Edgar Filing: VALMONT INDUSTRIES INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


(Mark One)
ý		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 24, 2011
Or
o		TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-31429

Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		47-0351813 (I.R.S. Employer Identification No.)
One Valmont Plaza, Omaha, Nebraska (Address of principal executive offices)		68154-5215 (Zip Code)
402-963-1000 (Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ý		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

26,443,449
Outstanding shares of common stock as of October 18, 2011

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

Page No.

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Operations for the thirteen and thirty-nine weeks ended September 24, 2011 and September 25, 2010	3
	Condensed Consolidated Balance Sheets as of September 24, 2011 and December 25, 2010	4
	Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended September 24, 2011 and September 25, 2010	5
	Condensed Consolidated Statements of Shareholders' Equity for the thirty-nine weeks ended September 24, 2011 and September 25, 2010	6
	Notes to Condensed Consolidated Financial Statements	7-26
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27-36
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	36
Item 4.	Controls and Procedures	37
PART II. OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	38
Signatures		39

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

		Thirteen Weeks Ended						Thirty-nine Weeks Ended

		September 24, 2011			September 25, 2010			September 24, 2011			September 25, 2010
Product sales		$	595,064		$	492,997		$	1,685,440		$	1,280,824
Services sales			77,128			34,834			223,310			95,968

	Net sales		672,192			527,831			1,908,750			1,376,792
Product cost of sales			453,462			374,678			1,285,629			955,611
Services cost of sales			51,340			20,632			151,256			59,284

	Cost of sales		504,802			395,310			1,436,885			1,014,895

	Gross profit		167,390			132,521			471,865			361,897
Selling, general and administrative expenses			95,357			85,378			285,912			245,803

	Operating income		72,033			47,143			185,953			116,094

Other income (expenses):
	Interest expense		(7,671	)		(8,487	)		(26,715	)		(22,878	)
	Interest income		3,141			1,733			6,919			3,181
	Other		(1,670	)		58			(776	)		28

			(6,200	)		(6,696	)		(20,572	)		(19,669	)

Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries			65,833			40,447			165,381			96,425

Income tax expense (benefit):
	Current		25,119			15,694			62,156			39,652
	Deferred		(1,346	)		(1,914	)		(11,544	)		(4,744	)

			23,773			13,780			50,612			34,908

Earnings before equity in earnings of nonconsolidated subsidiaries			42,060			26,667			114,769			61,517
Equity in earnings of nonconsolidated subsidiaries			2,354			1,068			4,509			1,987

	Net earnings		44,414			27,735			119,278			63,504

Less: Earnings attributable to noncontrolling interests			(2,273	)		(1,800	)		(5,701	)		(3,991	)

	Net earnings attributable to Valmont Industries, Inc.	$	42,141		$	25,935		$	113,577		$	59,513

Earnings per share attributable to Valmont Industries, Inc.—Basic		$	1.60		$	0.99		$	4.32		$	2.28

Earnings per share attributable to Valmont Industries, Inc.—Diluted		$	1.59		$	0.98		$	4.28		$	2.25

Cash dividends per share		$	0.180		$	0.165		$	0.525		$	0.480

Weighted average number of shares of common stock outstanding—Basic (000 omitted)			26,351			26,133			26,318			26,084

Weighted average number of shares of common stock outstanding—Diluted (000 omitted)			26,579			26,404			26,567			26,420

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

			September 24, 2011			December 25, 2010

ASSETS
Current assets:
	Cash and cash equivalents		$	336,908		$	346,904
	Receivables, net			449,431			410,566
	Inventories			377,525			280,223
	Prepaid expenses and other current assets			28,832			23,806
	Refundable and deferred income taxes			35,216			32,727

		Total current assets		1,227,912			1,094,226

Property, plant and equipment, at cost				889,857			865,287
	Less accumulated depreciation and amortization			452,718			425,678

		Net property, plant and equipment		437,139			439,609

Goodwill				315,140			314,847
Other intangible assets, net				174,946			185,535
Other assets				54,040			56,526

		Total assets	$	2,209,177		$	2,090,743

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current installments of long-term debt		$	236		$	238
	Notes payable to banks			11,022			8,824
	Accounts payable			221,909			179,814
	Accrued employee compensation and benefits			75,392			75,981
	Accrued expenses			82,844			77,705
	Dividends payable			4,760			4,352

		Total current liabilities		396,163			346,914

Deferred income taxes				85,531			89,922
Long-term debt, excluding current installments				494,775			468,596
Defined benefit pension liability				96,990			104,171
Deferred compensation				29,401			23,300
Other noncurrent liabilities				43,068			47,713
Shareholders' equity:
	Preferred stock Authorized 500,000 shares; none issued			—			—
	Common stock of $1 par value Authorized 75,000,000 shares; 27,900,000 issued			27,900			27,900
	Retained earnings			966,872			850,269
	Accumulated other comprehensive income			41,768			63,645
	Treasury stock			(25,117	)		(25,922	)

		Total Valmont Industries, Inc. shareholders' equity		1,011,423			915,892

	Noncontrolling interest in consolidated subsidiaries			51,826			94,235

		Total shareholders' equity		1,063,249			1,010,127

		Total liabilities and shareholders' equity	$	2,209,177		$	2,090,743

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

					Thirty-nine Weeks Ended

					September 24, 2011			September 25, 2010
Cash flows from operating activities:
	Net earnings				$	119,278		$	63,504
	Adjustments to reconcile net earnings to net cash flow from operations:
		Depreciation and amortization				53,193			41,829
		Stock-based compensation				3,962			4,712
		Defined benefit pension plan expense				4,544			—
		Contribution to defined benefit pension plan				(11,754	)		—
		Loss (gain) on sale of assets				(295	)		1,513
		Equity in earnings of nonconsolidated subsidiaries				(4,509	)		(1,987	)
		Deferred income taxes				(11,544	)		(4,744	)
		Changes in assets and liabilities, net of the effects of acquisitions:
			Receivables			(41,606	)		(44,046	)
			Inventories			(99,559	)		4,390
			Prepaid expenses			(5,378	)		1,063
			Accounts payable			33,782			(22,674	)
			Accrued expenses			11,484			19,230
			Other noncurrent liabilities			(4,492	)		10,254
			Income taxes payable/refundable			17,009			12,295

				Net cash flows from operating activities		64,115			85,339

Cash flows from investing activities:
	Purchase of property, plant and equipment					(46,366	)		(20,283	)
	Proceeds from sale of assets					2,903			11,090
	Acquisitions, net of cash acquired					(1,539	)		(249,057	)
	Dividends from nonconsolidated subsidiaries					590			9,606
	Other, net					793			2,062

				Net cash flows from investing activities		(43,619	)		(246,582	)

Cash flows from financing activities:
	Net borrowings (payments) under short-term agreements					2,152			2,549
	Proceeds from long-term borrowings					213,832			491,000
	Principal payments on long-term obligations					(187,234	)		(168,271	)
	Purchase of noncontrolling interest					(25,253	)		—
	Settlement of financial derivative					(3,568	)		—
	Dividends paid					(13,467	)		(12,240	)
	Dividends to noncontrolling interests					(4,958	)		(12,265	)
	Debt issuance costs					(1,284	)		(3,858	)
	Proceeds from exercises under stock plans					18,659			3,390
	Excess tax benefits from stock option exercises					2,799			1,479
	Purchase of treasury shares					(4,802	)		(878	)
	Purchase of common treasury shares—stock plan exercises					(19,829	)		(2,144	)

				Net cash flows from financing activities		(22,953	)		298,762

Effect of exchange rate changes on cash and cash equivalents						(7,539	)		4,845

Net change in cash and cash equivalents						(9,996	)		142,364
Cash and cash equivalents—beginning of year						346,904			180,786

Cash and cash equivalents—end of period					$	336,908		$	323,150

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Dollars in thousands)

(Unaudited)

			Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock			Noncontrolling interest in consolidated subsidiaries			Total shareholders' equity

Balance at December 26, 2009			$	27,900	$	—		$	767,398		$	16,953		$	(25,990	)	$	22,046		$	808,307
Comprehensive income:
	Net earnings			—		—			59,513			—			—			3,991			63,504
	Currency translation adjustment			—		—			—			7,503			—			2,503			10,006

		Total comprehensive income		—		—			—			—			—			—			73,510
Cash dividends ($0.480 per share)				—		—			(12,641	)		—			—			—			(12,641	)
Dividends to noncontrolling interests				—		—			—			—			—			(12,265	)		(12,265	)
Purchase of noncontrolling interest				—		(3,754	)		—			—			—			(3,311	)		(7,065	)
Acquisition of Delta plc				—		—			—			—			—			79,529			79,529
Purchase of 12,351 treasury shares				—		—			—			—			(878	)		—			(878	)
Stock options exercised; 84,900 shares issued				—		(2,437	)		2,847			—			2,980			—			3,390
Stock plan exercises; 29,095 shares purchased				—		—			—			—			(2,144	)		—			(2,144	)
Tax benefit from exercise of stock options				—		1,479			—			—			—			—			1,479
Stock option expense				—		3,675			—			—			—			—			3,675
Stock awards; 9,088 shares issued				—		1,037			—			—			650			—			1,687

Balance at September 25, 2010			$	27,900	$	—		$	817,117		$	24,456		$	(25,382	)	$	92,493		$	936,584

Balance at December 25, 2010			$	27,900	$	—		$	850,269		$	63,645		$	(25,922	)	$	94,235		$	1,010,127
Comprehensive income:
	Net earnings			—		—			113,577			—			—			5,701			119,278
	Currency translation adjustment			—		—			—			(18,442	)		—			(1,831	)		(20,273	)
	Loss on cash flow hedge			—		—			—			(3,568	)		—			—			(3,568	)
	Amortization of loss			—		—			—			133			—			—			133

		Total comprehensive income		—		—			—			—			—			—			95,570
Cash dividends ($0.525 per share)				—		—			(13,875	)		—			—			—			(13,875	)
Dividends to noncontrolling interests				—		—			—			—			—			(4,958	)		(4,958	)
Purchase of noncontrolling interest				—		16,592			—			—			—			(41,845	)		(25,253	)
Acquisitions				—		—			—			—			—			524			524
Purchase of 53,847 treasury shares				—		—			—			—			(4,802	)		—			(4,802	)
Stock options exercised; 291,208 shares issued				—		(23,353	)		16,901			—			25,111			—			18,659
Stock plan exercises; 181,603 shares purchased				—		—			—			—			(19,829	)		—			(19,829	)
Tax benefit from exercise of stock options				—		2,799			—			—			—			—			2,799
Stock option expense				—		3,732			—			—			—			—			3,732
Stock awards; 2,992 shares issued				—		230			—			—			325			—			555

Balance at September 24, 2011			$	27,900	$	—		$	966,872		$	41,768		$	(25,117	)	$	51,826		$	1,063,249

See accompanying notes to condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies

Condensed Consolidated Financial Statements

The Condensed Consolidated Balance Sheet as of September 24, 2011, the Condensed Consolidated Statements of Operations for the thirteen and thirty-nine week periods ended September 24, 2011 and September 25, 2010, the Condensed Consolidated Statements of Cash Flows and Shareholders' Equity for the thirty-nine week periods then ended have been prepared by the Company, without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of September 24, 2011 and for all periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2010. The accounting policies and methods of computation followed in these interim financial statements are the same as those followed in the financial statements for the year ended December 25, 2010. The results of operations for the periods ended September 24, 2011 are not necessarily indicative of the operating results for the full year.

Inventories

At September 24, 2011, approximately 36% of inventory is valued at the lower of cost, determined on the last-in, first-out (LIFO) method, or market. All other inventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods. The excess of replacement cost of inventories over the LIFO value was $50,775 and $42,559 at September 24, 2011 and December 25, 2010, respectively.

Inventories consisted of the following:

	September 24, 2011		December 25, 2010

Raw materials and purchased parts	$	193,469	$	133,380
Work-in-process		28,939		25,891
Finished goods and manufactured goods		205,892		163,511

Subtotal		428,300		322,782
LIFO reserve		50,775		42,559

Net inventory	$	377,525	$	280,223

Stock Plans

The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of the Board of Directors may grant incentive stock

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

options, nonqualified stock options, stock appreciation rights, non-vested stock awards and bonuses of common stock. At September 24, 2011, 861,939 shares of common stock remained available for issuance under the plans. Shares and options issued and available are subject to changes in capitalization.

Under the plans, the exercise price of each option equals the market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three to six years or on the fifth anniversary of the grant. Expiration of grants is from six to ten years from the date of grant. The Company's compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock option for the thirteen and thirty-nine weeks ended September 24, 2011 and September 25, 2010, respectively, were as follows:

	Thirteen Weeks Ended September 24, 2011		Thirteen Weeks Ended September 25, 2010		Thirty-nine Weeks Ended September 24, 2011		Thirty-nine Weeks Ended September 25, 2010

Compensation expense	$	1,265	$	1,218	$	3,732	$	3,675
Income tax benefits		487		469		1,437		1,415

Fair Value

The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements ("ASC 820") which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

•: Level 1: Quoted market prices in active markets for identical assets or liabilities.
•: Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
•: Level 3: Unobservable inputs that are not corroborated by market data.

The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

Trading Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification 320, Accounting for Certain Investments in Debt and Equity Securities, considering the employee's ability to change investment allocation of their deferred compensation at any time. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.

				Fair Value Measurement Using:

		Carrying Value September 24, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
	Trading Securities	$	18,051	$	18,051	$	—	$	—

				Fair Value Measurement Using:

		Carrying Value December 25, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
	Trading Securities	$	18,433	$	18,433	$	—	$	—

Accumulated Other Comprehensive Income (Loss)

Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. "Accumulated other comprehensive income (loss)" consisted of the following at September 24, 2011 and December 25, 2010:

	September 24, 2011			December 25, 2010

Foreign currency translation adjustment	$	16,278		$	34,693
Actuarial gain in defined benefit pension plan		28,925			28,952
Loss on cash flow hedge		(3,435	)		—

	$	41,768		$	63,645

Derivative Instrument

During the second quarter of 2011, the Company executed a contract to lock in the treasury rate related to the issuance of the $150,000 of principal amount of senior notes due in 2020. The contract, for a notional amount of $130,000, was executed to hedge the risk of potential fluctuations in the treasury rates which would change the amount of net proceeds received from the debt offering. As the benchmark rate component of the fixed rate debt issuance and the cash flow hedged risk is based on

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

1. Summary of Significant Accounting Policies (Continued)

that same benchmark, this was deemed an effective hedge at inception. On June 8, 2011, this contract was settled with the Company paying approximately $3,568 to the counterparty. The Company recorded the $3,568 in accumulated other comprehensive income and is amortizing this loss to interest expense over the term of the debt.

Recently Issued Accounting Pronouncements

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220), requiring entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. Reclassification adjustments between net income and other comprehensive income must be shown on the face of the statement(s), with no resulting change in net earnings. ASU 2011-05 is effective for statements issued by the Company after January 1, 2012. The Company will provide the required financial reporting presentation upon the effective date.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment, permitting an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Accounting Standards Codification Topic 350. This guidance will become effective for annual or interim goodwill impairment tests for fiscal years beginning after December 15, 2011. The Company will adopt this starting in fiscal 2012 and it is not expected to have a significant effect on its financial position, results of operations or cash flows.

2. Acquisitions

On May 12, 2010, the Company acquired Delta, plc. ("Delta") a public limited company incorporated in Great Britain, and listed on the London Stock Exchange (LSE: DLTA). The price paid per share was 185 pence in cash for each Delta share, or £284,463, or $436,736 based on the contracted average exchange rate of $1.5353 / £. Delta has manufacturing operations employing over 2,500 people in Australia, Asia, South Africa and the United States. Delta's businesses include engineered steel products, galvanizing services and manganese materials.

The Company's pro forma results of operations for the thirty-nine weeks ended September 25, 2010, assuming that the acquisition occurred at the beginning of fiscal 2010 was as follows:

	Thirty-nine Weeks Ended September 25, 2010

Net sales	$	1,569,210
Net earnings		64,512
Earnings per share—diluted	$	2.49

On June 24, 2011, the Company acquired the remaining 40% of Donhad Pty. Ltd. ("Donhad") that it did not own for $25,253. As this transaction was the acquisition of the remaining shares of a

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

2. Acquisitions (Continued)

consolidated subsidiary with no change in control, it was recorded within shareholders' equity. On June 1, 2011, the Company acquired 60% of an irrigation monitoring services company for $1,539. This acquisition did not have and is not expected to have a significant effect on the Company's fiscal 2011 financial results.

3. Goodwill and Intangible Assets

The Company's annual impairment testing of goodwill was performed and completed during the third quarter of 2011. As a result of that testing, it was determined that the goodwill on the Company's Condensed Consolidated Balance Sheet was not impaired. The Company continues to monitor changes in the global economy and its reporting units that could impact future operating results of its reporting units and related components.

Amortized Intangible Assets

The components of amortized intangible assets at September 24, 2011 and December 25, 2010 were as follows:

	As of September 24, 2011

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	155,651	$	47,083	13 years
Proprietary Software & Database		2,609		2,609	6 years
Patents & Proprietary Technology		9,524		3,486	8 years
Non-compete Agreements		1,683		1,236	6 years

	$	169,467	$	54,414

	As of December 25, 2010

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	155,664	$	37,932	13 years
Proprietary Software & Database		2,609		2,568	6 years
Patents & Proprietary Technology		9,486		2,336	8 years
Non-compete Agreements		1,674		1,054	6 years

	$	169,433	$	43,890

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

(Unaudited)

3. Goodwill and Intangible Assets (Continued)

Amortization expense for intangible assets for the thirteen and thirty-nine weeks ended September 24, 2011 and September 25, 2010, respectively was as follows:

The useful lives assigned to finite-lived intangible assets included consideration of factors such as the Company's past and expected experience related to customer retention rates, the remaining legal or contractual life of the underlying arrangement that resulted in the recognition of the intangible asset and the Company's expected use of the intangible asset.

Intangible assets with indefinite lives are not amortized. The carrying values of trade names at September 24, 2011 and December 25, 2010 were as follows:

The Company's trade names were tested for impairment separately from goodwill in the third quarter of 2011. The values of the trade names were determined using the relief-from-royalty method. The Company has not completed its evaluation of trade names as of the end of the third quarter of 2011, as it is considering its future use of certain trade names. This evaluation is planned to be completed during the fourth quarter of 2011.

In its determination of these intangible assets as indefinite-lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory, technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to maintain the value of the intangible asset. The Company expects that these intangible assets will maintain their value indefinitely. Accordingly, these assets are not amortized.

The Company considers all highly liquid temporary cash investments purchased with a maturity of three months or less to be cash equivalents. Cash payments for interest and income taxes (net of refunds) for the thirty-nine weeks ended were as follows:

At September 24, 2011 there were 218,007 shares of outstanding stock options with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted earnings per share for the thirteen and thirty-nine weeks ended September 24, 2011. At September 24, 2010 there were 403,867 of outstanding stock options with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted earnings per share for the thirteen and thirty-nine weeks ended September 24, 2010.

The lending agreements include certain maintenance covenants, including financial leverage and interest coverage. The Company was in compliance with all debt covenants at September 24, 2011.

The minimum aggregate maturities of long-term debt for each of the four years following 2011 are: $291, $20,256, $262 and $275.

The Company aggregates its operating segments into four reportable segments. Aggregation is based on similarity of operating segments as to economic characteristics, products, production processes, types or classes of customer and the methods of distribution. Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts and sales dollars.

ENGINEERED INFRASTRUCTURE PRODUCTS: This segment consists of the manufacture of engineered metal structures and components for the global lighting and traffic, wireless communication, roadway safety and access systems applications;

UTILITY SUPPORT STRUCTURES: This segment consists of the manufacture of engineered steel and concrete structures for the global utility industry;

COATINGS: This segment consists of galvanizing, anodizing and powder coating services on a global basis; and

IRRIGATION: This segment consists of the manufacture of agricultural irrigation equipment and related parts and services for the global agricultural industry.

In addition to these four reportable segments, the Company has other businesses and activities that individually are not more than 10% of consolidated sales. These include the manufacture of forged steel grinding media for the mining industry, tubular products for industrial customers, the electrolytic manganese dioxide for disposable batteries and the distribution of industrial fasteners and are reported in the "Other" category.

In the fourth quarter of 2010, the Company reorganized its segment reporting structure to reflect the management structure as a result of the acquisition of Delta plc. The main business units of Delta are organized as follows in the reportable segment structure:

Fiscal 2010 figures have been reclassified to conform to the fiscal 2011 segment presentation.

The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance of its business segments based upon operating income and

invested capital. The Company does not allocate interest expense, non-operating income and deductions, or income taxes to its business segments.

On April 8, 2010, the Company issued $300,000 of senior unsecured notes at a coupon interest rate of 6.625% per annum. In June 2011, the Company issued an additional $150,000 principal amount of these notes to redeem the Senior Subordinated Notes that were issued in 2004. The notes are guaranteed, jointly, severally, fully and unconditionally by certain of the Company's current and future direct and indirect domestic and foreign subsidiaries (collectively the "Guarantors"), excluding its other current domestic and foreign subsidiaries which do not guarantee the debt (collectively referred to as the "Non-Guarantors"). All Guarantors are 100% owned by the parent company.

On May 4, 2004, the Company completed a $150,000 offering of 6⁷/8% Senior Subordinated Notes. The notes were redeemed on June 16, 2011 at a redemption price of 101.146% of the principal amount plus accrued and unpaid interest thereon. The notes were guaranteed, jointly, severally, fully and unconditionally, on a senior subordinated basis by the Guarantors.

Condensed consolidated financial information for the Company ("Parent"), the Guarantor subsidiaries and the Non-Guarantor subsidiaries is as follows:

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirteen Weeks Ended September 24, 2011

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirty-nine Weeks Ended September 24, 2011

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirteen Weeks Ended September 25, 2010

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirty-nine Weeks Ended September 25, 2010

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirty-nine Weeks Ended September 24, 2011

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirty-nine Weeks Ended September 25, 2010

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking 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, expected future developments and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions. Many factors could affect the Company's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include, among other things, risk factors described from time to time in the Company's reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments.

This discussion should be read in conjunction with the financial statements and the 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 25, 2010.

In the fourth quarter of 2010, we reorganized our segment reporting structure to reflect our management structure as a result of the acquisition of Delta plc. The main business units of Delta are organized as follows in our segment structure:

On May 12, 2010, we acquired Delta plc (Delta). The total amount of the acquisition was $436.7 million and was financed by a combination of cash, borrowings under our revolving credit agreement of $85.0 million and $300.0 million of senior unsecured notes.

We began consolidating Delta's financial results in our consolidated financial statements beginning on May 12, 2010. On a segment reporting basis, Delta's operations are included in our results as follows:

The increases in sales and operating income by segment attributable to a full year effect of Delta in fiscal 2011, as compared with fiscal 2010, were as follows (in millions):

On a consolidated basis, the increase in net sales in the third quarter and year-to-date fiscal 2011, as compared with 2010, were the result of improved sales in all reportable segments, part of which was the result of Delta's financial results being included in our consolidated financial statements for all of 2011.

For the company as a whole, our 2011 third quarter and, without consideration of Delta sales, our year-to-date sales increases over 2010 were mainly due to increased unit sales volumes. On a reportable segment basis, the most significant unit sales volume increases were in the Irrigation and Utility Support Structures (Utility) segments. Sales prices overall were up modestly in the third quarter and year-to-date of fiscal 2011, as compared with 2010, mainly in response to rising steel prices. The increase in net sales in the third quarter and year-to-date fiscal 2011, as compared with 2010, due to currency translation effects were approximately $29 million and $54 million, respectively.

The decrease in gross profit margin (gross profit as a percent of sales) for the third quarter and year-to-date fiscal 2011, as compared with 2010, was due to the following factors:

Selling, general and administrative (SG&A) spending for the third quarter and year-to-date of fiscal 2011, as compared with 2010, increased due to the following factors:

These increases were somewhat offset by $12.9 million in lower acquisition and integration costs in the first three quarters of 2011, as compared with fiscal 2010, associated with the Delta acquisition.

On a reportable segment basis, the Irrigation, Utility and Coatings segments reported improved operating income in the third quarter and year-to-date 2011, as compared with 2010. The EIP segment operating income in 2011 was comparable to fiscal 2010. Currency translation effects also contributed to the increase in third quarter and year-to-date operating income in fiscal 2011, as compared with 2010, of approximately $2.9 million and $5.6 million, respectively.

The decrease in net interest expense in the third quarter of fiscal 2011, as compared with 2010, was mainly due to interest savings resulting from the refinancing of our senior subordinated debt in the second quarter of fiscal 2011 and increased interest income resulting from certain income tax refunds received in fiscal 2011. On a year-to-date basis, the increase in interest expense in fiscal 2011, as compared with 2010, was attributable to $2.8 million of expense incurred when we redeemed our senior subordinated debt and the full year effect (approximately $5.0 million) of interest expense associated with the $300 million in senior unsecured notes issued in April 2010, less $2.9 million of bank fees incurred in the first quarter of fiscal 2010 to provide the required bridge loan funding commitment for the Delta acquisition and the full impact of interest income from Delta's cash balances.

The increase in "Other" expense in the third quarter and first three quarters of fiscal 2011, as compared with 2010, was mainly due to investment losses in the assets held in our deferred compensation plan ($1.5 million and $1.8 million, respectively). The decreases in the value of these assets were offset by corresponding decreases in our deferred compensation liabilities, which were reflected as decreases in net corporate expense. Accordingly, there was no effect on net earnings from these investment losses.

Our effective income tax rate in third quarter of fiscal 2011 was higher than 2010, due to the reconciliation of our 2010 income tax returns and non-deductible currency losses incurred in our Mexican operation. On a year-to-date basis, the effective tax rate in fiscal 2011 was lower than 2010. This reduction was mainly due to the:

Aside from these events that are non-recurring in nature, we believe our year-to-date effective tax rate in fiscal 2011 and 2010 would have been approximately 32.0-33.0%.

Our cash flows provided by operations were approximately $64.1 million in 2011, as compared with $85.3 million in 2010. While net earnings increased in 2011, as compared with 2010, higher levels of working capital to support increased business activity in the Utility and Irrigation segments in 2011 and contributions to the Delta Pension Plan of $11.8 million in 2011 were the main reasons for the lower operating cash flow in 2011, as compared with 2010.

The increases in net sales in the third quarter and the first three quarters of 2011 as compared with 2010 were mainly due to currency translation effects ($14.1 million and $27.0 million, respectively) and improved international sales volumes. Year-to-date sales in fiscal 2011 were higher than 2010 due to these factors and the full year effect of the Delta operations. Global lighting markets continue to experience weak demand, resulting in increased price competition, despite higher raw material prices. In the Lighting product line, 2011 North American sales in the third quarter and first three quarters of the year were down slightly as compared with 2010. Market conditions in North America continue to be weak, especially in the transportation market, where funding is through federal, state and local governments. We believe sales demand in the transportation market was dampened by the lack of a long-term federal highway funding legislation and state budget deficits, as the lack of long-term funding legislation does not give the various states ample visibility to implement long-term initiatives. Furthermore, highway spending sponsored under the federal program requires the various states to provide part of required funding. Many states are in budget deficits, which may constrain their ability to access federal matching funds to implement roadway projects. Sales in other market channels helped to offset the lower transportation market sales in 2011, as compared with 2010. In Europe, sales were higher in the third quarter and first three quarters of 2011, as compared with 2010. However, sales pricing and product mix generally were unfavorable due to weak demand, as infrastructure spending in Europe has been affected by budget deficit control measures and public debt issues.

Communication product line sales in third quarter and first three quarters of fiscal 2011 were comparable to 2010. North America sales were lower in the third quarter of 2011, as compared with 2010 while year-to-date 2011 sales were slightly higher than 2010. While market conditions are generally more favorable in 2011 as compared with 2010, we believe uncertainty surrounding the AT&T/T-Mobile merger has caused demand for communication structures and components to slow down in the third quarter of 2011. In China, sales of wireless communication structures were higher in the third quarter and first three quarters of 2011, as compared with 2010. In 2010, annual supply contracts with Chinese wireless carriers were settled later than in the past and 2011 was more in line with what we believe is a more normal demand pattern.

Operating income for the segment was comparable in the third quarter and first three quarters of fiscal 2011, as compared with 2010. While operating income was enhanced by the addition of the Delta operations, the impact of rising raw material costs and very competitive pricing conditions in most of our markets hampered operating income for the segment. The impact of lower North America sales on operating profit was mitigated to an extent by factory operational improvements. The operating income effect of the increased sales associated with the Delta operations was relatively minor, as we experienced generally increased sales pricing competition, including that from outside Australia resulting from the stronger Australian dollar. Operating income in the third quarter and first three quarters of fiscal 2011, as compared with 2010, was enhanced by currency translation effects of $1.6 million and $2.8 million, respectively. The increase in SG&A expense in the first three quarters of

fiscal 2011 was mainly due to the acquisition of the Delta operations ($14.3 million), offset to a degree by lower spending levels in North America and Asia.

In the Utility segment, the sales increases in the third quarter and first three quarters of fiscal 2011, as compared with 2010, were due to improved unit sales volumes in the U.S., offset to a degree by lower sales volumes in international markets. In U.S. markets, electrical utility companies are increasing their investment in the electrical grid over a relatively slow 2010. The sales pricing environment is slowly improving but continues to be very competitive. Our sales in 2011 were somewhat reflective of market conditions in 2010 when certain utility structures projects were awarded at relatively low prices. In international markets, the sales decrease was mainly due to lower project sales into emerging markets and lower sales volumes in China, offset to a degree by improved sales volumes in Australia.

Operating income in fiscal 2011, as compared with 2010, increased due to the substantial increase in North America sales volume and associated operational leverage. Gross profit margins were negatively affected by the competitive pricing environment in North America and higher raw material costs, offset to an extent by productivity gains due to increased production volumes. The increase in SG&A expense for the segment in fiscal 2011 was higher than in 2010, mainly due to increased employee incentives associated with the increase in operating income.

Net sales in the Coatings segment increased in the third quarter of fiscal 2011, as compared with 2010, mainly due to currency translation effects. On a year-to-date basis, the sales increase resulted from the effect of the galvanizing operations acquired in the Delta transaction, currency translation effects (approximately $7.5 million) and stronger unit sales demand in our operations.

The increase in segment operating income in the third quarter of fiscal 2011, as compared with 2010, was mainly due to the effects of currency translation. Higher average zinc costs in 2011, as compared with 2010, were largely recovered through sales price increases and productivity improvements. On a year-to-date basis, the increase in operating income also was due to the effect of the acquired Delta businesses, improved sales volume and currency translation effects (approximately $0.8 million). SG&A expenses for the segment in the third quarter and first three quarters of 2011 were higher than the comparable periods in 2010, mainly due to the effect of the Delta businesses.

In 2011, a fire occurred at one of our galvanizing facilities in Australia. A property damage and business interruption claim was filed with our insurance carrier and settlement of the claim is ongoing. We are making the necessary capital expenditures to restore the facility and plan for operations to commence in the fourth quarter of 2011. We believe that the insurance claim proceeds will exceed the net book value of the assets damaged. The financial effect of this event will be reflected in our financial statements when the insurance claim is settled.

Irrigation segment net sales in the third quarter and first three quarters of fiscal 2011 substantially improved over 2010, mainly due to stronger sales volumes in both North American and international markets. In global markets, the sales growth was due to a very strong agricultural economy. Farm commodity prices are generally favorable and net farm income is projected to be strong in 2011. In addition, weather conditions in North America in 2011 were generally drier than 2010, further enhancing demand for irrigation machines and related service parts. In international markets, the sales improvement in fiscal 2011, as compared with 2010, was realized in most markets, particularly in Asia Pacific and South America.

Operating income for the segment improved in 2011 over 2010, due to improved sales unit volumes in North America and the associated operational leverage. Rising raw material prices resulted in $2.4 million in increased LIFO expense in the first three quarters of 2011, as compared with 2010, which negatively affected gross profit margins. SG&A expenses increased mainly due to employee compensation costs to support the increase in sales activity and future initiatives ($1.3 million and $3.7 million, respectively) and increased employee incentives due to improved operating performance in 2011 ($1.7 million and $2.7 million, respectively).

This unit includes the Delta grinding media and electrolytic manganese operations and our industrial tubing and fasteners operations. The increase in sales in the third quarter of 2011, as compared with 2010, was mainly due improved sales volumes in all of these operations and currency translation effects (approximately $5.6 million). Third quarter operating income improved due to improved operating results in the manganese dioxide and tubing operations and currency translation (approximately $0.8 million). On a year-to-date basis, the full year affect of the Delta operations and currency translation effects (approximately $9.1 million in sales and $1.4 million in operating income) also contributed to the sales increase and operating income increase.

Net corporate expense in the third quarter of 2011 was comparable to 2010. Expense increases included increased incentive expense associated with improved profitability in 2011 ($2.7 million), offset by lower deferred compensation expenses of $1.5 million, and favorable experience in health insurance expenses ($0.8 million).

On a year-to-date basis, the decrease in net corporate expense was due to Delta acquisition and integration costs that were incurred in 2010 ($12.9 million) but not 2011 and lower deferred compensation expense ($1.8 million). These decreases were offset somewhat by the full year effect of Delta's administration costs ($5.2 million) and higher employee incentive expense associated with improved profitability in 2011 as compared with 2010 ($5.9 million).

Working Capital and Operating Cash Flows—Net working capital was $831.7 million at September 24, 2011, as compared with $747.3 million at December 25, 2010. The increase in net working capital in 2011 mainly resulted from increased inventories to support the increase in sales, especially in the Irrigation and Utility Support Structures segments. Operating cash flow was $64.1 million in fiscal 2011, as compared with $85.3 million for the same period in 2010. The decrease in operating cash flow in 2011 mainly was the result of the increase in working capital as compared with 2010 and the annual contribution we made to the Delta Pension Plan of $11.8 million in fiscal 2011. In fiscal 2010, this contribution was made before we acquired Delta.

Investing Cash Flows—Capital spending in the fiscal 2011 was $46.4 million, as compared with $20.3 million in 2010. The most significant capital spending projects in 2011 included our new plant in India ($7.0 million), certain capacity expansions in the Utility segment ($4.7 million) and our Australian galvanizing operations ($3.9 million). We expect our capital spending for the 2011 fiscal year to be approximately $70 to $75 million. Investing cash flows for fiscal 2010 included $436.7 million of cash (less $198.8 million of cash acquired) for the Delta acquisition and an aggregate of $7.5 million associated with increasing our ownership interest in West Coast Engineering, Ltd. from 70% to 80% and the additional purchase price paid to the former shareholders of Stainton related to the performance of the operation after its acquisition in November 2008.

Financing Cash Flows—Our total interest-bearing debt increased from $477.7 million at December 25, 2010 to $506.0 million as of September 24, 2011. The increase in borrowings in 2011 was a seasonal increase in borrowings due to the increase in working capital in the U.S. In the second quarter of fiscal 2011, we redeemed all of our $150 million of senior subordinated notes that were due in May 2014 with the proceeds from the sale of $150 million principal amount of senior unsecured notes. The senior unsecured notes became part of a series of senior unsecured notes previously issued in April 2010. The senior unsecured notes were issued at a premium of $14.8 million in excess of the principal amount. We refinanced the senior subordinated notes to take advantage of a favorable interest-rate environment and to extend our long-term debt maturities. Financing cash flows in 2011 included approximately $25.3 million to acquire the remaining 40% of the shares of Donhad Pty. Ltd. (a manufacturer of steel grinding media serving the Australian mining industry).

We have historically funded our growth, capital spending and acquisitions through a combination of operating cash flows and debt financing. We have an internal long-term objective to maintain long-term debt as a percent of invested capital at or below 40%. At September 24, 2011, our long-term debt to invested capital ratio was 27.1%, as compared with 26.7% at December 25, 2010. Subject to our level of acquisition activity and steel industry operating conditions (which could affect the levels of inventory we need to fulfill customer commitments), we plan to maintain this ratio below 40% in 2011.

Our debt financing at September 24, 2011 consisted primarily of long-term debt. We also maintain certain short-term bank lines of credit totaling $51.7 million, $45.2 million of which was unused at September 24, 2011. Our long-term debt principally consists of:

At September 24, 2011, we had $20.0 million in outstanding borrowings under the revolving credit agreement, at an annual interest rate of 2.94%, not including facility fees. The revolving credit agreement has a termination date of October 16, 2013 and contains certain financial covenants that may limit our additional borrowing capability under the agreement. At September 24, 2011, we had the ability to borrow an additional $240.9 million under this facility.

These debt agreements contain covenants that require us to maintain certain coverage ratios and may limit us with respect to certain business activities, including capital expenditures. Our key debt covenants are that interest-bearing debt is not to exceed 3.75x EBITDA of the prior four quarters and that our EBITDA over our prior four quarters must be at least 2.50x our interest expense over the same period. At September 24, 2011, we were in compliance with all covenants related to these debt agreements. The key covenant calculations at September 24, 2011 were as follows:

The calculation of EBITDA—last 12 months (September 25, 2010—September 24, 2011) is as follows:

Our businesses are cyclical, but we have diversity in our markets, from a product, customer and a geographical standpoint. We have demonstrated the ability to effectively manage through business cycles and maintain liquidity. We have consistently generated operating cash flows in excess of our capital expenditures. Based on our available credit facilities, recent issuance of senior unsecured notes and our history of positive operational cash flows, we believe that we have adequate liquidity to meet our needs. We have not made any provision for U.S. income taxes in our financial statements on approximately $388 million of undistributed earnings of our foreign subsidiaries, as we intend to reinvest those earnings. Therefore, if we need to repatriate foreign cash balances to the United States to meet our cash needs, income taxes would be paid to the extent that those cash repatriations were undistributed earnings of our foreign subsidiaries.

Other than our additional borrowings under our senior unsecured notes related to the redemption of our senior subordinated notes and revolving credit agreement related to the Delta acquisition, there have been no material changes to our financial obligations and financial commitments as described beginning on page 35 in our Form 10-K for the year ended December 25, 2010. We have future financial obligations related to (1) payment of principal and interest on interest-bearing debt, (2) Delta pension plan contributions, (3) operating leases and (4) purchase obligations. These obligations at September 24, 2011 were as follows (in millions of dollars):

Long-term debt mainly consisted of $450.0 million principal amount of senior unsecured notes. At September 24, 2011, we had $20.0 million of outstanding borrowings under our bank revolving credit agreement. We also had various other borrowing arrangements aggregating $10.6 million at September 24, 2011. Obligations under these agreements may accelerate in event of non-compliance with covenants. The Delta pension plan contributions are related to agreed-upon cash funding commitments to the plan with the plan's trustees, which are re-negotiated in conjunction with a triennial valuation. Operating leases relate mainly to various production and office facilities and are in the normal course of business.

Unconditional purchase obligations relate to purchase orders for zinc, aluminum and steel, all of which we plan to use in 2011, and certain capital investments planned for 2011. We believe the quantities under contract are reasonable in light of normal fluctuations in business levels and we expect to use the commodities under contract during the contract period.

At September 24, 2011, we had approximately $50.0 million of various long-term liabilities related to certain income tax, environmental and other matters. These items are not scheduled above because we are unable to make a reasonably reliable estimate as to the timing of any potential payments.

There have been no changes in our off balance sheet arrangements as described on page 36 in our Form 10-K for the fiscal year ended December 25, 2010 during the fiscal quarter and year-to-date periods ended September 24, 2011.

There have been no changes in our critical accounting policies as described on pages 37–41 on our Form 10-K for the fiscal year ended December 25, 2010 during the fiscal quarter and year-to-date periods ended September 24, 2011.

There were no material changes in the company's market risk during the quarter ended September 24, 2011. For additional information, refer to the section "Risk Management" beginning on page 36 in our Form 10-K for the fiscal year ended December 25, 2010.

The Company carried out an evaluation under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 is (1) accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.

No changes in the Company's internal control over financial reporting occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

During the third quarter, the only shares reflected above were those delivered to the Company by employees as part of stock option exercises, either to cover the purchase price of the option or the related taxes payable by the employee as part of the option exercise. The price paid per share was the market price at the date of exercise.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf and by the undersigned hereunto duly authorized.

	Estimated Amortization Expense

2011	$	14,373
2012		13,886
2013		12,992
2014		12,569
2015		11,730

	September 24, 2011		December 25, 2010

Webforge	$	16,563	$	16,478
Newmark		11,111		11,111
Ingal EPS/Ingal Civil Products		8,794		8,795
Donhad		6,634		6,635
PiRod		4,750		4,750
Industrial Galvanizers		4,628		4,632
Other		7,413		7,591

	$	59,893	$	59,992

	Engineered Infrastructure Products Segment			Utility Support Structures Segment		Coatings Segment		Irrigation Segment			Other			Total

Balance December 25, 2010	$	152,062		$	77,141	$	64,868	$	2,064		$	18,712		$	314,847
Acquisition		—			—		—		939			—			939
Foreign currency translation		(478	)		—		129		(155	)		(142	)		(646	)

Balance September 24, 2011	$	151,584		$	77,141	$	64,997	$	2,848		$	18,570		$	315,140

		September 24, 2011		December 25, 2010

6.625% Senior Unsecured Notes(a)		$	450,000	$	300,000
Unamortized premium on senior unsecured notes(a)			14,437		—
6.875% Senior Subordinated Notes(b)			—		150,000
Revolving credit agreement(c)			20,000		8,000
IDR Bonds(d)			8,500		8,500
1.75% to 3.485% notes			2,074		2,334

	Total long-term debt		495,011		468,834
Less current installments of long-term debt			236		238

	Long-term debt, excluding current installments	$	494,775	$	468,596

				Thirteen Weeks Ended						Thirty-nine Weeks Ended

				September 24, 2011			September 25, 2010			September 24, 2011			September 25, 2010
Sales:
	Engineered Infrastructure Products segment:
		Lighting & Traffic		$	157,273		$	139,387		$	420,122		$	344,873
		Communication Structures			28,612			26,803			77,332			73,946
		Access Systems			36,358			31,411			100,136			49,140

			Engineered Infrastructure Products segment		222,243			197,601			597,590			467,959
	Utility Support Structures segment
		Steel			140,926			106,943			374,045			307,850
		Concrete			18,889			15,298			47,977			42,457

			Utility Support Structures segment		159,815			122,241			422,022			350,307
	Coatings segment				80,806			75,665			238,417			158,036
	Irrigation segment				150,618			88,255			485,367			309,053
	Other				88,870			61,328			246,977			131,613

		Total			702,352			545,090			1,990,373			1,416,968
Intersegment Sales:
	Engineered Infrastructure Products segment				6,611			2,936			18,035			4,712
	Utility Support Structures segment				4,480			1,465			6,739			2,100
	Coatings segment				11,852			9,204			34,283			21,721
	Irrigation segment				—			1			8			7
	Other				7,217			3,653			22,558			11,636

		Total			30,160			17,259			81,623			40,176
Net Sales:
	Engineered Infrastructure Products segment				215,632			194,665			579,555			463,247
	Utility Support Structures segment				155,335			120,776			415,283			348,207
	Coatings segment				68,954			66,161			204,134			136,315
	Irrigation segment				150,618			88,254			485,359			309,046
	Other				81,653			57,975			224,419			119,977

		Total		$	672,192		$	527,831		$	1,908,750		$	1,376,792

Operating Income:
	Engineered Infrastructure Products segment			$	17,189		$	17,169		$	30,907		$	31,862
	Utility Support Structures segment				14,731			9,740			41,214			36,988
	Coatings segment				14,238			13,577			39,600			27,993
	Irrigation segment				23,765			10,590			80,623			42,584
	Other				12,607			7,124			32,901			20,096
	Net corporate expense				(10,497	)		(11,057	)		(39,292	)		(43,429	)

		Total		$	72,033		$	47,143		$	185,953		$	116,094

		Basic EPS				Diluted EPS

Thirteen weeks ended September 24, 2011:
	Net earnings attributable to Valmont Industries, Inc.	$	42,141	—		$	42,141
	Shares outstanding		26,351	228			26,579
	Per share amount	$	1.60	(.01	)	$	1.59
Thirteen weeks ended September 25, 2010:
	Net earnings attributable to Valmont Industries, Inc.	$	25,935	—		$	25,935
	Shares outstanding		26,133	271			26,404
	Per share amount	$	0.99	(.01	)	$	0.98
Thirty-nine weeks ended September 24, 2011:
	Net earnings attributable to Valmont Industries, Inc.	$	113,577	—		$	113,577
	Shares outstanding		26,318	249			26,567
	Per share amount	$	4.32	(.04	)	$	4.28
Thirty-nine weeks ended September 25, 2010:
	Net earnings attributable to Valmont Industries, Inc.	$	59,513	—		$	59,513
	Shares outstanding		26,084	336			26,420
	Per share amount	$	2.28	(.03	)	$	2.25

		Parent			Guarantors			Non-Guarantors			Eliminations			Total

Net sales		$	277,350		$	98,619		$	352,928		$	(56,705	)	$	672,192
Cost of sales			205,787			83,008			272,671			(56,664	)		504,802

	Gross profit		71,563			15,611			80,257			(41	)		167,390
Selling, general and administrative expenses			37,169			11,212			46,976			—			95,357

	Operating income		34,394			4,399			33,281			(41	)		72,033

Other income (expense):
	Interest expense		(7,562	)		—			(109	)		—			(7,671	)
	Interest income		9			204			2,928			—			3,141
	Other		(1,297	)		12			(385	)		—			(1,670	)

			(8,850	)		216			2,434			—			(6,200	)

Earnings before income taxes and equity in earnings/(losses) of nonconsolidated subsidiaries			25,544			4,615			35,715			(41	)		65,833

Income tax expense (benefit):
	Current		12,153			(724	)		13,690			—			25,119
	Deferred		(1,397	)		2,710			(2,659	)		—			(1,346	)

			10,756			1,986			11,031			—			23,773

Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			14,788			2,629			24,684			(41	)		42,060
Equity in earnings/(losses) of nonconsolidated subsidiaries			27,353			14,705			2,127			(41,831	)		2,354

Net Earnings			42,141			17,334			26,811			(41,872	)		44,414
Less: Earnings attributable to noncontrolling interests			—			—			(2,273	)		—			(2,273	)

	Net Earnings attributable to Valmont Industries, Inc.	$	42,141		$	17,334		$	24,538		$	(41,872	)	$	42,141

		Parent			Guarantors		Non-Guarantors			Eliminations			Total

Net sales		$	842,493		$	259,733	$	947,843		$	(141,319	)	$	1,908,750
Cost of sales			627,802			209,827		740,621			(141,365	)		1,436,885

	Gross profit		214,691			49,906		207,222			46			471,865
Selling, general and administrative expenses			115,422			33,473		137,017			—			285,912

	Operating income		99,269			16,433		70,205			46			185,953

Other income (expense):
	Interest expense		(26,417	)		—		(298	)		—			(26,715	)
	Interest income		43			204		6,672			—			6,919
	Other		(1,105	)		42		287			—			(776	)

			(27,479	)		246		6,661			—			(20,572	)

Earnings before income taxes and equity in earnings/(losses) of nonconsolidated subsidiaries			71,790			16,679		76,866			46			165,381

Income tax expense (benefit):
	Current		31,505			4,552		26,099			—			62,156
	Deferred		(5,307	)		1,742		(7,979	)		—			(11,544	)

			26,198			6,294		18,120			—			50,612

Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			45,592			10,385		58,746			46			114,769
Equity in earnings/(losses) of nonconsolidated subsidiaries			67,985			35,042		4,247			(102,765	)		4,509

Net Earnings			113,577			45,427		62,993			(102,719	)		119,278
Less: Earnings attributable to noncontrolling interests			—			—		(5,701	)		—			(5,701	)

	Net Earnings attributable to Valmont Industries, Inc.	$	113,577		$	45,427	$	57,292		$	(102,719	)	$	113,577

		Parent			Guarantors			Non-Guarantors			Eliminations			Total

Net sales		$	200,302		$	84,440		$	280,704		$	(37,615	)	$	527,831
Cost of sales			147,511			64,990			220,474			(37,665	)		395,310

	Gross profit		52,791			19,450			60,230			50			132,521
Selling, general and administrative expenses			31,801			11,126			42,451			—			85,378

	Operating income		20,990			8,324			17,779			50			47,143

Other income (expense):
	Interest expense		(8,515	)		187			(159	)		—			(8,487	)
	Interest income		4			4			1,725			—			1,733
	Other		254			428			(624	)		—			58

			(8,257	)		619			942			—			(6,696	)

Earnings before income taxes and equity in earnings/(losses) of nonconsolidated subsidiaries			12,733			8,943			18,721			50			40,447

Income tax expense (benefit):
	Current		4,594			3,081			8,019			—			15,694
	Deferred		(183	)		(91	)		(1,640	)		—			(1,914	)

			4,411			2,990			6,379			—			13,780

Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			8,322			5,953			12,342			50			26,667
Equity in earnings/(losses) of nonconsolidated subsidiaries			17,613			5,751			1,021			(23,317	)		1,068

Net Earnings			25,935			11,704			13,363			(23,267	)		27,735
Less: Earnings attributable to noncontrolling interests			—			—			(1,800	)		—			(1,800	)

	Net Earnings attributable to Valmont Industries, Inc.	$	25,935		$	11,704		$	11,563		$	(23,267	)	$	25,935

		Parent			Guarantors			Non-Guarantors			Eliminations			Total

Net sales		$	616,823		$	217,203		$	640,764		$	(97,998	)	$	1,376,792
Cost of sales			456,108			165,722			491,763			(98,698	)		1,014,895

	Gross profit		160,715			51,481			149,001			700			361,897
Selling, general and administrative expenses			113,581			33,765			98,457			—			245,803

	Operating income		47,134			17,716			50,544			700			116,094

Other income (expense):
	Interest expense		(22,198	)		—			(680	)		—			(22,878	)
	Interest income		116			31			3,034			—			3,181
	Other		476			(72	)		(376	)		—			28

			(21,606	)		(41	)		1,978			—			(19,669	)

Earnings before income taxes and equity in earnings/(losses) of nonconsolidated subsidiaries			25,528			17,675			52,522			700			96,425

Income tax expense (benefit):
	Current		15,637			6,441			17,574			—			39,652
	Deferred		(3,101	)		(376	)		(1,267	)		—			(4,744	)

			12,536			6,065			16,307			—			34,908

Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			12,992			11,610			36,215			700			61,517
Equity in earnings/(losses) of nonconsolidated subsidiaries			46,521			10,077			1,383			(55,994	)		1,987

Net Earnings			59,513			21,687			37,598			(55,294	)		63,504
Less: Earnings attributable to noncontrolling interests			—			—			(3,991	)		—			(3,991	)

	Net Earnings attributable to Valmont Industries, Inc.	$	59,513		$	21,687		$	33,607		$	(55,294	)	$	59,513

						Parent			Guarantors			Non-Guarantors			Eliminations			Total

Cash flows from operations:
	Net earnings					$	113,577		$	45,427		$	62,993		$	(102,719	)	$	119,278
		Adjustments to reconcile net earnings to net cash flow from operations:
			Depreciation				15,758			9,416			28,019			—			53,193
			Stock-based compensation				3,962			—			—			—			3,962
			Defined benefit pension plan expense				—			—			4,544			—			4,544
			Contribution to defined benefit pension plan				—			—			(11,754	)		—			(11,754	)
			Loss (gain) on sale of assets				3			(56	)		(242	)		—			(295	)
			Equity in earnings of nonconsolidated subsidiaries				(261	)		—			(4,248	)		—			(4,509	)
			Deferred income taxes				(5,307	)		1,742			(7,979	)		—			(11,544	)
			Changes in assets and liabilities:
				Receivables			(10,659	)		(320	)		(30,627	)		—			(41,606	)
				Inventories			(44,029	)		(31,983	)		(23,547	)		—			(99,559	)
				Prepaid expenses			(1,753	)		(325	)		(3,300	)		—			(5,378	)
				Accounts payable			9,850			6,450			17,482			—			33,782
				Accrued expenses			17,225			3,805			(9,546	)		—			11,484
				Other noncurrent liabilities			1,202			—			(5,694	)		—			(4,492	)
				Income taxes payable/refundable			14,814			—			2,195			—			17,009

					Net cash flows from operations		114,382			34,156			18,296			(102,719	)		64,115

Cash flows from investing activities:
	Purchase of property, plant and equipment						(10,133	)		(9,358	)		(26,875	)		—			(46,366	)
	Proceeds from sale of assets						34			73			2,796			—			2,903
	Acquisitions, net of cash acquired						—			—			(1,539	)		—			(1,539	)
	Dividends from nonconsolidated subsidiaries						590			—			—			—			590
	Other, net						(92,449	)		(24,700	)		15,223			102,719			793

					Net cash flows from investing activities		(101,958	)		(33,985	)		(10,395	)		102,719			(43,619	)

Cash flows from financing activities:
	Net borrowings (repayments) under short-term agreements						—			—			2,152			—			2,152
	Proceeds from long-term borrowings						213,832			—			—			—			213,832
	Principal payments on long-term obligations						(187,186	)		—			(48	)		—			(187,234	)
	Purchase of noncontrolling interest						—			—			(25,253	)		—			(25,253	)
	Settlement of financial derivative						(3,568	)		—			—			—			(3,568	)
	Dividends paid						(13,467	)		—			—			—			(13,467	)
	Intercompany dividends						—			17,730			(17,730	)		—			—
	Dividends to noncontrolling interests						—			—			(4,958	)		—			(4,958	)
	Debt issue fees						(1,284	)		—			—			—			(1,284	)
	Proceeds from exercises under stock plans						18,659			—			—			—			18,659
	Excess tax benefits from stock option exercises						2,799			—			—			—			2,799
	Purchase of treasury shares						(4,802	)		—			—			—			(4,802	)
	Purchase of common treasury shares—stock plan exercises						(19,829	)		—			—			—			(19,829	)

					Net cash flows from financing activities		5,154			17,730			(45,837	)		—			(22,953	)

Effect of exchange rate changes on cash and cash equivalents							—			—			(7,539	)		—			(7,539	)

Net change in cash and cash equivalents							17,578			17,901			(45,475	)		—			(9,996	)
Cash and cash equivalents—beginning of year							8,015			619			338,270			—			346,904

Cash and cash equivalents—end of period						$	25,593		$	18,520		$	292,795		$	—		$	336,908

			Thirteen Weeks Ended									Thirty-nine Weeks Ended

			September 24, 2011			September 25, 2010			% Incr. (Decr.)			September 24, 2011			September 25, 2010			% Incr. (Decr.)
Consolidated
	Net sales		$	672.2		$	527.8			27.4	%	$	1,908.8		$	1,376.8			38.6	%
	Gross profit			167.4			132.5			26.3	%		471.9			361.9			30.4	%
		as a percent of sales		24.9	%		25.1	%					24.7	%		26.3	%
	SG&A expense			95.4			85.4			11.7	%		285.9			245.8			16.3	%
		as a percent of sales		14.2	%		16.2	%					15.0	%		17.9	%
	Operating income			72.0			47.1			52.9	%		186.0			116.1			60.2	%
		as a percent of sales		10.7	%		8.9	%					9.7	%		8.4	%
	Net interest expense			4.5			6.8			(33.8	)%		19.8			19.7			0.5	%
	Effective tax rate			36.1	%		34.1	%					30.6	%		36.2	%
	Net earnings attributable to Valmont Industries, Inc.		$	42.1		$	25.9			62.5	%	$	113.6		$	59.5			90.9	%
	Earnings per share attributable to Valmont Industries, Inc.—diluted		$	1.59		$	0.98			62.2	%	$	4.28		$	2.25			90.2	%
Engineered Infrastructure Products segment
	Net sales		$	215.6		$	194.7			10.8	%	$	579.6		$	463.3			25.1	%
	Gross profit			53.3			51.7			3.1	%		135.9			122.9			10.6	%
	SG&A expense			36.1			34.5			4.6	%		105.0			91.0			15.4	%
	Operating income			17.2			17.2			0.1	%		30.9			31.9			(3.1	)%
Utility Support Structures segment
	Net sales		$	155.3		$	120.8			28.6	%	$	415.3		$	348.2			19.3	%
	Gross profit			31.7			24.8			27.8	%		91.5			83.4			9.7	%
	SG&A expense			17.0			15.0			13.3	%		50.3			46.4			8.4	%
	Operating income			14.7			9.8			50.0	%		41.2			37.0			11.4	%
Coatings segment
	Net sales		$	69.0		$	66.1			4.2	%	$	204.1		$	136.3			49.7	%
	Gross profit			22.7			21.5			5.6	%		65.1			44.7			45.6	%
	SG&A expense			8.4			7.9			6.3	%		25.5			16.7			52.7	%
	Operating income			14.3			13.6			5.1	%		39.6			28.0			41.4	%
Irrigation segment
	Net sales		$	150.6		$	88.2			70.7	%	$	485.4		$	309.0			57.1	%
	Gross profit			42.4			23.7			78.9	%		131.1			82.8			58.3	%
	SG&A expense			18.7			13.2			41.7	%		50.5			40.3			25.3	%
	Operating income			23.7			10.5			125.7	%		80.6			42.5			89.6	%
Other
	Net sales		$	81.7		$	58.0			40.7	%	$	224.4		$	120.0			87.0	%
	Gross profit			17.3			12.5			38.4	%		48.2			31.1			55.0	%
	SG&A expense			4.7			5.4			(13.0	)%		15.3			11.0			39.1	%
	Operating income			12.6			7.1			77.5	%		32.9			20.1			63.7	%
Net Corporate expense
	Gross profit			—			(1.7	)		NM			0.1			(3.0	)		NM
	SG&A expense			10.4			9.4			10.6	%		39.3			40.4			(2.7	)%
	Operating loss			(10.4	)		(11.1	)		(6.3	)%		(39.2	)		(43.4	)		(9.7	)%

	Thirty-nine weeks ended September 24, 2011

	Net Sales		Operating Income
Engineered Infrastructure Products	$	79.0	$	4.8
Utility Support Structures		2.1		0.3
Coatings		61.9		8.2
Other		75.0		3.6
Net corporate expense		—		(4.4	)

Total	$	218.0	$	12.5


Interest-bearing debt			506,033
EBITDA—last 12 months			324,966
Leverage ratio			1.56
EBITDA—last 12 months			324,966
Interest expense—last 12 months			34,784
Interest earned ratio			9.34


Net cash flows from operating activities	$	130,996
Interest expense		34,784
Income tax expense		70,712
Deferred income tax benefit		1,783
Noncontrolling interest		(7,744	)
Equity in earnings/(losses) in nonconsolidated subsidiaries		4,961
Stock-based compensation		(6,404	)
Pension plan expense		(10,418	)
Contribution to pension plan		11,754
Payment of deferred compensation		393
Changes in assets and liabilities, net of acquisitions		95,544
Other		(1,395	)

EBITDA	$	324,966

Net earnings attributable to Valmont Industries, Inc.	$	148,443
Interest expense		34,784
Income tax expense		70,712
Depreciation and amortization expense		71,027

EBITDA	$	324,966

Contractual Obligations	Total		2011		2012–2013		2014–2015		After 2015

Long-term debt	$	495.0	$	—	$	20.5	$	0.5	$	474.0
Interest		270.0		15.1		60.2		59.8		134.9
Delta pension plan contributions		78.8		—		22.5		22.5		33.8
Operating leases		115.7		12.1		32.4		22.7		48.5
Unconditional purchase commitments		35.4		35.4		—		—		—

Total contractual cash obligations	$	994.9	$	62.6	$	135.6	$	105.5	$	691.2


		VALMONT INDUSTRIES, INC. (Registrant)
		/s/ TERRY J. MCCLAIN Terry J. McClain Senior Vice President and Chief Financial Officer (Principal Financial Officer)

		(a)		(b)		(c)		(d)

Period		Total Number of Shares Purchased		Average Price paid per share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
June 26, 2011 to July 23, 2011			13,030	$	106.38		—		—
July 24, 2011 to August 27, 2011			—		—		—		—
August 28, 2011 to September 24, 2011			—		—		—		—

	Total		13,030	$	106.38		—		—

		Exhibit No.			Description

			31.1		Section 302 Certificate of Chief Executive Officer
			31.2		Section 302 Certificate of Chief Financial Officer
			32.1		Section 906 Certifications of Chief Executive Officer and Chief Financial Officer
			101		The following financial information from Valmont's Quarterly Report on Form 10-Q for the quarter ended September 24, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Shareholders' Equity, (v) Notes to Condensed Consolidated Financial Statements (tagged as blocks of text).