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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the Fiscal Year Ended December 30, 1995
Commission File No. 0-3701
Valmont Industries, Inc.
------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 47-0351813
-------- ----------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
Valley, Nebraska 68064
----------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Phone Number, Including Area Code: (402) 359-2201
Securities Registered Pursuant to Section 12(g) of the Act:
Valmont Industries, Inc. Common Stock
-------------------------------------
$1.00 Par Value - Traded NASDAQ Stock Market (Symbol VALM)
----------------------------------------------------------
(Title of Class)
----------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding twelve 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 ninety days. Yes X No
--- ---
At March 1, 1996 there were outstanding 13,577,422 common shares of the
Company. The aggregate market value of the voting stock held by non-
affiliates of the Company on March 1, 1996 was $244,349,000.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. [ X ]
Documents Incorporated by Reference
-----------------------------------
Portions of the Company's annual report to shareholders for the fiscal year
ended December 30, 1995 (the "Annual Report") are incorporated by reference
in Parts I and II, and portions of the Company's proxy statement for its
annual meeting of stockholders to be held on April 22, 1996 (the "Proxy
Statement") are incorporated by reference in Part III.
Page 1 of 67
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Index to Exhibits, Page 14
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PART I
Item 1. Business.
(a) General Description of Business
Valmont Industries, Inc., a Delaware Corporation, (together with
its subsidiaries the "Company") is engaged in industrial products and
irrigation products businesses. The Industrial Products segment involves
the manufacture and distribution of engineered metal structures and other
fabricated products for industrial and commercial applications. The
Irrigation Products segment involves the manufacture and distribution of
agricultural irrigation equipment and related products. The description
of Valmont's businesses set forth on pages 6 through 11 of the Company's
Annual Report is incorporated herein by reference.
The Company entered the Irrigation Products market in 1953 from
its manufacturing location in Valley, Nebraska. The Industrial Products
segment began producing and marketing engineered metal structures as a
result of manufacturing support efforts for the irrigation business.
Valmont has grown internally and by acquisition. Valmont has
also divested certain businesses. Valmont's acquisitions include (i) an
expansion into the French steel and aluminum structures market in 1989
with the acquisition of Sermeto, (ii) the acquisition in 1991 of Valmont
Nederland B.V. (formerly Nolte Mastenfabriek B.V.), a Dutch
manufacturer of steel poles structures, (iii) the acquisition in 1991
of an 80% interest in Lampadaires Feralux, Inc., a Canadian producer of
aluminum pole structures, (iv) the acquisition in 1994 of the assets of
Energy Steel Corporation of Tulsa, Oklahoma, a manufacturer of utility
products, and (v) the acquisition of Microflect Company, Inc. in 1995, a
manufacturer and installer of microwave communication structures.
Divestitures include (i) the sale in 1994 of the assets of Good-All
Electric, Inc., a Colorado producer of cathodic protection rectifiers,
(ii) the 1993 sale of its investment in Inacom Corp., a national
microcomputer reseller business initially established as a division of
the Company, (iii) the 1993 exit of the Gate City Steel steel reinforcing
bar business, and (iv) the 1989 divestiture of the Gate City Steel service
center business.
(b) Industry Segments
The Company classifies its operations into two business segments:
Industrial Products - The manufacture and distribution of
engineered metal structures and other fabricated products.
Irrigation Products - The manufacture and distribution of
agricultural irrigation equipment and related products.
The amounts of revenues, operating income and identifiable assets
attributable to each segment for each of the last three years are set forth
on page 30 of the Annual Report and incorporated herein by reference.
(c) Narrative Description of Business
Principal Products Produced and Services Rendered.
--------------------------------------------------
The information called for by this item is hereby incorporated by
reference to pages 6 through 11 in the Company's Annual Report.
2
Suppliers and Availability of Raw Materials.
--------------------------------------------
Hot rolled steel coil and other carbon steel products are the
primary raw materials utilized in the manufacture of finished products for
the Industrial Products and Irrigation Products segments. These essential
items are purchased from steel mills and steel service centers and are
readily available. In addition to steel, key elements of the ballast
manufacturing process are copper and aluminum wire. These items are
obtained from wire mills and are also readily available. It is not likely
that key raw materials would be unavailable for extended periods.
Patents, Licenses, Franchises and Concessions.
----------------------------------------------
Valmont has a number of patents for its irrigation and ballast
designs. The Company also has a number of registered trademarks.
Management believes the loss of any individual patent would not have a
material adverse affect on the financial condition of the Company.
Seasonal Factors in Business.
-----------------------------
Sales in the Company's irrigation segment can be somewhat seasonal
based upon the agricultural growing season.
Customers.
----------
The Company is not dependent for a material part of its business
upon a single customer, or upon very few customers, the loss of any one of
which would have a material adverse effect on the financial condition of
the Company.
Backlog.
--------
The backlog of orders for the principal products manufactured and
marketed was approximately $109.6 million at the end of the 1995 fiscal
year and $111.1 million at the close of 1994. It is anticipated that most of
the backlog of orders will be filled during fiscal year 1996. At year end,
the backlog by segment was as follows (dollar amounts in millions):
Dec. 30, Dec. 31,
1995 1994
--------- ---------
Industrial Products $84.3 87.8
Irrigation Products 25.3 23.3
--------- ---------
$109.6 111.1
====== ======
Competitive Conditions.
-----------------------
In the Industrial Products segment, Valmont is a major
manufacturer and supplier of engineered metal structures to the lighting,
utility and communication industries; the Company delivers a broad line of
custom steel tubing products and manufactures and distributes lighting
ballasts, fasteners and grating. The Irrigation Products segment involves
the manufacture and distribution of mechanized irrigation equipment for both
the U.S. and international markets. The Company believes it is the world's
leading manufacturer of mechanized irrigation systems. The key competitive
strategy used by the Company in each segment is one of high quality and
service.
3
Research Activities.
--------------------
The information called for by this item is hereby incorporated by reference
to the following captioned paragraph (at the page indicated) in the
Company's Annual Report:
Page In
Annual
Paragraph Caption in Annual Report Report
---------------------------------- ------
RESEARCH AND DEVELOPMENT 28
Environmental Disclosure.
-------------------------
The Company is subject to various federal, state and local laws
and regulations pertaining to environmental protection and the discharge of
materials into the environment. Although the Company continues to incur
expenses and to make capital expenditures related to environmental
protection, it does not anticipate that future expenditures will materially
impact the financial condition of the Company.
Number of Employees.
--------------------
At December 30, 1995, the number of employees was 4,166.
Financial Information about Foreign Operations and Export Sales.
----------------------------------------------------------------
Valmont's international sales activity encompasses approximately
seventy foreign countries. The information called for by this item is hereby
incorporated by reference to "Business Segment Information-Summary by
Geographical Area" on page 30 of the Company's Annual Report.
Item 2. Properties.
The Company's primary plant and offices are located on a 352 acre
site near Valley, Nebraska, which is approximately twenty miles west of Omaha,
Nebraska. 336 of the acres are owned in fee. The other 16 acres are leased
on a yearly basis from the Union Pacific Railroad Company, which serves the
Company's primary plant, and which is entitled to terminate the lease on a
one-year notice in the event that the land is required for railroad
operations. The Valley, Nebraska location is used in common as the primary
facilities by Irrigation Products and certain Industrial Products
administrative and operating personnel. The Industrial Products segment's
other significant properties are three locations in France, a newly
constructed plant in Shanghai, China, and two locations for Valmont Electric.
Valmont Electric leases plant and office facilities in El Paso, Texas under a
long-term agreement. Valmont Electric also owns a plant and office
facilities in Juarez, Mexico which are located on land held in trust under
a long-term agreement. The Company's Microflect subsidiary leases office and
plant facilities in Salem, Oregon under long-term leases. The Company
operates other facilities as set forth on pages 2 and 3 of the Company's
Annual Report, which information is incorporated herein by reference.
Item 3. Pending Legal Proceedings.
--------------------------
The Company is involved in a limited number of legal actions.
Management believes that the ultimate resolution of all pending litigation
will not have a material adverse effect on the Company's financial condition.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
Not applicable.
4
Executive Officers of the Company
- ---------------------------------
The executive officers of the Company, their ages, positions held, and the
business experience of each during the past five years are, as follows:
Robert B. Daugherty, Age 74, Chairman of the Board and
Director of the Company continuously since March 1947.
Mogens C. Bay, Age 47, President and Chief Executive
Officer of the Company since August 1993 and Director of the
Company since October 1993. From 1991 to August 1993 served as
President and Chief Operating Officer of the Irrigation
Division of the Company.
Gary L. Cavey, Age 47, President and Chief Operating Officer,
Industrial Products Division since June 1995. President, North
American Operations - Industrial and Construction Products of
the Company from July 1994 to June 1995. From 1985 to July
1994 served as Vice President Marketing of Industrial and
Construction Products of the Company.
Vincent T. Corso, Age 48, Vice President - Operations since
June 1994. Previously served as Vice President - Corporate
Manufacturing, Emerson Electric from 1992 to June 1994 and Vice
President of Operations for Appleton Electric (a wholly owned
subsidiary of Emerson Electric) from 1987 to 1992.
Thomas P. Egan, Jr., Age 47, Vice President, Corporate Counsel and
Secretary of the Company since 1984.
Joseph M. Goecke, Age 58, President and Chief Operating Officer
- Valmont Irrigation since August 1993. Vice President -Operations
of the Company's Irrigation Division from 1991 to August 1993.
Lewis P. Hays, Age 54, President, Valmont Europe since January
1996. Corporate Vice President from June 1995 until January 1996.
President and Chief Operating Officer, Industrial and Construction
Products of the Company from 1985 to June 1995.
Terry J. McClain, Age 48, Vice President and Chief Financial Officer
of the Company since January 1994. Vice President-Finance and
Accounting of the Irrigation Division of the Company from 1990 to
January 1994.
E. Robert Meaney, Age 48, President and Chief Operating Officer
- Valmont International since February 1994. Previously served as
President Directeur General, Continental Can France, S.A. from
1989 to February 1994.
Howard G. Sachs, Age 53, President and Chief Operating Officer
- Valmont Electric, Inc. since October 1993. Previously Honeywell
Keyboard Division Vice President and General Manager from 1991 to
October 1993.
Mark E. Treinen Age 40, Vice President - Business Development since
January 1994. Director of Business Development of the Company
from 1991 until January 1994.
Brian C. Stanley, Age 53, Vice President - Investor Relations and
Controller of the Company since January 1994. Vice President and
Treasurer of the Company since 1990.
Tom L. Whalen, Age 48, Vice President, Human Resources of the
Company since 1982.
5
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
------------------------------------------------------------------
Matters.
-------
Item 6. Selected Financial Data.
------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
The information called for by items 5, 6 and 7 is hereby
incorporated by reference to the following captioned paragraphs (at the
pages indicated) in the Company's Annual Report:
Page(s) In
Annual
Item Caption in Annual Report Report
---- ------------------------ ------
5 Stock Trading Inside back cover
5 Stock Market Price and Dividends Declared 31
5 Approximate Number of Shareholders 18 - 19
5&6 Selected Eleven Year Financial Data 18 - 19
7 Management's Discussion and Analysis 12 - 17
Item 8. Financial Statements and Supplementary Data.
--------------------------------------------
The financial statements called for by this item are hereby
incorporated by reference to the Company's Annual Report as set forth on
pages 20 through 30, together with the independent auditors' report on page
32. The supplemental quarterly financial information is incorporated herein
by reference to page 31 of the Company's Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
------------------------------------------------------------------
Financial Disclosure.
---------------------
The Company filed a Form 8-K dated February 28, 1996 reporting the
change in its independent public accountants to Deloitte & Touche LLP from
KPMG Peat Marwick LLP. The information in the 8-K report is incorporated
herein by reference.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant.
---------------------------------------------------
Item 11. Executive Compensation.
-----------------------
Item 12. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Item 13. Certain Relationships and Related Transactions.
-----------------------------------------------
Except for the information relating to the executive officers of
the Company set forth in Part I of this 10-K Report, the information called
for by items 10, 11, 12 and 13 is hereby incorporated by reference to pages
4 through 11 of the Company's Proxy Statement.
6
PART IV
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Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
----------------------------------------------------------------
(a)(1)(2) Financial Statements. See index to financial statement
---------------------
schedules on page F-2.
(a)(3) Exhibits. See exhibit index, incorporated herein by reference.
---------
(b) Reports on Form 8-K. The Company filed a Form 8-K dated
--------------------
December 19, 1995 reporting the adoption of a Shareholder
Rights Plan with the declaration of a dividend of one preferred
share purchase right for each outstanding share of common
stock, payable January 8, 1996 to stockholders of record on
such date. The Company filed a Form 8-K dated February 28,
1996 reporting a change in the Company's independent public
accountants.
7
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Financial Statement Schedules Supporting
Consolidated Financial Statements for Inclusion
in Annual Report (Form 10-K)
December 30, 1995, December 31, 1994
and December 25, 1993
(With Independent Auditors' Report Thereon)
8
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Shareholders
Valmont Industries, Inc.:
Under date of February 16, 1996, we reported on the consolidated balance
sheets of Valmont Industries, Inc. and subsidiaries as of December 30, 1995
and December 31, 1994, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the years in
the three-year period ended December 30, 1995, as contained in the 1995
Annual Report to Shareholders. These consolidated financial statements and
our report thereon are incorporated by reference in the Annual Report on
Form 10-K for the year 1995. In connection with our audits of the
aforementioned consolidated financial statements, we also have audited the
related supplementary notes and consolidated financial statement schedules
as listed in the accompanying index. These supplementary notes and
consolidated financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
supplementary notes and consolidated financial statement schedules based on
our audits.
In our opinion, such supplementary notes and consolidated financial
statement schedules, when considered in relation to the consolidated
financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
As described in Note 1 to the consolidated financial statements, the
Company adopted the provisions of the Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes, in fiscal 1993.
KPMG PEAT MARWICK LLP
Omaha, Nebraska
February 16, 1996
9
F-1
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Index to Consolidated Financial Statements and Consolidated Financial
Statement Schedules
Consolidated Financial Statements
The following consolidated financial statements of Valmont
Industries, Inc. and subsidiaries have been incorporated by reference
to pages 20 to 30 of the Company's Annual Report to Shareholders for
the year ended December 30, 1995:
Independent Auditors' Report
Consolidated Balance Sheets - December 30, 1995 and
December 31, 1994
Consolidated Statements of Operations - Three-Year
Period Ended December 30, 1995
Consolidated Statements of Shareholders' Equity -
Three-Year Period Ended December 30, 1995
Consolidated Statements of Cash Flows - Three-Year
Period Ended December 30, 1995
Notes to Consolidated Financial Statements - Three-
Year Period Ended December 30, 1995
Page
----
Consolidated Financial Statement Schedules
Supporting Consolidated Financial Statements
SCHEDULE II - Valuation and Qualifying Accounts F-3
SCHEDULE XI - Statement Re: Computation of Per
Share Earnings F-4
All other schedules have been omitted as the required information is
inapplicable or the information is included in the consolidated financial
statements or related notes.
Separate financial statements of the Registrant have been omitted because
the Registrant meets the requirements which permit omission.
F-2
10
Schedule II
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
(Dollars in thousands)
Balance at Charged to Deductions Balance at
beginning profit and from close
of period loss reserves* of period
--------- ---- --------- ---------
Fifty-two weeks ended December 30, 1995 -
Reserve deducted in balance sheet from
the asset to which it applies -
Allowance for doubtful receivables $ 2,798 684 541 2,941
===== ===== ===== =====
Fifty-three weeks ended December 31, 1994 -
Reserve deducted in balance sheet from
the asset to which it applies -
Allowance for doubtful receivables $ 2,605 908 715 2,798
======= ===== ===== =====
Fifty-two weeks ended December 25, 1993 -
Reserve deducted in balance sheet from
the asset to which it applies -
Allowance for doubtful receivables $ 3,070 1,043 1,508 2,605
======= ===== ===== =====
*The deductions from reserves are net of recoveries.
F-3
11
Schedule XI
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Statement Re: Computation of Per Share Earnings
(Dollars in thousands, except per share amounts)
1995 1994 1993
---- ---- ----
Net earnings $ 24,759 18,887 7,278
======== ====== =====
Average number of shares outstanding:
Primary 13,733,286 13,615,004 13,620,299
Fully diluted 13,815,191 13,628,950 13,644,828
========== ========== ==========
Earnings per share:
Primary $ 1.80 1.39 0.53
Fully diluted 1.79 1.39 0.53
====== ==== ====
Earnings per share are determined by dividing net earnings by the weighted
number of shares outstanding and equivalent common shares from dilutive
stock options.
F-4
12
SIGNATURES
The Registrant. Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 22nd day of
March, 1996.
Valmont Industries, Inc.
/S/Mogens C. Bay
By ___________________________
Mogens C. Bay
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of Valmont Industries, Inc. and in the capacities indicated on the dates
indicated.
/S/ Mogens C. Bay March 22, 1996
- -------------------------- Director, President and --------------
Mogens C. Bay Chief Executive Officer Date
(Principal Executive
Officer)
/S/ Terry J. McClain March 22, 1996
- -------------------------- Vice President and --------------
Terry J. McClain Chief Financial Officer Date
(Principal Financial
Officer)
/S/ Brian C. Stanley March 22, 1996
- -------------------------- Vice President - Investor --------------
Brian C. Stanley Relations & Controller Date
(Principal Accounting
Officer)
Robert B. Daugherty* John E. Jones*
Charles M. Harper* Thomas F. Madison*
Allen F. Jacobson* Walter Scott, Jr.*
Lloyd P. Johnson* Robert G. Wallace*
*Mogens C. Bay, by signing his name hereto, signs the Annual Report on
behalf of each of the directors indicated on this 22nd day of March, 1996.
A Power of Attorney authorizing Mogens C. Bay to sign the Annual Report of
Form 10-K on behalf of each of the indicated directors of Valmont Industries,
Inc. has been filed herein as Exhibit 24.
/S/ Mogens C. Bay
By -------------------------
Mogens C. Bay
Attorney-in-Fact
13
INDEX TO EXHIBITS
This Exhibit Index relates to exhibits filed as a part of this
Report. Numbers are assigned to exhibits in accordance with Item 601 of
Regulation S-K. Page numbers relate to the pages in the sequential numbering
system where the exhibits can be found (for those exhibits which are not
incorporated by reference).
Exhibit 2 - Agreement and Plan of Merger dated July 9, 1995 among the
Company and Microflect Company, Inc. This document was filed
with the Company's Current Report on Form 8-K dated July 31,
1995 and is incorporated herein by reference.
Exhibit 3(a) - The Company's Certificate of Incorporation, as amended. This
document was filed with the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and is
incorporated herein by reference.
Exhibit 3(b) - The Company's By-Laws, as amended. This document was filed
with the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995 and is incorporated herein
by reference.
Exhibit 4 - Rights Agreement dated as of December 19, 1995 between the
Company and First National Bank of Omaha as Rights Agent.
This document was filed with the Company's Current Report on
Form 8-K dated December 19, 1995 and is incorporated herein by
reference.
Exhibit 10(a) - The Company's 1983 Stock Option Plan. This document was
filed as Exhibit 10(a) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 26, 1992 and is
incorporated herein by reference.
Exhibit 10(b) - The Company's 1988 Stock Plan and certain amendments. This
document was filed as Exhibit 10(b) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 26,
1992 and is incorporated herein by reference.
Exhibit 10(c) - Fourth Amendment to the Company's 1988 Stock Plan.....Page 15
Exhibit 10(d) - Valmont Industries, Inc. 1994 Incentive Bonus Plan. This
document was filed as Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 24, 1994
and is incorporated herein by reference.
Exhibit 10(e) - The Company's 1996 Stock Plan.........................Page 16
Exhibit 10(f) - The Valmont Executive Incentive Plan..................Page 26
Exhibit 11 - Statement re: Computation of Per Share Earnings included as
Schedule XI of the Consolidated Supporting Schedules herein.
Exhibit 13 - The Company's Annual Report to Shareholders
for its fiscal year ended December 30, 1995...........Page 28
Exhibit 21 - Subsidiaries of the Company...........................Page 64
Exhibit 23 - Consent of KPMG Peat Marwick LLP......................Page 65
Exhibit 24 - Power of Attorney.....................................Page 66
Exhibit 27 - Financial Data Schedule...............................Page 67
Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with
respect to Valmont Industries' long-term debt are not filed with this
Form 10-K. Valmont will furnish a copy of such long-term debt agreements
to the Securities and Exchange Commission upon request.
Management contracts and compensatory plans are set forth as exhibits 10(a)
through 10(f).
14