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 27, 2025. Segment net sales in the following table and elsewhere are presented net of intersegment sales. See Note 15 of our Condensed Consolidated Financial Statements for additional information on segment sales and intersegment sales. 21 Table of Contents EXECUTIVE OVERVIEW Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ ​ ​ Twenty-six weeks ended ​ ​ ​ ​ June ​ ​ ​ June ​ Percent ​ June ​ ​ ​ June ​ Percent Dollars in thousands, except per-share amounts ​ 27, 2026 ​ 28, 2025 ​ Change ​ 27, 2026 ​ 28, 2025 ​ Change Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 1,118,689 ​ $ 1,050,548 ​ 6.5% ​ $ 2,147,886 ​ $ 2,019,862 ​ 6.3% Gross profit ​ ​ 340,817 ​ 321,167 ​ 6.1% ​ 657,695 ​ 612,269 ​ 7.4% as a percentage of net sales ​ ​ 30.5% ​ 30.6% ​ ​ ​ 30.6% ​ 30.3% ​ ​ Selling, general, and administrative expenses ​ ​ 174,706 ​ 191,670 ​ (8.9%) ​ 335,958 ​ ​ 354,458 ​ (5.2%) as a percentage of net sales ​ ​ 15.6% ​ 18.2% ​ ​ ​ 15.6% ​ 17.5% ​ ​ Impairment of long-lived assets ​ ​ — ​ ​ 91,337 ​ NM ​ ​ — ​ ​ 91,337 ​ NM Realignment charges ​ ​ — ​ ​ 8,884 ​ NM ​ ​ — ​ ​ 8,884 ​ NM Operating income ​ ​ 166,111 ​ 29,276 ​ 467.4% ​ 321,737 ​ 157,590 ​ 104.2% as a percentage of net sales ​ ​ 14.8% ​ 2.8% ​ ​ ​ 15.0% ​ 7.8% ​ ​ Net interest expense ​ ​ 8,159 ​ 8,975 ​ (9.1%) ​ 16,193 ​ 15,696 ​ 3.2% Effective tax rate ​ ​ 25.8% ​ 117.2% ​ ​ ​ 25.7% ​ 38.7% ​ ​ Net earnings (loss) attrib. to Valmont Industries, Inc. ​ ​ 119,918 ​ ​ (4,020) ​ NM ​ ​ 227,951 ​ ​ 83,241 ​ 173.8% Diluted earnings (loss) per share ​ $ 6.14 ​ $ (1.53) ​ NM ​ $ 11.65 ​ $ 2.84 ​ 310.2% Infrastructure ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 876,718 ​ $ 763,092 ​ 14.9% ​ $ 1,679,898 ​ $ 1,466,583 ​ 14.5% Gross profit ​ 264,641 ​ ​ 227,883 ​ 16.1% ​ 508,831 ​ 440,758 ​ 15.4% as a percentage of net sales ​ ​ 30.2% ​ ​ 29.9% ​ ​ ​ ​ 30.3% ​ ​ 30.1% ​ ​ Selling, general, and administrative expenses ​ 110,265 ​ ​ 111,187 ​ (0.8%) ​ 211,432 ​ 206,850 ​ 2.2% as a percentage of net sales ​ ​ 12.6% ​ ​ 14.6% ​ ​ ​ ​ 12.6% ​ ​ 14.1% ​ ​ Impairment of long-lived assets ​ ​ — ​ ​ 89,356 ​ NM ​ ​ — ​ 89,356 ​ NM Realignment charges ​ ​ — ​ ​ 1,426 ​ NM ​ ​ — ​ 1,426 ​ NM Operating income ​ 154,376 ​ 25,914 ​ 495.7% ​ 297,399 ​ 143,126 ​ 107.8% as a percentage of net sales ​ ​ 17.6% ​ ​ 3.4% ​ ​ ​ ​ 17.7% ​ ​ 9.8% ​ ​ Agriculture ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 241,971 ​ $ 287,456 ​ (15.8%) ​ $ 467,988 ​ $ 553,279 ​ (15.4%) Gross profit ​ 76,176 ​ ​ 93,284 ​ (18.3%) ​ 148,864 ​ 171,511 ​ (13.2%) as a percentage of net sales ​ ​ 31.5% ​ ​ 32.5% ​ ​ ​ ​ 31.8% ​ ​ 31.0% ​ ​ Selling, general, and administrative expenses ​ 36,293 ​ ​ 52,366 ​ (30.7%) ​ 75,478 ​ 94,356 ​ (20.0%) as a percentage of net sales ​ ​ 15.0% ​ ​ 18.2% ​ ​ ​ ​ 16.1% ​ ​ 17.1% ​ ​ Impairment of long-lived assets ​ ​ — ​ ​ 1,981 ​ NM ​ ​ — ​ ​ 1,981 ​ NM Realignment charges ​ ​ — ​ ​ 2,886 ​ NM ​ ​ — ​ ​ 2,886 ​ NM Operating income ​ 39,883 ​ 36,051 ​ 10.6% ​ 73,386 ​ 72,288 ​ 1.5% as a percentage of net sales ​ ​ 16.5% ​ ​ 12.5% ​ ​ ​ ​ 15.7% ​ ​ 13.1% ​ ​ Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general, and administrative expenses ​ $ 28,148 ​ $ 28,117 ​ 0.1% ​ $ 49,048 ​ $ 53,252 ​ (7.9%) Realignment charges ​ ​ — ​ ​ 4,572 ​ NM ​ ​ — ​ ​ 4,572 ​ NM Operating loss ​ (28,148) ​ (32,689) ​ (13.9%) ​ (49,048) ​ (57,824) ​ NM ​ ​ NM = not meaningful Overview Consolidated net sales increased $68.1 million or 6.5% in the second quarter of fiscal 2026 and increased $128.0 million or 6.3% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The increases were primarily driven by higher net sales in the Infrastructure segment, particularly within the North America Utility product line, partially offset by lower net sales in the Agriculture segment, primarily from international markets. Consolidated gross profit increased $19.7 million or 6.1% in the second quarter of fiscal 2026 and increased $45.4 million or 7.4% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The increases were primarily attributable to favorable pricing and higher sales volumes in the Infrastructure segment, particularly within the North America Utility product line. These improvements were partially offset by lower sales volumes in the Agriculture segment, primarily in the Middle East. Consolidated selling, general, and administrative (“SG&A”) expenses decreased $17.0 million or 8.9% in the second quarter of fiscal 2026 and decreased $18.5 million or 5.2% in the first half of fiscal 2026, as compared to the same periods of 22 Table of Contents fiscal 2025. In the second quarter of fiscal 2025, the Company recognized $7.0 million of expenses associated with software licenses that were no longer expected to be used, in addition to a $3.2 million write-off related to the Company’s exit from the agriculture solar market in Brazil. The remaining decreases were primarily driven by lower expected credit losses, in part due to certain recoveries within our Agriculture segment operations in Brazil. Consolidated operating income increased $136.8 million or 467.4% in the second quarter of fiscal 2026 and increased $164.1 million or 104.2% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The increases were primarily attributable to the impairment charges on certain long-lived assets of $91.3 million and realignment charges of $8.9 million recognized in the second quarter of fiscal 2025, as well as lower SG&A expenses in fiscal 2026. Income Tax Expense Our effective income tax rate in the second quarter and first half of fiscal 2026 was 25.8%, and 25.7%, respectively, as compared to 117.2% and 38.7% in the same periods of fiscal 2025. The decreases in the effective tax rate were primarily attributable to goodwill impairment charges recognized during the second quarter of fiscal 2025 for which no tax benefit was recorded. Infrastructure Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ ​ ​ ​ ​ ​ ​ June 27, ​ June 28, ​ Dollar ​ Percent Dollars in thousands ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ Change North America Utility ​ $ 456,738 ​ $ 341,188 $ 115,550 33.9% North America Lighting and Transportation ​ ​ 130,502 ​ ​ 133,765 ​ (3,263) (2.4%) North America Coatings ​ ​ 69,037 ​ ​ 59,184 ​ 9,853 16.6% North America Telecommunications ​ ​ 56,985 ​ ​ 77,149 ​ (20,164) (26.1%) International Infrastructure and Solar ​ ​ 165,679 ​ ​ 154,239 ​ 11,440 7.4% Total sales ​ $ 878,941 ​ $ 765,525 ​ $ 113,416 14.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 154,376 ​ $ 25,914 ​ $ 128,462 495.7% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twenty-six weeks ended ​ ​ ​ ​ ​ ​ ​ June 27, ​ June 28, ​ Dollar ​ Percent Dollars in thousands ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ Change North America Utility ​ $ 880,922 ​ $ 674,024 $ 206,898 30.7% North America Lighting and Transportation ​ ​ 249,154 ​ ​ 257,888 ​ (8,734) (3.4%) North America Coatings ​ ​ 132,171 ​ ​ 114,892 ​ 17,279 15.0% North America Telecommunications ​ ​ 118,489 ​ ​ 141,137 ​ (22,648) (16.0%) International Infrastructure and Solar ​ ​ 304,126 ​ ​ 283,805 ​ 20,321 7.2% Total sales ​ $ 1,684,862 ​ $ 1,471,746 ​ $ 213,116 14.5% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 297,399 ​ $ 143,126 ​ $ 154,273 107.8% Infrastructure segment sales increased $113.4 million or 14.8% in the second quarter of fiscal 2026 and increased $213.1 million or 14.5% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The increases were driven by favorable pricing and higher sales volumes in the North America Utility product line, as well as higher sales volumes in the North America Coatings product line. These increases more than offset lower sales volumes in the North America Telecommunications product line. Foreign currency translation favorably impacted results by approximately $7.4 million in the second quarter of fiscal 2026 and $19.4 million the first half of fiscal 2026. North America Utility product line sales increased $115.6 million or 33.9% in the second quarter of fiscal 2026 and increased $206.9 million or 30.7% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025, reflecting favorable pricing and higher sales volumes. Demand remained strong, supported by increased electrical energy consumption and continued utility investment to expand and reinforce grid capacity, including investments to serve growing power demand from data centers and other sources of load growth. North America Lighting and Transportation product line sales decreased $3.3 million or 2.4% in the second quarter of fiscal 2026 and decreased $8.7 million or 3.4% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025, primarily due to lower sales volumes resulting from certain operational challenges, partially offset by favorable pricing. 23 Table of Contents North America Coatings product line sales increased $9.9 million or 16.6% in the second quarter of fiscal 2026 and increased $17.3 million or 15.0% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025, driven by higher sales volumes resulting from continued strength in infrastructure-related and data center demand. North America Telecommunications product line sales decreased $20.2 million or 26.1% in the second quarter of fiscal 2026 and decreased $22.6 million or 16.0% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025, primarily due to lower sales volumes associated with reduced carrier spending. International Infrastructure and Solar product line sales increased $11.4 million or 7.4% in the second quarter of fiscal 2026 and increased $20.3 million or 7.2% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The increases were largely attributable to favorable foreign currency impacts of approximately $7.0 million in the second quarter of fiscal 2026 and $18.3 million in the first half of fiscal 2026. Infrastructure segment gross profit increased $36.8 million or 16.1% in the second quarter of fiscal 2026 and increased $68.1 million or 15.4% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025, primarily due to favorable pricing and higher sales volumes in the North America Utility and the North America Coatings product lines. Infrastructure segment SG&A expenses decreased $0.9 million or 0.8% in the second quarter of fiscal 2026 and increased $4.6 million or 2.2% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The second-quarter decrease was primarily driven by lower expected credit losses, partially offset by higher compensation costs. The increase in the first half of fiscal 2026 was primarily driven by higher compensation and incentive costs, partially offset by lower expected credit losses. Infrastructure segment operating income increased $128.5 million or 495.7% in the second quarter of fiscal 2026 and increased $154.3 million or 107.8% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The increases were primarily attributable to the impairment charges of $89.4 million related to certain long-lived assets, primarily in the Solar and Access Systems reporting units, and realignment charges of $1.4 million recorded during the second quarter of fiscal 2025. The increases also reflected favorable pricing and higher sales volumes, partially offset by higher input costs. Agriculture Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ ​ ​ ​ ​ ​ ​ ​ ​ June 27, ​ June 28, ​ ​ ​ Dollar ​ ​ ​ Percent Dollars in thousands ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ Change North America ​ $ 139,157 ​ $ 142,482 $ (3,325) (2.3%) International ​ ​ 104,542 ​ ​ 146,938 ​ (42,396) (28.9%) Total sales ​ $ 243,699 ​ $ 289,420 ​ $ (45,721) (15.8%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 39,883 ​ $ 36,051 ​ $ 3,832 10.6% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twenty-six weeks ended ​ ​ ​ ​ ​ ​ ​ June 27, ​ June 28, ​ Dollar ​ Percent Dollars in thousands ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ Change North America ​ $ 278,750 ​ $ 279,958 $ (1,208) (0.4%) International ​ ​ 191,945 ​ ​ 276,733 ​ (84,788) (30.6%) Total sales ​ $ 470,695 ​ $ 556,691 ​ $ (85,996) (15.4%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 73,386 ​ $ 72,288 ​ $ 1,098 1.5% In North America, Agriculture segment sales decreased $3.3 million or 2.3% in the second quarter of fiscal 2026 and decreased $1.2 million or 0.4% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The decreases were primarily attributable to lower irrigation equipment sales volumes reflecting continued softness in the agricultural market, partially offset by higher average selling prices. This softness was driven by lower grain prices, uncertainty surrounding trade policy, and the timing of government funding. In international markets, Agriculture segment sales decreased $42.4 million or 28.9% in the second quarter of fiscal 2026 and decreased $84.8 million or 30.6% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The declines were primarily driven by disruptions related to the ongoing Middle East conflict, as well as slightly lower sales 24 Table of Contents volumes in Brazil. These impacts were partially offset by favorable foreign currency impacts of approximately $6.8 million and $11.8 million during the second quarter and first half of fiscal 2026, respectively. The Agriculture business is cyclical and influenced by factors including net farm income, commodity prices, weather volatility, geopolitical events, and farmer sentiment regarding future economic conditions. We closely monitor these variables across our key markets. In the U.S., net farm income estimates published by the U.S. Department of Agriculture are a key indicator of grower purchasing capacity. In Brazil, we monitor grain prices, projected farm input costs, interest rates, and net farm income trends, which collectively influence grower liquidity, credit availability, and purchasing behavior. We remain focused on managing through evolving market conditions and positioning the Agriculture business for long-term growth across both domestic and international markets. Agriculture segment gross profit decreased $17.1 million or 18.3% in the second quarter of fiscal 2026 and decreased $22.6 million or 13.2% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The decreases were primarily attributable to lower sales volumes resulting from the ongoing Middle East conflict and continued market softness in North America, partially offset by higher average selling prices in North America. Agriculture segment SG&A decreased $16.1 million or 30.7% in the second quarter of fiscal 2026 and decreased $18.9 million or 20.0% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The decreases were primarily driven by lower expected credit losses, which included $3.8 million of recoveries of previously aged accounts receivable in Brazil. Agriculture segment operating income increased $3.8 million or 10.6% in the second quarter of fiscal 2026 and increased $1.1 million or 1.5% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The increases were primarily attributable to favorable pricing and lower SG&A expenses, partially offset by lower sales volumes. Results for the second quarter of fiscal 2025 were also impacted by impairment and other non-recurring charges of $5.9 million related to the agriculture solar business and realignment charges of $2.9 million. Corporate Corporate SG&A expenses increased by 0.1% in the second quarter of fiscal 2026 and decreased by $4.2 million or 7.9% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. The second-quarter increase was primarily due to higher professional service fees, partially offset by lower compensation and incentive costs resulting from lower headcount. The first-half decrease was primarily due to lower compensation costs, partially offset by higher professional service fees. KEY FACTORS AFFECTING FINANCIAL RESULTS 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 first quarter of fiscal 2026, we acquired the remaining 80% ownership interest in RMDS Innovation, Inc., a Quebec-based technology company, included in the Agriculture 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 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. The Middle East continued to experience military conflict and related geopolitical instability during the second quarter of fiscal 2026. We have agriculture operations headquartered in Dubai, United Arab Emirates, with business activities throughout the region. The conflict and broader regional instability have affected, and could continue to adversely affect, our regional operations through disruptions to logistics networks and transportation infrastructure, increased energy costs, and 25 Table of Contents volatility in regional currency and financial markets. Certain customers and suppliers in the region have been, and could continue to be, negatively affected by these developments. We continue to actively monitor the situation and are taking actions, as appropriate, to mitigate potential impacts on our operations, financial results, and liquidity. On April 2, 2026, a proclamation was issued modifying Section 232 tariffs on steel, aluminum, and certain derivative articles, effective April 6, 2026. Under the proclamation, tariffs on certain steel products, including utility poles, are determined based on sourcing requirements, with a 10% ad valorem rate applicable to products in which at least 95% of steel content was melted and poured in the U.S. Products that do not meet these requirements are subject to higher tariff rates, including up to 50% on full value. On June 1, 2026, a subsequent proclamation further adjusted the tariff framework by lowering the U.S.-content threshold for preferential rate eligibility from 95% to 85%. During fiscal 2025, we imported approximately $220.0 million of fabricated steel structures from Mexico into the U.S., which represents the primary category of products affected by these modifications. Based on our current assessment, we believe that the majority of our steel poles produced at our Mexico facility will qualify for the 10% tariff rate, as those structures are produced using U.S. melted and poured steel. Management has interpreted the requirements of the proclamation based on its current understanding and available guidance. Regulatory interpretations may evolve, and authorities could reach conclusions that differ from management’s interpretation. If such differing interpretations were to occur, the Company may be required to modify its practices, which could result in increased costs or changes to reported results. 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 June 27, 2026, we had approximately $450.6 million of remaining capacity under the share repurchase program. Since the program’s inception in May 2014, we have repurchased approximately 9.1 million shares for a total of $1.6 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 June 27, 2026 and December 27, 2025, our accounts payable in the Condensed Consolidated Balance Sheets included $38.8 million and $56.3 million, respectively, related to the obligations under this program. 26 Table of Contents Sources of Financing As of June 27, 2026, our available debt financing primarily included senior unsecured notes and a revolving credit facility. Senior Unsecured Notes As of June 27, 2026, our senior unsecured notes consisted of: ● $450.0 million face value ($434.8 million carrying value) notes at an interest rate of 5.00% per annum, maturing in October 2044. ● $305.0 million face value ($295.7 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 June 27, 2026, we had no outstanding borrowings under this facility. As of December 27, 2025, we had outstanding borrowings of $65.0 million under this facility. The facility includes a financial covenant that may limit additional borrowing. As of June 27, 2026, 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 $5.7 million, all of which were unused as of June 27, 2026. 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. 27 Table of Contents 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. As of June 27, 2026, 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 2026 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 June 27, 2026, we held $139.1 million in cash, including $110.9 million in non-U.S. subsidiaries. Distributions of this foreign cash would incur tax liabilities. As of June 27, 2026, we had liabilities of $1.6 million for foreign withholding taxes and $0.2 million for U.S. state income taxes. We expect fiscal 2026 capital expenditures to range from $170.0 million to $200.0 million. Cash Flows The table below summarizes our cash flow information for the twenty-six weeks ended June 27, 2026 and June 28, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ Twenty-six weeks ended ​ ​ June 27, ​ June 28, Dollars in thousands ​ ​ ​ 2026 ​ ​ ​ 2025 Net cash flows from operating activities ​ $ 251,583 ​ $ 232,739 Net cash flows from investing activities ​ (76,556) ​ (64,319) Net cash flows from financing activities ​ (223,716) ​ (131,223) Operating Cash Flows and Working Capital – Cash provided by operating activities totaled $251.6 million in the first half of fiscal 2026, as compared to $232.7 million in the same period of fiscal 2025. The change in operating cash flows reflects higher net earnings and lower cash income tax payments, partially offset by unfavorable changes in working capital, including increases in receivables, inventories, and the $20.3 million settlement payment associated with our litigation matters in Brazil. The lower cash tax payments were a result of the worthless securities deduction that was recorded in the fourth quarter of fiscal 2025 that gave rise to a federal tax receivable that was used to reduce estimated tax payments through the first half of fiscal 2026. Investing Cash Flows – Cash used in investing activities totaled $76.6 million in the first half of fiscal 2026, as compared to $64.3 million in the same period of fiscal 2025. Investing activities in the first half of fiscal 2026 primarily included capital spending of $70.5 million and the acquisition of RMDS Innovation, Inc., net of cash acquired, of $11.5 million. Investing activities in the first half of fiscal 2025 primarily included capital spending of $62.3 million. 28 Table of Contents Financing Cash Flows – Cash used in financing activities totaled $223.7 million in the first half of fiscal 2026, as compared to $131.2 million in the same period of fiscal 2025. Our total interest-bearing debt was $755.2 million as of June 27, 2026 and $829.5 million as of December 27, 2025. Financing activities in the first half of fiscal 2026 primarily consisted of borrowings on the revolving credit facility of $65.2 million offset by payments of $130.6 million, dividends paid of $28.2 million, stock repurchases of $117.5 million, and the purchase of a redeemable noncontrolling interest of $8.9 million. Financing activities in the first half 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 $134.9 million, dividends paid of $25.7 million, and stock repurchases of $100.0 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 twenty-six weeks ended June 27, 2026 and June 28, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirteen weeks ended ​ Twenty-six weeks ended ​ ​ June 27, ​ June 28, ​ June 27, ​ June 28, Dollars in thousands ​ ​ ​ 2026 ​ 2025 ​ 2026 ​ 2025 Net sales ​ $ 825,299 ​ $ 725,881 ​ $ 1,603,795 ​ $ 1,402,572 Gross profit ​ 247,331 ​ 220,733 ​ 475,739 ​ 419,878 Operating income ​ 128,643 ​ 70,364 ​ 253,776 ​ 163,359 Net earnings attributable to Valmont Industries, Inc. ​ 87,907 ​ 45,600 ​ 169,262 ​ 105,586 The combined financial information as of June 27, 2026 and December 27, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 27, ​ December 27, Dollars in thousands ​ 2026 ​ ​ ​ 2025 Current assets ​ $ 988,910 ​ $ 901,456 Non-current assets ​ 850,759 ​ 851,743 Current liabilities ​ 422,077 ​ 415,155 Non-current liabilities ​ 1,283,245 ​ 1,241,800 As of June 27, 2026 and December 27, 2025, non-current assets included a receivable from non-guarantor subsidiaries of $67,171 and $83,641, respectively. As of June 27, 2026 and December 27, 2025, non-current liabilities included a payable to non-guarantor subsidiaries of $409,258 and $325,225, 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 29 Table of Contents data prepared in accordance with GAAP. Additionally, they should not be interpreted as indicators of operating performance or liquidity. The calculation of Adjusted EBITDA for the four fiscal quarters ended June 27, 2026 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ Four fiscal quarters ended ​ ​ June 27, Dollars in thousands ​ 2026 Net cash flows from operating activities ​ $ 475,328 Interest expense ​ 38,725 Income tax expense ​ 49,889 Impairment of long-lived assets ​ ​ (9,340) Deferred income taxes ​ (4,631) Redeemable noncontrolling interests ​ (3,579) Net periodic pension cost ​ (2,677) Contribution to defined benefit pension plan ​ 2,553 Changes in assets and liabilities ​ 149,847 Other, net ​ 1,392 Impairment of long-lived assets ​ ​ 9,340 Realignment activities ​ ​ 6,272 Pro forma acquisition adjustment ​ ​ 4,709 Adjusted EBITDA ​ $ 717,828 ​ ​ ​ ​ ​ ​ ​ Four fiscal quarters ended ​ ​ June 27, Dollars in thousands ​ 2026 Net earnings attributable to Valmont Industries, Inc. ​ $ 494,983 Interest expense ​ 38,725 Income tax expense ​ 49,889 Depreciation and amortization ​ 91,560 Stock-based compensation ​ 22,350 Impairment of long-lived assets ​ ​ 9,340 Realignment activities ​ ​ 6,272 Pro forma acquisition adjustment ​ ​ 4,709 Adjusted EBITDA ​ $ 717,828 The calculation of the leverage ratio as of June 27, 2026 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ June 27, Dollars in thousands ​ 2026 Interest-bearing debt, excluding origination fees and discounts of $24,522 ​ $ 755,207 Less: Cash and cash equivalents in excess of $50,000 ​ 89,051 Net indebtedness ​ $ 666,156 Adjusted EBITDA ​ 717,828 Leverage ratio ​ 0.93 FINANCIAL OBLIGATIONS AND COMMITMENTS There were no material changes in the Company’s financial obligations and commitments during the twenty-six weeks ended June 27, 2026. 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 27, 2025. 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 our Infrastructure 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. 30 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 twenty-six weeks ended June 27, 2026. 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 27, 2025. Impairment of Goodwill and Other Intangible Assets In fiscal 2025, there were no changes to the composition of our reporting units. However, the number of reporting units with recorded goodwill decreased from twelve to eleven during fiscal 2025 as a result of the full impairment of goodwill associated with our Solar reporting unit in the second quarter. We periodically reassess our reporting unit structure based on changes in how the business is managed, including changes in organizational structure, leadership, and the manner in which financial information is reviewed by segment management. Determining reporting units requires judgment, including evaluating the level at which discrete financial information is available and regularly reviewed by segment management, how components of the business are organized and managed, and whether components of the business share similar economic characteristics. These same considerations directly inform how acquired assets, liabilities, and goodwill are assigned or reallocated to reporting units. Specifically, items are assigned based on how the underlying operations are organized and how financial results are reviewed by segment management, including whether assets and liabilities are specifically identifiable to a reporting unit or are shared across reporting units. In the first quarter of fiscal 2024, we reorganized certain operations within our Agriculture reportable segment. Specifically, the former Agriculture Technology reporting unit was integrated into the North America Irrigation and International Irrigation reporting units. This reorganization was driven by changes in senior leadership and a strategic determination that technology offerings are integral to the underlying irrigation equipment business rather than a separate independent line of business, which also resulted in a change to the manner in which discrete financial information is reviewed by segment management. Accordingly, management concluded that the Agriculture Technology operations no longer constituted a separate reporting unit. In connection with this reorganization, we performed goodwill impairment assessments immediately before and after the reorganization and concluded that no impairment existed. This assessment reflected improved cash flow forecasts relative to the prior annual impairment test, primarily due to restructuring actions undertaken in the fourth quarter of fiscal 2023. The assets and liabilities (excluding goodwill) of the former Agriculture Technology reporting unit were reassigned to the North America Irrigation and International Irrigation reporting units in a manner consistent with how the underlying operations and financial information are managed and reviewed by segment management following the reorganization. Assets and liabilities that were specifically identifiable to a reporting unit were directly assigned. For assets and liabilities that were not specifically identifiable, amounts were reallocated based on the reorganization of the business and the revised internal reporting structure used by segment management. Goodwill of approximately $168.0 million, which includes the goodwill associated with our former Prospera business, was then allocated to these reporting units using a relative fair value approach in accordance with ASC 350-20-35-45. This approach was used because goodwill does not represent separately identifiable assets and must be reallocated based on the relative fair values of the reporting units expected to benefit from the reorganization. The estimated fair values were derived from projected revenues and cash flows of the respective reporting units. Accordingly, goodwill associated with the former Prospera business is included within these reporting units. During fiscal 2025, management elected to abandon the use of Prospera’s proprietary technology and initiated actions to exit the business. Management performed a qualitative assessment and concluded that no triggering event existed, as the decision did not materially affect the expected future cash flows of the reporting units and no indicators were present that it was more likely than not that the fair value of any reporting unit was below its carrying amount prior to the annual impairment test. Accordingly, no after-tax cash flows associated with Prospera were included in the projected cash flows 31 Table of Contents used in our fiscal 2025 annual goodwill impairment test, reflecting management’s expectation at the time of the annual test that Prospera would not contribute to the future operating performance of the reporting units. In the fourth quarter of fiscal 2025, we completed a legal entity reorganization that resulted in a deemed liquidation of the Prospera business. Because the fiscal 2025 annual goodwill impairment test had already excluded Prospera-related cash flows, management concluded that the subsequent decision by the Board of Directors to formally exit the business and abandon its technology did not represent a change in the assumptions used in the annual impairment test. Accordingly, this event did not constitute a triggering event requiring an interim goodwill impairment assessment under ASC 350-20-35-30. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no material changes in the Company’s market risk during the twenty-six weeks ended June 27, 2026. 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 27, 2025.