VALMONT INDUSTRIES INC 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Valmont Industries, Inc., along with its subsidiaries (collectively referred to as the “Company,” “Valmont,” “we,” “us,” or “our”), is a diversified manufacturer of products and services for infrastructure and agriculture markets. Founded in 1946 and headquartered in Omaha, Nebraska, our purpose is to conserve resources and improve life. Forward-Looking Statements Management’s discussion and analysis contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions that management has made in light of experience in the industries in which the Company operates, as well as management’s perceptions of historical trends, current conditions, anticipated future developments, and other factors deemed to be relevant. However, these statements are not guarantees of future performance or results. They are subject to risks, uncertainties (some beyond the Company’s control), and various assumptions. Management believes these forward-looking statements are based on reasonable assumptions. However, many factors could cause the actual financial results to differ materially from expectations. These factors include, among others, risk factors described in the Company’s reports to the Securities and Exchange Commission, as well as future economic and market conditions, industry trends, Company performance and financial results, operational efficiencies, availability and pricing of raw materials, availability and market acceptance of new products, product pricing, domestic and international competition, and actions or policy changes by domestic and foreign governments. This discussion should be read in conjunction with the financial statements and notes thereto, and the management’s discussion and analysis included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024. Segment net sales in the following table and elsewhere are presented net of intersegment sales. See Note 8 of our Condensed Consolidated Financial Statements for additional information on segment sales and intersegment sales. 24 Table of Contents EXECUTIVE OVERVIEW Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ ​ ​ Thirty-nine weeks ended ​ ​ ​ ​ September September ​ Percent ​ September September ​ Percent Dollars in thousands, except per-share amounts ​ 27, 2025 ​ 28, 2024 ​ Change ​ 27, 2025 ​ 28, 2024 ​ Change Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 1,045,980 ​ $ 1,020,175 ​ 2.5% ​ $ 3,065,842 ​ $ 3,037,740 ​ 0.9% Gross profit ​ ​ 318,246 ​ 301,693 ​ 5.5% ​ 930,515 ​ 928,191 ​ 0.3% as a percentage of net sales ​ ​ 30.4% ​ 29.6% ​ ​ 30.4% ​ 30.6% ​ Selling, general, and administrative expenses ​ ​ 176,790 ​ 175,958 ​ 0.5% ​ 531,248 ​ ​ 523,595 ​ 1.5% as a percentage of net sales ​ ​ 16.9% ​ 17.2% ​ ​ 17.3% ​ 17.2% ​ Impairment of long-lived assets ​ ​ — ​ ​ — ​ NM ​ ​ 91,337 ​ ​ — ​ NM Realignment charges ​ ​ — ​ ​ — ​ NM ​ ​ 8,884 ​ ​ — ​ NM Operating income ​ ​ 141,456 ​ 125,735 ​ 12.5% ​ 299,046 ​ 404,596 ​ (26.1%) as a percentage of net sales ​ ​ 13.5% ​ 12.3% ​ ​ 9.8% ​ 13.3% ​ Net interest expense ​ ​ 8,150 ​ 12,233 ​ (33.4%) ​ 23,846 ​ 41,022 ​ (41.9%) Effective tax rate ​ ​ 23.1% ​ 26.5% ​ ​ 31.1% ​ 25.0% ​ Net earnings attrib. to Valmont Industries, Inc. ​ ​ 99,031 ​ ​ 83,068 ​ 19.2% ​ ​ 182,272 ​ ​ 270,606 ​ (32.6%) Diluted earnings per share ​ $ 4.98 ​ $ 4.11 ​ 21.2% ​ $ 7.80 ​ $ 13.34 ​ (41.5%) Infrastructure ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 806,562 ​ $ 756,370 ​ 6.6% ​ $ 2,273,145 ​ $ 2,237,533 ​ 1.6% Gross profit ​ 239,426 ​ ​ 223,333 ​ 7.2% ​ 680,184 ​ 673,353 ​ 1.0% as a percentage of net sales ​ ​ 29.7% ​ ​ 29.5% ​ ​ ​ ​ 29.9% ​ ​ 30.1% ​ ​ Selling, general, and administrative expenses ​ 96,049 ​ ​ 99,676 ​ (3.6%) ​ 302,899 ​ 298,251 ​ 1.6% as a percentage of net sales ​ ​ 11.9% ​ ​ 13.2% ​ ​ ​ ​ 13.3% ​ ​ 13.3% ​ ​ Impairment of long-lived assets ​ ​ — ​ ​ — ​ NM ​ ​ 89,356 ​ — ​ NM Realignment charges ​ ​ — ​ ​ — ​ NM ​ ​ 1,426 ​ — ​ NM Operating income ​ 143,377 ​ 123,657 ​ 15.9% ​ 286,503 ​ 375,102 ​ (23.6%) as a percentage of net sales ​ ​ 17.8% ​ ​ 16.3% ​ ​ ​ ​ 12.6% ​ ​ 16.8% ​ ​ Agriculture ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 239,418 ​ $ 263,805 ​ (9.2%) ​ $ 792,697 ​ $ 800,207 ​ (0.9%) Gross profit ​ 78,820 ​ ​ 78,360 ​ 0.6% ​ 250,331 ​ 254,838 ​ (1.8%) as a percentage of net sales ​ ​ 32.9% ​ ​ 29.7% ​ ​ ​ ​ 31.6% ​ ​ 31.8% ​ ​ Selling, general, and administrative expenses ​ 55,631 ​ ​ 49,467 ​ 12.5% ​ 149,987 ​ 145,001 ​ 3.4% as a percentage of net sales ​ ​ 23.2% ​ ​ 18.8% ​ ​ ​ ​ 18.9% ​ ​ 18.1% ​ ​ Impairment of long-lived assets ​ ​ — ​ ​ — ​ NM ​ ​ 1,981 ​ ​ — ​ NM Realignment charges ​ ​ — ​ ​ — ​ NM ​ ​ 2,886 ​ ​ — ​ NM Operating income ​ 23,189 ​ 28,893 ​ (19.7%) ​ 95,477 ​ 109,837 ​ (13.1%) as a percentage of net sales ​ ​ 9.7% ​ ​ 11.0% ​ ​ ​ ​ 12.0% ​ ​ 13.7% ​ ​ Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general, and administrative expenses ​ $ 25,110 ​ $ 26,815 ​ (6.4%) ​ $ 78,362 ​ $ 80,343 ​ (2.5%) Realignment charges ​ ​ — ​ ​ — ​ NM ​ ​ 4,572 ​ ​ — ​ NM Operating loss ​ (25,110) ​ (26,815) ​ (6.4%) ​ (82,934) ​ (80,343) ​ 3.2% ​ ​ NM = not meaningful Overview On a consolidated basis, net sales increased in the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The increase was primarily driven by higher net sales in the Infrastructure segment, partially offset by lower net sales in the Agriculture segment. Consolidated gross profit increased in the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The third quarter improvement was largely attributable to higher sales volumes in the Infrastructure segment, particularly within the Utility and Telecommunications product lines, as well as higher average selling prices in the Agriculture segment. For the first three quarters of fiscal 2025, lower sales in North America within the Agriculture segment more than offset gains in international markets. Improved volumes and pricing in the Infrastructure segment also contributed to the overall increase in consolidated gross profit. 25 Table of Contents Consolidated selling, general, and administrative (“SG&A”) expenses was similar in the third quarter and slightly higher for the first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The changes were primarily driven by higher credit loss expense, partially offset by lower compensation and incentive costs. Consolidated operating income increased in the third quarter of fiscal 2025 and decreased in the first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The third quarter increase was primarily due to improved pricing and higher volumes in the Infrastructure segment, partially offset by lower volumes in the Agriculture segment. The first three quarters decline was primarily attributable to the impairment of certain long-lived assets totaling $91.3 million, realignment charges of $8.9 million, and increased SG&A expenses. Acquisitions and Divestitures We continue to strategically enhance our portfolio through targeted acquisitions and divestitures, demonstrating our commitment to refining our business focus and driving value within our core segments. In the fourth quarter of fiscal 2024, we divested George Industries, a coating and anodizing company in California previously included in the Infrastructure segment, and our extractive business, which included the manufacturing and distribution of screening products for the mining and quarrying sectors in Australia and New Zealand, previously included in the Infrastructure segment. Macroeconomic and Geopolitical Impacts on Financial Results and Liquidity We continue to actively monitor a range of macroeconomic and geopolitical uncertainties that have affected, and may continue to affect, our business operations and financial performance. These include volatility in the global economic and trade environment, inflationary cost pressures, supply chain disruptions, foreign currency fluctuations relative to the United States (“U.S.”) dollar, changing interest rates, ongoing international conflicts, and labor shortages. These factors may influence our operational costs, revenue streams, and overall financial stability. As conditions evolve, we are proactively adjusting our business strategies to mitigate potential risks, maintain financial resilience, and ensure sufficient liquidity to support ongoing operations and strategic initiatives. Net Interest Expense Consolidated net interest expense decreased in the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, due to a decrease in average outstanding borrowings on the revolving line of credit along with lower average interest rates. Income Tax Expense Our effective income tax rate in the third quarter and first three quarters of fiscal 2025 was 23.1% and 31.1%, respectively, as compared to 26.5% and 25.0% in the same periods of fiscal 2024. The decrease in the effective tax rate for the third quarter of fiscal 2025 was primarily due to a more favorable geographic mix of earnings. The increase in the effective tax rate for the first three quarters of fiscal 2025 was mainly attributable to goodwill impairment charges recorded during the period, for which no corresponding tax benefits were recognized. Infrastructure Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ ​ ​ ​ ​ ​ ​ September 27, ​ September 28, ​ Dollar ​ Percent Dollars in thousands 2025 2024 Change Change Utility ​ $ 391,901 ​ $ 349,085 $ 42,816 12.3% Lighting and Transportation ​ ​ 215,072 ​ ​ 222,535 ​ (7,463) (3.4%) Coatings ​ ​ 96,561 ​ ​ 88,046 ​ 8,515 9.7% Telecommunications ​ ​ 88,097 ​ ​ 64,288 ​ 23,809 37.0% Solar ​ ​ 16,654 ​ ​ 34,625 ​ (17,971) (51.9%) Total sales ​ $ 808,285 ​ $ 758,579 ​ $ 49,706 6.6% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 143,377 ​ $ 123,657 ​ $ 19,720 15.9% ​ 26 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirty-nine weeks ended ​ ​ ​ ​ ​ ​ ​ September 27, ​ September 28, ​ Dollar ​ Percent Dollars in thousands 2025 2024 Change Change Utility ​ $ 1,086,582 ​ $ 1,017,623 $ 68,959 6.8% Lighting and Transportation ​ ​ 625,628 ​ ​ 667,998 ​ (42,370) (6.3%) Coatings ​ ​ 269,707 ​ ​ 266,710 ​ 2,997 1.1% Telecommunications ​ ​ 240,111 ​ ​ 176,649 ​ 63,462 35.9% Solar ​ ​ 58,003 ​ ​ 115,955 ​ (57,952) (50.0%) Total sales ​ $ 2,280,031 ​ $ 2,244,935 ​ $ 35,096 1.6% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 286,503 ​ $ 375,102 ​ $ (88,599) (23.6%) Infrastructure segment sales increased in the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. This growth was primarily driven by higher sales volumes in the Utility and Telecommunications product lines, which more than offset declines in the Lighting and Transportation (“L&T”) and Solar product lines. Foreign currency translation negatively impacted the first three quarters of fiscal 2025 results by approximately $4.5 million. Regionally, Infrastructure segment sales increased in North America in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, but declined in international markets during the same periods. Utility product line sales increased in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, reflecting favorable pricing and higher volumes. This performance was supported by continued strong demand in the utility market driven by ongoing investments in energy transition and grid modernization. L&T product line sales declined in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, driven by lower volumes in the Asia-Pacific region and softer market demand in North America. A significant contributor to the decline was the divestiture of the extractive business in the fourth quarter of fiscal 2024. Coatings product line sales increased in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, benefiting from healthy infrastructure demand. Telecommunications product line sales increased significantly in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, supported by our quick-turn order strategy and alignment with carrier spending programs. Solar product line sales declined significantly in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, largely due to lower volumes resulting from the Company’s strategic decision to exit select regional markets. Infrastructure segment gross profit increased in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, primarily due to higher volumes in the Utility and Telecommunications product lines, partially offset by lower volumes in the Solar product line. Additionally, a slowdown of L&T markets outside of the U.S., among other factors, led to the recognition of approximately $6.0 million of slow moving inventory reserves. Infrastructure segment SG&A expenses decreased in the third quarter of fiscal 2025 and increased in the first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The third quarter decrease primarily reflected lower compensation and incentives costs, partially offset by higher credit loss expense of approximately $3.7 million. The first three quarters increase primarily reflected higher credit loss expense of approximately $8.0 million, notably in the Solar product line in North America, partially offset by lower incentive costs. Infrastructure segment operating income increased in the third quarter of fiscal 2025 and decreased in the first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The third quarter increase was primarily attributable to higher pricing and volumes, and an improved global cost structure. The first three quarters decline was primarily due to the impairment of certain long-lived assets totaling $89.4 million, realignment charges of $1.4 million, lower volumes in the L&T and Solar product lines, and higher SG&A expenses. 27 Table of Contents Agriculture Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ ​ ​ ​ ​ ​ September 27, ​ September 28, Dollar Percent Dollars in thousands 2025 2024 Change Change North America ​ $ 111,334 ​ $ 119,973 $ (8,639) (7.2%) International ​ ​ 130,004 ​ ​ 145,313 ​ (15,309) (10.5%) Total sales ​ $ 241,338 ​ $ 265,286 ​ $ (23,948) (9.0%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 23,189 ​ $ 28,893 ​ $ (5,704) (19.7%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirty-nine weeks ended ​ ​ ​ ​ ​ ​ ​ September 27, ​ September 28, ​ Dollar ​ Percent Dollars in thousands 2025 2024 Change Change North America ​ $ 391,292 ​ $ 441,198 $ (49,906) (11.3%) International ​ ​ 406,737 ​ ​ 364,526 ​ 42,211 11.6% Total sales ​ $ 798,029 ​ $ 805,724 ​ $ (7,695) (1.0%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 95,477 ​ $ 109,837 ​ $ (14,360) (13.1%) In North America, Agriculture segment sales declined in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. These decreases were primarily due to lower irrigation equipment sales volumes, reflecting continued softness in the agriculture market. Contributing factors included lower grain prices, uncertainty surrounding trade policy, and the timing of government funding. In addition, average selling prices for irrigation equipment were similar for the quarter but declined slightly year-to-date, primarily due to a shift in product mix and increased competitive bidding activity in certain regions. In international markets, Agriculture segment sales decreased in the third quarter of fiscal 2025 and increased in the first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The third quarter decline was primarily driven by the timing of project sales in the Middle East and lower volumes in South America. The first three quarters increase was driven by stronger project volumes in the Europe, Middle East, and Africa (“EMEA”) region and higher volumes in Brazil. These gains were partially offset by unfavorable foreign currency translation impacts of approximately $10.0 million in the first three quarters of fiscal 2025. Our Agriculture business remains cyclical and is influenced by factors such as net farm income, commodity prices, weather volatility, geopolitical events, and farmer sentiment regarding future economic conditions. We actively monitor these variables, including U.S. net farm income estimates published by the U.S. Department of Agriculture. In Brazil, w e track fluctuations in grain prices and projected farm input costs to assess grower sentiment. Looking ahead, Irrigation Equipment and Parts sales in North America are expected to remain muted for the remainder of fiscal 2025. However, we remain focused on navigating evolving market conditions and positioning the Agriculture business for long-term growth across both domestic and international markets. Agriculture segment gross profit was similar in the third quarter of fiscal 2025 and decreased in the first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The first three quarters decline was driven by lower volumes and slightly lower average selling prices in North America, which more than offset international volume gains. Agriculture segment SG&A increased in the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The increase primarily reflected higher Brazil credit loss expense of approximately $11.0 million related to specific customer receivables, partially offset by lower compensation and incentive costs. Agriculture segment operating income declined in both the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024. The third quarter decline was primarily due to lower volumes and increased expected customer credit loss expense. The first three quarters decline was primarily driven by lower sales volumes in North America and one-time charges related to the agriculture solar business totaling $5.9 million. In the third quarter and first three quarters of fiscal 2025, operating income in the Agriculture segment was also negatively impacted by $4.1 million and $8.0 million, respectively, primarily due to an increase in reserves related to an unfavorable Brazilian court ruling involving a former dealer. The Company has appealed the decision and intends to contest all allegations. Management cannot reasonably estimate the timing of a potential outcome, the amount of a potential outcome, 28 Table of Contents or litigation costs associated with this matter. While we maintain reserves for liabilities that are reasonably estimable, these reserves may prove insufficient to cover the final judgment. As a result, this uncertainty could adversely affect SG&A expenses by up to an additional $20.0 million within the Agriculture segment. Corporate Corporate SG&A expenses decreased in the third quarter and first three quarters of fiscal 2025, as compared to the same periods of fiscal 2024, primarily due to lower compensation and incentive costs, partially offset by higher professional services fees. In addition, the first three quarters of fiscal 2025 included realignment charges totaling $4.6 million. LIQUIDITY AND CAPITAL RESOURCES Capital Allocation Philosophy Our capital allocation priorities are intended to present a balanced approach to maintaining disciplined investments in organic and inorganic growth opportunities while delivering meaningful capital returns to shareholders over the next three to five years. These priorities are expected to be supported by our projected cash flow generation. We plan to allocate approximately 50% of operating cash flow to high-return growth opportunities, focused on: ● capital expenditures for strategic capacity expansion, primarily in the Infrastructure segment, to maintain and increase manufacturing output and efficiency while driving innovation to better serve customers, and ● acquisitions that strategically augment our competitive position, with a focus on sustainable growth and premium returns on invested capital. We plan to allocate the remaining approximately 50% of operating cash flow to shareholder returns through the form of share repurchases and dividends. In February 2025, the Board of Directors increased the authorized capacity under our share repurchase program by $700.0 million, bringing the total authorization to $2.1 billion, with no stated expiration date. We are not obligated to make repurchases and may discontinue the program at any time. Any purchases will be funded through available liquidity and ongoing cash flows, and will be made subject to prevailing market and economic conditions. As of September 27, 2025, we had approximately $640.2 million of remaining capacity under the share repurchase program. Since the program’s inception in May 2014, we have repurchased approximately 8.7 million shares for a total of $1.5 billion. We remain committed to maintaining a capital structure that supports our investment-grade credit rating. As of the latest assessments, our credit ratings were Baa2 (stable outlook) by Moody’s Ratings and BBB+ (stable outlook) by S&P Global Ratings. To support these ratings, we aim to manage our debt-to-invested capital ratio within levels that reinforce our investment-grade status. Supplier Finance Program We have established a supplier finance program with a financial institution, allowing qualifying suppliers the option to sell their receivables from us to the financial institution under independently negotiated terms. Participation in the program is entirely voluntary for suppliers and does not affect our payment terms, amounts, timing, or liquidity. We have no economic interest in a supplier’s decision to participate. As of September 27, 2025 and December 28, 2024, our accounts payable in the Condensed Consolidated Balance Sheets included $60.8 million and $45.6 million, respectively, related to the obligations under this program. Sources of Financing As of September 27, 2025, our available debt financing primarily included senior unsecured notes and a revolving credit facility. Senior Unsecured Notes As of September 27, 2025, our senior unsecured notes consisted of: ● $450.0 million face value ($434.4 million carrying value) notes at an interest rate of 5.00% per annum, maturing in October 2044. 29 Table of Contents ● $305.0 million face value ($295.5 million carrying value) notes at an interest rate of 5.25% per annum, maturing in October 2054. We retain the option to repurchase these notes by paying a make-whole premium. Both tranches are guaranteed by certain subsidiaries. Revolving Credit Facility Our revolving credit facility, managed by JPMorgan Chase Bank, N.A., as Administrative Agent, has a maturity date of July 10, 2030. The facility provides up to $800.0 million in unsecured revolving credit, with $400.0 million available for borrowings in foreign currencies. An additional $400.0 million may be added to the facility, subject to lender commitments. Authorized borrowers include the Company and its wholly owned subsidiaries, Valmont Industries Holland B.V. and Valmont Group Pty. Ltd. Obligations under this facility are guaranteed by the Company and its wholly owned subsidiaries, Valmont Telecommunications, Inc., Valmont Coatings, Inc., Valmont Newmark, Inc., and Valmont Queensland Pty. Ltd. The interest rate on our borrowings will be, at our option, either: (a) term Secured Overnight Financing Rate (“SOFR”), based on a one-, three-, or six-month period, and a spread of 100 to 162.5 basis points, depending on our senior unsecured long-term debt credit rating by S&P Global Ratings and Moody’s Ratings; (b) the higher of ● the prime lending rate, ● the overnight bank rate plus 50 basis points, or ● term SOFR (based on a one-month period) plus 100 basis points, plus, in each case, 0 to 62.5 basis points, depending on our credit rating; or (c) daily simple SOFR and a spread of 100 to 162.5 basis points, depending on our credit rating. Additionally, a commitment fee is applied to the average daily unused portion of the facility, ranging from 9 to 20 basis points, based on our credit rating. As of September 27, 2025 and December 28, 2024, we had no outstanding borrowings under this facility. The facility includes a financial covenant that may limit additional borrowing. As of September 27, 2025, we could borrow $799.8 million under the facility, after accounting for $0.2 million in standby letters of credit related to certain insurance obligations. Additionally, we maintain short‑term bank lines of credit totaling $30.0 million, all of which were unused as of September 27, 2025. Covenants and Compliance Both our senior unsecured notes and revolving credit facility contain cross-default provisions, which allow for the acceleration of debt if we default on other indebtedness that also permits acceleration. The revolving credit facility requires us to maintain a financial leverage ratio of 3.50 or lower, measured as of the last day of each fiscal quarter. A temporary increase to 3.75 is permitted for the four fiscal quarters following a material acquisition. The leverage ratio is defined as the ratio of: (a) interest-bearing debt, minus unrestricted cash in excess of $50.0 million (but not exceeding $500.0 million), to (b) earnings before interest, taxes, depreciation, and amortization, adjusted for non-cash stock-based compensation and non-recurring non-cash charges or gains, subject to certain limitations (“Adjusted EBITDA”). Additionally, in the event of an acquisition or divestiture, Adjusted EBITDA is calculated on a pro forma basis, reflecting the transaction as if it had occurred on the first day of the period. Additional covenants restrict activities such as incurring indebtedness, placing liens, engaging in mergers, making investments, selling assets, paying dividends, conducting affiliate transactions, and making debt prepayments. Customary events of default may trigger the acceleration of obligations, subject to grace periods where applicable. 30 Table of Contents As of September 27, 2025, we were in compliance with all covenants related to these debt agreements. For detailed calculations of Adjusted EBITDA and the leverage ratio, please refer to the “Selected Financial Measures” section. Cash Uses Our primary cash needs include working capital, capital expenditures, debt service, taxes, and pension contributions. We may also pursue strategic investments, acquisitions, stock repurchases, or dividends, subject to market conditions and debt agreement restrictions. Our business operates in cyclical markets, but our diverse portfolio—spanning various products, customers, and regions—has enabled us to navigate these cycles effectively while maintaining liquidity. Historically, we have consistently generated operating cash flows that exceed our capital expenditures, demonstrating our ability to manage cash effectively through economic cycles. For fiscal 2025 and beyond, we are confident in our liquidity position, supported by accessible credit facilities, capital markets, and a solid track record of positive operating cash flows. As of September 27, 2025, we held $226.1 million in cash, including $180.2 million in non-U.S. subsidiaries. Distributions of this foreign cash would incur tax liabilities. As of September 27, 2025, we had liabilities of $1.5 million for foreign withholding taxes and $0.5 million for U.S. state income taxes. We are in negotiations to purchase shares owned by minority shareholders of two consolidated subsidiaries that are not wholly owned. If completed, these transactions would result in the acquisition of the remaining associated redeemable noncontrolling interests. We estimate that the related cash outflows could exceed $90.0 million and may occur during the fourth quarter of fiscal 2025. The ultimate timing and amounts of these potential payments will depend on the outcome of the ongoing negotiations. We expect our capital expenditures to be in the range of $140.0 million to $150.0 million for fiscal 2025. Cash Flows The table below summarizes our cash flow information for the thirty-nine weeks ended September 27, 2025 and September 28, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirty-nine weeks ended ​ ​ September 27, ​ September 28, Dollars in thousands 2025 2024 Net cash flows from operating activities ​ $ 345,243 ​ $ 379,264 Net cash flows from investing activities ​ (104,311) ​ (55,099) Net cash flows from financing activities ​ (186,169) ​ (325,877) Operating Cash Flows and Working Capital – Cash provided by operating activities totaled $345.2 million in the first three quarters of fiscal 2025, as compared to $379.3 million in the same period of fiscal 2024. The change in operating cash flows reflects unfavorable changes in working capital, including decreased customer receipts due to large down payments received in the third quarter of fiscal 2024. This was partially offset by decreases in tax and interest payments, as well as a reduction in required pension contributions. Cash flows for the first three quarters of fiscal 2025 and the first three quarters of fiscal 2024 were also impacted by severance payments totaling $5.5 million and $11.8 million, respectively, related to organizational realignment programs. Investing Cash Flows – Cash used in investing activities totaled $104.3 million in the first three quarters of fiscal 2025, as compared to $55.1 million in the same period of fiscal 2024. Investing activities in the first three quarters of fiscal 2025 primarily included capital spending of $104.2 million. Investing activities in the first three quarters of fiscal 2024 primarily included capital spending of $53.8 million. Financing Cash Flows – Cash used in financing activities totaled $186.2 million in the first three quarters of fiscal 2025, as compared to $325.9 million in the same period of fiscal 2024. Our total interest-bearing debt was $755.7 million as of September 27, 2025 and $757.9 million as of December 28, 2024. Financing activities in the first three quarters of fiscal 2025 primarily consisted of borrowings on the revolving credit facility and short-term notes of $132.8 million offset by principal payments on our long-term debt and short-term borrowings of $135.0 million, dividends paid of $39.1 million, the purchase of treasury shares of $125.8 million, the purchase of a redeemable noncontrolling interest of $14.6 million following the exercise of put options by the minority shareholders, and the net activity from stock option and incentive plans, 31 Table of Contents including the associated withholding payments, of $1.9 million. Financing activities in the first three quarters of fiscal 2024 primarily consisted of borrowings on the revolving credit facility and short-term notes of $37.4 million, offset by principal repayments on our long-term debt and short-term borrowings of $249.9 million, dividends paid of $36.3 million, the repurchase of common stock of $55.1 million, the purchase of redeemable noncontrolling interests of $17.7 million, and the net activity from stock option and incentive plans, including the associated withholding payments, of $3.9 million. Guarantor Summarized Financial Information This information is provided in compliance with Rule 3-10 and Rule 13-01 of Regulation S-X, relating to our two tranches of senior unsecured notes. These senior notes are jointly, severally, fully, and unconditionally guaranteed—subject to certain customary release provisions, including the sale of the subsidiary guarantor or of all or substantially all of its assets—by certain of our current and future direct and indirect domestic and foreign subsidiaries (collectively, the “Guarantors”). The Parent serves as the Issuer of the notes and consolidates all Guarantors. The financial information for the Issuer and Guarantors is presented on a combined basis, with intercompany balances and transactions between the Issuer and the Guarantors eliminated. Any amounts due to or from the Issuer or Guarantors, as well as transactions with non-guarantor subsidiaries, are disclosed separately. The combined financial information for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Thirty-nine weeks ended ​ ​ September 27, ​ September 28, ​ September 27, ​ September 28, Dollars in thousands 2025 ​ 2024 ​ 2025 ​ 2024 Net sales ​ $ 726,916 ​ $ 683,626 ​ $ 2,129,488 ​ $ 2,066,805 Gross profit ​ 215,042 ​ 200,042 ​ 634,920 ​ 624,246 Operating income ​ 107,493 ​ 83,740 ​ 270,852 ​ 277,824 Net earnings attributable to Valmont Industries, Inc. ​ 78,168 ​ 52,830 ​ 183,754 ​ 174,052 The combined financial information as of September 27, 2025 and December 28, 2024 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 27, ​ December 28, Dollars in thousands ​ 2025 2024 Current assets ​ $ 853,520 ​ $ 805,713 Non-current assets ​ 834,721 ​ 835,197 Current liabilities ​ 445,264 ​ 470,652 Non-current liabilities ​ 1,151,550 ​ 1,091,773 As of September 27, 2025 and December 28, 2024, non-current assets included a receivable from non-guarantor subsidiaries of $92,038 and $90,938, respectively. As of September 27, 2025 and December 28, 2024, non-current liabilities included a payable to non-guarantor subsidiaries of $299,469 and $243,465, respectively. Selected Financial Measures The leverage ratio is a key financial metric we use to assess our maximum borrowing capacity. It is defined as the ratio of (a) interest-bearing debt, minus unrestricted cash in excess of $50.0 million (but not exceeding $500.0 million), to (b) Adjusted EBITDA. In the event of an acquisition or divestiture, Adjusted EBITDA is calculated on a pro forma basis, reflecting the transaction as if it had occurred on the first day of the period. Our revolving credit facility requires us to maintain a leverage ratio of 3.50 or lower (or 3.75 or lower following certain material acquisitions) on a rolling four-fiscal-quarter basis, measured as of the last day of each fiscal quarter. Failure to comply with this financial covenant may result in higher financing costs or early debt repayment obligations. The leverage ratio and Adjusted EBITDA are non-generally accepted accounting principles (“GAAP”) measures. As presented, these measures may not be directly comparable to similarly titled measures used by other companies. They should not be considered in isolation or as a substitute for net earnings, cash flows from operations, or other income or cash flow data prepared in accordance with GAAP. Additionally, they should not be interpreted as indicators of operating performance or liquidity. 32 Table of Contents The calculation of Adjusted EBITDA for the four fiscal quarters ended September 27, 2025 was as follows: ​ ​ ​ ​ ​ Four fiscal quarters ended ​ ​ September 27, Dollars in thousands ​ 2025 Net cash flows from operating activities ​ $ 538,657 Interest expense ​ 42,738 Income tax expense ​ 110,702 Impairment of long-lived assets ​ ​ (91,337) Deferred income taxes ​ 3,700 Redeemable noncontrolling interests ​ (2,974) Net periodic pension cost ​ (958) Contribution to defined benefit pension plan ​ 3,215 Changes in assets and liabilities ​ (60,136) Other ​ (12,359) Impairment of long-lived assets ​ ​ 91,337 Realignment charges ​ ​ 9,794 Non-recurring non-cash charges ​ ​ 3,918 Pro forma divestitures adjustment ​ ​ 59 Adjusted EBITDA ​ $ 636,356 ​ ​ ​ ​ ​ ​ ​ Four fiscal quarters ended ​ ​ September 27, Dollars in thousands ​ 2025 Net earnings attributable to Valmont Industries, Inc. ​ $ 259,925 Interest expense ​ 42,738 Income tax expense ​ 110,702 Depreciation and amortization ​ 90,283 Stock-based compensation ​ 27,600 Impairment of long-lived assets ​ ​ 91,337 Realignment charges ​ ​ 9,794 Non-recurring non-cash charges ​ ​ 3,918 Pro forma divestitures adjustment ​ ​ 59 Adjusted EBITDA ​ $ 636,356 The calculation of the leverage ratio as of September 27, 2025 was as follows: ​ ​ ​ ​ ​ September 27, Dollars in thousands ​ 2025 Interest-bearing debt, excluding origination fees and discounts of $25,075 ​ $ 755,740 Less: Cash and cash equivalents in excess of $50,000 ​ 176,107 Net indebtedness ​ $ 579,633 Adjusted EBITDA ​ 636,356 Leverage ratio ​ 0.91 FINANCIAL OBLIGATIONS AND COMMITMENTS There were no material changes in the Company’s financial obligations and commitments during the thirty-nine weeks ended September 27, 2025. For additional information on the Company’s financial obligations and commitments, refer to the “Cash Uses” section in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024. CRITICAL ACCOUNTING ESTIMATES The accounting policies described below involve significant judgments and estimates that are used in preparing our Consolidated Financial Statements. Management exercises substantial judgment in determining these estimates, which are essential to our financial reporting. The key areas that involve such estimates include impairments of goodwill and other intangible assets, income taxes, revenue recognition for product lines recognized over time, and inventory obsolescence. These estimates are based on our past experiences and other assumptions that we believe to be reasonable given the circumstances. 33 Table of Contents We continually re-evaluate these estimates as circumstances evolve, understanding that actual results may differ due to changes in assumptions or conditions. To ensure accuracy and transparency in our financial reporting, the selection and application of our critical accounting policies are reviewed annually by our Audit Committee. Other than the below, there were no material changes in the Company’s critical accounting estimates during the thirty-nine weeks ended September 27, 2025. For additional information on the Company’s critical accounting estimates, refer to the “Critical Accounting Estimates” section in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024. Impairment of Goodwill and Other Intangible Assets We evaluate goodwill for impairment annually during the third fiscal quarter, aligning this assessment with our strategic planning process. For the fiscal 2025 annual goodwill impairment test, we estimated the fair value of the eleven reporting units with recorded goodwill using a discounted cash flow model. This model factors in projected after-tax cash flows from operations, net of capital expenditures, discounted to their present value. Additionally, we perform sensitivity analyses to assess the impact of changes in key assumptions, such as discount rates and cash flow forecasts, on the valuation of the reporting units. For fiscal 2025 annual testing, no reporting units had a fair value lower than their carrying value. However, in the second quarter of fiscal 2025, we identified triggering events that required interim goodwill impairment testing for certain reporting units within the Infrastructure segment, resulting in impairments totaling $64.9 million. For fiscal 2024, no reporting units had a fair value lower than their carrying value. Our reporting units are cyclical, and their sales and profitability may fluctuate from year to year. For our APAC Highway Safety and EMEA Structures reporting units, with a combined goodwill of approximately $43.6 million, the amount of cushion or excess fair value above their carrying values was less than or approximately 15%. We believe these reporting units will generate positive cash flows that exceed their current carrying values, and we will continue to monitor their growth prospects and opportunities for continuous improvement. We actively monitor the global economy for potential factors that could impact the operating results of our reporting units. Should adverse conditions arise, we will conduct an impairment test for any affected reporting units prior to our annual testing. When evaluating reporting units, we focus on their long-term prospects, recognizing that current performance may not always be indicative of future value, which requires management judgment, particularly regarding cash flow projections. Our indefinite-lived intangible assets primarily consist of trade names, which are tested separately from goodwill. We use the relief-from-royalty method to value these assets, calculating the potential royalty a third party might pay to use the trade name, which is then discounted to present value and tax-effected. For fiscal 2025 annual testing, the fair value of our trade names exceeded their carrying value. However, in the second quarter of fiscal 2025, we performed an interim test on certain indefinite-lived trade names and one trade name’s carrying value exceeded its fair value, resulting in a $4.8 million impairment within the Infrastructure segment. For fiscal 2024, the fair value of our trade names exceeded their carrying value. Additionally, in the second quarter of fiscal 2025, due to identified impairment indicators, we tested the recoverability of an amortizing customer relationship intangible asset in the Agriculture segment. We determined the asset’s carrying value exceeded its total undiscounted estimated future cash flows. As a result, we recognized a $1.4 million impairment within the Agriculture segment. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no material changes in the Company’s market risk during the thirty-nine weeks ended September 27, 2025. For additional information on the Company’s market risk, refer to Part II, Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024. 34 Table of Contents