profits may be materially reduced because of risks of doing business in foreign markets.
+Added: Design patent litigation related to guardrails could reduce demand for such products and raise litigation risk.
+Added: Certain of the Company’s foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety products, primarily for sale in non-U.S.
+Added: markets, and license certain design patents related to guardrails to third parties.
+Added: There are currently domestic U.S.
+Added: product liability lawsuits against some companies that manufacture and install certain guardrail products.
+Added: Such lawsuits, some of which have at times involved a foreign subsidiary based on its design patent, could lead to a decline in demand for such products or approval for use of such products by government purchasers both domestically and internationally, and potentially raise litigation risk for foreign subsidiaries and negatively impact their sales and license fees.
Failure to comply with any applicable anti-corruption legislation could result in fines, criminal penalties and an adverse effect on our business.
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In addition, from time to time we have been named as a potentially responsible party under Superfund or similar state laws.
−Removed: While we are not aware of any contaminated sites that are not provided for in our financial statements, including third‑party sites, at which we
−Removed: may have material obligations, the discovery of additional contaminants or the imposition of additional cleanup obligations at these sites could result in significant liability beyond amounts provided for in our financial statements.
+Added: While we are not aware of any contaminated sites that are not provided for in our financial statements, including third‑party sites, at which we may have material obligations, the discovery of additional contaminants or the imposition of additional cleanup obligations at these sites could result in significant liability beyond amounts provided for in our financial statements.
Liquidity and Capital Recourses Risk
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• our degree of leverage may make us more vulnerable in the event of a downturn in our business, our industry or the economy in general.
−Removed: We had $400.7 million of cash at December 26, 2020, which mitigates a portion of the risk associated with our debt.
+Added: We had $177 million of cash at December 25, 2021.
Approximately 96% of our consolidated cash balances are outside the United States and most of our interest‑bearing debt is borrowed by U.S.
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A default, if not waived, could result in acceleration of the debt outstanding under the agreement and in a default with respect to, and acceleration of, the debt outstanding under our other debt agreements.
−Removed: The accelerated debt would become immediately due and payable.
+Added: The accelerated debt would become immediately due
If that should occur, we may not be able to pay all such debt or to borrow sufficient funds to refinance it.
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We cannot provide assurance that this assumption will prove correct with respect to any acquisition.
+Added: For example, in 2021, we acquired Prospera Technology Ltd, an integrated artificial intelligence (AI) technologies company that provides real-time crop analysis and anomaly detection solutions in agricultural fields.
+Added: To provide these services, Prospera develops algorithms that can detect, with a high accuracy, field anomalies caused by pests, disease or water issues.
+Added: We store, process and transmit agricultural field data.
+Added: A failure to integrate innovative acquisitions such as Prospera could negatively impact future growth in our technology sales.
Any future acquisitions may present significant challenges for our management due to the time and resources required to properly integrate management, employees, information systems, accounting controls, personnel and administrative functions of the acquired business with those of Valmont and to manage the combined company on a going forward basis.
We may not be able to completely integrate and streamline overlapping functions or, if such activities are successfully accomplished, such integration may be more costly to accomplish than presently contemplated.
−Removed: have difficulty in successfully integrating the product offerings of Valmont and acquired businesses to improve our collective product offering.
+Added: We may also have difficulty in successfully integrating the product offerings of Valmont and acquired businesses to improve our collective product offering.
Our efforts to integrate acquired businesses could be affected by a number of factors beyond our control, including general economic conditions.
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and foreign countries, including members of the European Union.
−Removed: We protect our sensitive information and confidential personal data, our facilities and information technology systems, but we may be vulnerable to future security breaches.
+Added: Additionally, our operations also include innovative technologies, such as Prospera Technology Ltd, an integrated AI technologies company.
+Added: Successful cybersecurity attacks or other security incidents could result in the loss of key innovations in artificial intelligence, internet of things (IoT), or other disruptive technologies;
+Added: the loss of access to critical data or systems through ransomware, crypto mining, destructive attacks, or other means;
+Added: and business delays, service or system disruptions or denials of service.
+Added: We protect our sensitive information and confidential personal data, our facilities
+Added: and information technology systems, but we may be vulnerable to future security breaches.
This could lead to legal risk, fines and penalties, negative publicity, theft, modification or destruction of proprietary information or key information, manufacture of defective products, production downtimes and operational disruptions, which could adversely affect our reputation, competitiveness and results of operations.
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UNRESOLVED STAFF COMMENTS.
−Removed: VALMONT INDUSTRIES, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Three-year period ended December 28, 2019
−Removed: (Dollars in thousands, except per share amounts)
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.