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Item 1A. Risk Factors

2025-02-25 compared with 2024-02-28 · 243 added, 228 removed, 20 unchanged (96% of the section changed)

1 unchanged sentence

Economic and Business Risks

The ultimate consumers of our products operate in cyclical industries that have been subject to significant downturns which have adversely impacted our sales in the past and may again in the future.

Our sales are sensitive to the market conditions present in the industries in which the ultimate consumers of our products operate, which in some cases have been highly cyclical and subject to substantial downturns.

The ultimate consumers of our products operate in cyclical industries, which have experienced significant downturns that have adversely impacted our sales in the past and may do so again in the future.

Our sales are sensitive to market conditions in the industries where the ultimate consumers of our products operate.

In some cases, these industries have been highly cyclical and subject to substantial downturns.

For example, a significant portion of our sales of support structures is to the electric utility industry.

Our sales to the U.S.

electric utility industry were over $1.0 billion in fiscal 2023.

Purchases of our products are deferrable to the extent that utilities may reduce capital expenditures for reasons such as unfavorable regulatory environments, a slow U.S.

In fiscal 2024, our sales to the U.S.

electric utility industry were over $1.0 billion.

Utilities may defer purchases of our products by reducing capital expenditures for reasons such as unfavorable regulatory environments, a slow U.S.

economy, or financing constraints.

In the event of weakness in the demand for utility structures due to reduced or delayed spending for electrical generation and transmission projects, our sales and operating income likely will decrease.

If demand for utility structures weakens due to reduced or delayed spending on electrical generation and transmission projects, our sales and operating income are likely to decrease.

The end-users of our mechanized irrigation equipment are farmers.

Accordingly, economic changes within the agriculture industry, particularly the level of farm income, may affect sales of these products.

From time to time, lower levels of farm income resulted in reduced demand for our mechanized irrigation and tubing products.

Farm income decreases when

commodity prices, acreage planted, crop yields, government subsidies, and export levels decrease.

In addition, weather conditions, which may be exacerbated by climate change, such as extreme drought, may result in reduced availability of water for irrigation and can affect farmers’ buying decisions.

Farm income can also decrease as farmers’ operating costs increase.

Increases in oil and natural gas prices result in higher costs of energy and nitrogen‑based fertilizer (which uses natural gas as a major ingredient).

Furthermore, uncertainty as to future government agricultural policies may cause indecision on the part of farmers.

The status and trend of government farm supports, financing aids, and policies regarding the ability to use water for agricultural irrigation can affect the demand for our irrigation equipment.

In the U.S., certain parts of the country are considering policies that would restrict usage of water for irrigation.

All of these factors may cause farmers to delay capital expenditures for farm equipment.

Consequently, downturns in the agricultural industry will likely result in a slower, and possibly a negative, rate of growth in irrigation equipment and tubing sales.

Economic changes within the agriculture industry, particularly fluctuations in farm income, can impact sales of these products.

Lower levels of farm income have, at times, led to reduced demand for our mechanized irrigation and tubing products.

Farm income decreases when commodity prices, acreage planted, crop yields, government subsidies, and export levels decline.

Additionally, weather conditions—potentially worsened by climate change, such as extreme drought—can limit water availability for irrigation and influence farmers’ purchasing decisions.

Higher energy and nitrogen-based fertilizer costs, driven by rising oil and natural gas prices, increase farmers’ operating expenses.

Furthermore, uncertainty regarding future government agricultural policies may lead to indecision among farmers.

Changes in government farm support programs, financing aids, and irrigation water use policies can influence the demand for our irrigation equipment.

In the U.S., certain regions are considering policies that may restrict water use for irrigation.

These factors could prompt farmers to delay capital expenditures for farm equipment, potentially slowing or even reversing growth in irrigation equipment and tubing sales.

In February 2025, the U.S.

Department of Agriculture (“USDA”) forecasted U.S.

2024 net farm income to be $116.1 billion, a decrease of $39.8 billion (or -25.5%), relative to 2023.

The decrease was primarily related to a decrease in cash receipts from crops and livestock, in addition to a decrease in direct government support payments and higher production expenses.

With this projected decline, net farm income in 2024 would be 1.7% below its 20-year average.

We have also experienced cyclical demand for those of our products that we sell to the wireless communications industry.

Sales of wireless structures and components to wireless carriers and build-to-suit companies that serve the wireless communications industry have historically been cyclical.

These customers may elect to curtail spending on new capacity to focus on cash flow and capital management.

Changes in the competitive structure of the wireless industry, due to industry consolidation or reorganization, may interrupt capital plans of the wireless carriers as they assess their networks.

Due to the cyclical nature of these markets, we have experienced, and in the future we may experience, significant fluctuations in our sales and operating income with respect to a substantial portion of our total product offering, and such fluctuations could be material and adverse to our overall financial condition, results of operations, and liquidity.

Changes in prices and reduced availability of key commodities such as steel, aluminum, zinc, natural gas, and fuel may increase our operating costs and likely reduce our net sales and profitability.

Department of Agriculture forecasted U.S.

net farm income for 2025 to be $180.1 billion, an increase of $41.0 billion (or 29.5%) compared to 2024.

This rise is primarily due to an increase in direct government support payments, partially offset by lower cash receipts from corn and soybeans.

We have also experienced cyclical demand for products sold to the wireless communications industry.

Sales of wireless structures and components to wireless carriers and build-to-suit companies that serve the industry have historically been cyclical.

These customers may reduce spending on new capacity to focus on cash flow and capital management.

Changes in the competitive structure of the wireless industry, due to industry consolidation or reorganization, may disrupt the capital plans of wireless carriers as they reassess their networks.

Due to the cyclical nature of these markets, we have experienced, and may continue to experience, significant fluctuations in sales and operating income for a substantial portion of our product offerings.

These fluctuations could be material and adversely affect our overall financial condition, results of operations, and liquidity.

Changes in prices and reduced availability of key commodities such as steel, aluminum, zinc, natural gas, and fuel may increase our operating costs, likely reducing our net sales and profitability.

Hot-rolled steel coil and other carbon steel products have historically constituted approximately one-third of the cost of manufacturing our products.

We also use large quantities of aluminum for lighting structures and zinc for the galvanization of most of our steel products.

Our facilities use large quantities of natural gas for heating and processing tanks in our galvanizing operations.

We use gasoline and diesel fuel to transport raw materials to our locations and to deliver finished goods to our customers.

We also use large quantities of aluminum for lighting structures and zinc for galvanizing most of our steel products.

Our facilities consume large amounts of natural gas for heating and processing tanks in our galvanizing operations.

Additionally, we use gasoline and diesel fuel to transport raw materials to our locations and deliver finished goods to our customers.

The markets for these commodities can be volatile.

The following factors increase the cost and reduce the availability of these commodities:

● increased demand, which occurs when we and other industries require greater quantities of these commodities, which can result in higher prices and lengthen the time it takes to receive these commodities from suppliers;

● lower production levels of these commodities, due to reduced production capacities or shortages of materials needed to produce these commodities (such as coke and scrap steel for the production of steel) which could result in reduced supplies of these commodities, higher costs for us, and increased lead times;

● increased cost of major inputs, such as scrap steel, coke, iron ore, and energy;

● fluctuations in foreign exchange rates can impact the relative cost of these commodities, which may affect the cost effectiveness of imported materials and limit our options in acquiring these commodities;

● international trade disputes, import duties, tariffs, and quotas since we import some steel and aluminum finished components and products for various product lines.

Increases in the selling prices of our products may not fully recover higher commodity costs and generally lag increases in our costs of these commodities.

Consequently, an increase in these commodities will increase our operating costs and likely reduce our profitability.

Rising steel prices, as seen for example in the first half of fiscal 2021 and the first quarter of fiscal 2023, can put pressure on gross profit margins, especially in our Infrastructure segment product lines.

The elapsed time between the release of a customer’s purchase order and the manufacturing of the product ordered can be several months.

As some of the sales in the Infrastructure segment are fixed-price contracts, rapid increases in steel costs likely will result in lower operating income.

Steel prices for both hot rolled coil and plate can also decrease substantially in a given period, which occurred, for example,

in the fourth quarter of fiscal 2021 and through much of fiscal 2022.

Steel is most significant for our TD&S product line where the cost of steel has been approximately 50% of the net sales, on average.

● increased demand, which occurs when we and other industries require greater quantities of these commodities, which can result in higher prices and longer lead times to receive them from suppliers;

● lower production levels of these commodities, due to reduced production capacities or shortages of materials needed to produce them (such as coke and scrap steel for the production of steel), which could result in reduced supplies, higher costs for us, and increased lead times;

● increased costs of major inputs, such as scrap steel, coke, iron ore, and energy;

● fluctuations in foreign exchange rates, which can impact the relative cost of these commodities, which may affect the cost effectiveness of imported materials and limit our options for acquiring them;

● international trade disputes, import duties, tariffs, and quotas, as we import some steel and aluminum components and products for various product lines.

Increases in the selling prices of our products may not fully recover higher commodity costs and generally lag increases in these costs.

Consequently, an increase in commodity prices will increase our operating costs and likely reduce our profitability.

Rising steel prices, as seen in the first half of fiscal 2021 and the first quarter of fiscal 2023, can put pressure on gross profit margins, especially in our Infrastructure segment product lines.

The time between the release of a customer’s purchase order and the manufacturing of the product can span several months.

Since some sales in the Infrastructure segment are fixed-price contracts, rapid increases in steel costs likely result in lower operating income.

Steel prices for both hot-rolled coil and plate can also decrease substantially in a given period, as occurred in the fourth quarter of fiscal 2021 and much of fiscal 2022.

Steel is particularly significant for our Utility product line, where the cost of steel has accounted for approximately 50% of net sales on average.

Assuming a similar sales mix, a hypothetical 20% change in the price of steel would have affected our net sales in this product line by approximately $110.0 million for the fiscal year ended December 28, 2024.

We believe the volatility over the past several years was due to significant increases in global steel production and rapid changes in consumption (especially in rapidly growing economies, such as China and India).

The speed with which steel suppliers impose price increases on us may prevent us from fully recovering these price increases particularly in our lighting, traffic, and utility businesses.

In the same respect, rapid decreases in the price of steel can also result in reduced operating margins in our utility businesses due to the long production lead times.

Demand for our infrastructure products including coating services is highly dependent upon the overall level of infrastructure spending.

We manufacture and distribute engineered infrastructure products for lighting and traffic, utility, and other specialty applications.

Our Coatings product line serves many construction‑related industries.

Because these products are used primarily in infrastructure construction, sales in these businesses are highly correlated with the level of construction activity, which historically has been cyclical.

Construction activity by our private and government customers is affected by, and can decline because of, a number of factors, including, but not limited to:

● weakness in the general economy, which may negatively affect tax revenues, resulting in reduced funds available for construction;

● interest rate increases, which increase the cost of construction financing;

● adverse weather conditions, which slow construction activity.

We believe recent volatility stems from increased global steel production and shifting consumption patterns, particularly in fast-growing economies like China and India.

The speed with which steel suppliers impose price increases on us may prevent us from fully recovering these price increases, particularly in our L&T and Utility businesses.

Similarly, rapid decreases in steel prices can result in reduced operating margins in our Utility businesses due to long production lead times.

Demand for our infrastructure products, including coating services, is highly dependent on overall infrastructure spending.

We manufacture and distribute engineered infrastructure products for lighting, traffic, utility, and other specialty applications.

Our Coatings product line serves various construction‑related industries.

Because these products are primarily used in infrastructure projects, sales are closely tied to construction activity, which has historically been cyclical.

Several factors can impact construction activity and, consequently, our sales, including:

● weakness in the general economy, which may reduce tax revenues and limit funds available for construction;

● interest rate increases, which raise the cost of construction financing;

● adverse weather conditions, which can delay or slow construction activity.

The current economic uncertainty in the U.S.

and Europe will have some negative effects on our business.

In our L&T product line, some of our lighting structure sales are for new residential and commercial areas.

When residential and commercial construction is weak, we have experienced some negative impact on our light pole sales to these markets.

In a broader sense, in the event of an overall downturn in the economies in Europe, Australia, or China, we may experience decreased demand if our customers in these countries have difficulty securing credit for their purchases from us.

In addition, sales in our Infrastructure segment, particularly our lighting, transportation, and highway safety products, are highly dependent upon federal, state, local, and foreign government spending on infrastructure development projects.

federal funding initiatives, such as the IIJA and the IRA, support multi-year demand for our infrastructure products, although the timing and amount of funding appropriations from these initiatives can be difficult to predict.

The level of spending on such projects may decline for a number of reasons beyond our control, including, among other things, budgetary constraints affecting government spending generally or transportation agencies in particular, decreases in tax revenues, and changes in the political climate, including legislative delays, with respect to infrastructure appropriations.

and Europe may negatively affect our business.

In our L&T product line, some lighting structure sales depend on new residential and commercial developments.

When construction in these sectors slows, our light pole sales may decline.

Additionally, an economic downturn in Europe, Australia, or China could reduce demand if customers in these regions face credit challenges.

Our Infrastructure segment, particularly for lighting, transportation, and highway safety products, relies heavily on government funding.

federal funding initiatives, such as the IIJA and IRA, bolster long-term demand for our products.

However, the timing and distribution of federal infrastructure funds remain uncertain.

Infrastructure spending may also decline due to factors beyond our control, including budget constraints, reduced tax revenues, and legislative delays affecting appropriations.

We are subject to currency fluctuations from our international sales, which can negatively impact our reported earnings.

We sell our products in many countries around the world.

Approximately 31% of our fiscal 2023 sales were in markets outside the U.S.

and are often made in foreign currencies, mainly the Australian dollar, Brazilian real, Canadian dollar, Chinese renminbi, and Euro.

We sell our products in many countries worldwide, with approximately 30% of our fiscal 2024 net sales occurring outside the U.S.

These sales are often conducted in foreign currencies, primarily the Australian dollar, Brazilian real, Chinese renminbi, and euro.

Because our Consolidated Financial Statements are denominated in U.S.

dollars, fluctuations in exchange rates between the U.S.

dollar and other currencies have had and will continue to have an impact on our reported earnings.

dollar weakens or strengthens versus the foreign currencies mentioned above, the result will be an increase or decrease in our reported sales and earnings, respectively.

Currency fluctuations have affected our financial performance in the past and may affect our financial performance in any given period.

In cases where local currencies are strong, the relative cost of goods imported from outside our country of operation becomes lower and affects our ability to compete profitably in our home markets.

We also face risks arising from the imposition of foreign exchange controls and currency devaluations.

Exchange controls may limit our ability to convert foreign currencies into U.S.

dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls.

Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation.

Actions of this nature could have a material adverse effect on our results of operations and financial condition in any given period.

In addition to the discussion above of economic and business risks, please see our further discussion on interest rates, foreign currency exchange rates, and commodity prices included in “Market Risk” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in this report.

dollar and these currencies will continue to impact our reported earnings.

A weaker U.S.

dollar enhances our reported earnings by increasing the value of foreign revenues, whereas a stronger U.S.

dollar has the opposite effect.

Currency fluctuations have affected our financial performance in the past and may continue to do so in future periods.

Additionally, when local currencies strengthen, the cost of imported goods decreases, potentially affecting our ability to compete profitably in domestic markets.

We also face risks from foreign exchange controls and currency devaluations.

Foreign exchange controls may limit currency conversion and restrict our ability to transfer funds from international subsidiaries.

Currency devaluations can reduce the value of funds held in the affected currency.

Such actions could materially and adversely impact our results of operations and financial condition in any given period.

For further discussion on economic and business risks, including interest rates, foreign currency exchange rates, and commodity prices, please refer to the “Market Risk” section within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report.

Legal and Regulatory Risks

We may lose some of our foreign investment or our foreign sales and profits may decline because of risks of doing business in foreign markets, including trade relations and tariffs.

We are an international manufacturing company with operations around the world.

As of December 30, 2023, we operated over 80 manufacturing plants located on six continents and sold our products in more than 100 countries.

In fiscal 2023, approximately 31% of our net sales were either sold in markets or produced by our manufacturing plants outside of North America (primarily the U.S., Canada, and Mexico).

We have operations in geographic markets that have recently experienced political instability, such as the Middle East, and economic uncertainty, such as Western Europe.

Our geographic diversity also requires that we hire, train, and retain competent management for our various local markets, which not only impacts our operational results but also our managing and reporting functions.

Demand for our products and our profitability are affected by trade relations between countries.

We have a significant manufacturing presence in Australia, Brazil, Europe, and China.

These operations are affected by U.S.

trade policies, such as additional tariffs on a broad range of imports and retaliatory actions by foreign countries, most recently China, which have impacted sales of our products.

In addition, there can be a derived indirect impact on demand for our products arising from quotas, restrictions, and retaliatory tariffs (e.g., China tariffs on imported soybeans affect U.S.

net farm income).

We expect that international sales will continue to account for a significant percentage of our net sales in the future.

Accordingly, our foreign business operations and our foreign sales and profits are subject to the following potential risks:

● political and economic instability, resulting in the reduction of the value of, or the loss of, our investment;

● recessions in economies of countries in which we have business operations, decreasing our international sales;

● natural disasters and public health issues in our geographic markets, negatively impacting our workforce, manufacturing capability, and sales;

● difficulties and costs of staffing and managing our foreign operations, increasing our foreign operating costs and decreasing profits, with additional risk to our managing and reporting functions;

● potential violation of local laws or unsanctioned management actions that could affect our profitability or ability to compete in certain markets;

● difficulties in enforcing our rights outside the U.S.

for patents on our manufacturing machinery, poles, and irrigation designs;

● increases in tariffs, export controls, taxes, and other trade barriers reducing our international sales and our profit on these sales;

Our operations are subject to trade policies, tariffs, and trade agreements, and any further changes could adversely affect our business, potentially leading to a decline in sales and profits or the loss of certain foreign investments.

As a global manufacturing company, we operate over 80 manufacturing plants across six continents.

In fiscal 2024, approximately 30% of our net sales came from markets outside of the U.S.

Demand for our products and our profitability are influenced by global trade relations.

We maintain a significant manufacturing presence in Australia, Brazil, Europe, and Mexico—regions affected by U.S.

trade policies, including tariffs on a broad range of imports, as well as retaliatory measures from foreign governments, particularly China.

Recently proposed trade policies and tariffs could increase the cost of goods that we and our suppliers purchase from Canada, China, and Mexico, which would increase our cost of goods sold.

Additionally, our Mexican operations play a vital role in our Infrastructure segment, exporting approximately $230.0 million of steel structures to the U.S.

in fiscal 2024.

Moreover, indirect effects of trade restrictions, such as China’s tariffs on imported soybeans impacting U.S.

farm income, can reduce demand for our products.

On February 3, 2025, U.S.

President Trump announced a one-month delay in imposing tariffs on imports from Mexico.

Then, on February 10, 2025, he announced a 25% tariff on all steel and aluminum imports into the U.S., set to take effect on March 4, 2025.

These actions, along with any future legislation or measures by the U.S.

federal government that restrict trade, such as additional tariffs, trade barriers, or other protectionist or retaliatory measures, could adversely impact our financial results, depending on their timing and duration.

Some of our international operations are in regions with political instability, such as the Middle East, or economic uncertainty, such as Western Europe.

Managing operations across diverse geographic markets also requires hiring, training, and retaining skilled local management, which impacts both operational performance and financial reporting.

We expect international sales to continue representing a significant portion of our net sales.

Consequently, our foreign business operations, sales, and profits will continue to be subject to the following risks:

● political and economic instability, which may reduce the value of or lead to the loss of our investment;

● economic recessions in key markets, potentially decreasing international sales;

● natural disasters and public health crises that could disrupt our workforce, manufacturing operations, and sales;

● increased costs and challenges related to staffing and managing international operations, impacting both profitability and reporting functions;

● potential violations of local laws or unauthorized management actions that could harm our competitive position or financial performance;

● difficulty enforcing intellectual property rights, including patents on our manufacturing machinery, poles, and irrigation designs, outside the U.S.;

● rising tariffs, export controls, taxes, and other trade barriers, which may reduce sales and profitability;

● acts of war or terrorism.

As a result, we may lose some of our foreign investment, or our foreign sales and profits may be materially reduced, because of risks of doing business in foreign markets.

Failure to comply with any applicable anti-corruption legislation could result in fines, criminal penalties, and an adverse effect on our business.

We must comply with all applicable laws, which include the U.S.

Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act, and other anti-corruption laws.

These anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage regardless of whether those practices are legal or culturally expected in a particular jurisdiction.

Recently, there has been a substantial increase in the global enforcement of anti-corruption laws.

Although we have a compliance program in place designed to reduce the likelihood of potential violations of such laws, violations of these laws could result in criminal or civil sanctions and an adverse effect on our reputation, business, and results of operations and financial condition.

We could incur substantial costs as the result of violations of, or liabilities under, environmental laws.

Our facilities and operations are subject to U.S.

and foreign laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, and the cleanup of contamination.

Failure to comply with these laws and regulations, or with the permits required for our operations, could result in fines or civil or criminal sanctions, third-party claims for property damage or personal injury, and investigation and cleanup costs.

Potentially significant expenditures could be required in order to comply with environmental laws that regulators may adopt or impose in the future.

Certain of our facilities have been in operation for many years and, over time, we and other predecessor operators of these facilities have generated, used, handled, and disposed of hazardous and other regulated wastes.

We detected contaminants at some of our present and former sites, principally in connection with historical operations.

In addition, from time to time, we have been named as a potentially responsible party under Superfund or similar state laws.

While we are not aware of any contaminated sites that are not provided for in our Consolidated Financial Statements, including third‑party sites, at which we may have material obligations, the discovery of additional contaminants or the imposition of additional cleanup obligations at these sites could result in significant liability beyond amounts provided for in our Consolidated Financial Statements.

Failure to successfully commercialize or protect our intellectual property rights may have a material adverse effect on our business, financial condition, and operating results.

The successful commercialization and protection of our current and future patents, trademarks, trade secrets, copyrights, unpatented proprietary processes, methods, and other technologies are critical to our business and competitive position.

We rely on our business expertise to commercialize these intellectual property rights.

We rely on patents, trademarks, trade secrets, copyrights, and contractual restrictions to protect our intellectual property rights.

We may fail to apply the appropriate business expertise to successfully commercialize an intellectual property right, particularly with respect to new and developing technologies.

Our intellectual property rights protections could be challenged, invalidated, circumvented, or rendered unenforceable.

Third parties may infringe or misappropriate our intellectual property rights.

We may incur substantial unrecoverable litigation costs in seeking to protect our intellectual property rights.

Failure to successfully commercialize or protect our intellectual property rights may have a material adverse effect on our business, financial condition, and operating results.

We have been and may be subject to or involved in litigation or threatened litigation, the outcome of which may be difficult to predict, and which may be costly to defend, divert management attention, require us to pay damages, or restrict the operation of our business.

From time to time, we have been and may be subject to disputes and litigation, with and without merit, which may be costly, and which may divert the attention of our management and our resources in general, whether or not any dispute actually proceeds to litigation.

The results of complex legal proceedings are difficult to predict.

Moreover, complaints filed against us may not specify the amount of damages that plaintiffs seek, and we therefore may be unable to estimate the possible range of damages that might be incurred should these lawsuits be resolved against us.

Even if we are able to estimate losses related to these actions, the ultimate amount of loss may be materially higher than our estimates.

Any resolution of litigation, or threatened litigation, could involve the payment of damages or expenses by us, which may be significant or involve an agreement with terms that restrict the operation of our business.

Even if any future lawsuits are not resolved against us, the costs of defending such lawsuits may be significant.

These costs may exceed the dollar limits or may not be covered at all by our insurance policies.

Design patent litigation related to guardrails could reduce demand for such products and raise litigation risk.

Certain of our foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety products, primarily for sale in non-U.S.

markets, and license certain design patents related to guardrails to third parties.

There are currently domestic U.S.

product liability lawsuits against some companies that manufacture and install certain guardrail products.

Such lawsuits, some of which have at times involved a foreign subsidiary based on its design patent, could lead to a decline in demand for such products or approval for use of such products by government purchasers both domestically and internationally, and potentially raise litigation risk for foreign subsidiaries and negatively impact their sales and license fees.

As a result, we face the risk of losing foreign investments or experiencing a significant decline in sales and profits due to the challenges of operating in foreign markets.

Failure to comply with anti-corruption laws could result in fines, criminal penalties, and harm to our business.

We are subject to anti-corruption laws, including the U.S.

Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act, and other similar regulations.

These laws generally prohibit companies and their intermediaries from offering improper payments or anything of value to influence government officials or private individuals to gain a business advantage, regardless of local customs or legality.

Global enforcement of anti-corruption laws has increased significantly in recent years.

While we have a compliance program designed to mitigate the risk of violations, any breach of these laws could result in criminal or civil penalties, damage to our reputation, and a negative impact on our business, financial condition, and operations.

We could incur substantial costs due to violations of, or liabilities under, environmental laws.

Our facilities and operations are subject to both U.S.

and international environmental laws and regulations, including those governing air and water pollution, hazardous waste management and disposal, and contamination cleanup.

Noncompliance with these laws or permit requirements could result in fines, civil or criminal penalties, third-party claims for property damage or personal injury, and investigation or remediation costs.

Future regulatory changes may also require significant expenditures for compliance.

Some of our facilities have operated for many years, during which we, and prior operators, have generated, used, handled, and disposed of hazardous materials.

Contaminants have been detected at certain current and former sites, primarily linked to historical operations.

Additionally, we have occasionally been identified as a potentially responsible party under Superfund or similar state laws.

While we are not aware of any contaminated sites not accounted for in our Consolidated Financial Statements for known obligations, unforeseen contamination discoveries or additional cleanup requirements could result in liabilities beyond our current provisions.

Failure to successfully commercialize or protect our intellectual property rights may materially impact our business, financial condition, and operating results.

The commercialization and protection of our patents, trademarks, trade secrets, copyrights, proprietary processes, and other technologies are essential to maintaining our competitive position.

We rely on patents, trademarks, trade secrets, copyrights, and contractual restrictions to safeguard our intellectual property.

However, our ability to successfully commercialize these rights, particularly for emerging technologies, depends on applying the right business strategies.

Our intellectual property protections may be challenged, invalidated, circumvented, or deemed unenforceable.

Third parties may infringe upon or misappropriate our rights, and enforcing them could lead to significant, unrecoverable litigation costs.

Failure to effectively commercialize or protect our intellectual property could materially harm our business, financial condition, and operating results.

We have been, and may continue to be, involved in litigation or threatened litigation, the outcomes of which can be difficult to predict.

These matters can be costly to defend, divert management’s attention, require payment of damages, or restrict our business operations.

From time to time, we face disputes, with and without merit, that may result in significant costs and divert management’s focus and resources, even if the dispute does not proceed to litigation.

The outcomes of complex legal proceedings are inherently uncertain.

Additionally, complaints filed against us may not specify the damages sought, making it challenging to estimate a potential range of liabilities.

Even when we can estimate losses, the actual amounts may be materially higher than expected.

Resolving litigation or threatened litigation could result in substantial payments or agreements that limit our business operations.

Even if we are liable in future lawsuits, the costs of defending such actions may be significant and could exceed the coverage limits or remain uncovered by our insurance policies.

Design patent litigation related to guardrails could reduce demand for these products and increase litigation risk.

Some of our foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety products primarily for non-U.S.

markets and license certain guardrail design patents to third parties.

Currently, U.S.

product liability lawsuits have been filed against companies that manufacture and install specific guardrail products, some of which involve a foreign subsidiary due to its design patent.

This litigation could decrease demand for these products or affect government approvals for their use, both domestically and internationally.

It may also increase litigation risks for our foreign subsidiaries, negatively impacting their sales and licensing revenue.

Liquidity and Capital Resources Risks

We have, from time to time, maintained a substantial amount of outstanding indebtedness, which could impair our ability to operate our business and react to changes in our business, remain in compliance with debt covenants, and make payments on our debt.

As of December 30, 2023, we had $1,138.1 million of total outstanding indebtedness, of which $379.9 million matures within the next five fiscal years.

We also had $421.9 million of capacity to borrow under our revolving credit facility as of December 30, 2023.

We occasionally borrow money to make business acquisitions and repurchase shares.

From time to time, our borrowings have been significant.

Most of our interest‑bearing debt is borrowed by U.S.

Rising interest rates have increased our cost of indebtedness.

Our level of indebtedness could have important consequences, including:

● our ability to satisfy our obligations under our debt agreements could be affected and any failure to comply with the requirements, including significant financial and other restrictive covenants, of any of our debt agreements could result in an event of default under the agreements governing our indebtedness;

● a substantial portion of our cash flow from operations will be required to make interest and principal payments and will not be available for operations, working capital, capital expenditures, expansion, or general corporate and other purposes, including possible future acquisitions that we believe would be beneficial to our business;

● our ability to obtain additional financing in the future may be impaired;

● we may be more highly leveraged than our competitors, which may place us at a competitive disadvantage;

● our flexibility in planning for, or reacting to, changes in our business and industry may be limited;

● our degree of leverage may make us more vulnerable in the event of a downturn in our business, our industry, or the economy in general.

The restrictions and covenants in our debt agreements could limit our ability to obtain future financings, make needed capital expenditures, withstand a future downturn in our business or the economy in general, or otherwise conduct necessary corporate activities.

These covenants may prevent us from taking advantage of business opportunities that arise.

A breach of any of these covenants would result in a default under the applicable debt agreement.

A default, if not waived, could result in acceleration of the debt outstanding under our agreement and a default or acceleration of the debt outstanding under our other debt agreements.

The accelerated debt would become immediately due and payable.

If that were to occur, we may not be able to pay all such debt or to borrow sufficient funds to refinance it.

Even if new financing were then available, it may not be on terms that are favorable to us.

As of December 30, 2023, we had $203.0 million of cash and cash equivalents.

Approximately 80% of our consolidated cash balance is outside the U.S.

In the event that we would have to repatriate cash from international operations to meet cash needs in the U.S., we may be subject to legal, contractual, or other restrictions.

In addition, as we use cash for acquisitions and other purposes, any of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flows, and business prospects.

We assumed an underfunded pension liability as part of the fiscal 2010 acquisition of Delta Ltd., and the combined company may be required to increase funding of the plan and/or be subject to restrictions on the use of excess cash.

is the sponsor of a U.K.

defined benefit pension plan (the “Plan”) that, as of December 30, 2023, covered approximately 5,400 inactive or retired former Delta employees.

The Plan has no active employees as members.

As of December 30, 2023, the Plan was, for accounting purposes, overfunded by approximately £12.1 million ($15.4 million).

The current agreement with the trustees of the Plan for annual funding is approximately £13.1 million ($16.7 million) in respect of the funding shortfall at the time of acquisition and approximately £1.3 million ($1.7 million) in respect of administrative expenses.

Although this funding obligation was considered in the acquisition price for the Delta shares, the underfunded position may adversely affect the combined company as follows:

● Laws and regulations in the U.K.

normally require the Plan trustees to agree on a new funding plan with us every three years.

The last funding plan was developed in fiscal 2022.

Changes in actuarial assumptions, including future discount, inflation, and interest rates, investment returns, and mortality rates may increase the

underfunded position of the Plan and cause the combined company to increase its funding levels in the Plan to cover underfunded liabilities.

regulates the Plan, and the trustees represent the interests of covered workers.

Laws and regulations, under certain circumstances, could create an immediate funding obligation to the Plan, which could be significantly greater than the asset recognized for accounting purposes as of December 30, 2023.

Such immediate funding is calculated by reference to the cost of buying out liabilities on the insurance market and could affect our ability to fund the future growth of the business or finance other obligations.

We have, from time to time, maintained a substantial amount of outstanding indebtedness, which could impair our ability to operate our business, respond to changes in our operations, comply with debt covenants, and make debt payments.

As of December 28, 2024, we had a total of $757.9 million in outstanding indebtedness, of which $2.9 million matures within the next five fiscal years.

Additionally, as of December 28, 2024, we had $799.8 million in borrowing capacity under our revolving credit facility.

We occasionally borrow funds for business acquisitions and share repurchases.

At times, our borrowings have been significant, with the majority of our interest‑bearing debt incurred by U.S.

Rising interest rates have increased our borrowing costs.

Our level of indebtedness may have significant consequences, including:

● Our ability to meet obligations under our debt agreements could be impacted.

Failure to comply with debt covenants and other requirements, including financial and restructuring terms, could result in a default under our debt agreements.

● A substantial portion of our cash flow from operations will be used to make interest and principal payments, limiting the funds available for operations, working capital, capital expenditures, expansion, and other corporate purposes, including future acquisitions that could benefit our business.

● Our ability to secure additional financing in the future may be hindered.

● We may be more highly leveraged than our competitors, placing us at a competitive disadvantage.

● Our flexibility in responding to changes in our business and industry may be constrained.

● Our level of leverage may make us more vulnerable in the event of a downturn in our business, industry, or the broader economy.

The restrictions and covenants in our debt agreements may limit our ability to secure future financing, make necessary capital expenditures, withstand a downturn in our business or the economy, or conduct essential corporate activities.

These covenants could prevent us from capitalizing on emerging business opportunities.

A breach of any of these covenants would constitute a default under the relevant debt agreement.

If not waived, this could trigger immediate repayment obligations under that agreement and potentially accelerate repayment requirements under other agreements.

If this occurs, the debt would become immediately due and payable.

We may not have the funds to pay all such debt or to obtain sufficient financing to refinance it.

Even if financing is available, the terms may not be favorable.

As of December 28, 2024, we had $164.3 million in cash and cash equivalents.

Approximately 83% of our consolidated cash balance is held outside the U.S.

Repatriating funds to meet U.S.

cash needs could be subject to legal restrictions, tax liabilities, or contractual limitations.

Additionally, as we use cash for acquisitions and other purposes, these factors could have a material adverse effect on our business, financial condition, results of operations, cash flows, and future prospects.

We assumed an underfunded pension liability as part of the fiscal 2010 acquisition of Delta Ltd., which may require increased funding and impose restrictions on excess cash usage.

sponsors a U.K.

defined benefit pension plan (the “Plan”), which, as of December 28, 2024, covered approximately 5,150 former employees, either inactive or retired.

The Plan has no active employee members.

As of December 28, 2024, the Plan was overfunded by approximately £37.0 million ($46.5 million) for accounting purposes.

Under the current agreement with the Plan trustees, we are obligated to provide annual funding of approximately £13.1 million ($16.7 million) to address the funding shortfall at the time of acquisition, along with an additional approximately £1.9 million ($2.5 million) for administrative expenses.

Although this funding obligation was factored into the acquisition price of Delta, the Plan’s funding status may still have adverse effects on the combined company, including:

laws and regulations typically require the Plan trustees to agree on a new funding plan every three years, with the most recent plan established in fiscal 2022.

Changes in actuarial assumptions, such as discount rates, inflation, interest rates, investment returns, and mortality projections, could increase the Plan’s underfunded position, requiring higher contributions to cover liabilities.

government regulates the Plan, and its trustees represent the interests of covered workers.

Under certain circumstances, regulations could trigger an immediate funding obligation significantly greater than the asset recognized for accounting purposes as of December 28, 2024.

This obligation, calculated based on the cost of purchasing annuities to cover liabilities, could impact our ability to finance business growth or meet other financial commitments.

General Risks

Our businesses require skilled labor and management talent, and we may be unable to attract and retain qualified employees.

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

Skills such as welding, equipment maintenance, and operating complex manufacturing machinery may be in short supply in certain geographic areas, leading to shortages of skilled labor and increased labor costs.

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

In some geographic areas, skilled management talent for certain positions may be difficult to find.

To the extent we have difficulty in finding and retaining these skills in the workforce, there may be an adverse effect on our ability to grow profitably in the future.

We face strong competition in our markets.

We face competitive pressures from a variety of companies in each of the markets we serve.

Our competitors include companies who provide the technologies that we provide as well as companies who provide competing technologies, such as drip irrigation.

Our competitors include international, national, and local manufacturers, some of whom may have greater financial, manufacturing, marketing, and technical resources than we do or greater penetration in, or familiarity with, a particular geographic market than we have.

In addition, certain of our competitors, particularly with respect to our TD&S and Telecommunications product lines, have sought bankruptcy protection in recent years and may emerge with reduced debt service obligations, which could allow them to operate at pricing levels that put pressure on our margins.

Some of our customers have moved manufacturing operations or product sourcing overseas, which can negatively impact our sales of galvanizing and anodizing services.

To remain competitive, we will need to invest continuously in manufacturing, product development, and customer service, and we may need to reduce our prices, particularly with respect to customers in industries that are experiencing downturns.

We cannot provide assurance that we will be able to maintain our competitive position in each of the markets that we serve.

We may not realize the improved operating results that we anticipate from acquisitions we may make in the future, and we may experience difficulties in integrating the acquired businesses or may inherit significant liabilities related to such businesses.

We explore opportunities to acquire businesses that we believe are related to our core competencies from time to time, some of which may be material to us.

We expect such acquisitions will produce operating results better than those historically experienced or presently expected to be experienced in the future by us in the absence of the acquisition.

We cannot provide assurance that this assumption will prove correct with respect to any acquisition.

Any future acquisitions may present significant challenges for our management due to the time and resources required to properly integrate management, employees, information systems, accounting controls, personnel, and administrative functions of the acquired business with those of Valmont and to manage the combined company going forward.

We may not be able to completely integrate and streamline overlapping functions or, if such activities are successfully accomplished, such integration may be more costly to accomplish than originally contemplated.

We may also have difficulty in successfully integrating our product offerings with those of acquired businesses to improve our collective product offering.

Our efforts to integrate acquired businesses could be affected by a number of factors beyond our control, including general economic conditions.

In addition, the process of integrating acquired businesses could cause the interruption of, or loss of momentum in, the activities of our existing business.

The diversion of management’s attention and any delays or difficulties encountered in connection with the integration of acquired businesses could adversely impact our

business, results of operations, and liquidity, and the benefits we anticipate may never materialize.

These factors are relevant to any acquisition we undertake.

In addition, although we conduct reviews of businesses we acquire, we may be subject to unexpected claims or liabilities, including environmental cleanup costs, as a result of these acquisitions.

Such claims or liabilities could be costly to defend or resolve and be material in amount, and thus could materially and adversely affect our business, results of operations, and liquidity.

Our businesses rely on skilled labor and management talent, and we may face challenges in attracting and retaining qualified employees.

Skilled factory workers and management are essential to meeting customer needs, driving sales growth, and maintaining competitive advantages.

In some regions, shortages of workers with specific skills, such as welding, equipment maintenance, and operating complex machinery, have increased labor costs.

Equally important is management talent, which is crucial for business growth and effective succession planning as key employees retire.

In certain regions, it may be difficult to find skilled management for specific roles.

If we struggle to attract and retain these critical skills, it could negatively impact our ability to grow profitably in the future.

We face strong competition in the markets we serve.

We experience competitive pressures from various companies across all our markets.

Our competitors include both companies offering similar technologies and those providing alternative solutions, such as drip irrigation.

These competitors range from international and national manufacturers to local ones, some of which may have greater financial, manufacturing, marketing, and technical resources, or deeper penetration and familiarity with specific geographic markets.

Additionally, certain competitors, particularly in our Utility and Telecommunications product lines, have sought bankruptcy protection in recent years.

If they emerge with reduced debt obligations, they may be able to operate at lower prices, putting pressure on our margins.

Some customers have also shifted manufacturing or sourcing operations overseas, negatively impacting our sales of galvanizing services.

To remain competitive, we must invest in manufacturing, product development, and customer service.

At times, we may need to adjust pricing, particularly for customers in struggling industries.

However, we cannot guarantee our competitive position in all markets.

We may not achieve the improved operating results we anticipate from future acquisitions, and we may face difficulties integrating the acquired businesses or inherit significant liabilities associated with them.

We regularly explore opportunities to acquire businesses that align with our core competencies, some of which may be material to us.

We expect these acquisitions to result in better operating performance than we would otherwise achieve.

However, we cannot guarantee that this expectation will be realized for any given acquisition.

Future acquisitions may present significant challenges for our management, requiring considerable time and resources to integrate key aspects of the acquired business, such as management, employees, information systems, accounting controls, personnel, and administrative functions, into Valmont.

We may struggle to fully integrate and streamline overlapping functions, and even if we do succeed, the process may be more costly than initially anticipated.

Additionally, integrating our product offerings with those of acquired businesses may prove difficult, and we may not be able to improve our collective product offering as expected.

Our integration efforts could be affected by factors beyond our control, such as general economic conditions.

Moreover, the integration process may disrupt or slow down the activities of our existing business.

The diversion of management’s attention, along with any delays or challenges encountered during integration, could negatively impact our operations, results, and liquidity.

In some cases, the anticipated benefits of the acquisition may never materialize.

Furthermore, although we conduct due diligence reviews of potential acquisitions, we may still be exposed to unexpected claims or liabilities, including environmental cleanup costs.

These liabilities could be costly to defend or resolve and may be substantial, potentially having a material adverse effect on our business, results, and liquidity.

We may incur significant warranty or contract management costs.

In our Infrastructure segment, we manufacture large structures for electrical transmission.

These products may be highly engineered for very large, complex contracts and subject to terms and conditions that penalize us for late delivery and result in consequential and compensatory damages.

From time to time, we may have a product quality issue on a large utility structures order and the related costs may be significant.

Our products in the Infrastructure segment also include structures for a wide range of outdoor lighting, traffic, and wireless communication applications.

Our Agriculture products carry warranty provisions, some of which may span several years.

In the event we have widespread product reliability issues with certain components, we may be required to incur significant costs to remedy the situation.

Our operations could be adversely affected if our information technology systems and networks are compromised or otherwise subjected to cyberattacks.

Global cyberattacks continually increase in sophistication and pose significant risks to the security of our information technology systems and networks which, if breached, could materially adversely affect the confidentiality, availability, and integrity of our data.

Our operations involve transferring data across international borders, and we must comply with increasingly complex and rigorous standards to protect business and personal data in the U.S.

and foreign countries, including members of the European Union.

The primary objective of our risk management and strategy is maintaining and protecting the confidentiality, integrity, and availability of information for our business and customers.

We rely on our information security program which covers a range of cybersecurity activities.

More information on these measures may be found in Part I, Item 1C in this report.

While these measures are designed to prevent, detect, respond to, and mitigate unauthorized activity, there is no guarantee that they will be sufficient to prevent or mitigate the risk of a cyberattack whether experienced directly through our information technology systems and networks or third-party service providers, or allow us to detect, report, or respond adequately in a timely manner.

Successful cybersecurity attacks or other security incidents could result in the loss of key innovations in artificial intelligence, Internet of Things, or other disruptive technologies;

the loss of access to critical data or systems through ransomware, crypto mining, destructive attacks, or other means;

and business delays, service or system disruptions, or denials of service.

This could lead to legal risk, fines and penalties, negative publicity, theft, modification or destruction of proprietary information or key information, manufacture of defective products, production downtimes, and operational disruptions, which could adversely affect our reputation, competitiveness, and results of operations.

In our Infrastructure segment, we manufacture large electrical transmission structures, which are often highly engineered for large, complex contracts.

These contracts may include terms that penalize us for late delivery, leading to consequential and compensatory damages.

Occasionally, product quality issues may arise on large utility structure orders, resulting in significant costs.

Additionally, our Infrastructure segment includes structures for a variety of applications such as outdoor lighting, traffic, and wireless communication.

Our Agriculture products are covered by warranty provisions, some of which extend over several years.

If widespread product reliability issues occur with certain components, we may face substantial costs to address the situation.

Our operations could be adversely affected if our information technology systems and networks are compromised or subjected to cyberattacks.

Cyberattacks are becoming increasingly sophisticated and pose significant risks to the security of our information technology systems and networks.

If these systems are breached, it could severely affect the confidentiality, availability, and integrity of our data.

As our operations involve transferring data across international borders, we must comply with complex and stringent standards to protect both business and personal data, including in the U.S.

and European Union countries.

Our risk management strategy focuses on maintaining and protecting the confidentiality, integrity, and availability of information for both our business and customers.

We rely on an information security program that includes a wide range of cybersecurity measures.

More details about these measures can be found in Part I, Item 1C of this report.

While these measures are designed to prevent, detect, respond to, and mitigate unauthorized activity, there is no guarantee they will be sufficient to prevent or mitigate the risks of a cyberattack—whether directly targeting our systems or through third-party service providers—or to enable us to detect, report, or respond in a timely and effective manner.

Successful cyberattacks or other security incidents could result in the loss of key innovations, such as artificial intelligence or Internet of Things technologies;

loss of access to critical data or systems through ransomware, crypto mining, or destructive attacks;

and business delays or service disruptions.

These incidents could lead to legal risks, fines, penalties, negative publicity, theft, modification or destruction of proprietary information, defective products, production downtimes, and operational disruptions.

All of these could harm our reputation and competitiveness, and materially affect our business strategy, results of operations, or financial condition.

Regulatory and business developments regarding climate change could adversely impact our operations and demand for our products.

Regulatory and business developments regarding climate change could adversely impact our operations.

We follow the scientific discussion on climate change and related legislative and regulatory enactments, including those under consideration, to deliberate the potential impact on our operations and demand for our products.

The scientific discussion on the presence and scope of climate change and the attention that domestic and international legislatures and regulatory authorities have given to enacting or considering laws or rules related to climate change are expected to continue.

The production and market for our products are subject to the impact of laws and rules related to climate change.

Our customers and our operating segments are exposed to risks of increased costs to comply with such laws and rules, including increased costs for raw materials and transportation, as well as exposure to damage to our respective business reputations upon any failure of compliance.

Other adverse consequences of climate change could include an increased frequency of severe weather events and rising sea levels that could affect operations at our manufacturing facilities, the price of insuring our assets, or other unforeseen disruptions of our operations, systems, property, or equipment.

Regulatory and business developments related to climate change could adversely affect our operations and the demand for our products.

We closely monitor scientific discussions and legislative developments regarding climate change, including proposed regulations, to assess their potential impact on our business.

Ongoing debates about the presence and scope of climate change, along with increasing legislative and regulatory attention, are expected to continue.

Our production processes and the market for our products are influenced by such laws and regulations.

Compliance with these measures may result in higher costs for raw materials and transportation.

Non-compliance could damage our reputation and further expose our operations and customers to significant risks.

Climate change also presents physical risks, such as the increased frequency of severe weather events and rising sea levels, which could disrupt operations at our manufacturing facilities.

These events may cause unforeseen disruptions of systems, equipment, or overall operations.

Additionally, we are facing rising insurance premiums and costs, including for property, casualty, and business interruption insurance.

This trend is partly driven by the growing frequency and severity of extreme weather events such as hurricanes, floods, wildfires, and other natural disasters.

Insurers have responded by tightening underwriting standards, reducing coverage limits, and increasing premium rates, particularly for businesses with geographically diverse and asset-intensive operations like ours.

Any reduction in insurance coverage limits or the introduction of policy exclusions increases our financial exposure to losses associated with casualty events, including extreme weather occurrences.

We may encounter challenges in quickly adjusting our manufacturing capacity to respond to sudden shifts in demand for Infrastructure products.

Producing large engineered structures for Infrastructure customers requires significant machinery and often necessitates operating our facilities at or near full capacity to achieve optimal utilization.

As a result, if demand for specific structure types in the Utility market changes unexpectedly, our ability to adjust manufacturing capacity in the near term may be limited.

Establishing new manufacturing capacity or expanding existing capacity involves significant vendor lead times, capital investments, and customer approvals, all of which further delay our ability to respond to unexpected increases in demand.

These limitations could lead to delays in order fulfillment, customer dissatisfaction, potential business loss, inventory imbalances, increased labor and material costs, reduced productivity, lower profit margins, reputational harm, and a weakened market position.

If we are unable to effectively address these challenges, it could have a material adverse impact on our business, financial condition, and operating results.

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 1A. Risk Factors