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 25, 2010
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

26,350,190
Outstanding shares of common stock as of October 25, 2010

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q



PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Operations for the thirteen and thirty-nine weeks ended September 25, 2010 and September 26, 2009	3
	Condensed Consolidated Balance Sheets as of September 25, 2010 and December 26, 2009	4
	Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended September 25, 2010 and September 26, 2009	5
	Condensed Consolidated Statements of Shareholders' Equity for the thirty-nine weeks ended September 25, 2010 and September 26, 2009	6
	Notes to Condensed Consolidated Financial Statements	7-31
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32-42
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	42
Item 4.	Controls and Procedures	43
PART II. OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 5.	Other Information	44
Item 6.	Exhibits	44
Signatures		45

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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 25, 2010			September 26, 2009			September 25, 2010			September 26, 2009
Net sales		$	527,831		$	434,010		$	1,376,792		$	1,387,974
Cost of sales			395,310			297,652			1,014,895			978,619

	Gross profit		132,521			136,358			361,897			409,355
Selling, general and administrative expenses			85,378			73,625			245,803			218,887

	Operating income		47,143			62,733			116,094			190,468

Other income (expenses):
	Interest expense		(8,487	)		(3,587	)		(22,878	)		(11,847	)
	Interest income		1,733			370			3,181			986
	Other		58			2,106			28			1,916

			(6,696	)		(1,111	)		(19,669	)		(8,945	)

Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries			40,447			61,622			96,425			181,523

Income tax expense (benefit):
	Current		15,694			22,779			39,652			54,345
	Deferred		(1,914	)		(2,441	)		(4,744	)		5,299

			13,780			20,338			34,908			59,644

Earnings before equity in earnings of nonconsolidated subsidiaries			26,667			41,284			61,517			121,879
Equity in earnings of nonconsolidated subsidiaries			1,068			84			1,987			579

	Net earnings		27,735			41,368			63,504			122,458

Less: Earnings attributable to noncontrolling interests			(1,800	)		(894	)		(3,991	)		(1,890	)

	Net earnings attributable to Valmont Industries, Inc.	$	25,935		$	40,474		$	59,513		$	120,568

Earnings per share attributable to Valmont Industries, Inc.—Basic		$	0.99		$	1.56		$	2.28		$	4.65

Earnings per share attributable to Valmont Industries, Inc.—Diluted		$	0.98		$	1.53		$	2.25		$	4.59

Cash dividends per share		$	0.165		$	0.150		$	0.480		$	0.430

Weighted average number of shares of common stock outstanding—Basic (000 omitted)			26,133			25,963			26,084			25,936

Weighted average number of shares of common stock outstanding—Diluted (000 omitted)			26,404			26,402			26,420			26,257

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 25, 2010			December 26, 2009

				ASSETS
Current assets:
	Cash and cash equivalents				$	323,150		$	180,786
	Receivables, net					400,683			259,521
	Inventories					296,335			210,611
	Prepaid expenses and other current assets					29,731			22,143
	Refundable and deferred income taxes					35,576			42,361

		Total current assets				1,085,475			715,422

Property, plant and equipment, at cost						858,051			675,446
	Less accumulated depreciation and amortization					(423,595	)		(392,358	)

		Net property, plant and equipment				434,456			283,088

Goodwill						294,111			178,320
Other intangible assets, net						190,595			96,378
Other assets						54,733			28,961

		Total assets			$	2,059,370		$	1,302,169

			LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current installments of long-term debt				$	243		$	231
	Notes payable to banks					14,449			11,900
	Accounts payable					179,131			118,210
	Accrued employee compensation and benefits					78,088			66,611
	Accrued expenses					86,641			55,921
	Dividends payable					4,348			3,944

		Total current liabilities				362,900			256,817

Deferred income taxes						82,932			49,281
Long-term debt, excluding current installments						482,932			160,251
Defined benefit pension liability						124,663			—
Deferred compensation						23,455			19,013
Other noncurrent liabilities						45,904			8,500
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					817,117			767,398
	Accumulated other comprehensive income (loss)					24,456			16,953
	Treasury stock					(25,382	)		(25,990	)

		Total Valmont Industries, Inc. shareholders' equity				844,091			786,261

	Noncontrolling interest in consolidated subsidiaries					92,493			22,046

		Total shareholders'equity				936,584			808,307

		Total liabilities and shareholders' equity			$	2,059,370		$	1,302,169

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 25, 2010			September 26, 2009
Cash flows from operating activities:
	Net earnings				$	63,504		$	122,458
	Adjustments to reconcile net earnings to net cash flow from operations:
		Depreciation and amortization				41,829			33,639
		Stock-based compensation				4,712			4,814
		Loss on sales of property, plant and equipment				1,513			807
		Equity in earnings of nonconsolidated subsidiaries				(1,987	)		(579	)
		Deferred income taxes				(4,744	)		5,299
		Other				—			(238	)
		Changes in assets and liabilities, net of the effects of acquisitions:
			Receivables			(44,046	)		37,945
			Inventories			4,390			102,820
			Prepaid expenses			1,063			(11,556	)
			Accounts payable			(22,674	)		(19,949	)
			Accrued expenses			19,230			(1,262	)
			Other noncurrent liabilities			10,254			(737	)
			Income taxes payable/refundable			12,295			(7,035	)

				Net cash flows from operating activities		85,339			266,426

Cash flows from investing activities:
	Purchase of property, plant and equipment					(20,283	)		(38,718	)
	Proceeds from sale of assets					11,090			595
	Acquisitions (net of cash acquired of $198,810)					(249,057	)		—
	Dividends to noncontrolling interests					(12,265	)		(289	)
	Dividends from nonconsolidated subsidiaries					9,606			—
	Other, net					2,062			(2,454	)

				Net cash flows from investing activities		(258,847	)		(40,866	)

Cash flows from financing activities:
	Net borrowings (payments) under short-term agreements					2,549			5,398
	Proceeds from long-term borrowings					491,000			10,001
	Principal payments on long-term obligations					(168,271	)		(175,909	)
	Dividends paid					(12,240	)		(10,753	)
	Debt issuance costs					(3,858	)		—
	Proceeds from exercises under stock plans					3,390			4,549
	Excess tax benefits from stock option exercises					1,479			1,954
	Purchase of treasury shares					(878	)		—
	Purchase of common treasury shares—stock plan exercises					(2,144	)		(3,440	)

				Net cash flows from financing activities		311,027			(168,200	)

Effect of exchange rate changes on cash and cash equivalents						4,845			3,917

Net change in cash and cash equivalents						142,364			61,277
Cash and cash equivalents—beginning of year						180,786			68,567

Cash and cash equivalents—end of period					$	323,150		$	129,844

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 27, 2008			$	27,900	$	—		$	624,254		$	(533	)	$	(27,490	)	$	16,845		$	640,976
Comprehensive income:
	Net earnings			—		—			120,568			—			—			1,890			122,458
	Currency translation adjustment			—		—			—			15,314			—			2,800			18,114

		Total comprehensive income		—		—			—			—			—			—			140,572
Cash dividends ($0.43 per share)				—		—			(11,292	)		—			—			—			(11,292	)
Dividends to noncontrolling interests				—		—			—			—			—			(289	)		(289	)
Stock plan exercises; 49,709 shares purchased				—		—			—			—			(3,440	)		—			(3,440	)
Stock options exercised; 152,864 shares issued				—		(6,410	)		7,254			—			3,705			—			4,549
Tax benefit from exercise of stock options						1,954			—			—			—			—			1,954
Stock option expense				—		3,061			—			—			—			—			3,061
Stock awards; 9,746 shares issued				—		1,395			—			—			436			—			1,831

Balance at September 26, 2009			$	27,900	$	—		$	740,784		$	14,781		$	(26,789	)	$	21,246		$	777,922

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

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 25, 2010, the Condensed Consolidated Statements of Operations for the thirteen and thirty-nine week periods ended September 25, 2010 and September 26, 2009, 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 25, 2010 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 26, 2009. 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 26, 2009. The results of operations for the periods ended September 25, 2010 are not necessarily indicative of the operating results for the full year.

Inventories

At September 25, 2010, approximately 33.7% 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 approximately $45,900 and $39,500 at September 25, 2010 and December 26, 2009, respectively.

Inventories consisted of the following:

	September 25, 2010		December 26, 2009

Raw materials and purchased parts	$	145,705	$	112,911
Work-in-process		26,335		20,217
Finished goods and manufactured goods		170,192		117,032

Subtotal		342,232		250,160
LIFO reserve		45,897		39,549

Net inventory	$	296,335	$	210,611

Stock Plans

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

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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)

nonqualified stock options, stock appreciation rights, non-vested stock awards and bonuses of common stock. At September 25, 2010, 1,084,185 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 25, 2010 and September 26, 2009, respectively, were as follows:

	Thirteen Weeks Ended September 25, 2010		Thirteen Weeks Ended September 26, 2009		Thirty-nine Weeks Ended September 25, 2010		Thirty-nine Weeks Ended September 26, 2009

Compensation expense	$	1,218	$	1,021	$	3,675	$	3,061
Income tax benefits		469		394		1,415		1,178

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.

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

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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)

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 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	$	17,776	$	17,776	$	—	$	—

				Fair Value Measurement Using:

		Carrying Value December 26, 2009		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
	Trading Securities	$	15,653	$	15,653	$	—	$	—

Recently Issued Accounting Pronouncements

In fiscal 2010, the Company implemented the provisions of updated ASC Topic 860, Transfers and Servicing, which significantly changed the accounting for transfers of financial assets. The update to ASC 860 eliminated the qualifying special purpose entity ("QSPE") concept, established conditions for reporting a transfer of a portion of a financial asset as a sale, clarified the financial-asset derecognition criteria, revised how interests retained by the transferor in a sale of financial assets initially are measured, and removed the guaranteed mortgage securitization recharacterization provisions. The implementation of this new accounting guidance had no impact on the Company's condensed consolidated financial statements for the fiscal period ended September 25, 2010.

2. Acquisition of Delta plc

On March 10, 2010, the Company commenced a cash offer for all of the issued and to be issued ordinary share capital of Delta, plc. ("Delta") a public limited company incorporated in Great Britain, and listed on the London Stock Exchange (LSE: DLTA). The acquisition was completed on May 12, 2010 and the Company now owns 100% of the ordinary shares of Delta. 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 financed the acquisition with the net proceeds from an April 2010 sale of $300 million of senior notes at an interest rate of 6.625% per annum, cash balances of $83 million and borrowings under the Company's revolving credit agreement. The factors that contributed to a purchase price resulting in the recognition of goodwill,

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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. Acquisition of Delta plc (Continued)

non-deductable for tax purposes, for the acquisition of Delta were to (i) increase the Company's business presence in the Asia Pacific region, (ii) add to its current business activities in the galvanizing and support structures product lines, and (iii) provide growth opportunities in businesses that are not directly related to the Company's current product offerings.

The Company incurred $0.5 million and $14.6 million of expenses (reported as "Selling, general and administrative expenses") in the thirteen and thirty-nine week periods ended September 25, 2010, respectively, related to the Delta acquisition. These expenses included amounts paid for investment banking fees, due diligence costs and other direct expenses related to the purchase of the Delta shares. From a segment reporting standpoint, these expenses were reported as part of "Net corporate expense".

The fair value measurement was preliminary at September 25, 2010, subject to and further management reviews and assessments of the preliminary fair values of the assets acquired and liabilities assumed. The Company expects the fair value measurement process to be completed in the fourth quarter of 2010.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the date of acquisition.

		At May 12, 2010

Current assets		$	406,544
Property, plant and equipment			162,435
Other long-term assets			28,136
Intangible assets			100,716
Goodwill			111,503

	Total fair value of assets acquired	$	809,334

Current liabilities			106,255
Defined benefit pension liability			118,725
Deferred income taxes			35,871
Other non-current liabilities			32,218
Non-controlling interests			79,529

	Total fair value of liabilities assumed and non-controlling interests		372,598

	Net assets acquired	$	436,736

Delta disposed of the shares of its subsidiary UPC Holdings, Inc. in December 2000 for approximately $100 million. The buyer caused UPC Holdings to dispose of its assets in January 2001. The IRS in 2005 established that the buyer had a tax liability on the asset sale of $47 million (exclusive of penalties and interest). During 2009-2010, the Internal Revenue Service issued summons requesting documentation related to the UPC Holdings transactions. The summons state that they were issued in connection with UPC's unsatisfied tax liability and Delta's potential transferee liability. Documents have been provided to the IRS in response to the summons. Based on an evaluation of this matter at

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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. Acquisition of Delta plc (Continued)

the May 12, 2010 date of acquisition, the Company established a provision in the amount of $20 million to address certain legal and factual uncertainties, which amount is included in "Other non-current liabilities".

The Company's Condensed Consolidated Statements of Operations for the quarterly and year-to-date periods ended September 25, 2010 included net sales of $131,357 and $205,522, respectively and net earnings of $6,171 and $9,992, respectively, resulting from Delta's operations from May 12, 2010 until September 25, 2010.

The Company's pro forma results of operations for the thirteen and thirty-nine weeks ended September 26, 2009 and September 25, 2010, assuming that the acquisition occurred at the beginning of 2009 was as follows:

	Thirteen Weeks Ended September 26, 2009		Thirty-nine Weeks Ended September 25, 2010		Thirty-nine Weeks Ended September 26, 2009

Net sales	$	557,123	$	1,569,210	$	1,762,192
Net earnings		47,535		64,512		124,869
Earnings per share—diluted	$	1.80	$	2.49	$	4.81

Based on the results of an independent valuation, the Company allocated $100,716 of the purchase price to acquired intangible assets. The following table summarizes the major classes of Delta acquired intangible assets and the respective weighted-average amortization periods:

	Amount		Weighted Average Amortization Period (Years)

Trade Names	$	36,540	Indefinite
Customer Relationships		58,188	12.0
Proprietary Technology		5,988	5.0

	$	100,716

3. Goodwill and Intangible Assets

The Company's annual impairment testing of goodwill was performed and completed during the third quarter of 2010. As a result of that testing, it was determined that the goodwill on the Company's Condensed Consolidated Balance Sheet was not impaired, although the fair value of the North American Communications Structures reporting unit, which has approximately $6.1 million of goodwill, was not substantially higher than carrying value. The Company will continue to monitor changes in the global economy and industry operating conditions that could impact future operating results of its reporting units. If such conditions arise, the Company will test a given reporting unit for impairment prior to the annual impairment test.

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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)

Amortized Intangible Assets

The components of amortized intangible assets at September 25, 2010 and December 26, 2009 were as follows:

	As of September 25, 2010

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	156,547	$	34,898	13 years
Proprietary Software & Database		2,626		2,540	6 years
Patents & Proprietary Technology		9,579		1,959	8 years
Non-compete Agreements		1,680		997	6 years

	$	170,432	$	40,394

	As of December 26, 2009

	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	97,289	$	27,559	14 years
Proprietary Software & Database		2,627		2,434	6 years
Patents & Proprietary Technology		3,466		1,257	13 years
Non-compete Agreements		1,704		823	6 years

	$	105,086	$	32,073

Amortization expense for intangible assets for the thirteen and thirty-nine weeks ended September 25, 2010 and September 26, 2009, respectively was as follows:

Thirteen Weeks Ended September 25, 2010		Thirteen Weeks Ended September 26, 2009			Thirty-nine Weeks Ended September 25, 2010			Thirty-nine Weeks Ended September 26, 2009

$3,521		$	2,419		$	8,295		$	6,534

	Estimated Amortization Expense

2010	$	11,892
2011		14,032
2012		13,984
2013		13,087
2014		12,664

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)

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 25, 2010 and December 26, 2009 were as follows:

The Webforge, Ingal, Donhad and Industrial Galvanizers trade names were acquired as part of the Delta acquisition. Trade names were tested for impairment separately from goodwill in the third quarter of 2010. The values of the trade names were determined using the relief-from-royalty method. Based on this evaluation, the Company determined that its trade names were not impaired, except for the PiRod trade name, which may be impaired and is undergoing further evaluation by the Company. The Company plans to complete its valuation of this trade name in the fourth quarter of 2010.

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 25, 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 25, 2010. At September 26, 2009 there were 185,773 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 26, 2009.

The lending agreements include certain maintenance covenants, including financial leverage and interest coverage. The Company was in compliance with all debt covenants at September 25, 2010.

The minimum aggregate maturities of long-term debt for each of the four years following 2010 are: $296, $248, $23,249 and $150,255.

Delta provides defined benefit retirement income to eligible employees in the United Kingdom and is the plan sponsor. Pension retirement benefits to qualified employees are 1.67% of final salary per year of service upon reaching the age of 65 years. This Plan has less than ten active members.

The Company recognizes the overfunded or underfunded status of the pension plan as an asset or liability. The funded status represents the difference between the pension benefit obligation (PBO) and the fair value of the plan assets. The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases and inflation. Plan assets are measured at fair value. At the date of the Delta acquisition (May 12, 2010), the Company determined fair value of the PBO and plan assets. Because the pension plan is denominated in British pounds sterling, the Company used exchange rates of $1.5353/£ and $1.5679/£ to translate the net pension liability into U.S. dollars at May 12, 2010 and September 25, 2010, respectively.

Projected Benefit Obligation and Fair Value of Plan Asset at date of Delta acquisition—The accumulated benefit obligation (ABO) is the present value of benefits earned to date. The underfunded ABO represents the difference between the projected benefit obligation (PBO) and the fair value of plan assets. The PBO, ABO, and fair value of plan assets for pension plans with accumulated benefit obligations in excess of the fair value of the plan assets were as follows at May 12, 2010:

Assumptions—The weighted-average actuarial assumptions used to determine the benefit obligation at May 12, 2010 were as follows:

Pension expense is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is applied to a calculated value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended to reduce year-to-year volatility in pension expense, but it can have the effect of delaying the recognition of differences between actual returns on assets and expected returns based on long-term rate of return assumptions. Differences in actual experience in relation to assumptions are not recognized in net earnings immediately, but are deferred and, if necessary, amortized as pension expense.

The components of the net periodic pension expense were as follows for the period from May 12, 2010 to September 25, 2010:

Assumptions—The weighted-average actuarial assumptions used to determine expense are as follows for fiscal 2010:

The discount rate is based on the annualized yield on the iBoxx over the 15-year AA-rated corporate bonds index with cash flows generally matching the Plan's expected benefit payments. The expected return on plan assets is based on the asset allocation mix and the historical return, taking into account current and expected market conditions.

Employer contributions to the pension plan have been set at $9,878 (£6.3 million) per annum in accordance with the Plan's 10-year recovery plan, along with a contribution to cover the administrative costs of the Plan of approximately $1,568 (£1.0 million) per annum.

The following table details expected pension benefit payments for the years 2010 through 2019:

The investment strategy for pension plan assets is to maintain a diversified portfolio mainly in long-term fixed-income securities that are investment grade or government-backed in nature. The plan, as required by U.K. law, has an independent trustee that sets investment policy and consults with representatives of the plan sponsor and independent advisors regularly on such matters.

The pension plan investments are held in a trust. Most of the pension plan assets are invested in fixed income securities. The debt portfolio is also broadly diversified and invested primarily in U.K. Treasury and corporate securities. The weighted-average maturity of the debt portfolio was 12 years at September 25, 2010.

The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

Index-linked gilts—Index-linked gilts are U.K. government-backed securities consisting of bills, notes, bonds, and other fixed income securities issued directly by the U.K. Treasury or by government-sponsored enterprises.

Corporate Bonds—Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations.

Corporate Stock—This investment category consists of common and preferred stock issued by U.K. and non-U.K. corporations.

These assets are pooled investment funds whereby the underlying investments can be valued using quoted market prices. As the fair values of the pooled investment funds themselves are not publicly quoted, they are classified as Level 2 investments.

At May 12, 2010, the pension plan assets measured at fair value on a recurring basis were as follows:

The Company aggregates its operating segments into five 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 based on employee headcounts and sales dollars.

ENGINEERED SUPPORT STRUCTURES: This segment consists of the manufacture of engineered metal structures and components for the lighting and traffic and wireless communication industries worldwide and for other specialty 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;

IRRIGATION: This segment consists of the manufacture of agricultural irrigation equipment and related parts and services; and

DELTA: This segment consists of the operations of Delta plc, which was purchased by Valmont on May 12, 2010. The primary product lines in this segment are engineered steel products for industrial access systems, road safety, poles and grinding media, galvanizing services, and manganese materials.

In addition to these five reportable segments, the Company has other businesses that individually are not more than 10% of consolidated sales. These businesses, which include the manufacture of tubular products and the distribution of industrial fasteners, are reported in the "Other" category.

In the fourth quarter of 2009, the Company reorganized its management structure and redefined its Utility segment to include Utility support structure activities on a global basis. Previously, sales of utility support structures outside of North America were reported as part of the ESS segment. This management structure change should help the Company better serve the global utility support structure market. Information presented for 2009 has been reclassified to conform to the 2010 presentation. The Company will reassess the composition of the Delta segment at the end of fiscal 2010 and make any appropriate changes to its reportable segment structure at that time.

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 $300,000,000 of senior unsecured notes at a coupon interest rate of 6.625% per annum. 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 $150,000,000 offering of 6⁷/8% Senior Subordinated Notes. The Notes are guaranteed, jointly, severally, fully and unconditionally, on a senior subordinated basis by the Guarantors.

Subsequent to the issuance of the Company's consolidated financial statements on Form 10-K on February 23, 2010, management identified certain errors in the presentation of the condensed consolidated balance sheet contained in this footnote as of December 26, 2009. The errors were the result of (i) a historical accounting policy to record currency translation adjustments only in the subsidiary ledgers and not in the Parent accounts; (ii) a historical accounting policy not to record non-earnings related transactions (e.g. cash dividends, stock options and stock compensation) in the Parent equity accounts; (iii) a bookkeeping error in the beginning 2008 equity balance that was also subsequently carried forward to 2009; and (iv) not correctly reflecting investments in certain subsidiaries in each of the appropriate entities. Accordingly, the previously presented condensed consolidated balance sheet as of December 26, 2009 has been corrected. The "Guarantors" and "Total" columns are not impacted by any of these corrections. These adjustments did not affect the consolidated financial statements for the periods presented.

The impact to the December 26, 2009 condensed consolidated balance sheet is as follows:

The "Guarantors" and "Total" columns have not been impacted by any of the foregoing. There was no impact on the consolidated financial statements for the periods presented.

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 25, 2010

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirteen Weeks Ended September 26, 2009

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirty-nine Weeks Ended September 26, 2009

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirty-nine Weeks Ended September 26, 2009

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 26, 2009. See Note 7 to the Condensed Consolidated Financial Statements.

In the fourth quarter of 2009, we reorganized our Utility Support Structures reporting structure to include oversight of sales and operating income of utility structures on a world-wide basis. In the second quarter of 2010, we acquired Delta plc. Accordingly, we have changed our segment reporting to match our internal reporting structure and now report five reportable segments. Previously, sales and operating profit associated with utility support structure sales outside of North America were included in the Engineered Support Structures segment. Financial information for 2009 has been reclassified to conform to the 2010 presentation. In our segment reporting structure, Delta's financial information is presented in the "Delta segment".

On March 4, 2010, we made an offer to acquire all the ordinary shares of Delta plc ("Delta"), a public company traded on the London Stock exchange under the symbol "DLTA". The offer price was £1.85 per ordinary share, with a total estimated purchase price of $436.7 million. To manage the foreign exchange risk associated with the offer, we executed a forward foreign exchange contract with a multinational bank, whereby, if the acquisition was completed, the required British pound sterling would be delivered to us at a fixed exchange rate of $1.5353/£ to complete the acquisition. In accordance with takeover rules in the United Kingdom, we established funding for the purchase price and related acquisition costs by a combination of $264 million in restricted cash (comprised of cash balances of $83 million and $181 million in borrowings under our revolving credit agreement) and a $200 million bank bridge loan commitment. In April 2010, we issued $300 million of senior unsecured notes, terminated the bridge loan and reduced our revolving credit agreement borrowings to approximately $85 million. We completed the acquisition on May 12, 2010 and we now own 100% of Delta's ordinary shares.

We began consolidating Delta's financial results in our consolidated financial statements beginning on May 12, 2010. Delta's sales included in our consolidated results for the third quarter of 2010 and the period of May 12, 2010 to September 25, 2010 were $131.4 million and $205.5 million respectively. Operating income over the same periods was $8.2 million and $15.4 million, respectively.

In the third quarter and year-to-date 2010, certain expenses were incurred in our condensed consolidated statement of operations that were associated with the Delta acquisition. These expenses included:

	September 25, 2010		December 26, 2009

Webforge	$	16,913	$	—
Newmark		11,111		11,111
Ingal EPS/Ingal Civil Products		8,926		—
Donhad		6,734		—
PiRod		4,750		4,750
Industrial Galvanizers		4,698		—
Other		7,425		7,504

	$	60,557	$	23,365

	Engineered Support Structures Segment			Utility Support Structures Segment		Coatings Segment		Irrigation Segment		Delta Segment		Total

Balance December 26, 2009	$	55,338		$	77,141	$	43,777	$	2,064	$	—	$	178,320
Acquisition		—			—		—		—		111,503		111,503
Foreign currency translation		(451	)		—		—		—		4,739		4,288

Balance September 25, 2010	$	54,887		$	77,141	$	43,777	$	2,064	$	116,242	$	294,111

		September 25, 2010		December 26, 2009

6.625% Senior Unsecured Notes(a)		$	300,000	$	—
6.875% Senior Subordinated Notes(b)			150,000		150,000
Revolving credit agreement(c)			23,000		—
IDR Bonds(d)			8,500		8,500
1.75% to 3.485% notes			1,675		1,982

	Total long-term debt		483,175		160,482
Less current installments of long-term debt			243		231

	Long-term debt, excluding current installments	$	482,932	$	160,251



Until May 1, 2011	102.292	%
From May 1, 2011 until May 1, 2012	101.146	%
After May 1, 2012	100.000	%

Underfunded Accumulated Benefit Obligation Thousands of Dollars	May 12, 2010

Projected benefit obligation	$	(469,780	)
Fair value of plan assets		351,055

Underfunded accumulated benefit obligation	$	(118,725	)

		Basic EPS				Diluted EPS

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
Thirteen weeks ended September 26, 2009:
	Net earnings attributable to Valmont Industries, Inc.	$	40,474	—		$	40,474
	Shares outstanding		25,963	439			26,402
	Per share amount	$	1.56	(.03	)	$	1.53
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
Thirty-nine weeks ended September 26, 2009:
	Net earnings attributable to Valmont Industries, Inc.	$	120,568	—		$	120,568
	Shares outstanding		25,936	321			26,257
	Per share amount	$	4.65	(.06	)	$	4.59

Thousands of Dollars

Net Periodic Benefit Cost:
	Service cost	$	98
	Interest cost		9,755
	Expected return on plan assets		(6,404	)

Net periodic benefit expense		$	3,449

Percentages

Discount rate	5.60	%
Expected return on plan assets	5.51	%
Salary increase	4.70	%
Inflation	3.70	%

Thousands of Dollars

2010	$	5,858
2011		9,537
2012		9,909
2013		10,295
2014		10,698
Years 2015-2019		60,080

Thousands of Dollars		Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Plan net assets:
	Temporary cash investments	$	—	$	—	$	—	$	—
	Index-linked gilts		—		39,456		—		39,456
	Corporate bonds		—		294,117		—		294,117
	Corporate stock		—		15,550		—		15,550
	Other investments		—		1,933		—		1,933

Total plan net assets at fair value		$	—	$	351,056	$	—	$	351,055

	Parent As previously reported		Parent As corrected		Non- Guarantors As previously reported			Non- Guarantors As corrected			Eliminations As previously reported			Eliminations As corrected

Investment in subsidiaries and intercompany accounts	$	672,135	$	644,836	$	(34,722	)	$	(9,725	)	$	(711,318	)	$	(709,016	)
Total assets		1,131,254		1,103,955		475,882			500,879			(711,318	)		(709,016	)
Additional paid-in capital		—		—		139,577			131,580			(321,119	)		(313,122	)
Retained earnings		811,650		767,398		158,724			191,718			(372,205	)		(361,198	)
Accumulated other comprehensive income		—		16,953		—			—			—			(16,953	)
Total Valmont Industries, Inc. shareholders' equity		813,560		786,281		318,748			343,271			(711,318	)		(709,016	)
Total liabilities and shareholders' equity		1,131,254		1,103,855		475,882			500,879			(711,318	)		(709,016	)

		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

Net Sales		$	225,013		$	101,875	$	143,657		$	(36,535	)	$	434,010
Cost of Sales			160,249			69,914		104,594			(37,105	)		297,652

	Gross profit		64,764			31,961		39,063			570			136,358
Selling, general and administrative expenses			37,667			13,121		22,837			—			73,625

	Operating income		27,097			18,840		16,226			570			62,733

Other income (expense):
	Interest expense		(3,331	)		—		(256	)		—			(3,587	)
	Interest income		15			—		355			—			370
	Other		1,440			46		620			—			2,106

			(1,876	)		46		719			—			(1,111	)
Earnings before income taxes, minority interest and equity in earnings/(losses) of nonconsolidated subsidiaries			25,221			18,886		16,945			570			61,622

Income tax expense:
	Current		9,439			5,872		7,468			—			22,779
	Deferred		(789	)		1,618		(3,270	)		—			(2,441	)

			8,650			7,490		4,198			—			20,338

Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			16,571			11,396		12,747			570			41,284
Equity in earnings/(losses) of nonconsolidated subsidiaries			23,333			—		—			(23,249	)		84

	Net earnings		39,904			11,396		12,747			(22,679	)		41,368
Less: Earnings attributable to noncontrolling interests			—			—		(894	)		—			(894	)

Net Earnings attributable to Valmont Industries, Inc.		$	39,904		$	11,396	$	11,853		$	(22,679	)	$	40,474

		Parent			Guarantors			Non-Guarantors			Eliminations			Total

Net Sales		$	732,898		$	359,051		$	414,983		$	(118,958	)	$	1,387,974
Cost of Sales			530,621			260,205			308,660			(120,867	)		978,619

	Gross profit		202,277			98,846			106,323			1,909			409,355
Selling, general and administrative expenses			114,842			41,401			62,644			—			218,887

	Operating income		87,435			57,445			43,679			1,909			190,468

Other income (expense):
	Interest expense		(11,003	)		(13	)		(831	)		—			(11,847	)
	Interest income		44			1			941			—			986
	Other		2,536			149			(769	)		—			1,916

			(8,423	)		137			(659	)		—			(8,945	)
Earnings before income taxes, minority interest and equity in earnings/(losses) of nonconsolidated subsidiaries			79,012			57,582			43,020			1,909			181,523

Income tax expense:
	Current		22,215			19,807			12,323			—			54,345
	Deferred		5,822			1,949			(2,472	)		—			5,299

			28,037			21,756			9,851			—			59,644

Earnings before equity in earnings/(losses) of nonconsolidated subsidiaries			50,975			35,826			33,169			1,909			121,879
Equity in earnings/(losses) of nonconsolidated subsidiaries			67,684			—			—			(67,105	)		579

	Net earnings		118,659			35,826			33,169			(65,196	)		122,458
Less: Earnings attributable to noncontrolling interests			—			—			(1,890	)		—			(1,890	)

Net Earnings attributable to Valmont Industries, Inc		$	118,659		$	35,826		$	31,279		$	(65,196	)	$	120,568

				Thirteen Weeks Ended				Thirty-nine Weeks Ended

				September 25, 2010		September 26, 2009		September 25, 2010		September 26, 2009
Sales:
	Engineered Support Structures segment:
		Lighting & Traffic			115,076		128,553		312,622		347,201
		Communication Structures			29,760		32,163		73,946		99,991

			Engineered Support Structures segment		144,836		160,716		386,568		447,192
	Utility Support Structures segment
		Steel			105,097		142,362		304,006		464,661
		Concrete			15,300		23,520		42,458		101,409

			Utility Support Structures segment		120,397		165,882		346,464		566,070
	Coatings segment				35,356		29,683		96,693		88,295
	Irrigation segment				88,255		75,230		309,054		279,339
	Delta segment				131,357		—		205,522		—
	Other				21,338		16,697		68,459		53,457

			Total		541,539		448,208		1,412,760		1,434,353
Intersegment Sales:
	Engineered Support Structures segment				2,936		3,196		4,712		13,961
	Utility Support Structures segment				1,001		553		1,636		1,639
	Coatings segment				5,653		7,020		17,513		19,351
	Irrigation segment				1		2		7		16
	Delta segment				464		—		464		—
	Other				3,653		3,427		11,636		11,412

			Total		13,708		14,198		35,968		46,379
Net Sales:
	Engineered Support Structures segment				141,900		157,520		381,856		433,231
	Utility Support Structures segment				119,396		165,329		344,828		564,431
	Coatings segment				29,703		22,662		79,180		68,944
	Irrigation segment				88,254		75,228		309,047		279,323
	Delta segment				130,893		—		205,058		—
	Other				17,685		13,271		56,823		42,045

			Total	$	527,831	$	434,010	$	1,376,792	$	1,387,974

Operating Income (Loss):
	Engineered Support Structures segment			$	11,680	$	13,238	$	22,364	$	31,240

						Parent			Guarantors			Non-Guarantors			Eliminations			Total

Cash flows from operations:
	Net earnings					$	59,513		$	21,687		$	37,598		$	(55,294	)	$	63,504
		Adjustments to reconcile net earnings to net cash flow from operations:
			Depreciation				14,984			9,564			17,281			—			41,829
			Stock-based compensation				4,712			—			—			—			4,712
			Loss on sales of property, plant and equipment				23			4			1,486			—			1,513
			Equity in losses of nonconsolidated subsidiaries				(604	)		—			(1,383	)		—			(1,987	)
			Deferred income taxes				(3,101	)		(376	)		(1,267	)		—			(4,744	)
			Other adjustments
			Changes in assets and liabilities:
				Receivables			(19,675	)		1,177			(25,548	)		—			(44,046	)
				Inventories			6,432			7,606			(9,648	)		—			4,390
				Prepaid expenses			(1,108	)		(305	)		2,476			—			1,063
				Accounts payable			4,022			1,031			(27,727	)		—			(22,674	)
				Accrued expenses			9,199			(9,803	)		19,834			—			19,230
				Other noncurrent liabilities			160			—			10,094			—			10,254
				Income taxes payable/refundable			(2,601	)		14,923			27			—			12,295

					Net cash flows from operations		71,956			45,508			23,169			(55,294	)		85,339

Cash flows from investing activities:
	Purchase of property, plant and equipment						(8,443	)		(1,468	)		(10,372	)		—			(20,283	)
	Proceeds from sale of property and equipment						21			7			11,062			—
	Acquisitions, gross of cash acquired						—			(436,736	)		(11,131	)		—			(447.867	)
	Cash acquired through acquisitions						—			—			198,810			—			198,810
	Dividends to minority interests						—			—			(12,265	)		—			(12,265	)
	Dividends from nonconsolidated subsidiaries						100			—			9,506			—			9,606
	Other, net						3,229			(51,750	)		(4,711	)		55,294			2,062

					Net cash flows from investing activities		(5,093	)		(489,947	)		180,899			55,294			(258,847	)

Cash flows from financing activities:
	Net borrowings (repayments) under short-term agreements						—			(10	)		2,559			—			2,549
	Proceeds from long-term borrowings						491,000			—			—			—			491,000
	Principal payments on long-term obligations						(168,181	)		—			(90	)		—			(168,271	)
	Debt issue fees						(3,858	)		—			—			—			(3,858	)
	Activity under intercompany note						(443,702	)		443,702			—			—			—
	Dividends paid						(12,240	)		—			—			—			(12,240	)
	Proceeds from exercises under stock plans						3,390			—			—			—			3,390
	Excess tax benefits from stock option exercises						1,479			—			—			—			1,479
	Purchase of treasury shares						(2,678	)		—			1,800			—			(878	)
	Purchase of common treasury shares—stock plan exercises						(2,144	)		—			—			—			(2,144	)

					Net cash flows from financing activities		(136.934	)		443,692			4,269			—			311,027

Effect of exchange rate changes on cash and cash equivalents							—			—			4,845			—			4,845

Net change in cash and cash equivalents							(70,071	)		(747	)		213,182			—			142,364
Cash and cash equivalents—beginning of year							82,017			1,666			97,103			—			180,786

Cash and cash equivalents—end of period						$	11,946		$	919		$	310,285		$	—		$	323,150

			Thirteen Weeks Ended									Thirty-nine Weeks Ended

			September 25, 2010			September 26, 2009			% Incr. (Decr.)			September 25, 2010			September 26, 2009			% Incr. (Decr.)
Consolidated
	Net sales		$	527,831		$	434,010			21.6	%	$	1,376,792		$	1,387,974			-0.8	%
	Gross profit			132,521			136,358			-2.8	%		361,897			409,355			-11.6	%
		as a percent of sales		25.1	%		31.4	%					26.3	%		29.5	%
	SG&A expense			85,378			73,625			16.0	%		245,803			218,887			12.3	%
		as a percent of sales		16.2	%		17.0	%					17.9	%		15.8	%
	Operating income			47,143			62,733			-24.9	%		116,094			190,468			-39.0	%
		as a percent of sales		8.9	%		14.5	%					8.4	%		13.7	%
	Net interest expense			6,754			3,217			109.9	%		19,697			10,861			81.4	%
	Effective tax rate			34.1	%		33.0	%					36.2	%		32.9	%
	Net earnings attributable to Valmont Industries, Inc.			25,935			40,474			-35.9	%		59,513			120,568			-50.6	%
	Earnings per share attributable to Valmont Industries, Inc.—diluted		$	0.98		$	1.53					$	2.25		$	4.59
Engineered Support Structures segment
	Net sales		$	141,900		$	157,520			-9.9	%	$	381,856		$	433,231			-11.8	%
	Gross profit			36,382			41,291			-11.9	%		98,822			111,525			-11.4	%
	SG&A expense			24,702			28,053			-11.8	%		76,458			80,285			-4.7	%
	Operating income			11,680			13,238			-12.1	%		22,364			31,240			-28.5	%
Utility Support Structures segment
	Net sales		$	119,396		$	165,329			-27.8	%	$	344,828		$	564,431			-38.9	%
	Gross profit			24,171			62,388			-61.2	%		82,010			188,653			-56.5	%
	SG&A expense			14,916			17,168			-13.4	%		46,107			53,115			-13.3	%
	Operating income			9,255			45,220			-79.5	%		35,903			135,538			-73.5	%
Coatings segment
	Net sales		$	29,703		$	22,662			31.1	%	$	79,180		$	68,944			14.8	%
	Gross profit			12,216			10,901			12.1	%		31,030			30,338			2.3	%
	SG&A expense			3,567			3,320			7.4	%		10,263			10,373			-1.1	%
	Operating income			8,649			7,581			14.1	%		20,767			19,965			4.0	%
Irrigation segment
	Net sales		$	88,254		$	75,228			17.3	%	$	309,047		$	279,323			10.6	%
	Gross profit			23,709			17,450			35.9	%		82,840			63,601			30.2	%
	SG&A expense			13,119			11,890			10.3	%		40,256			36,271			11.0	%
	Operating income			10,590			5,560			90.5	%		42,584			27,330			55.8	%
Delta
	Net sales		$	130,893		$	—			NA		$	205,058		$	—			NA
	Gross profit			29,554			—			NA			47,824			—			NA
	SG&A expense			21,384			—			NA			32,441			—			NA
	Operating income			8,170			—			NA			15,383			—			NA
Other
	Net sales		$	17,685		$	13,271			33.3	%	$	56,823		$	42,045			35.1	%
	Gross profit			6,092			4,998			21.9	%		19,534			16,004			22.1	%
	SG&A expense			1,864			1,852			0.6	%		5,841			5,762			1.4	%
	Operating income			4,228			3,146			34.4	%		13,693			10,242			33.7	%
Net Corporate expense
	Gross profit		$	397		$	(670	)		-159.3	%	$	(163	)	$	(766	)		-78.7	%
	SG&A expense			5,826			11,342			-48.6	%		34,437			33,081			4.1	%
	Operating loss			(5,429	)		(12,012	)		-54.8	%		(34,600	)		(33,847	)		2.2	%