VALMONT INDUSTRIES INC 10-Q

ITEM 1. FINANCIAL STATEMENTS VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ June 29, ​ July 1, ​ ​ 2024 2023 2024 2023 Product sales ​ $ 928,479 ​ $ 945,873 ​ $ 1,803,157 ​ $ 1,903,881 Service sales ​ 111,258 ​ 100,423 ​ 214,408 ​ 204,896 Net sales ​ 1,039,737 ​ 1,046,296 ​ 2,017,565 ​ 2,108,777 Product cost of sales ​ 651,731 ​ 651,413 ​ 1,256,946 ​ 1,333,203 Service cost of sales ​ 67,724 ​ 65,486 ​ 134,121 ​ 137,592 Total cost of sales ​ 719,455 ​ 716,899 ​ 1,391,067 ​ 1,470,795 Gross profit ​ 320,282 ​ 329,397 ​ 626,498 ​ 637,982 Selling, general, and administrative expenses ​ 172,974 ​ 195,664 ​ 347,637 ​ 385,783 Operating income ​ 147,308 ​ 133,733 ​ 278,861 ​ 252,199 Other income (expenses): ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ( 15,846 ) ​ ( 14,917 ) ​ ( 32,067 ) ​ ( 28,022 ) Interest income ​ 1,499 ​ 563 ​ 3,278 ​ 1,393 Gain on deferred compensation investments ​ 525 ​ 941 ​ 1,956 ​ 2,135 Gain on divestiture ​ ​ — ​ 2,994 ​ — ​ 2,994 Other ​ ( 1,250 ) ​ ( 2,382 ) ​ ( 1,355 ) ​ ( 4,758 ) Total other income (expenses) ​ ( 15,072 ) ​ ( 12,801 ) ​ ( 28,188 ) ​ ( 26,258 ) Earnings before income taxes and equity in loss of nonconsolidated subsidiaries ​ 132,236 ​ 120,932 ​ 250,673 ​ 225,941 Income tax expense (benefit): ​ ​ ​ ​ Current ​ 40,961 ​ 37,791 ​ 60,605 ​ 62,147 Deferred ​ ( 9,894 ) ​ ( 5,856 ) ​ 450 ​ 1,631 Total income tax expense ​ 31,067 ​ 31,935 ​ 61,055 ​ 63,778 Earnings before equity in loss of nonconsolidated subsidiaries ​ 101,169 ​ 88,997 ​ 189,618 ​ 162,163 Equity in loss of nonconsolidated subsidiaries ​ ( 19 ) ​ ​ ( 199 ) ​ ​ ( 39 ) ​ ​ ( 1,020 ) Net earnings ​ 101,150 ​ 88,798 ​ 189,579 ​ 161,143 Loss (earnings) attributable to redeemable noncontrolling interests ​ ( 1,434 ) ​ 578 ​ ( 2,041 ) ​ 2,773 Net earnings attributable to Valmont Industries, Inc. ​ $ 99,716 ​ $ 89,376 ​ $ 187,538 ​ $ 163,916 Net earnings attributable to Valmont Industries, Inc. per share: ​ ​ ​ ​ ​ Basic ​ $ 4.94 ​ $ 4.25 ​ $ 9.29 ​ $ 7.75 Diluted ​ $ 4.91 ​ $ 4.21 ​ $ 9.24 ​ $ 7.67 See accompanying Notes to Condensed Consolidated Financial Statements. ​ 3 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ June 29, ​ July 1, ​ ​ 2024 2023 2024 2023 Net earnings ​ $ 101,150 ​ $ 88,798 ​ $ 189,579 ​ $ 161,143 Other comprehensive income (loss), net of tax: ​ ​ ​ ​ Foreign currency translation adjustments: ​ ​ ​ ​ Unrealized translation gain (loss) ​ ( 18,768 ) ​ 11,967 ​ ( 40,186 ) ​ 20,156 Hedging activities: ​ ​ ​ ​ Unrealized loss on commodity hedges ​ ( 1,498 ) ​ ( 1,339 ) ​ ( 2,059 ) ​ ( 2,815 ) Realized loss (gain) on commodity hedges included in earnings ​ 298 ​ 925 ​ ( 419 ) ​ 3,797 Unrealized gain (loss) on cross currency swaps ​ ​ 816 ​ ​ ( 760 ) ​ ​ 1,011 ​ ​ ( 1,351 ) Amortization cost included in interest expense ​ ( 12 ) ​ ( 12 ) ​ ( 24 ) ​ ( 28 ) Total hedging activities ​ ​ ( 396 ) ​ ​ ( 1,186 ) ​ ​ ( 1,491 ) ​ ​ ( 397 ) Net gain on defined benefit pension plan ​ 381 ​ 95 ​ 762 ​ 186 Total other comprehensive income (loss), net of tax ​ ( 18,783 ) ​ 10,876 ​ ( 40,915 ) ​ 19,945 Comprehensive income ​ 82,367 ​ 99,674 ​ 148,664 ​ 181,088 Comprehensive loss (income) attributable to redeemable noncontrolling interests ​ ( 1,269 ) ​ 233 ​ ( 1,719 ) ​ 2,135 Comprehensive income attributable to Valmont Industries, Inc. ​ $ 81,098 ​ $ 99,907 ​ $ 146,945 ​ $ 183,223 See accompanying Notes to Condensed Consolidated Financial Statements. ​ 4 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except par value) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ June 29, ​ December 30, ​ ​ 2024 2023 ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ Cash and cash equivalents ​ $ 163,142 ​ $ 203,041 Receivables, net ​ 703,255 ​ 657,960 Inventories ​ 633,232 ​ 658,428 Contract assets ​ 191,846 ​ 175,721 Prepaid expenses and other current assets ​ 92,560 ​ 92,479 Total current assets ​ 1,784,035 ​ 1,787,629 Property, plant, and equipment, at cost ​ 1,524,355 ​ 1,513,239 Less accumulated depreciation ​ ( 920,029 ) ​ ( 895,845 ) Property, plant, and equipment, net ​ 604,326 ​ 617,394 Goodwill ​ 630,232 ​ 632,964 Other intangible assets, net ​ 142,527 ​ 150,687 Defined pension benefit asset ​ ​ 33,853 ​ 15,404 Other non-current assets ​ 262,229 ​ 273,370 Total assets ​ $ 3,457,202 ​ $ 3,477,448 ​ ​ ​ ​ ​ ​ ​ LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ Current installments of long-term debt ​ $ 569 ​ $ 719 Notes payable to banks ​ 1,876 ​ 3,205 Accounts payable ​ 353,729 ​ 358,311 Accrued employee compensation and benefits ​ 108,009 ​ 130,861 Contract liabilities ​ 68,811 ​ 70,978 Other accrued expenses ​ 139,515 ​ 146,903 Income taxes payable ​ ​ 20,427 ​ ​ — Dividends payable ​ 12,098 ​ 12,125 Total current liabilities ​ 705,034 ​ 723,102 Deferred income taxes ​ 18,675 ​ 21,205 Long-term debt, excluding current installments ​ 1,017,543 ​ 1,107,885 Operating lease liabilities ​ 154,247 ​ 162,743 Deferred compensation ​ 32,550 ​ 32,623 Other non-current liabilities ​ 11,423 ​ 12,818 Total liabilities ​ ​ 1,939,472 ​ ​ 2,060,376 Redeemable noncontrolling interests ​ 46,249 ​ 62,792 Shareholders’ equity: ​ ​ Common stock of $ 1 par value, authorized 75,000,000 shares; issued 27,900,000 shares ​ 27,900 ​ 27,900 Additional paid-in capital ​ 5,135 ​ — Retained earnings ​ 2,806,933 ​ 2,643,606 Accumulated other comprehensive loss ​ ( 313,829 ) ​ ( 273,236 ) Treasury stock ​ ( 1,054,658 ) ​ ( 1,043,990 ) Total shareholders’ equity ​ ​ 1,471,481 ​ ​ 1,354,280 Total liabilities, redeemable noncontrolling interests, and shareholders’ equity ​ $ 3,457,202 ​ $ 3,477,448 See accompanying Notes to Condensed Consolidated Financial Statements. ​ 5 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ ​ 2024 2023 Cash flows from operating activities: ​ ​ ​ Net earnings ​ $ 189,579 ​ $ 161,143 Adjustments to reconcile net earnings to net cash flows from operations: ​ ​ ​ ​ Depreciation and amortization ​ 46,526 ​ 48,792 Contribution to defined benefit pension plan ​ ( 18,009 ) ​ ( 15,259 ) Gain on divestiture ​ ​ — ​ ​ ( 2,994 ) Stock-based compensation ​ 14,108 ​ 19,856 Net periodic pension cost ​ ​ 317 ​ ​ 122 Loss on sale of property, plant, and equipment ​ 315 ​ 1,297 Equity in loss of nonconsolidated subsidiaries ​ 39 ​ 1,020 Deferred income taxes ​ 450 ​ 1,631 Changes in assets and liabilities: ​ ​ ​ ​ Receivables ​ ( 62,930 ) ​ ( 38,147 ) Inventories ​ 14,800 ​ 6,402 Contract assets ​ ( 16,141 ) ​ 20,052 Prepaid expenses and other assets (current and non-current) ​ ( 9,784 ) ​ ( 26,001 ) Accounts payable ​ 1,224 ​ ( 20,750 ) Contract liabilities ​ ( 47 ) ​ ( 53,728 ) Accrued expenses ​ ( 28,388 ) ​ ( 11,202 ) Income taxes payable ​ 22,961 ​ 24,395 Other non-current liabilities ​ ( 877 ) ​ ( 7,083 ) Net cash flows from operating activities ​ 154,143 ​ 109,546 Cash flows from investing activities: ​ ​ ​ ​ Purchases of property, plant, and equipment ​ ( 33,328 ) ​ ( 45,393 ) Proceeds from divestitures, net of cash divested ​ ​ — ​ 6,369 Proceeds from sale of assets ​ 226 ​ 1,261 Proceeds from property damage insurance claims ​ ​ — ​ 4,844 Other, net ​ ​ ( 3,402 ) ​ ​ ( 1,127 ) Net cash flows from investing activities ​ ( 36,504 ) ​ ( 34,046 ) Cash flows from financing activities: ​ ​ ​ ​ Proceeds from short-term borrowings ​ 6,093 ​ 14,905 Repayments on short-term borrowings ​ ( 7,368 ) ​ ( 19,598 ) Proceeds from long-term borrowings ​ 15,009 ​ 165,012 Principal payments on long-term borrowings ​ ( 105,349 ) ​ ( 84,105 ) Proceeds from settlement of financial derivatives ​ 2,711 ​ — Dividends paid ​ ( 24,239 ) ​ ( 24,376 ) Dividends to redeemable noncontrolling interests ​ ( 664 ) ​ ( 662 ) Purchases of redeemable noncontrolling interests ​ ( 17,745 ) ​ — Repurchases of common stock ​ ( 14,941 ) ​ ( 135,115 ) Proceeds from exercises under stock plans ​ 4,333 ​ 5,201 Tax withholdings on exercises under stock plans ​ ( 8,715 ) ​ ( 15,416 ) Net cash flows from financing activities ​ ( 150,875 ) ​ ( 94,154 ) Effect of exchange rate changes on cash and cash equivalents ​ ( 6,663 ) ​ 155 Net change in cash and cash equivalents ​ ( 39,899 ) ​ ( 18,499 ) Cash and cash equivalents—beginning of period ​ 203,041 ​ 185,406 Cash and cash equivalents—end of period ​ $ 163,142 ​ $ 166,907 See accompanying Notes to Condensed Consolidated Financial Statements. ​ 6 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (Dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ ​ ​ ​ Total ​ Redeemable ​ ​ Common ​ paid-in ​ Retained ​ comprehensive ​ Treasury ​ shareholders’ ​ noncontrolling ​ ​ stock ​ capital ​ earnings ​ loss ​ stock ​ equity ​ interests Balance as of December 30, 2023 ​ $ 27,900 ​ $ — ​ $ 2,643,606 ​ $ ( 273,236 ) ​ $ ( 1,043,990 ) ​ $ 1,354,280 ​ $ 62,792 Net earnings ​ — ​ — ​ 87,822 ​ — ​ — ​ 87,822 ​ 607 Other comprehensive loss ​ — ​ — ​ — ​ ( 21,975 ) ​ — ​ ( 21,975 ) ​ ( 157 ) Cash dividends declared ($ 0.60 per share) ​ — ​ — ​ ( 12,113 ) ​ — ​ — ​ ( 12,113 ) ​ — Purchase of redeemable noncontrolling interests ​ ​ — ​ ​ ( 147 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 147 ) ​ ​ ( 17,598 ) Dividends to redeemable noncontrolling interests ​ — ​ — ​ — ​ — ​ — ​ — ​ ( 664 ) Repurchases of common stock; 96,224 shares acquired ​ — ​ 21,074 ​ — ​ — ​ ( 21,124 ) ​ ( 50 ) ​ — Stock option and incentive plans ​ — ​ ​ ( 15,259 ) ​ ​ — ​ ​ — ​ ​ 16,733 ​ ​ 1,474 ​ ​ — Balance as of March 30, 2024 ​ $ 27,900 ​ $ 5,668 ​ $ 2,719,315 ​ $ ( 295,211 ) ​ $ ( 1,048,381 ) ​ $ 1,409,291 ​ $ 44,980 Net earnings ​ — ​ — ​ 99,716 ​ — ​ — ​ 99,716 ​ 1,434 Other comprehensive loss ​ — ​ — ​ — ​ ( 18,618 ) ​ — ​ ( 18,618 ) ​ ( 165 ) Cash dividends declared ($ 0.60 per share) ​ — ​ — ​ ( 12,098 ) ​ — ​ — ​ ( 12,098 ) ​ — Repurchases of common stock; 59,186 shares acquired ​ — ​ — ​ — ​ — ​ ( 15,061 ) ​ ( 15,061 ) ​ — Stock option and incentive plans ​ — ​ ( 533 ) ​ — ​ — ​ 8,784 ​ 8,251 ​ — Balance as of June 29, 2024 ​ $ 27,900 ​ $ 5,135 ​ $ 2,806,933 ​ $ ( 313,829 ) ​ $ ( 1,054,658 ) ​ $ 1,471,481 ​ $ 46,249 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ ​ ​ ​ Total ​ Redeemable ​ ​ Common ​ paid-in ​ Retained ​ comprehensive ​ Treasury ​ shareholders’ ​ noncontrolling ​ stock capital earnings loss stock equity ​ interests Balance as of December 31, 2022 ​ $ 27,900 ​ $ — ​ $ 2,593,039 ​ $ ( 274,909 ) ​ $ ( 765,183 ) ​ $ 1,580,847 ​ $ 60,865 Net earnings (loss) ​ — ​ — ​ 74,540 ​ — ​ — ​ 74,540 ​ ( 2,195 ) Other comprehensive income ​ — ​ — ​ — ​ 8,776 ​ — ​ 8,776 ​ 293 Cash dividends declared ($ 0.60 per share) ​ — ​ — ​ ( 12,634 ) ​ — ​ — ​ ( 12,634 ) ​ — Dividends to redeemable noncontrolling interests ​ ​ — ​ — ​ — ​ — ​ — ​ — ​ ( 662 ) Repurchases of common stock; 356,887 shares acquired ​ ​ — ​ — ​ — ​ — ​ ( 111,115 ) ​ ( 111,115 ) ​ — Stock option and incentive plans ​ — ​ ​ — ​ ​ ( 19,317 ) ​ ​ — ​ ​ 19,002 ​ ​ ( 315 ) ​ ​ — Balance as of April 1, 2023 ​ $ 27,900 ​ $ — ​ $ 2,635,628 ​ $ ( 266,133 ) ​ $ ( 857,296 ) ​ $ 1,540,099 ​ $ 58,301 Net earnings (loss) ​ — ​ — ​ 89,376 ​ — ​ — ​ 89,376 ​ ( 578 ) Other comprehensive income ​ — ​ — ​ — ​ 10,531 ​ — ​ 10,531 ​ 345 Cash dividends declared ($ 0.60 per share) ​ — ​ — ​ ( 12,607 ) ​ — ​ — ​ ( 12,607 ) ​ — Repurchases of common stock; 85,300 shares acquired ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 25,132 ) ​ ​ ( 25,132 ) ​ ​ — Stock option and incentive plans ​ — ​ ​ — ​ ​ ( 2,015 ) ​ ​ — ​ ​ 11,972 ​ ​ 9,957 ​ ​ — Balance as of July 1, 2023 ​ $ 27,900 ​ $ — ​ $ 2,710,382 ​ $ ( 255,602 ) ​ $ ( 870,456 ) ​ $ 1,612,224 ​ $ 58,068 See accompanying Notes to Condensed Consolidated Financial Statements. ​ ​ 7 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ (1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Condensed Consolidated Financial Statements The Condensed Consolidated Balance Sheets as of June 29, 2024 and December 30, 2023 and the Condensed Consolidated Statements of Earnings, Comprehensive Income, Cash Flows, and Shareholders’ Equity and Redeemable Noncontrolling Interests for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023 have been prepared by Valmont Industries, Inc. (the “Company”) without audit. In the opinion of the Company’s management, all necessary adjustments, which include normal and recurring adjustments, have been made to present fairly the financial statements as of June 29, 2024 and for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023. The results of operations for the period ended June 29, 2024 are not necessarily indicative of the operating results for the full fiscal year. Inventories Inventories are valued at the lower of cost, determined by the first-in, first-out method, or net realizable value. Finished and manufactured goods inventories include the costs of acquired raw materials and the related factory labor and overhead charges required to convert raw materials to finished and manufactured goods. Inventories as of June 29, 2024 and December 30, 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 29, ​ December 30, ​ ​ 2024 2023 Raw materials and purchased parts ​ $ 233,957 ​ $ 217,134 Work in process ​ 42,716 ​ 37,826 Finished and manufactured goods ​ 356,559 ​ 403,468 Total inventories ​ $ 633,232 ​ $ 658,428 ​ Geographical Markets Earnings before income taxes and equity in loss of nonconsolidated subsidiaries for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ June 29, ​ July 1, ​ ​ 2024 2023 2024 2023 United States ​ $ 94,731 ​ $ 77,066 ​ $ 180,943 ​ $ 108,924 Foreign ​ 37,505 ​ 43,866 ​ 69,730 ​ 117,017 Earnings before income taxes and equity in loss of nonconsolidated subsidiaries ​ $ 132,236 ​ $ 120,932 ​ $ 250,673 ​ $ 225,941 ​ Pension Costs The Company incurs costs in connection with the Delta Pension Plan (“DPP”). The DPP was acquired as part of the Delta PLC acquisition in fiscal 2010 and has no members who are active employees. In order to measure the cost and the related benefit obligation, various assumptions are made including the discount rates used to value the obligation, the expected return on plan assets used to fund the costs, and the estimated future inflation rates. These assumptions are based on historical experience as well as current facts and circumstances. An actuarial analysis is used to measure the cost and liability associated with pension benefits. 8 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ The components of the net periodic pension cost for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ June 29, ​ July 1, ​ ​ 2024 2023 2024 2023 Interest cost ​ $ 5,242 ​ $ 5,414 ​ $ 10,484 ​ $ 10,670 Expected return on plan assets ​ ( 5,591 ) ​ ( 5,477 ) ​ ( 11,183 ) ​ ( 10,794 ) Amortization of prior service costs ​ 127 ​ 124 ​ 254 ​ 246 Amortization of net actuarial loss ​ 381 ​ — ​ 762 ​ — Net periodic pension cost ​ $ 159 ​ $ 61 ​ $ 317 ​ $ 122 ​ Stock Plans The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resources Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. As of June 29, 2024, 1,466,563 shares of common stock remained available for issuance under the plans. Stock options granted under the plans call for the exercise price of each option to equal the closing market price as of the date of the grant. Options vest beginning on the first anniversary of the grant date in equal amounts over three years or on the grant’s fifth-anniversary date. The expiration of grants is seven to ten years from the date of the award. Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant. The Company’s stock-based compensation (included in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Earnings) and associated income tax benefits related to stock options and restricted stock awards for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ June 29, ​ July 1, ​ ​ 2024 2023 2024 2023 Stock-based compensation ​ $ 6,925 ​ $ 11,167 ​ $ 14,108 ​ $ 19,856 Income tax benefits ​ 1,731 ​ 2,792 ​ 3,527 ​ 4,964 ​ Fair Value The Company applies the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 9 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: ● Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. ● Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3: Unobservable inputs for the asset or liability. The categorization within the valuation hierarchy is based on the lowest level input that is significant to the fair value measurement. The following are descriptions of the valuation methodologies used for assets and liabilities measured at fair value. Deferred Compensation Investments: The Company’s deferred compensation investments include mutual funds invested in debt and equity securities held in the Valmont Deferred Compensation Plan. Quoted market prices are available for these securities in an active market. The investments are included in “Other non-current assets” in the Condensed Consolidated Balance Sheets. Derivative Financial Instruments: The fair values of foreign currency, commodity, and cross currency swap derivative contracts are based on valuation models that use market observable inputs including forward and spot prices for commodities and currencies. Mutual Funds: The Company has short-term investments in various mutual funds. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Value ​ Fair Value Measurement Using: ​ ​ June 29, 2024 ​ Level 1 ​ Level 2 ​ Level 3 Deferred compensation investments ​ $ 26,493 ​ $ 26,493 ​ $ — ​ $ — Derivative financial instruments, net ​ ​ ( 1,613 ) ​ ​ — ​ ​ ( 1,613 ) ​ ​ — Cash and cash equivalents—mutual funds ​ ​ 4,425 ​ ​ 4,425 ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Value ​ Fair Value Measurement Using: ​ ​ December 30, 2023 ​ Level 1 ​ Level 2 ​ Level 3 Deferred compensation investments ​ $ 26,803 ​ $ 26,803 ​ $ — ​ $ — Derivative financial instruments, net ​ ​ 2,860 ​ ​ — ​ ​ 2,860 ​ ​ — Cash and cash equivalents—mutual funds ​ ​ 6,258 ​ ​ 6,258 ​ ​ — ​ ​ — ​ Long-Lived Assets The Company’s other non-financial assets include goodwill and other intangible assets, which are measured at fair value on a non-recurring basis using Level 3 inputs. See Note 5 for further information. Leases The Company’s operating lease right-of-use assets are included in “Other non-current assets” and the corresponding lease obligations are included in “Other accrued expenses” and “Operating lease liabilities” in the Condensed Consolidated Balance Sheets. Comprehensive Income (Loss) Comprehensive income (loss) includes net earnings, foreign currency translation adjustments, certain derivative-related activity, and changes in prior service costs and net actuarial losses from the pension plan. Results of operations for 10 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. Accumulated other comprehensive income (loss) (“AOCI”) consisted of the following as of June 29, 2024 and December 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 29, ​ December 30, ​ ​ 2024 2023 Foreign currency translation adjustments ​ $ ( 276,554 ) ​ $ ( 236,690 ) Hedging activities ​ ​ 19,498 ​ ​ 20,989 Defined benefit pension plan ​ ​ ( 56,773 ) ​ ​ ( 57,535 ) Accumulated other comprehensive loss ​ $ ( 313,829 ) ​ $ ( 273,236 ) ​ Revenue Recognition The Company determines the appropriate revenue recognition model for contracts by analyzing the type, terms, and conditions of each contract or arrangement with a customer. Contracts with customers for all businesses are fixed-price with sales tax excluded from revenue and do not include variable consideration. Discounts included in contracts with customers, typically early-pay discounts, are recorded as a reduction of net sales in the period in which the sale is recognized. Contract revenues are classified as “Product sales” when the performance obligation is related to the manufacture and sale of goods. Contract revenues are classified as “Service sales” when the performance obligation is the performance of a service. Service revenue is primarily related to the Coatings product line and Technology Products and Services product line. Customer acceptance provisions exist only in the design stage of our products (on a limited basis, the Company may agree to other acceptance terms), and acceptance of the design by the customer is required before manufacturing commences and the product is manufactured and delivered to the customer. The Company is generally not entitled to any compensation solely based on the design of the product and does not recognize this service as a separate performance obligation, therefore, no revenue is recognized for design services. No general rights of return exist for customers once the product has been delivered, and the Company establishes provisions for estimated warranties. Shipping and handling costs associated with sales are recorded within cost of sales. The Company elected to use the practical expedient of treating freight as a fulfillment obligation instead of a separate performance obligation and ratably recognize freight expense as the structure is being manufactured when the revenue from the associated customer contract is being recognized over time. With the exception of the Transmission, Distribution, and Substation (“TD&S”), Solar, and Telecommunications product lines, the Company’s inventory is interchangeable for a variety of each segment’s customers. The Company has elected not to disclose the partially satisfied performance obligation at the end of the period when the contract has an original expected duration of one year or less. In addition, the Company does not adjust the amount of consideration to be received in a contract for any significant financing component if payment is expected within one year of transfer of control of goods or services. Most of the Company’s customers are invoiced upon shipment or delivery of the goods to the customer’s specified location. As revenue is recognized over time, contract assets are recorded, and such contract assets are relieved when the customer is invoiced. As of June 29, 2024 and December 30, 2023, total contract assets were $ 191,846 and $ 175,721 , respectively, and were recorded as “Contract assets” in the Condensed Consolidated Balance Sheets. Certain customers are also invoiced by advanced billings or progress billings. When progress on performance obligations is less than the amount the customer has been billed, a contract liability is recognized. As of June 29, 2024 and December 30, 2023, total contract liabilities were $ 68,811 and $ 70,978 , respectively, and were recorded as “Contract liabilities” in the Condensed Consolidated Balance Sheets. Additional details are as follows: ● During the thirteen and twenty-six weeks ended June 29, 2024, the Company recognized $ 7,230 and $ 41,509 of revenue that was included in the total contract liability as of December 30, 2023, respectively. The revenue recognized was due to applying advance payments received for performance obligations completed during the period. 11 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ ● During the thirteen and twenty-six weeks ended July 1, 2023, the Company recognized $ 41,217 and $ 100,157 of revenue that was included in the total contract liability as of December 31, 2022, respectively. The revenue recognized was due to applying advance payments received for performance obligations completed during the period. ● As of June 29, 2024, the Company had no material remaining performance obligations on contracts with an expected duration of one year or more. Segment and Product Line Revenue Recognition Infrastructure Segment Steel and concrete structures within the TD&S and Telecommunications product lines are engineered to customer specifications resulting in limited ability to sell the structures to a different customer if an order is canceled after production commences. The continuous transfer of control to the customer is evidenced either by contractual termination clauses or by rights to payment for work performed to date plus a reasonable profit as the products do not have an alternative use to the Company. Since control is transferred over time, revenue is recognized based on the extent of progress toward completion of the performance obligation. The selection of the method to measure progress toward completion requires judgment. For the structures manufactured within the TD&S and Telecommunications product lines, the Company generally recognizes revenue on an inputs basis, using total production hours incurred to date for each order as a percentage of total hours estimated to complete the order. The completion percentage is applied to the order’s total revenue and total estimated costs to determine reported revenue, cost of sales, and gross profit. Production of an order, once started, is typically completed within three months. Depending on the product sold, revenue from the Solar product line is recognized upon shipment or delivery of goods to the customer depending on contract terms, or by using an inputs method, based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. External sales agents are used in certain TD&S product line sales and the Company has chosen to expense estimated commissions owed to third parties by recognizing them proportionately as the goods are manufactured. For the structures sold for the Lighting and Transportation product line and for the majority of Telecommunications products, revenue is recognized upon shipment or delivery of goods to the customer depending on contract terms, which is the same point in time that the customer is billed. Some large regional customers have unique product specifications for telecommunication structures. When the customer contract includes a cancellation clause that would require them to pay for work completed plus a reasonable margin if an order was canceled, revenue is recognized over time based on hours worked as a percent of total estimated hours to complete production. The Coatings product line revenues are derived by providing coating services to customers’ products, which include galvanizing, anodizing, and powder coating. Revenue is recognized once the service has been performed and the goods are ready to be picked up or delivered to the customer, which is the same time that the customer is billed. Agriculture Segment Revenue recognition from the manufacture of irrigation equipment and related parts and services (including tubular products for industrial customers) is generally upon shipment of the goods to the customer which is the same point in time that the customer is billed. The remote monitoring subscription services recognized as part of the Technology Products and Services product line are primarily billed annually and revenue is recognized on a straight-line basis over the contract period. The disaggregation of revenue by product line is disclosed in Note 9. Supplier Finance Program During fiscal 2019, the Company entered into an agreement with a third-party financial institution to facilitate a supplier finance program that allows qualifying suppliers to sell their receivables from the Company to the financial institution. These participating suppliers negotiate their outstanding receivable arrangements directly with the financial 12 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ institution and the Company’s rights and obligations to suppliers are not impacted. The Company has no economic interest in a supplier’s decision to enter into these agreements. Once a qualifying supplier elects to participate in the supplier finance program and reaches an agreement with a financial institution, they elect which individual Company invoices they sell to the financial institution. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers to the financial institution on the invoice due date, regardless of whether the individual invoice is sold by the supplier to the financial institution. The financial institution pays the supplier on the invoice due date for any invoices that were not previously sold under the supplier finance program. The invoice amounts and scheduled payment terms are not impacted by the suppliers’ decisions to sell amounts under these arrangements. The payment of these obligations is included in “Net cash flows from operating activities” in the Condensed Consolidated Statements of Cash Flows. Included in “Accounts payable” in the Condensed Consolidated Balance Sheets as of June 29, 2024 and December 30, 2023 were $ 41,509 and $ 41,916 of outstanding payment obligations, respectively, that were sold to the financial institution under the Company’s supplier finance program. ​ ​ ​ ​ ​ Confirmed obligations outstanding as of December 30, 2023 ​ $ 41,916 Invoices confirmed during the period ​ ​ 108,504 Confirmed invoices paid during the period ​ ( 108,911 ) Confirmed obligations outstanding as of June 29, 2024 ​ $ 41,509 ​ Redeemable Noncontrolling Interests Subsequent to the issuance of the Company’s Consolidated Financial Statements as of and for the period ended July 1, 2023, the Company identified an error in the presentation of “Noncontrolling interests in consolidated subsidiaries” of $ 60,865 as of December 31, 2022, $ 58,301 as of April 1, 2023, and $ 58,068 as of July 1, 2023 that has been corrected in the current period. Such amounts were previously reported within “Total shareholders’ equity” and have been revised in the July 1, 2023 Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interests to be presented as “Redeemable noncontrolling interests” outside of “Total shareholders’ equity”. The Company has evaluated the materiality of this error based on an analysis of quantitative and qualitative factors and concluded it was not material to the prior period financial statements, individually or in aggregate. Noncontrolling interests with redemption features that are not solely within the Company’s control are considered redeemable noncontrolling interests. The Company has redeemable noncontrolling interests in certain entities. The seller can require the Company to purchase their remaining ownership, known as a put right, for an amount and on a date specified in the applicable operating agreement. Likewise, the Company can require the seller to sell the Company their remaining ownership based on the same amount and timing, known as a call option. As a result of these redemption features, the Company records the noncontrolling interests as redeemable and classifies the balances in temporary equity in the Condensed Consolidated Balance Sheets initially at its acquisition-date fair value. The Company adjusts the redeemable noncontrolling interests each reporting period for the net income (loss) attributable to the noncontrolling interests and any redemption value adjustments. The redeemable noncontrolling interest is accreted to the future redemption value using the effective interest method up to the date on which the put right becomes effective. Any accretion adjustment in the current reporting period of the redeemable noncontrolling interest is offset against retained earnings and impacts earnings used in the calculation of earnings per share in the reporting period. As of June 29, 2024 and December 30, 2023, the redeemable noncontrolling interests were $ 46,249 and $ 62,792 , respectively. The ultimate amount paid for the redeemable noncontrolling interests could be significantly different because the redemption amounts depend on the future results of the operations of the businesses. 13 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ Treasury Stock Repurchased shares are recorded as “Treasury stock” and result in a reduction of “Shareholders’ equity” in the Condensed Consolidated Balance Sheets. When treasury shares are re-issued, the Company uses the last-in, first-out method, and the difference between the repurchase cost and re-issuance price is charged or credited to “Additional paid-in capital”. In May 2014, the Company announced a capital allocation philosophy that covered a share repurchase program. Specifically, the Board of Directors at that time authorized the purchase of up to $ 500,000 of the Company’s outstanding common stock from time to time over twelve months at prevailing market prices, through open market or privately negotiated transactions. In February 2015 and again in October 2018, the Board of Directors authorized an additional purchase of up to $ 250,000 of the Company’s outstanding common stock with no stated expiration date. In February 2023, the Board of Directors increased the amount remaining under the program by an additional $ 400,000 , with no stated expiration date, bringing the total authorization to $ 1,400,000 . As of June 29, 2024, the Company has acquired 8,051,134 shares for $ 1,278,832 under this share repurchase program. In November 2023, the Company entered into an accelerated purchase agreement to repurchase $ 120,000 of the Company’s outstanding common stock (“November 2023 ASR”) with CitiBank, N.A. as counterparty. The November 2023 ASR was entered into under the Company’s previously announced share repurchase program described above. The Company pre-paid $ 120,000 in the fourth quarter of fiscal 2023 and received an initial delivery of 438,917 shares of common stock. The agreement was settled with the delivery of an additional 96,224 shares of common stock in the first quarter of fiscal 2024. The total number of shares ultimately delivered under the November 2023 ASR, and therefore the average purchase price paid per share of $ 224.24 , was determined based on the volume-weighted average market price of the Company’s common stock during the term of the agreement, less a discount. Recently Issued Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which improves the disclosures about reportable segments including more detailed information about a reportable segment’s expenses. This guidance will be effective for the fiscal year ending December 28, 2024 and the interim periods thereafter, with early adoption permitted. The guidance will have no effect on the Company’s results of operations as the changes are primarily disclosure related. The Company has elected not to early adopt. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which enhances the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. This guidance will be effective on a prospective basis for the fiscal year ending December 27, 2025, with early adoption permitted. The guidance will have no effect on the Company’s results of operations as the changes are primarily disclosure related. The Company has elected not to early adopt. ​ (2) ACQUISITIONS Acquisition of Business On August 31, 2023, the Company acquired HR Products for $ 58,044 Australian dollars ($ 37,302 United States (“U.S.”) dollars) in cash (net of cash acquired) and subject to working capital adjustments. Of this amount, $ 7,200 Australian dollars ($ 4,626 U.S. dollars) was withheld by the Company at closing as a retention fund, to be settled in two equal payments at 12 and 24 months from the acquisition date for contingencies and disagreements. HR Products provides a broad range of irrigation products to serve the agriculture and landscaping industries and its operations are reported in the Agriculture segment. The acquisition strengthens the Company’s value proposition to customers in the key agriculture market of Australia by expanding its geographic footprint and accelerating its aftermarket parts presence. The customer relationships will be amortized over 13 years . The amount allocated to goodwill is attributable to anticipated synergies and other intangibles that do not qualify for separate recognition and is not deductible for tax purposes. The Company is currently completing its fair value assessment and expects to finalize the purchase price allocation by the third quarter of fiscal 2024. 14 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed of HR Products as of the date of acquisition: ​ ​ ​ ​ ​ ​ August 31, ​ ​ 2023 Current assets ​ $ 24,153 Property, plant, and equipment ​ 1,397 Goodwill ​ 9,912 Customer relationships ​ ​ 11,503 Other non-current assets ​ 3,997 Total fair value of assets acquired ​ ​ 50,962 Current liabilities ​ 4,183 Deferred income taxes ​ 3,450 Operating lease liabilities ​ 2,792 Total fair value of liabilities assumed ​ ​ 10,425 Net assets acquired ​ $ 40,537 ​ Proforma disclosures were omitted for this acquisition as it does not have a significant impact on the Company’s financial results. Acquisition-related costs incurred for the above acquisition were insignificant for all periods presented. Acquisitions of Redeemable Noncontrolling Interests In the first quarter of fiscal 2024, the Company acquired approximately 9 % of ConcealFab for $ 7,227 and acquired the remaining portion of Valmont Substations, LLC for $ 10,518 . These transactions were for the acquisitions of portions of the remaining shares of consolidated subsidiaries with no changes in control. (3) DIVESTITURES On April 30, 2023, the Company completed the sale of Torrent Engineering and Equipment, an integrator of prepackaged pump stations in Indiana, reported in the Agriculture segment, for net proceeds of $ 6,369 . In the second quarter of fiscal 2023, a pre-tax gain of $ 2,994 was reported in “ Other income (expenses) ” in the Condensed Consolidated Statements of Earnings. (4) REALIGNMENT ACTIVITIES During the third quarter of fiscal 2023, management initiated a plan to streamline segment support across the Company and reduce costs through an organizational realignment program (the “Realignment Program”). The Realignment Program provided for a reduction in force through a voluntary early retirement program and other headcount reduction actions, which were completed as of December 30, 2023. The Board of Directors authorized the incurrence of cash charges up to $ 36,000 in connection with the Realignment Program. During the fiscal year ended December 30, 2023, the Company recorded the following cumulative pre-tax expenses for the Realignment Program: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ Agriculture ​ Corporate ​ Total Severance and other employee benefit costs ​ $ 17,260 ​ $ 9,101 ​ $ 8,849 ​ $ 35,210 ​ 15 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ Changes in liabilities recorded for the Realignment Program were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of Recognized Costs Paid or Balance as of ​ ​ December 30, ​ Realignment ​ Otherwise ​ June 29, ​ ​ 2023 ​ Expense ​ Settled ​ 2024 Severance and other employee benefit costs ​ $ 12,514 $ — ​ $ ( 10,625 ) ​ $ 1,889 ​ (5) GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The carrying amount of goodwill by segment as of June 29, 2024 and December 30, 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure Agriculture Total Gross balance as of December 30, 2023 ​ $ 478,663 ​ $ 323,683 ​ $ 802,346 Accumulated impairment losses ​ ( 49,382 ) ​ ( 120,000 ) ​ ( 169,382 ) Balance as of December 30, 2023 ​ 429,281 ​ 203,683 ​ ​ 632,964 Acquisition measurement period adjustment ​ — ​ 735 ​ 735 Foreign currency translation ​ ( 2,801 ) ​ ( 666 ) ​ ( 3,467 ) Balance as of June 29, 2024 ​ $ 426,480 ​ $ 203,752 ​ $ 630,232 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure Agriculture Total Gross balance as of June 29, 2024 ​ $ 475,862 ​ $ 323,752 ​ $ 799,614 Accumulated impairment losses ​ ​ ( 49,382 ) ​ ​ ( 120,000 ) ​ ​ ( 169,382 ) Balance as of June 29, 2024 ​ $ 426,480 ​ $ 203,752 ​ $ 630,232 ​ Other Intangible Assets The components of other intangible assets as of June 29, 2024 and December 30, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 29, 2024 December 30, 2023 ​ ​ Gross ​ ​ ​ Gross ​ ​ ​ ​ ​ Carrying ​ Accumulated Carrying ​ Accumulated ​ Amount Amortization Amount Amortization Amortizing intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships ​ $ 232,263 ​ $ 162,853 ​ $ 233,852 ​ $ 157,873 Patents & proprietary technology ​ 59,273 ​ 46,158 ​ 59,311 ​ 45,416 Trade names ​ 2,870 ​ ​ 1,265 ​ 2,870 ​ 1,056 Other ​ 4,410 ​ 4,263 ​ 4,787 ​ 4,538 Non-amortizing intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade names ​ ​ 58,250 ​ ​ — ​ ​ 58,750 ​ ​ — ​ ​ $ 357,066 ​ $ 214,539 ​ $ 359,570 ​ $ 208,883 ​ Amortizing intangible assets carry a remaining weighted-average life of approximately four years . Amortization expenses were $ 3,356 and $ 7,071 for the thirteen and twenty-six weeks ended June 29, 2024, respectively, and $ 5,225 and $ 10,415 for the thirteen and twenty-six weeks ended July 1, 2023, respectively. Based on amortizing intangible assets recognized in the Condensed Consolidated Balance Sheets as of June 29, 2024, amortization expense is estimated to average $ 10,164 for each of the next five fiscal years. 16 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ (6) CASH FLOW SUPPLEMENTARY INFORMATION The Company considers all highly liquid temporary cash investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash payments for interest and income taxes (net of refunds) for the twenty-six weeks ended June 29, 2024 and July 1, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ ​ 2024 2023 Interest ​ $ 31,528 ​ $ 27,387 Income taxes ​ 41,071 ​ 42,504 ​ (7) EARNINGS PER SHARE The following table provides a reconciliation between the net earnings attributable to Valmont Industries, Inc. and weighted average share amounts used to compute both basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 29, ​ July 1, ​ June 29, ​ July 1, ​ ​ 2024 2023 2024 2023 Net earnings attributable to Valmont Industries, Inc. ​ $ 99,716 ​ $ 89,376 ​ $ 187,538 ​ $ 163,916 Weighted average shares outstanding (000s): ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 20,175 ​ ​ 21,029 ​ ​ 20,182 ​ ​ 21,149 Dilutive effect of various stock awards ​ ​ 117 ​ ​ 200 ​ ​ 125 ​ ​ 221 Diluted ​ ​ 20,292 ​ ​ 21,229 ​ ​ 20,307 ​ ​ 21,370 Net earnings attributable to Valmont Industries, Inc. per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 4.94 ​ $ 4.25 ​ $ 9.29 ​ $ 7.75 Dilutive effect of various stock awards ​ ​ ( 0.03 ) ​ ​ ( 0.04 ) ​ ​ ( 0.05 ) ​ ​ ( 0.08 ) Diluted ​ $ 4.91 ​ $ 4.21 ​ $ 9.24 ​ $ 7.67 ​ As of June 29, 2024 and July 1, 2023, there were 56,261 and 40,564 outstanding stock options with exercise prices exceeding the average market price of common stock during the applicable period excluded from the computation of diluted earnings per share, respectively. (8) DERIVATIVE FINANCIAL INSTRUMENTS The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency denominated transactions and investments in foreign subsidiaries. Depending on the circumstances, the Company may manage these risks by utilizing derivative financial instruments. Some derivative financial instruments are marked to market and recorded in the Company’s Condensed Consolidated Statements of Earnings, while others may be accounted for as fair value, cash flow, or net investment hedges. Derivative financial instruments have credit and market risk. The Company manages these risks of derivative instruments by monitoring limits as to the types and degree of risk that can be taken and by entering into transactions with counterparties who are recognized, stable multinational banks. Any gains or losses from net investment hedge activities remain in AOCI until the sale or substantially complete liquidation of the related subsidiaries. 17 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ The fair value of derivative instruments as of June 29, 2024 and December 30, 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated ​ June 29, ​ December 30, Derivatives designated as hedging instruments: Balance Sheets location ​ 2024 ​ 2023 Commodity contracts ​ Prepaid expenses and other current assets ​ $ 526 ​ $ 2,520 Commodity contracts ​ Other accrued expenses ​ ​ ( 2,580 ) ​ ​ ( 1,586 ) Cross currency swap contracts Prepaid expenses and other current assets ​ ​ 441 ​ 1,938 Cross currency swap contracts Other accrued expenses ​ ​ — ​ ( 12 ) ​ ​ ​ ​ $ ( 1,613 ) ​ $ 2,860 ​ Gains (losses) on derivatives recognized in the Condensed Consolidated Statements of Earnings for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ Statements of Earnings ​ June 29, ​ July 1, ​ June 29, ​ July 1, Derivatives designated as hedging instruments: ​ location ​ 2024 2023 2024 2023 Commodity contracts ​ Product cost of sales ​ $ ( 397 ) ​ $ ( 1,078 ) ​ $ 559 ​ $ ( 5,063 ) Foreign currency forward contracts ​ Other income (expenses) ​ ​ — ​ 80 ​ ​ — ​ 177 Interest rate hedge amortization ​ Interest expense ​ ​ ( 16 ) ​ ( 16 ) ​ ​ ( 32 ) ​ ( 32 ) Cross currency swap contracts ​ Interest expense ​ ​ 306 ​ 449 ​ ​ 686 ​ 895 ​ ​ ​ ​ $ ( 107 ) ​ $ ( 565 ) ​ $ 1,213 ​ $ ( 4,023 ) ​ Cash Flow Hedges The Company enters into commodity forward, swap, and option contracts that qualify as cash flow hedges of the variability in cash flows attributable to future purchases. The gain (loss) realized upon settlement for each will be recorded in “Product cost of sales” in the Condensed Consolidated Statements of Earnings in the period consumed. Notional amounts, purchase quantities, and maturity dates of these contracts as of June 29, 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ Total ​ ​ Commodity Type ​ Amount ​ Purchase Quantity ​ Maturity Dates Hot-rolled coil steel ​ $ 22,178 ​ 26,500 short tons June 2024 to December 2024 Natural gas ​ ​ 2,747 ​ 639,825 MMBtu ​ June 2024 to March 2026 Diesel fuel ​ ​ 689 ​ 2,898,000 gallons ​ June 2024 to December 2025 ​ Net Investment Hedges In order to mitigate foreign currency risk on the Company’s Euro investments and to reduce interest expense, the Company enters into fixed-for-fixed cross currency swaps (“CCS”), swapping U.S. dollar principal and interest payments on a portion of its 5.00 % senior unsecured notes due in 2044 for foreign-currency‑denominated payments. Interest is exchanged twice per year on April 1 and October 1. The Company designated the initial full notional amounts as hedges of the net investment in certain European subsidiaries under the spot method, with all changes in the fair value of the CCS that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) recorded as cumulative foreign currency translation within AOCI. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS. 18 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ Key terms of the CCS net investment hedges as of June 29, 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ ​ ​ Swapped ​ Set Settlement Currency ​ Amount ​ Termination Date ​ Interest Rate ​ Amount Euro ​ $ 80,000 ​ April 1, 2029 3.461 % ​ € 74,509 ​ In the first quarter of fiscal 2024, a Euro net investment hedge entered into in fiscal 2019 was early settled and the Company received proceeds of $ 2,711 , which will remain in AOCI until either the sale or substantially complete liquidation of the related subsidiaries. ​ (9) BUSINESS SEGMENTS & RELATED REVENUE INFORMATION The Company has two reportable segments based on its management structure. Each segment is global with a manager responsible for operational performance and the 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. 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, solar, lighting and transportation, and telecommunications, along with coatings services to protect metal products. Agriculture : This segment consists of the manufacture of center pivot and linear irrigation equipment components for agricultural markets, including aftermarket parts and tubular products, and advanced technology solutions for precision agriculture. The Company evaluates the performance of its reportable segments based on operating income and return on invested capital. The Company’s operating income for segment purposes excludes unallocated corporate general and administrative expenses, interest expenses, non-operating income and deductions, and income taxes. Summary by Business Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 29, July 1, June 29, July 1, ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 SALES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ $ 762,742 ​ $ 770,595 ​ $ 1,486,356 ​ $ 1,506,701 Agriculture ​ 281,703 ​ 279,933 ​ 540,438 ​ 612,096 Total sales ​ 1,044,445 ​ 1,050,528 ​ 2,026,794 ​ 2,118,797 INTERSEGMENT SALES: ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ ( 2,312 ) ​ ( 2,437 ) ​ ( 5,193 ) ​ ( 6,403 ) Agriculture ​ ( 2,396 ) ​ ( 1,795 ) ​ ( 4,036 ) ​ ( 3,617 ) Total intersegment sales ​ ( 4,708 ) ​ ( 4,232 ) ​ ( 9,229 ) ​ ( 10,020 ) NET SALES: ​ ​ ​ ​ Infrastructure ​ 760,430 ​ 768,158 ​ 1,481,163 ​ 1,500,298 Agriculture ​ 279,307 ​ 278,138 ​ 536,402 ​ 608,479 Total net sales ​ $ 1,039,737 ​ $ 1,046,296 ​ $ 2,017,565 ​ $ 2,108,777 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING INCOME (LOSS): ​ ​ ​ ​ Infrastructure ​ $ 133,581 ​ $ 115,950 ​ $ 251,445 ​ $ 210,302 Agriculture ​ 39,971 ​ 49,251 ​ 80,944 ​ 102,574 Corporate ​ ( 26,244 ) ​ ( 31,468 ) ​ ( 53,528 ) ​ ( 60,677 ) Total operating income ​ $ 147,308 ​ $ 133,733 ​ $ 278,861 ​ $ 252,199 ​ 19 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended June 29, 2024 ​ ​ Infrastructure Agriculture ​ Intersegment Consolidated Geographical market: ​ ​ ​ ​ ​ ​ North America ​ $ 582,143 ​ $ 161,310 ​ $ ( 4,686 ) ​ $ 738,767 International ​ 180,599 ​ 120,393 ​ ( 22 ) ​ 300,970 Total sales ​ $ 762,742 ​ $ 281,703 ​ $ ( 4,708 ) ​ $ 1,039,737 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product line: ​ ​ ​ ​ Transmission, Distribution, and Substation ​ $ 323,087 ​ $ — ​ $ — ​ $ 323,087 Lighting and Transportation ​ 243,562 ​ — ​ — ​ 243,562 Coatings ​ 91,574 ​ — ​ ( 2,294 ) ​ 89,280 Telecommunications ​ 58,400 ​ — ​ — ​ 58,400 Solar ​ 46,119 ​ — ​ ( 18 ) ​ 46,101 Irrigation Equipment and Parts ​ — ​ 254,310 ​ ( 2,396 ) ​ 251,914 Technology Products and Services ​ — ​ 27,393 ​ — ​ 27,393 Total sales ​ $ 762,742 ​ $ 281,703 ​ $ ( 4,708 ) ​ $ 1,039,737 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twenty-six weeks ended June 29, 2024 ​ ​ Infrastructure Agriculture Intersegment Consolidated Geographical market: ​ ​ ​ ​ ​ North America ​ $ 1,150,715 ​ $ 321,225 ​ $ ( 9,152 ) ​ $ 1,462,788 International ​ 335,641 ​ 219,213 ​ ( 77 ) ​ 554,777 Total sales ​ $ 1,486,356 ​ $ 540,438 ​ $ ( 9,229 ) ​ $ 2,017,565 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product line: ​ ​ ​ ​ Transmission, Distribution, and Substation ​ $ 648,343 ​ $ — ​ $ — ​ $ 648,343 Lighting and Transportation ​ 465,658 ​ — ​ — ​ 465,658 Coatings ​ 178,664 ​ — ​ ( 5,120 ) ​ 173,544 Telecommunications ​ 112,361 ​ — ​ — ​ 112,361 Solar ​ 81,330 ​ — ​ ( 73 ) ​ 81,257 Irrigation Equipment and Parts ​ — ​ 487,430 ​ ( 4,036 ) ​ 483,394 Technology Products and Services ​ — ​ 53,008 ​ — ​ 53,008 Total sales ​ $ 1,486,356 ​ $ 540,438 ​ $ ( 9,229 ) ​ $ 2,017,565 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended July 1, 2023 ​ ​ Infrastructure Agriculture Intersegment Consolidated Geographical market: ​ ​ ​ ​ ​ North America ​ $ 587,313 ​ $ 140,981 ​ $ ( 3,613 ) ​ $ 724,681 International ​ 183,282 ​ 138,952 ​ ( 619 ) ​ 321,615 Total sales ​ $ 770,595 ​ $ 279,933 ​ $ ( 4,232 ) ​ $ 1,046,296 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product line: ​ ​ ​ ​ Transmission, Distribution, and Substation ​ $ 314,307 ​ $ — ​ $ — ​ $ 314,307 Lighting and Transportation ​ 246,123 ​ — ​ — ​ 246,123 Coatings ​ 91,120 ​ — ​ ( 1,818 ) ​ 89,302 Telecommunications ​ 67,738 ​ — ​ — ​ 67,738 Solar ​ 51,307 ​ — ​ ( 619 ) ​ 50,688 Irrigation Equipment and Parts ​ — ​ 252,457 ​ ( 1,795 ) ​ 250,662 Technology Products and Services ​ — ​ 27,476 ​ — ​ 27,476 Total sales ​ $ 770,595 ​ $ 279,933 ​ $ ( 4,232 ) ​ $ 1,046,296 ​ 20 Table of Contents VALMONT INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twenty-six weeks ended July 1, 2023 ​ ​ Infrastructure Agriculture Intersegment Consolidated Geographical market: ​ ​ ​ ​ ​ North America ​ $ 1,171,396 ​ $ 323,850 ​ $ ( 8,987 ) ​ $ 1,486,259 International ​ 335,305 ​ 288,246 ​ ( 1,033 ) ​ 622,518 Total sales ​ $ 1,506,701 ​ $ 612,096 ​ $ ( 10,020 ) ​ $ 2,108,777 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product line: ​ ​ ​ ​ Transmission, Distribution, and Substation ​ $ 629,127 ​ $ — ​ $ — ​ $ 629,127 Lighting and Transportation ​ 475,259 ​ — ​ — ​ 475,259 Coatings ​ 181,234 ​ — ​ ( 5,370 ) ​ 175,864 Telecommunications ​ 135,875 ​ — ​ — ​ 135,875 Solar ​ 85,206 ​ — ​ ( 1,033 ) ​ 84,173 Irrigation Equipment and Parts ​ — ​ 551,638 ​ ( 3,617 ) ​ 548,021 Technology Products and Services ​ — ​ 60,458 ​ — ​ 60,458 Total sales ​ $ 1,506,701 ​ $ 612,096 ​ $ ( 10,020 ) ​ $ 2,108,777 ​ A breakdown by segment of revenue recognized over time and revenue recognized at a point in time for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended June 29, 2024 Twenty-six weeks ended June 29, 2024 ​ Point in Time ​ Over Time ​ Total Point in Time ​ Over Time ​ Total Infrastructure ​ $ 430,252 ​ $ 330,178 ​ $ 760,430 ​ $ 820,187 ​ $ 660,976 ​ $ 1,481,163 Agriculture ​ 271,011 ​ ​ 8,296 ​ 279,307 ​ 521,771 ​ ​ 14,631 ​ 536,402 Total net sales ​ $ 701,263 ​ $ 338,474 ​ $ 1,039,737 ​ $ 1,341,958 ​ $ 675,607 ​ $ 2,017,565 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended July 1, 2023 ​ Twenty-six weeks ended July 1, 2023 ​ ​ Point in Time Over Time Total ​ Point in Time Over Time Total Infrastructure ​ $ 451,885 ​ $ 316,273 ​ $ 768,158 ​ $ 863,102 ​ $ 637,196 ​ $ 1,500,298 Agriculture ​ 270,811 ​ ​ 7,327 ​ 278,138 ​ 595,017 ​ ​ 13,462 ​ 608,479 Total net sales ​ $ 722,696 ​ $ 323,600 ​ $ 1,046,296 ​ $ 1,458,119 ​ $ 650,658 ​ $ 2,108,777 ​ ​ ​ ​ 21 Table of Contents