Valmont Industries Stock

Valmont Industries, Inc., along with its subsidiaries (Valmont), is a diversified manufacturer of products and services for infrastructure and agriculture markets.

Segments

The company has two reportable segments: Infrastructure and Agriculture.

Customers and end-users of the company's Infrastructure products include utility and telecommunication companies, municipalities and government entities, manufacturers of commercial lighting fixtures, and contractors. Customers of the company's Agriculture segment are primarily dealers who resell mechanized irrigation equipment to their end-customer, the farmer. Both segments service the general manufacturing sector as well. In the year ended December 30, 2023 (fiscal 2023), approximately 31% of the company's net sales were either sold in markets or produced by its manufacturing plants outside of North America.

The company's reportable segments are as follows:

Infrastructure: This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, solar, lighting, transportation, and telecommunications, along with coatings services to protect metal products.

Agriculture: This segment consists of the manufacture of center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture.

Infrastructure segment

Products

Transmission, Distribution, and Substation ('TD&S')

The company engineers and manufactures steel, pre-stressed concrete, and composite structures to support the lines and equipment that carry and transform power for electrical transmission, substation, and distribution applications for the utility industry. Transmission refers to moving high-voltage power from where it is produced to where it is used. Substations transform the electricity from the generation source so that it can be carried on the transmission lines. A substation is then required to transform the high-voltage electricity from the transmission lines to low voltage so it can be distributed to the end-user. These innovative structures are offered to meet the growing demand for reliable energy. These solutions also support grid hardening across the globe, where fires, storms, and floods are occurring with increasing regularity.

TD&S projects are often complex and include large structures, therefore product design engineering is important to the function and safety of these solutions. The company's engineering process considers weather and loading conditions, such as wind speeds, ice loads, and power line requirements, to arrive at the final design.

Lighting and Transportation ('L&T')

The company designs, engineers, and manufactures steel, aluminum, wood, and composite poles and structures for a wide range of lighting and transportation applications. The demand for these products is driven by infrastructure, commercial, and residential construction and by consumers' desire for well-lit streets, highways, parking lots, and common areas. Beyond technical and engineering needs, customers also want product designs that are visually appealing and meet local aesthetic requirements.

The company's traffic and sign structures contribute to the orderly flow of automobile traffic. These structures support traffic signals and overhead signs. They are engineered to meet customer specifications to ensure the proper function and safety of the structure. Product engineering considers factors such as weather (e.g., wind, ice) and the products loaded on the structure (e.g., lighting fixtures, traffic signals, overhead signs) to determine the design. The company has expanded its capabilities in the traffic market with the development of patented vibration mitigation technology which continuously improves the safety of traffic and roadway structures by reducing the effects of wind and fatigue. The company's L&T product line also includes highway safety system products that are designed and engineered to enhance roadway safety. These systems include guardrail barriers, wire rope safety barriers, crash attenuation barriers, and other products which primarily serve the Australian and Indian markets.

Coatings

The company provides finishing services that inhibit corrosion, extend service lives, and enhance the aesthetics of a wide range of materials and products. With a variety of finish options, including galvanizing, anodizing, and painting, the company can meet customer-specific requirements for a variety of applications. Hot-dip galvanizing is a process that protects and prolongs the life of steel with a zinc coating that is bonded to the product surface to inhibit rust and corrosion. CorroCote adds protection to steel against the corrosive effects of soil and underground moisture for those products that are anchored below ground. Anodizing is a process applied to aluminum that oxidizes the surface of the aluminum in a controlled manner, which protects the aluminum from corrosion and allows the material to be dyed a variety of colors. The company also paints products using powder coating for certain industries and markets.

Telecommunications

The company engineers, manufactures, and distributes products, including towers, small cell structures, camouflage concealment solutions, passive intermodulation ('PIM') mitigation equipment, and components serving the wireless communication market. These solutions support expanded 5G requirements and the ever-growing demand for data. A wireless communication cell site mainly consists of a steel pole or tower, shelter (enclosure where the radio equipment is located), antennas (devices that receive and transmit data and voice information to and from wireless communication devices), and components (items that are used to mount antennas to a structure and to connect cabling and other parts from the antennas to the shelter). Small cell applications are utilized to enhance signal densification in urban environments and enhance the signal from the tower. Concealment solutions, such as faux trees, convert traditional telecommunication structures and camouflage them to fit seamlessly into the surrounding environment. PIM mitigation solutions are provided to solve issues with signal interference. The company's telecommunication structures are engineered and designed to customer specifications, which include factors such as equipment and antenna requirements, wind and soil conditions, and aesthetic standards, all while ensuring that they meet safety specifications.

Solar

The company's solar single-axis tracker product is an integrated system of steel structures, electric motors, and electronic controllers. Trackers move solar panels throughout the day to maintain an optimal orientation to the sun, which materially increases their energy production. The company's trackers utilize a simple, modular design allowing ease of installation and low operational maintenance. Further, the flexibility of the company's trackers' design allows for improved site utilization, which is especially valuable to the company's customers considering that solar projects are being constructed on increasingly challenging sites. The company sells its products to engineering, procurement, and construction firms that build solar energy projects, as well as solar developers, independent power producers, and utilities.

Markets

The key markets across the Infrastructure product lines have a portion of their funding supported through local, state, and federal government programs. The utility industry in North America is a significant market for the Infrastructure segment.

The company also serves the transportation, construction, and industrial markets. Many products from the company's transportation product portfolio will be utilized when making enhancements to traffic structures, bridge systems, roadway and street lighting, and high-mast lighting. A combination of state and federal funding, including the IIJA, supports transportation projects throughout the U.S. Public and private partnerships have also recently emerged as an additional funding source. The company has many long-standing relationships with lighting and equipment manufacturers who also serve this market. Industrial markets are typically driven by infrastructure, industrial, and commercial construction spending. While markets are varied, the company's markets for anodized or painted products are more directly dependent on consumer markets than industrial markets.

The market for the company's Telecommunications products is driven by demand for wireless communication and data. The company's customers are wireless network providers and companies that own and maintain cell sites. The company also sells products to state and federal governments for two-way radio communication, radar, broadcasting, and security applications.

The company's strategy is to compete based on the quality of the coating finish and timely delivery of the coated product to the customer.

Distribution Methods

Infrastructure sales and distribution activities are handled through a combination of a direct sales force and commissioned agents. Working with end-users and distributors, the company's sales force represents Valmont, as well as light fixture and traffic-signal manufacturers. This enables the company's agents to provide the pole, fixtures, and other equipment to the end-user as a complete package. Commercial lighting, wireless communication products and components, access systems, and highway safety sales are normally made through the company's sales employees, although some sales are made through independent commissioned sales agents. The company's TD&S and Solar products are normally sold directly to electrical utilities, developers, or energy providers with some sales sold through commissioned sales agents.

The company is globally one of the largest custom galvanizers and the company's sales are a small percentage of the total market. Sales and customer service are provided directly to the user by a direct sales force, generally assigned to each specific location.

Agriculture segment

Products

Irrigation Equipment and Parts

The company manufactures and distributes mechanical irrigation equipment and related service parts under the Valley brand name. A Valley irrigation machine is powered by electricity (via a grid, solar, or diesel generator), propels itself over a farm field, and applies water and chemicals to crops. Water and chemicals are applied through sprinklers attached to a pipeline that is supported by a series of towers, each of which is propelled via a drivetrain and tires. A standard mechanized irrigation machine (also known as a center pivot) rotates in a circle, although the company also manufactures and distributes center pivot extensions that can irrigate corners of square and rectangular farm fields, as well as conform to irregular field boundaries (referred to as a corner machine). The company's irrigation machines can also irrigate fields by moving up and down the field as opposed to rotating in a circle (referred to as a linear machine). Irrigation machines can be configured to irrigate fields in sizes from four acres to over 500 acres, with a standard size in the U.S. configured for a 160-acre tract of ground. The irrigation machine used in international markets is substantially the same as the one produced for the North American market. The company also manufactures tubular products for industrial customers primarily in the agriculture industry, as well as in transportation and other industries.

Technology Products and Services

Through over 100,000 connected devices, Valley has paired sustainable infrastructure with technology to help growers see crop production issues before they become problems. The company's suite of advanced technology solutions offers capabilities to assist in reducing water and energy use as the center pivot is the only infrastructure on the farm that is continually in the field every day of the year. During fiscal 2021, the company purchased Prospera Technologies, Ltd., a leading global artificial intelligence and machine learning provider of advanced agronomy monitoring solutions. The company's crop anomaly detection can alert growers of pivot-related water issues with artificial intelligence and machine learning (in select markets) to help farmers determine where and how much to irrigate.

Distribution Methods

The company markets its irrigation machines, technology offerings, and service parts through independent dealers. There are approximately 250 dealer locations in North America, with another approximately 400 dealers serving international markets in over 60 countries. The dealer determines the grower's requirements, designs the configuration of the machine, installs the machine (including providing ancillary products that deliver water and electrical power to the machine), and provides after-sales service. The company's dealer network is supported and trained by the company's technical and sales teams. The company's international dealers are supported through its regional operations in South America, South Africa, Western Europe, Australia, China, and the United Arab Emirates, as well as the company's manufacturing facility in Valley, Nebraska.

Research and Development

The company's research and development expenses included approximately $55,000 for the year ended December 30, 2023.

Business Strategy

The company's strategy is to pursue growth opportunities that leverage its existing product portfolio, knowledge of the company's principal end-markets and customers, and engineering capabilities to increase the company's sales, including increasing the market penetration of its existing products; bringing the company's existing products to new markets; developing new products for markets that the company serves; and developing new products for new markets or leveraging core competencies to further diversify the company's business is a path to increase sales.

Acquisitions

In 2023, the company acquired HR Products, a leading wholesale supplier of irrigation parts in Australia (Agriculture).

Divestitures

In 2023, the company divested Torrent Engineering and Equipment, an integrator of prepackaged pump stations in Indiana (Agriculture).

History

Valmont Industries, Inc. was founded in 1946. The company was incorporated in 1974.