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Item 1. Business

2024-02-28 compared with 2023-03-01 · 159 added, 192 removed, 96 unchanged (79% of the section changed)

We are a diversified manufacturer of products and services for infrastructure and agriculture markets.

Our Infrastructure products and services create communities that are safer, cleaner, more efficient, and better connected.

Our Agriculture products and services help growers produce greater crop yields with fewer inputs.

In 2022, the Company operated and reported its results in the following two reporting segments:

● Infrastructure

● Agriculture

Our Infrastructure segment is comprised of five primary product lines.

Our Transmission, Distribution, and Substation product line helps deliver power with products to better harden electric grids to make infrastructure more resilient by selling structures to support electrical transmission, distribution lines, and substation conversion and storage.

Our Lighting and Transportation offering includes solutions to help make roadways safer, infrastructure smarter, and increases connectivity through the following products:

outdoor lighting, traffic control, and roadway safety structures.

Our Coatings product line provides coatings services for Valmont and other industrial customers to assist in extending the lifespan of infrastructure.

Our Telecommunications product line offers wireless communication structures and components.

Our Renewable Energy product line sells solar tracking solutions.

Our Agriculture segment produces mechanized irrigation equipment and related services to help deliver water, fertilizers, herbicides, and pesticides to agricultural crops that save time and conserve water, energy, and other input costs while also assisting in increasing yields.

This segment also develops technology for better precision application including predictive, autonomous crop and irrigation management.

Customers and end-users of our Infrastructure products include municipalities and government entities globally, manufacturers of commercial lighting fixtures (“OEM”), contractors, and telecommunications and utility companies.

Customers of our Agriculture segment in the United States are dealers who resell mechanized irrigation equipment to their end customer, which is the farmer.

Both segments service the general manufacturing sector as well.

In 2022, approximately 32% of our net sales were either sold in markets or produced by our manufacturing plants outside of North America.

We were founded in 1946, went public in 1968, and our shares trade on the New York Stock Exchange (ticker:

Valmont Industries, Inc., along with its subsidiaries (collectively, the “Company”, “Valmont”, “we”, “us”, or “our”), is a diversified manufacturer of products and services for infrastructure and agriculture markets.

We were founded in 1946, went public in 1968, and our shares trade on the New York Stock Exchange under the ticker symbol “VMI”.

We are headquartered in Omaha, Nebraska.

Business Strategy

Our strategy is to pursue growth opportunities that leverage our existing product portfolio, knowledge of our principal end-markets and customers, and engineering capability to increase our sales, earnings, and cash flow, including:

Increasing the Market Penetration of our Existing Products.

Our strategy is to increase our market penetration by differentiating our products from our competitors’ products through superior customer service, engineering proficiency, technological innovation, and consistent high quality.

Our Agriculture segment experienced sales volume growth in 2022 which we believe was partially due to the continuing importance of our precision agriculture and technology offerings.

Bringing our Existing Products to New Markets.

Our strategy is to expand the sales of our existing products into geographic areas where we do not currently serve and where end-users do not currently purchase our type of product.

For example, we have expanded our geographic presence in Europe, the Middle East, and North Africa for lighting structures.

This strategy resulted in recently building manufacturing presences in Poland and India to expand our offering of pole structures for lighting, utility, and wireless communication to these markets and to expand our manufacturing presence in the United Arab Emirates to serve growing Middle East markets.

Our Agriculture segment has a long history of developing new emerging markets for mechanized irrigation around the world.

In 2020, we secured a $240 million multi-year order for the Egypt market.

In January 2023, we secured an $85 million multi-year agreement for projects in Africa.

Developing New Products for Markets that We Currently Serve.

Our strategy is to grow by developing new products for markets using our comprehensive understanding of end-user requirements and leveraging longstanding relationships with key distributors and end-users.

In recent years, we developed and sold structures for spun concrete distribution poles for North American utility markets, steel bridge girders for North America, and began offering concealment solutions for the wireless communication markets.

Developing New Products for New Markets or Leveraging Core Competencies to Further Diversify our Business is a Path to Increase Sales.

For example, the establishment and growth of our Coatings product line was based on using our expertise in galvanizing to develop what is now a global product line.

We have grown sales through expanding our presence in the decorative lighting market, which has different requirements and preferences than our traditional transportation and commercial markets.

Acquisitions are a key component of our strategy to expand the markets we serve through new products and services.

In 2022, we acquired a majority interest in ConcealFab, a 5G infrastructure and passive intermodulation mitigation solutions company, expanding our portfolio of telecommunications products that support 5G technology.

In 2021, we acquired Prospera Technologies, Ltd., an artificial intelligence technology company focused on machine learning and computer vision in agriculture providing an opportunity to grow recurring revenue through agronomy monitoring software solutions.

In 2020, we acquired Solbras ® , a provider of solar energy solutions for agriculture and during 2018, we acquired Convert Italia S.p.A., a provider of engineered single axis solar tracking solutions.

These two acquisitions are furthering our commitment to renewable energy which we believe will provide us future growth opportunities through the ability to bring power to underserved regions and transform unproductive land into efficient cropland.

We have grown organically and by acquisition.

Our significant business expansions during the past five years include the following (including the segment where the business reports):

● Acquisition of an integrator of prepackaged pump stations (Torrent Engineering and Equipment) located in Indiana (Agriculture)

● Acquisition of a worldwide provider of parts for agricultural irrigation equipment, Irrigation Components International (ICI), located in the United States (Agriculture)

● Acquisition of an engineering and manufacturer of overhead sign structures (Walpar) located in Alabama (Infrastructure)

● Acquisition of 75% of a provider of engineered solar tracker solutions (Convert Italia S.p.A.) headquartered in Italy (Infrastructure)

● Acquisition of a steel lattice structures producer (Derit) located in India (Infrastructure)

● Acquisition of a galvanizing business (CSP Coating Systems) located in New Zealand (Infrastructure)

● Acquisition of a wireless communication concealment solutions provider (Larson Camouflage) headquartered in Arizona (Infrastructure)

● Acquisition of the remaining 4.8% not previously owned of Valmont SM (Other)

● Acquisition of a galvanizing business (United Galvanizing) located in Texas (Infrastructure)

● Acquisition of a manufacturer and distributor of wireless site components and safety products (Connect-It Wireless, Inc.) located in Florida (Infrastructure)

● Acquisition of the remaining 49% not previously owned of AgSense, LLC (Agriculture)

● Acquisition of 55% of a provider of solar solutions for Agriculture (Solbras) located in Brazil (Agriculture)

● Acquisition of KC Utility Packaging, LLC, a utility substation product provider located in Missouri (Infrastructure)

● Acquisition of Prospera Technologies, Ltd., an artificial intelligence company in agriculture located in Israel ( Agriculture )

● Acquisition of PivoTrac, a remote monitoring irrigation service company located in Texas ( Agriculture )

● Acquisition of 51% of ConcealFab, a 5G infrastructure and passive intermodulation mitigation solutions company located in Colorado (Infrastructure)

● Acquisition of the remaining 9% not previously owned of Convert Italia S.p.A.

(Infrastructure)

● Acquisition of the remaining 20% not previously owned of Valmont West Coast Engineering, Ltd.

(Infrastructure)

In 2018, the Company divested of Donhad, a grinding media producer in Australia.

In 2022, the Company divested of Valmont SM, a wind energy structures business in Denmark manufacturing both on and offshore structures.

During the first quarter of 2022, the Company’s Chief Operating Decision Maker (“CODM”) changed the Company’s management structure and began to manage the business, allocate resources, and evaluate performance based on the new structure.

As a result, the Company has realigned to a two reportable segment structure organized by market dynamics (Infrastructure and Agriculture).

Three operating segments resulted from the new management structure and two are aggregated into the Agriculture reportable segment.

The Company considers gross profit margins, nature of products sold, nature of the production processes, type and class of customer, and methods used to distribute products when assessing aggregation of operating segments.

The Infrastructure segment includes the previous reportable segments of Utility Support Structures, Engineered Support Structures, and Coatings.

All prior period segment information has been recast to reflect this change in reportable segments.

Both reportable segments are global in nature with a manager responsible for segment operational performance and allocation of capital within the segment.

Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts.

Reportable segments are as follows:

Our purpose as a company is to conserve resources and improve life.

We have two reportable segments based on our management structure.

Both reportable segments are global in nature with a manager responsible for operational performance and allocation of capital.

Corporate expense is net of certain service-related expenses that are allocated to business units generally based on employee headcounts and sales dollars.

Customers and end-users of our Infrastructure products include utility and telecommunication companies, municipalities and government entities, manufacturers of commercial lighting fixtures, and contractors.

Customers of our Agriculture segment are primarily dealers who resell mechanized irrigation equipment to their end-customer, the farmer.

Both segments service the general manufacturing sector as well.

In fiscal 2023, approximately 31% of our net sales were either sold in markets or produced by our manufacturing plants outside of North America.

Our reportable segments are as follows:

Infrastructure:

This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation, and telecommunications, and coatings services to preserve metal products.

This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to protect metal products.

This segment consists of the manufacture of center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.

In addition to these two reportable segments, the Company had a business and related activities that was not more than 10% of consolidated sales, operating income, or assets.

These activities include the offshore wind energy structures business until its divestiture in 2022.

In addition to these two reportable segments, we had a business and related activities that were not more than 10% of consolidated sales, operating income, or assets.

These activities comprised the offshore wind energy structures business until its divestiture in the fourth quarter of fiscal 2022.

Information concerning the principal products produced and services rendered, markets, competition, and distribution methods for each of our two reportable segments is set forth below.

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● Transmission, Distribution, and Substation (“TD&S”):

We engineer and manufacture steel, pre-stressed concrete, composite, and hybrid structures (concrete base section and steel upper sections).

These products are used to support the lines and equipment that carry power for electrical transmission, substation, and distribution applications.

Transmission refers to moving power from where it is produced to where it is used.

Substations transfer high voltage electricity to low voltage transmission.

Electrical distribution carries electricity from the substation to the end-user.

These innovative structures are offered to address the growing need for grid hardening across the globe, where fires, storms, and floods have recently occurred with increasing regularity.

Utility structures can be very large, so product design engineering is important to the function and safety of the structure.

Our engineering process takes into account weather and loading conditions, such as wind speeds, ice loads, and the power lines attached to the structure, in order to arrive at the final design.

● Lighting and Transportation:

We design, engineer, and manufacture steel, aluminum, wood, and composite poles and structures for a wide range of lighting and highway transportation applications.

The demand for these products is driven by infrastructure, commercial, and residential construction and by consumers’ desire for well-lit streets, highways, parking lots, and common areas.

Valmont structures help keep these areas safer, provide technologically advanced solutions for smart cities, and support 24-hour convenience.

Beyond design, technical, and engineering needs, customers also want products that are visually appealing and meet local aesthetic requirements.

In Europe, Valmont is a leader in decorative lighting poles, which provide an attractive yet functional solution for our customers.

We are leveraging this expertise to expand our decorative product sales in North America and the Middle East.

Valmont traffic and overhead sign structures contribute to the orderly flow of automobile traffic.

These poles, which support traffic signals and overhead signs, are engineered to meet customer specifications to ensure the proper function and safety of the structure.

Product engineering takes into account factors such as weather (e.g., wind, ice) and the products loaded on the structure (e.g., lighting fixtures, traffic signals, overhead signs) to determine the design of the pole.

Valmont has expanded its capabilities in the traffic market with the development of patented vibration mitigation technology which continuously improves the safety of traffic and roadway structures by reducing the effects of wind and fatigue.

Our transportation product line also includes highway safety system products that are designed and engineered to enhance roadway safety.

These systems include guard rail barriers, wire rope safety barriers, crash attenuation barriers, and other products which primarily serve the Australia market.

Additionally, Valmont has expanded into the bridge market with the development of our Con-Struct Bridge system.

systems are effective, long-lasting, and can be installed quickly to reduce costs and expand the life of the structure.

We add finishes to metals that inhibit corrosion, extend service lives, and enhance the aesthetics of a wide range of materials and products.

We take unfinished products from our customers and return them with a galvanized, anodized, or painted finish.

We engineer and manufacture steel, pre-stressed concrete, and composite structures to support the lines and equipment that carry and transform power for electrical transmission, substation, and distribution applications for the utility industry.

Transmission refers to moving high-voltage power from where it is produced to where it is used.

Substations transform the electricity from the generation source so that it can be carried on the transmission lines.

A substation is then required to transform the high-voltage electricity from the transmission lines to low voltage so it can be distributed to the end-user.

These innovative structures are offered to meet the growing demand for reliable energy.

These solutions also support grid hardening across the globe, where fires, storms, and floods are occurring with increasing regularity.

TD&S projects are often complex and include large structures, therefore product design engineering is important to the function and safety of these solutions.

Our engineering process considers weather and loading conditions, such as wind speeds, ice loads, and power line requirements, to arrive at the final design.

● Lighting and Transportation (“L&T”):

We design, engineer, and manufacture steel, aluminum, wood, and composite poles and structures for a wide range of lighting and transportation applications.

The demand for these products is driven by infrastructure, commercial, and residential construction and by consumers’ desire for

well-lit streets, highways, parking lots, and common areas.

Beyond technical and engineering needs, customers also want product designs that are visually appealing and meet local aesthetic requirements.

Our traffic and sign structures contribute to the orderly flow of automobile traffic.

These structures support traffic signals and overhead signs.

They are engineered to meet customer specifications to ensure the proper function and safety of the structure.

Product engineering considers factors such as weather (e.g., wind, ice) and the products loaded on the structure (e.g., lighting fixtures, traffic signals, overhead signs) to determine the design.

We have expanded our capabilities in the traffic market with the development of patented vibration mitigation technology which continuously improves the safety of traffic and roadway structures by reducing the effects of wind and fatigue.

Our L&T product line also includes highway safety system products that are designed and engineered to enhance roadway safety.

These systems include guardrail barriers, wire rope safety barriers, crash attenuation barriers, and other products which primarily serve the Australian and Indian markets.

We provide finishing services that inhibit corrosion, extend service lives, and enhance the aesthetics of a wide range of materials and products.

With a variety of finish options, including galvanizing, anodizing, and painting, we can meet customer-specific requirements for a variety of applications.

Hot-dip galvanizing is a process that protects and prolongs the life of steel with a zinc coating that is bonded to the product surface to inhibit rust and corrosion.

CorroCote adds a protection to steel for those products that are anchored below ground against the corrosive effects of soil and underground moisture.

CorroCote ® adds protection to steel against the corrosive effects of soil and underground moisture for those products that are anchored below ground.

Anodizing is a process applied to aluminum that oxidizes the surface of the aluminum in a controlled manner, which protects the aluminum from corrosion and allows the material to be dyed a variety of colors.

We also paint products using powder coating for a number of industries and markets.

We also paint products using powder coating for certain industries and markets.

● Telecommunications:

We engineer, manufacture, and distribute a broad range of structures (poles and towers), camouflage concealment solutions, and components serving the wireless communication market supporting expanded 5G customer needs.

We engineer, manufacture, and distribute products including towers, small cell structures, camouflage concealment solutions, passive intermodulation (“PIM”) mitigation equipment, and components serving the wireless communication market.

These solutions support expanded 5G requirements and the ever-growing demand for data.

A wireless communication cell site mainly consists of a steel pole or tower, shelter (enclosure where the radio equipment is located), antennas (devices that receive and transmit data and voice information to and from wireless communication devices), and components (items that are used to mount antennas to a structure and to connect cabling and other parts from the antennas to the shelter).

Larger monopole structures are engineered and designed to customer specifications, which include factors such as the number of antennas on the structure and wind and soil conditions.

Due to the size of these monopole structures, design is important to ensure each structure meets performance and safety specifications.

● Renewable Energy:

Small cell applications are utilized to enhance signal densification in urban environments and enhance the signal from the tower.

Concealment solutions, such as faux trees, convert traditional telecommunication structures and camouflage them to fit seamlessly into the surrounding environment.

PIM mitigation solutions are provided to solve issues with signal interference.

Our telecommunication structures are engineered and designed to customer specifications, which include factors such as equipment and antenna requirements, wind and soil conditions, and aesthetic standards, all while ensuring that they meet safety specifications.

Our solar single-axis tracker product is an integrated system of steel structures, electric motors, and electronic controllers.

Trackers move solar panels throughout the day to maintain an optimal orientation to the sun, which materially increases their energy production.

Solar energy projects utilizing trackers generate approximately 20% more energy compared to traditional fixed tilt ground-mounted systems, according to Wood Mackenzie.

Our trackers utilize a simple, modular design allowing ease of installation and low operational maintenance.

Further, the flexibility of our trackers’ design allows for improved site utilization, which is especially valuable to our customers considering that solar projects are being constructed on increasingly challenging sites today.

We sell our products to engineering, procurement, and construction firms (“EPCs”) that build solar energy projects as well as solar developers, independent power producers, and utilities.

The key markets across the Infrastructure product lines have a portion of their funding supported through local, state, and federal government spending programs.

For example, the U.S.

government will fund infrastructure improvement through the newly passed Infrastructure Investment and Jobs Act as well as the Inflation Reduction Act.

These bills will allocate funding to reinforce the nation’s bridges, increase safety for the travelling public, update vital infrastructure, improve highway safety, and harden the electrical grid.

The market for our TD&S product line is mainly in North America, where the key drivers in the utility business are significant upgrades in the electrical grid to support enhanced reliability standards, policy changes encouraging more generation from renewable energy sources, and increased electrical consumption, which has outpaced the transmission investment in the past decades.

We sell our products to engineering, procurement, and construction firms that build solar energy projects as well as solar developers, independent power producers, and utilities.

The key markets across the Infrastructure product lines have a portion of their funding supported through local, state, and federal government programs.

Currently, the United States of America (“U.S.”) government is supporting infrastructure improvement through the Infrastructure Investment and Jobs Act (“IIJA”) and the Inflation Reduction Act (“IRA”).

These acts will allocate funding to reinforce the nation’s bridges, increase safety for the traveling public, update vital infrastructure, improve highway safety, and harden the electrical grid.

The utility industry in North America is a significant market for the Infrastructure segment.

The key drivers are significant upgrades in the electrical grid to support enhanced reliability standards, policy changes encouraging more generation from renewable energy sources, and increased electrical consumption, which has outpaced transmission investment in the past decades.

According to the Edison Electric Institute, the electrical transmission grid in the U.S.

requires significant investment in the coming years to respond to the compelling industry drivers and lack of investment prior to 2008.

requires significant investment in the coming years to respond to compelling industry drivers and lack of investment prior to 2008.

Electrical consumption is also expected to increase within international markets.

This will require substantial investment in new electricity generation capacity and growth in transmission grid development.

We expect these factors to result in increased demand for electrical utility structures to transport electricity from source to user, as is used in the U.S.

We expect these factors to result in increased demand for electrical utility structures to transport electricity from source to user, as is used in U.S.

markets today.

Our lighting and transportation products and solutions serve the transportation, construction, and industrial markets.

Many products from our transportation product portfolio will be utilized when making these enhancements including traffic structures, bridge systems, roadway and street lighting, high-mast lighting, etc.

Matching funding from the various states may be required as a condition of federal funding in the United States.

Additionally, public and private partnerships have recently emerged as an additional funding source.

In the United States, there are approximately four million miles of public roadways, with approximately 24% carrying over 80% of the traffic.

We also serve the transportation, construction, and industrial markets.

Many products from our transportation product portfolio will be utilized when making enhancements to traffic structures, bridge systems, roadway and street lighting, and high-mast lighting.

A combination of state and federal funding, including the IIJA, supports transportation projects throughout the U.S.

Public and private partnerships have also recently emerged as an additional funding source.

In the U.S., there are approximately four million miles of public roadways, with approximately 24% carrying over 80% of the traffic.

Accordingly, the need to improve traffic flow through traffic controls and lighting is a priority for many communities.

The construction market is mostly funded privately and includes lighting for applications such as parking lots, shopping centers, sports stadiums, and business parks.

This market is driven by macro-economic factors such as general economic growth rates, interest rates, and the commercial construction economy.

Valmont has many long-standing relationships with OEMs (also manufacture light fixtures and equipment) who also serve this market.

The commercial construction market is mostly privately funded and includes lighting for applications such as parking lots, shopping centers, sports stadiums, and business parks.

This market is driven by macroeconomic factors such as general economic growth rates, interest rates, and the commercial construction economy.

We have many long-standing relationships with lighting and equipment manufacturers who also serve this market.

Industrial markets are typically driven by infrastructure, industrial, and commercial construction spending.

Markets for our Coatings products are varied and our profitability is not substantially dependent on any one industry or external customer.

However, a meaningful percentage of demand is internal, driven by Valmont’s other product lines.

However, a meaningful percentage of demand is internal, driven by our other product lines and their market demand.

Demand for coatings services generally follows the local industrial economies.

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While markets are varied, our markets for anodized or painted products are more directly dependent on consumer markets than industrial markets.

The market for our communication products is driven by increased demand for wireless communication and data.

Our customers are wireless network providers and organizations that own cell sites and attach antennas from multiple carriers to the pole or tower structure (build to suit companies).

The market for our Telecommunications products is driven by demand for wireless communication and data.

Our customers are wireless network providers and companies that own and maintain cell sites.

We also sell products to state and federal governments for two-way radio communication, radar, broadcasting, and security applications.

We believe long-term growth should mainly be driven by increased usage and technologies such as 5G, which demand higher network density.

Improved emergency response systems, as part of the U.S.

Homeland Security initiatives, creates additional demand.

The market for our Renewable Energy product line is driven by the transition to clean energy sources globally and incentives for renewable energy investment.

As utilities increase development of large-scale solar power and micro-grid applications, single axis solar tracker solutions will be an essential tool for achieving higher energy production.

Our competitive strategy in all of the markets we serve is to provide high value solutions to the customer at the appropriate price.

We compete on the basis of product quality, engineering expertise, high levels of customer service, and timely, complete, and accurate delivery of the product.

There are numerous competitors in North America as well as international markets.

Companies compete on the basis of price, product quality, reliable delivery, engineering design, unique product features, and service.

We believe long-term growth should mainly be driven by increased data usage and technologies such as 5G, which demands higher network density.

Improved emergency response systems, as part of U.S.

Department of Homeland Security initiatives, create additional demand.

The solar market is driven by the transition to clean energy sources globally and incentives for renewable energy investment.

As utilities increase the development of large-scale solar power and micro-grid applications, single-axis solar tracker solutions will be an essential tool for achieving higher energy production.

Our competitive strategy is to provide high-value solutions to the customer at the appropriate price.

We compete based on product quality, engineering expertise, high levels of customer service, and timely, complete, and accurate delivery of the product.

We leverage the production capacity at our network of plants to ensure that the customer receives quality and timely service.

There are numerous competitors in North America as well as in international markets.

Pricing can be very competitive, especially when demand is weak or when strong local currencies result in increased competition from imported products.

Infrastructure sales are often made through a competitive bid process, whereby the lowest bidder is awarded the contract, provided the competitor meets all other qualifying criteria.

In weak markets, price is a more important criteria in the bid process.

Infrastructure sales are often made through a competitive bid process, whereby the lowest bidder is awarded the contract, provided the bidder meets all other qualifying criteria.

We also sell on a preferred-provider basis to certain large customers.

These contractual arrangements often last between three and five years and are frequently renewed.

We also use the production capacity at our network of plants to ensure that the customer receives quality, timely service.

The Coatings product line markets traditionally have been very fragmented, with a large number of competitors.

Most of these competitors are relatively small, privately held companies who compete on the basis of price and personal relationships with their customers.

Our strategy is to compete on the basis of quality of the coating finish and timely delivery of the coated product to the customer.

The Coatings product line markets have traditionally been very fragmented with a large number of competitors.

Most of these competitors are relatively small, privately held companies that compete based on price and personal relationships with their customers.

Our strategy is to compete based on the quality of the coating finish and timely delivery of the coated product to the customer.

The Solar product line offers solutions that are specific to the solar industry.

We primarily compete with other mid-sized market participants and differentiate ourselves based on the quality of service and ability to combine offerings from the TD&S product line to provide full-grid solutions.

Distribution Methods

For lighting and transportation, sales and distribution activities are handled through a combination of a direct sales force and commissioned agents.

Lighting agents represent Valmont as well as lighting fixture and traffic signal lines and sell other related products.

Sales are typically to electrical distributors, who provide the pole, fixtures, and other equipment to the end user as a complete package.

Commercial lighting, wireless communication products and components, access systems, and highway safety sales are normally made through Valmont sales employees, who work on a salary plus incentive,

although some sales are made through independent, commissioned sales agents.

Our TD&S and Renewable Energy products are normally sold directly to electrical utilities, developers, or energy providers with some sales sold through commissioned sales agents.

Infrastructure sales and distribution activities are handled through a combination of a direct sales force and commissioned agents.

Working with end-users and distributors, our sales force represents Valmont as well as light fixture and traffic-signal manufacturers.

This enables our agents to provide the pole, fixtures, and other equipment to the end-user as a complete package.

Commercial lighting, wireless communication products and components, access systems, and highway

safety sales are normally made through our sales employees, although some sales are made through independent commissioned sales agents.

Our TD&S and Solar products are normally sold directly to electrical utilities, developers, or energy providers with some sales sold through commissioned sales agents.

Due to freight costs, a galvanizing location has an effective service area of an approximate 300-to-500-mile radius.

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We manufacture and distribute mechanical irrigation equipment and related service parts under the Valley ® brand name.

A Valley irrigation machine is powered by electricity (via solar, grid, or diesel generator) and propels itself over a farm field and applies water and chemicals to crops.

Water and, in some instances, chemicals are applied through sprinklers attached to a pipeline that is supported by a series of towers, each of which is propelled via a drive train and tires.

A Valley ® irrigation machine is powered by electricity (via a grid, solar, or diesel generator), propels itself over a farm field, and applies water and chemicals to crops.

Water and chemicals are applied through sprinklers attached to a pipeline that is supported by a series of towers, each of which is propelled via a drivetrain and tires.

A standard mechanized irrigation machine (also known as a center pivot) rotates in a circle, although we also manufacture and distribute center pivot extensions that can irrigate corners of square and rectangular farm fields as well as conform to irregular field boundaries (referred to as a corner machine).

Our irrigation machines can also irrigate fields by moving up and down the field as opposed to rotating in a circle (referred to as a linear machine).

Irrigation machines can be configured to irrigate fields in size from four acres to over 500 acres, with a standard size in the U.S.

Irrigation machines can be configured to irrigate fields in sizes from four acres to over 500 acres, with a standard size in the U.S.

configured for a 160-acre tract of ground.

The irrigation machine used in international markets is substantially the same as the one produced for the North American market.

We also manufacture tubular products for industrial customers primarily in the agriculture industry as well as in the transportation and other industries.

We also manufacture tubular products for industrial customers primarily in the agriculture industry as well as in transportation and other industries.

● Technology Products and Services:

Our remote management capabilities allow control of pivots and a variety of other farm equipment on any web-connected device and our suite of advanced technology solutions offers capabilities to assist in reducing water and energy use.

Through over 100,000 connected devices, Valley ® has paired sustainable infrastructure with technology to help growers see crop production issues before they become problems.

Our suite of advanced technology solutions offers capabilities to assist in reducing water and energy use as the center pivot is the only infrastructure on the farm that is continually in the field every day of the year.

During fiscal 2021, we purchased Prospera Technologies, Ltd., a leading global artificial intelligence and machine learning provider of advanced agronomy monitoring solutions.

Our crop anomaly detection can alert growers of pivot-related water issues with artificial intelligence and machine learning (in select markets) to help farmers determine where and how much to irrigate.

During fiscal year 2021, we purchased Prospera Technologies, Ltd., a leading global artificial intelligence and machine learning provider of advanced agronomy monitoring solutions.

Agriculture net sales in 2022, 2021, and 2020 included technology sales of $115.1 million, $97.9 million, and $67.1 million, respectively.

We also sell solar energy solutions for agriculture primarily in international markets.

Market drivers in North America and international markets are essentially the same.

Market drivers in North American and international markets are essentially the same.

Since the purchase of an irrigation machine is a capital expenditure, the purchase decision is based on the expected return on investment.

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We estimate that:

● only 2.5% of total worldwide water supply is freshwater;

● only 2.5% of the total worldwide water supply is freshwater;

● of that 2.5%, only 30% of freshwater is available to humans;

● the largest user of that freshwater is agriculture.

We believe these factors, along with the trends of a growing worldwide population, improving diets, and governments’ efforts to address food security, reflect the need to use water more efficiently while increasing food production to feed this growing population.

We believe that mechanized irrigation can improve water application efficiency by 40% to 90% compared with traditional irrigation methods by applying water uniformly near the root zone and reducing water runoff.

Furthermore, reduced water runoff improves water quality in nearby rivers, aquifers, and streams, thereby providing environmental benefits in addition to conservation of water.

Furthermore, reduced water runoff improves water quality in nearby rivers, aquifers, and streams, thereby providing environmental benefits in addition to the conservation of water.

In North America, there are a number of entities that provide irrigation products and services to agricultural customers.

We believe we are the leader of the four main participants in the mechanized irrigation business.

Participants compete for sales on the basis of product innovation and features, product durability and reliability, price, quality, and service capabilities of the local dealer.

Participants compete for sales based on product durability and reliability, price, quality, and service capabilities of the local dealer.

We continue to innovate and expand our technology offerings as growers continue to seek more solutions to increase their crop yields.

Pricing can become very competitive, especially in periods when market demand is low.

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Our dealer network is supported and trained by our technical and sales teams.

Our international dealers are supported through our regional operations in South America, South Africa, Western Europe, Australia, China, and the United Arab Emirates as well as the manufacturing facility in Valley, Nebraska.

Our international dealers are supported through our regional operations in South America, South Africa, Western Europe, Australia, China, and the United Arab Emirates, as well as our manufacturing facility in Valley, Nebraska.

Certain information generally applicable to our two reportable segments is set forth below.

Business Strategy

Our strategy is to pursue growth opportunities that leverage our existing product portfolio, knowledge of our principal end-markets and customers, and engineering capabilities to increase our sales, earnings, and cash flow, including:

Increasing the Market Penetration of Our Existing Products:

Our strategy is to increase our market penetration by differentiating our products from our competitors through superior customer service, engineering proficiency, technological innovation, and consistent high quality.

Our Agriculture segment experienced international sales growth in fiscal 2023 which we believe was partially due to the continuing importance of our precision agriculture and technology offerings.

Bringing Our Existing Products to New Markets:

Our strategy is to expand the sales of our existing products into geographic areas where there is market opportunity, where we do not currently serve, and where end-users do not currently purchase our type of products.

For example, we have a manufacturing presence in Poland and India to expand our offering of structures for L&T, TD&S, and Telecommunications to these markets and we have expanded our manufacturing presence in the United Arab Emirates to serve growing Middle East markets.

Our Agriculture segment has a long history of developing new emerging markets for mechanized irrigation around the world.

For example, in January 2023, we secured an approximately $85.0 million multi-year agreement for projects in Africa.

Developing New Products for Markets That We Currently Serve:

In recent years, in North America, we developed and sold structures for spun concrete distribution poles and steel bridge girders.

Additionally, we began offering concealment solutions for the wireless communication markets.

Developing New Products for New Markets or Leveraging Core Competencies to Further Diversify Our Business Is a Path to Increase Sales:

For example, the establishment and growth of our Coatings product line was based on using our expertise in galvanizing to develop what is now a global product line.

We have grown sales through expanding our presence in the decorative lighting market, which has different requirements and preferences than our traditional transportation and commercial markets.

Acquisitions are a key component of our strategy to expand the markets we serve through new products and services.

In fiscal 2023, we acquired HR Products, a leading wholesale supplier of irrigation parts in Australia, expanding our geographic footprint and growing our parts presence in a key agriculture market.

In fiscal 2022, we acquired a majority interest in ConcealFab, a 5G infrastructure and passive intermodulation mitigation solutions company, expanding our portfolio of telecommunications products that support 5G technology.

We have grown organically and by acquisition.

Our significant business acquisitions during the past two fiscal years include the following (including the segment in which the business reports):

● Acquisition of HR Products, a leading wholesale supplier of irrigation parts in Australia (Agriculture)

● Acquisition of 51% of ConcealFab, a 5G infrastructure and PIM mitigation solutions company in Colorado (Infrastructure)

● Acquisition of the remaining 9% not previously owned of Convert Italia S.p.A.

(Infrastructure)

● Acquisition of the remaining 20% not previously owned of Valmont West Coast Engineering, Ltd.

(Infrastructure)

Our business divestitures during the past two fiscal years include the following (including the segment in which the business reported):

● Divestiture of Torrent Engineering and Equipment, an integrator of prepackaged pump stations in Indiana (Agriculture)

● Divestiture of Valmont SM, an offshore wind energy structures business in Denmark (Other)

Suppliers and Availability of Raw Materials

Hot rolled steel coil and plate, zinc, and other carbon steel products are the primary raw materials utilized in the manufacture of finished products for all segments.

We purchase these essential items from steel mills, steel service centers, and zinc producers and these materials are usually readily available.

We purchase these essential items from steel mills, steel service centers, and zinc producers where these materials are usually readily available.

While we may experience increased lead times to acquire materials and volatility in our purchase costs, we do not believe that key raw materials would be unavailable for extended periods.

We have not experienced extended or wide-spread shortages of steel in the past several years, due to what we believe are strong relationships with some of the major steel producers.

We have not experienced extended or widespread shortages of steel in the past several years, due to what we believe are strong relationships with some of the major steel producers.

In the past several years, we experienced volatility in steel, zinc, and natural gas prices, but we did not experience any disruptions to our operations due to availability.

Patents, Licenses, Franchises, and Concessions

We have a number of patents for our manufacturing machinery, poles, highway guardrail, and irrigation designs.

We have a number of patents for our manufacturing machinery, structures, solar trackers, highway guardrails, and irrigation designs.

We also have a number of registered trademarks.

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Seasonal Factors in Business

Sales can be somewhat seasonal based upon the agricultural growing season and the infrastructure construction season.

Sales can be somewhat seasonal based on the agricultural growing season and the infrastructure construction season.

Sales of mechanized irrigation equipment to farmers are traditionally higher during the spring and fall and lower in the summer.

Sales of infrastructure products are traditionally higher in the summer and fall and lower in the winter.

We are not dependent for a material part of any segment’s business upon a single customer or upon very few customers.

We are not dependent upon a single customer or upon very few customers for a material part of any segment’s business.

The loss of any one customer would not have a material adverse effect on our financial condition, results of operations, or liquidity.

The backlog of orders for the principal products manufactured and marketed was $1,656.4 million at the end of the 2022 fiscal year and $1,621.9 million at the end of the 2021 fiscal year.

As of December 30, 2023 and December 31, 2022, the backlog of orders for our principal products manufactured and marketed was $1,465.5 million and $1,656.4 million, respectively.

An order is reported in our backlog upon receipt of a purchase order from the customer or execution of a sales order contract.

We anticipate that most of the 2022 backlog of orders will be filled during fiscal year 2023.

At year-end, the segments with backlog were as follows (dollar amounts in millions):

We anticipate that most of the fiscal 2023 backlog of orders will be filled during fiscal 2024.

The total backlog by segment as of December 30, 2023 and December 31, 2022 was as follows:

Dollars in millions

Infrastructure

Environmental Disclosure

Total backlog

Environmental Protection

We are subject to various federal, state, and local laws and regulations pertaining to environmental protection and the discharge of materials into the environment.

Although we continually incur expenses and make capital expenditures related to environmental protection, we do not anticipate that future expenditures should materially impact our financial condition, results of operations, or liquidity.

Although we continually incur expenses and make capital expenditures related to environmental protection, we do not anticipate that future expenditures will materially impact our financial condition, results of operations, or liquidity.

Number of Employees

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Human Capital Resources

Our policies and practices with respect to human capital resources are generally set forth in our Code of Business Conduct, our Human Rights Policy, and the principles described on the “About Us” page on our website www.valmont.com.

Essential to our success is a company-wide commitment to customer service and innovation and the ability to provide the best value to our customers for our products and services.

Our employees are the cornerstone of our accomplishments, we pride ourselves on being people of passion and integrity who excel and deliver results.

Our employees are the cornerstone of our accomplishments, and we pride ourselves on being people of passion and integrity who excel and deliver results.

Our Code of Business Conduct and our culture require each employee to act responsibly and to treat each other fairly and with the utmost respect.

Our businesses require skilled workers and management in order to meet our customer’s needs, grow our sales, and maintain competitive advantages.

Our businesses require skilled workers and management in order to meet our customers’ needs, grow our sales, and maintain competitive advantages.

We require employees with skills in engineering, welding, equipment maintenance, and the operation of complex manufacturing machinery.

Management talent is critical, as well, to help grow our businesses and effectively plan for succession of key employees upon retirement.

As of December 31, 2022, we had 6,599 employees in the United States and 4,765 employees in foreign countries.

The Company places a high value on diversity and inclusion, seeking employees with diverse backgrounds and experiences who share a common interest in profitable development, improving corporate culture, and delivering sustainable business results.

Management talent is critical, as well, to help grow our businesses and effectively plan for the succession of key employees upon retirement.

As of December 30, 2023, we had 6,356 employees in the U.S.

and 4,769 employees in countries outside the U.S.

We place a high value on diversity and inclusion, seeking employees with diverse backgrounds and experiences who share a common interest in profitable development, improving corporate culture, and delivering sustainable business results.

We have adopted a Human Rights Policy which is published on our website.

We expect our employees, suppliers, vendors, dealers, and distributors to share our commitment to human rights.

We prohibit discrimination on the basis of age, race, disability, ethnicity, marital or family status, national origin, religion, gender, sexual orientation, veteran status, gender identity, or any other characteristic protected by law.

We prohibit discrimination based on age, race, disability, ethnicity, marital or family status, national origin, religion, gender, sexual orientation, veteran status, gender identity, or any other characteristic protected by law.

We are committed to voluntary employment, and we strictly prohibit all forms of compulsory labor, including child labor, forced labor, slavery, and human trafficking.

We respect internally recognized human rights standards, and this policy is guided by the U.N.

Guiding Principles for Business and Human Rights.

We require full compliance with applicable, wage, work hours, overtime, and benefit laws.

We respect internally recognized human rights standards, and this policy is guided by the United Nations Guiding Principles on Business and Human Rights.

We require full compliance with applicable wage, work hours, overtime, and benefits laws.

We are committed to creating a culture where a healthy and safe workplace is recognized by everyone as essential to our success.

Any employee can always contact our compliance officer, and confidential reporting of a situation or to ask a question is available on a secure website maintained by a third party.

Employees are eligible for health insurance, paid and unpaid leaves, retirement plan, and life and disability / accident coverage.

Any employee can always contact our compliance officer, and confidential reporting of a situation or the ability to ask a question is available on a secure website maintained by a third party.

Employees are eligible for health insurance, paid and unpaid leaves, retirement plans, and life, disability, and accident coverage.

When positions come open at Valmont, we try first to fill them from within.

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We have found them to be our richest talent resource.

Our program for succession and management development has our highest level of attention with our CEO responsible for reporting on the program directly to our board of directors.

For additional information, please see the “About Us” and "Sustainability"

pages on our website and section titled “Governance, Human Capital and Sustainability Highlights” in the Company’s 2023 Proxy Statement.

Our program for succession and management development has our highest level of attention with our Chief Executive Officer (“CEO”) responsible for reporting on the program directly to our Board of Directors.

For additional information, please see the “Governance” and “Sustainability” pages on our website and the section titled “Governance, Human Capital and Sustainability Highlights” in our 2024 Proxy Statement.

Available Information

We make available, free of charge on the Investors page of our website at www.valmont.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

We make available, free of charge on the “Investors” page of our website at www.valmont.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the "SEC").

Additionally, we use our website, through the “Investors” page, as a channel for routine distribution of important information, including news releases, analyst presentations, and financial information.

The information on our website is not, and will not be deemed to be, a part of this annual report on Form 10-K or incorporated into any of our other filings with the SEC.

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.

What changed 10-K

Item 1. Business