Valmont Industries, Inc. (NYSE: VMI) reported financial results for the third quarter ended September 24, 2022. CEO Stephen Kaniewski said gains in the telecommunications infrastructure sector were driven by institutional investments and attention to rebuilding aging infrastructure.
“I am extremely pleased with the outstanding performance and record results delivered by the entire Valmont team this quarter,” said Kaniewski. “We continue to see strong demand globally for our products and solutions across infrastructure and agriculture markets. Broad-based infrastructure market strength is being driven by continued investments in grid resiliency and upgrades to aging infrastructure, ongoing demand for renewable power and clean energy solutions and the 5G network transition.”
Highlights for the quarter included:
- Record Third Quarter Net Sales of $1.1 billion increased 26.3 percent YoY
- Operating Income increased 44.3 percent to $110.0 million YoY, or 10.0 percent of net sales compared to $76.2 million or 8.8 percent of net sales ($80.4 million or 9.3 percent adjusted)
- Record Third Quarter Diluted Earnings per Share (EPS) of $3.34 compared to $2.40
- Generated strong third quarter operating cash flows of $116 million driven by better overall working capital management including a reduction in inventory compared to second quarter 2022
- Record backlog of $2.0 billion, an increase of 25.4 percent or $412 million since the end of fiscal 2021, and sequentially higher due to continued strong market demand across the portfolio
- Returned $22.4 million to shareholders through dividends and share repurchases
“Despite continued challenges of inflation and supply chain volatility,” Kaniewski said, “we delivered record third quarter earnings per share as our team continues to live our core values of passion, integrity, and continuous improvement, with an unwavering focus on delivering results. Across our global portfolio we remain committed to the execution of our growth strategy while also improving profitability and delivering long-term value for our shareholders.”
Infrastructure, accounting for 70.5 percent of net sales includes products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation and telecommunications, and coatings services to preserve metal products.
Sales of $778.4 million grew 22.7 percent year-over-year with double-digit sales growth across all product lines, net of 2.3 percent unfavorable foreign currency translation impacts. Higher sales were driven by favorable pricing globally, primarily in the
Operating Income improved to $43.3 million, or 13.3 percent of net sales ($47.4 million or 14.6 percent adjusted) compared to $27.7 million or 11.7 percent of net sales ($32.0 million or 13.5 percent adjusted) in 2021. The benefit of higher average selling prices and additional volume leverage was partially offset by higher SG&A, including incremental R&D expense for technology investments.
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