Valmont Industries (VMI) Reports Decreased Sales Volumes

By Tamara Parker • Thursday, February 22 11:09 • Permanent Link

Valmont Industries, Inc. (NYSE: VMI) has reported its financial results for the fourth quarter and full year 2023, as well as provided its financial outlook for 2024 and new long-term financial targets. President and CEO Avner M. Applbaum highlighted the company's performance, stating, "the Valmont team delivered fourth-quarter results in line with our expectations. Despite lower sales volumes, we expanded gross profit margins year-over-year through successful pricing strategies and improved operational efficiencies in our facilities."

In the fourth quarter of 2023, net sales decreased by 10.3% to $1.0 billion, with operating income decreasing by 42.1% to $63.5 million. Diluted earnings per share ("EPS") were reported at $1.38, compared to $1.86 in the same period of the previous year.

For the full year 2023, net sales decreased by 3.9% to $4.2 billion, with operating income decreasing by 32.7% to $291.6 million. Diluted EPS for the full year was $6.78, compared to $11.62 in the previous year.

Applbaum provided insights into the company's outlook, stating, "in 2024, we remain focused on what we can control. We are sustaining higher gross profit margins through ongoing improvement in operational efficiencies and commitment to our pricing strategies. We are reducing SG&A expense through the realignment program we announced last quarter."

The company also introduced its 2024 full-year financial outlook and key assumptions, including a net sales change of (3.0%) to flat, with infrastructure sales growth expected to approach mid-single digits and agriculture sales expected to decrease by 15-20%. The diluted earnings per share outlook for 2024 is $14.25 to $15.50, with an effective tax rate of approximately 26%.

Furthermore, Valmont provided new long-term financial targets beyond 2024, with a focus on organic net sales growth above mid-single digits, operating margin approaching mid-teens, return on invested capital (ROIC) in the high-teens, and free cash flow conversion of 100% of net earnings.

The company's full 8-K submission is available here.

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