Q1 2024 Valmont Industries Inc Earnings Call

Greetings.

Operator: Welcome to Valmont Industries Inc.'s first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. We ask that you please limit yourself to one question and one brief follow-up question and return to the queue.

Welcome to Zelma Industries, Inc. First quarter 2024 earnings conference call.

Operator: At this time all participants are in a listen only mode.

Operator: A question and answer session will follow the formal presentation.

Operator: We ask that you. Please limit yourself to one question and one brief follow up question and return to the queue.

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Renee Campbell, Senior Vice President and Vestal Relations and Treasurer. Ms. Campbell, you may begin.

Operator: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: Please note this conference is being recorded.

Operator: I will now turn the conference over to your host Renee Campbell Senior Vice President Investor Relations and Treasurer Ms. Campbell you may begin.

Renee L. Campbell: Thank you and good morning. Welcome to Valmont Industries' first quarter 2024 earnings call. With me today are Avner Applbaum, President and Chief Executive Officer, and Tim Francis, Interim Chief Financial Officer. This morning, Avner will provide a brief summary of our first quarter results, current market dynamics, and strategic priorities for 2024. Pam will review our first quarter financial performance and provide our updated outlook and indications for the year, with closing remarks from Avner.

Renee L. Campbell: Thank you and good morning, welcome to Belmond industries first quarter 2024 earnings call.

Renee L. Campbell: With me today are president and Chief Executive Officer, and Tim Francis Interim Chief Financial Officer.

Renee L. Campbell: Good morning, Evan will provide a brief summary of our first quarter results current market dynamics and strategic priorities for 2024.

Timothy P. Francis: Campbell will review, our first quarter financial performance and provide our updated outlook and indications for the year with closing remarks from Advair. This will be followed by Q&A.

Renee L. Campbell: A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the investors site at Belmont Dot com.

Renee L. Campbell: A replay will be available on our website later this morning.

Renee L. Campbell: Please note that this call is subject to our disclosure on forward looking statements, which applies to today's discussion.

Renee L. Campbell: As outlined on slide three of the presentation and will be read in full at the end of today's call.

Renee L. Campbell: Finally to stay updated with Belmont the latest news releases and information please sign up for email alerts on our investors site.

Renee L. Campbell: Also invite investors and other interested parties to follow Belmont and our brands on the social media channel linked on our website.

Renee L. Campbell: This will be followed by Q&A. A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the investor's site at Valmont.com. A replay will be available on our website later this morning.

Renee L. Campbell: With that I would now like to turn the call over to our President and Chief Executive Officer, Andrew <unk>.

Renee L. Campbell: Please note that this call is subject to our disclosure on forward-looking statements, which applies to today's discussion, is outlined on slide 3 of the presentation, and will be read in full at the end of today's call. Finally, to stay updated on Valmont's latest news releases and information, please sign up for email alerts on our Investors site. We also invite investors and other interested parties to follow Valmont and our brands on the social media channels linked to our website. With that, I would now like to turn the call over to our President and Chief Executive Officer, Avner Applbaum.

Speaker Change: Thank you Renee.

Avner M. Applbaum: Morning, everyone and thank you for joining us.

Avner M. Applbaum: Thank you, Renee. Good morning, everyone, and thank you for joining us. Before discussing first quarter results, I'd like to address the recent severe weather in the central U.S., including Nebraska. I'm relieved to report that our employees are safe, our facilities are undamaged, and our operations have not been disrupted. However, the extent of the damage to local irrigation systems and utility infrastructure throughout the area is not yet clear.

Avner M. Applbaum: Before discussing first quarter results I'd like to address the recent severe weather in the central U S, including Nebraska.

Avner M. Applbaum: I'm relieved to report that our.

Avner M. Applbaum: These are state our facilities are undamaged and our operations have not been disrupted.

Avner M. Applbaum: Terms of the damage to local irrigation system and utility infrastructure throughout the area is not yet clear.

Avner M. Applbaum: But we're ready to support our dealers and customers with any needed repairs and replacements. We extend our heartfelt concerns to everyone impacted by these events. Turning to slide five and first quarter results, we've had a strong start to 2024, delivering results that exceeded our expectations with significant commercial and operational achievements and salvaged financial performance. Our success this quarter demonstrates the strength of our organization and the value we create through the Valmont business model.

Avner M. Applbaum: But we are ready to support our dealers and customers with any needed repairs and replacements.

Avner M. Applbaum: We extend our heartfelt concerns to everyone impacted by these events.

Avner M. Applbaum: Now.

Avner M. Applbaum: Turning to slide five and first quarter results.

Avner M. Applbaum: We've had a strong start to 2020 for delivering results that exceeded our expectations with significant commercial and operational achievements.

Avner M. Applbaum: Our solid financial performance.

Avner M. Applbaum: Our success this quarter demonstrate the strength of our organization and the value we create through development business model.

Avner M. Applbaum: Guided by our core values and aligned around our focus areas, we're a more resilient company and are more adaptable to dynamic market conditions. Through this strong performance, we expanded operating margins by 240 basis points and grew diluted earnings per share by nearly 25%. Despite sales decreasing, a focus on commercial execution, operational excellence, and reduced SG&A expenses has allowed us to improve profitability in an environment of lower demand from some in-market competitors. This was a true team effort across the organization. I am very proud of what we were able to accomplish.

Avner M. Applbaum: Guided by our core values and aligned around our focus areas. We're a more resilient company and are more adaptable to dynamic market conditions.

Avner M. Applbaum: Through the strong performance, we expanded operating margins 240 basis points.

Avner M. Applbaum: And grew diluted earnings per share nearly 25%.

Avner M. Applbaum: Despite sales decreasing 8%.

Avner M. Applbaum: Our focus on commercial execution operational excellence and reduced SG&A expenses.

Avner M. Applbaum: Allowed us to improve profitability in an environment of lower demand from some end markets.

Avner M. Applbaum: This was a true team effort across the organization.

Avner M. Applbaum: I am very proud of what we were able to accomplish.

Avner M. Applbaum: Overall, I'm encouraged by your ability to execute and drive profitability. Our success reflects our shared core capabilities across the organization, including Product Innovation, Talent Development, and Operational Excellence. Their legacy was built on leveraging these core competencies to build a resilient company with a broad market exposure. The strength of our portfolio diversity is evident in our first quarter results, as the size and strength of our infrastructure segment are helping to balance soft demand and aggregate.

Avner M. Applbaum: Overall, I am encouraged by our ability to execute and drive profitability.

Avner M. Applbaum: Our success reflects our shared core capabilities across the organization include.

Avner M. Applbaum: Including product innovation talent development and operational excellence.

Avner M. Applbaum: For our legacy was built on leveraging these core competencies to build a resilient company with a broad market exposure.

Avner M. Applbaum: The strength of our portfolio diversity is evident in our first quarter results.

Avner M. Applbaum: As the size and strength of our infrastructure segment is helping to balance soft demand in agriculture.

Avner M. Applbaum: This quarter saw continued strong demand for infrastructure, notably in our TDMS business, driven by the multi-year energy transition and needed investment to build a more resilient grid. Our strategic investments to enhance flexibility in our footprint are helping to drive a favorable product mix and generate higher returns. For example, this quarter, we grew our transmission business while also successfully increasing the production of distribution and substation products. Stable demand in lighting and transportation markets continues, even as IIJA funding has yet to benefit our business. However, as expected, demand in telecommunications markets remains muted as carrier investments normalize to support network expansion. The tournament that I recall.

Avner M. Applbaum: This quarter saw continued strong demand in infrastructure, notably in our <unk> business, driven by the multiyear energy transition and needed investment to build a more resilient grid.

Avner M. Applbaum: Our strategic investments to enhance flexibility in our footprint are helping to drive favorable product mix and generate higher returns.

Avner M. Applbaum: For example, this quarter we grew our transmission business are also successfully increasing the production of distribution and substation products.

Avner M. Applbaum: Stable demand in lighting and transportation markets continue even at IAG funding has yet to benefit our business.

Avner M. Applbaum: As expected demand in telecommunications market remains muted as carrier investments normalized to support network expansion.

Avner M. Applbaum: Turning to agriculture.

Avner M. Applbaum: Demand in North America continues to be soft, but stable, and generally in line with our expectations. We are encouraged by the trend of higher order rates during the spring selling season compared to last year, as center pivots continue to be a compelling investment for growers. In Brazil, we continue to see muted grower sentiment in general market software. Lower crop prices are weighing on growers' profitability, causing them to defer certain capital investments, including irrigation equipment. International project shipments this quarter were lower, largely due to challenging conditions in Egypt.

Avner M. Applbaum: Demand in North America continues to be soft, but stable and generally in line with our expectation.

Avner M. Applbaum: We are encouraged by the trend of a higher order rates during the spring selling season compared to last year as center pivots continued to be a compelling investment for.

Avner M. Applbaum: For growers.

Avner M. Applbaum: In Brazil, we continue to see muted grower sentiment and general market softness.

Avner M. Applbaum: <unk> prices are weighing on gross profitability.

Avner M. Applbaum: Turning them to defer certain capital investments, including irrigation equipment.

Avner M. Applbaum: International project shipments this quarter were lower largely due to challenging conditions in Egypt.

Avner M. Applbaum: We effectively navigated these delays and are pleased to report that shipments have resumed in the second quarter. Turning to slide 6, and shifting our view from near-term dynamics to long-term fundamentals. Our end markets have several multi-year demand drivers. For example, in our infrastructure segment, the energy transition, replacement of aging infrastructure for enhanced resiliency, and rising consumption of data and technology are all multi-year megatrends driving increased demand for our products. Investments in grid infrastructure are increasing to support these megatrends, with projections for U.S. electricity demand growth over the next five years doubling from last year.

Avner M. Applbaum: We effectively navigated these delayed and are pleased to report that shipments have resumed in the second quarter.

Avner M. Applbaum: Turning to slide six and shifting our view from near term dynamics to long term fundamentals.

Avner M. Applbaum: Our end markets have several multi year demand drivers in our infrastructure segment, the energy transition replacement of aging infrastructure for enhanced resiliency.

Avner M. Applbaum: And rising consumption of data and technology are all multiyear mega trends driving increased demand for our products.

Avner M. Applbaum: Investments in grid infrastructure are increasing to support these mega trends with projections for U S electricity demand growth over the next five years doubling from last year.

Avner M. Applbaum: This growth is driven by both the expansion of data centers to manage AI's extensive data needs and by increased manufacturing for high-demand industries such as chips, batteries, and electric vehicles. Requested rate increases by utilities set a record in 2023 for the third consecutive year supporting their capital investment plan. While high interest rates and the timing of rate increases can lead to project movement for certain customers, we have built flexibility in our footprint to be agile and adjust quickly to evolving customer needs.

Avner M. Applbaum: This growth is driven by both expansion of data centers to manage AI has extensive data needs.

Avner M. Applbaum: And by increased manufacturing for high demand industry, such as chip battery and electric vehicles.

Avner M. Applbaum: Requested rate increases by utilities set a record in 2023 for the third consecutive year.

Avner M. Applbaum: Porting their capital investment plans.

Avner M. Applbaum: While high interest rate and the approval timing of rate increases can lead to project movement for certain customers we.

Avner M. Applbaum: Have built flexibility in our footprint to be agile and adjust quickly to evolving customer needs.

Avner M. Applbaum: Transmission demand continues to grow at high rates, and all FTD units are supported by a compelling global mix. Lighting and transportation products typically delivered in the latter stages of projects financed by IIJA funding, along with coating services, which protect steel from corrosion in harsh environments, also stand to benefit from these enduring multi-year drives. In the telecom markets, our customers expect carrier capex spending to remain muted this year, following record years in 2021 and 2022. We stand ready to quickly respond to the anticipated uptick in demand driven by spectrum deployment and continued 5G spending. Sterling Tagg recalls,

Avner M. Applbaum: Transmission demand continues to grow at high rates in all of television is supported by compelling global Mega trends.

Avner M. Applbaum: Lighting and transportation products typically delivered in the latter stages of projects financed by IHA funding, along with coding services, which protect steel from corrosion and harsh environment also stand to benefit from these enduring multiyear drivers.

Avner M. Applbaum: And telecom market, our customers expect carrier capex spending to remain muted this year.

Avner M. Applbaum: Boeing record years in 2021 and 2022.

Avner M. Applbaum: We stand ready to quickly respond to the anticipated uptick in demand driven by spectrum deployment and continued <unk> expansion.

Avner M. Applbaum: Turning to agriculture.

Avner M. Applbaum: Projected net farm income levels and lower crop prices, plus natural variation in weather patterns, all impact grower sentiment, especially in larger markets such as North America and Brazil. However, while global ag market conditions remain soft in the near term, several factors are poised to drive demand growth in the global irrigation market beyond 2024. Climate change, water scarcity, and sustainability considerations are key drivers. Food Security Concerns and Population Growth will further bolster demand for irrigation products.

Avner M. Applbaum: Projected net farm income levels, and lower crop prices plus natural variation in weather pattern, Paul impacts grower sentiment, especially in larger markets, such as North America and Brazil.

Avner M. Applbaum: While global AG market conditions remained soft in the near term several factors are poised to drive demand growth in the global irrigation market beyond 2024.

Avner M. Applbaum: Climate change water scarcity and sustainability consideration are key drivers food security concerns and population growth will further bolster demand for irrigation products.

Avner M. Applbaum: North America and Brazil both remain key geographic regions for our business, each projected to have favorable long-term growth. Our international project pipeline remains strong. I'm pleased to share that we have recently secured over $50 million in new projects for Middle East markets. We expect to complete most of these shipments in 2024.

Avner M. Applbaum: North America, and Brazil, both remain key geographic regions for our business. Each project has a favorable long term growth trend.

Avner M. Applbaum: Our International project pipeline remains strong I'm pleased to share that we have recently secured over $50 million in new projects for middle East market.

Avner M. Applbaum: We expect to complete most of these shipments in 2020 for.

Avner M. Applbaum: This specific region is seeing an overall strategic shift from flood to center pivot irrigation. The drivers for this shift include water conservation, increasing land productivity, and reducing crop inflation, key aspects of sustainable agriculture and improving resource efficiency. Valley Irrigation is well-positioned to support these significant projects, utilizing our advanced technology, manufacturing footprint, and strong dealer network. As you can see, even with softnecks in certain markets, our broad and diverse revenue streams are paying off.

Avner M. Applbaum: This specific region is seeing an overall strategic shift from flood center pivot irrigation.

Avner M. Applbaum: The drivers for this shift include water conservation, increasing lab productivity and reducing crop inputs key aspect of sustainable agriculture, and improving resource efficiency.

Avner M. Applbaum: Sadly litigation is well positioned to support these significant projects utilizing our advanced technology manufacturing footprint and strong dealer network.

Avner M. Applbaum: As you can see even with softness in certain markets are broad and diverse revenue streams are paying off.

Avner M. Applbaum: We have strategically built our end market exposure around our core capability, and our growth strategy is aligned with multi-year demand drivers across these markets. This diversification makes us less susceptible to a downturn in any single market, enhancing the stability and consistency of our profitability and growth. Turning to slide 7.

Avner M. Applbaum: We have strategically built our end market exposure around our core capabilities are.

Avner M. Applbaum: Our growth strategy is aligned with multiyear demand drivers across these markets.

Avner M. Applbaum: This diversification makes us less susceptible to a downturn in any single market enhancing the stability stability and consistency of our profitability and growth.

Avner M. Applbaum: Turning to slide seven.

Avner M. Applbaum: I'd like to highlight our strategic priorities for this. These are grounded in the Valmont business model, which we shared last quarter, and are the foundation for value creation. Each priority ties back to our key focus, starting with our people.

Avner M. Applbaum: I'd like to highlight our strategic priorities for this year.

Avner M. Applbaum: These are grounded in the <unk> business model, which we shared last quarter and are the foundation to value creation.

Avner M. Applbaum: Each priority ties back to our key focus areas.

Avner M. Applbaum: Starting with our people.

Avner M. Applbaum: This quarter's accomplishments underscore the high-performance culture we're building, one that drives market leadership and fosters innovation. We continue to live our core values of passion, integrity, and continuous improvement as we deliver results on our journey toward excellence. I want to thank our team for their extraordinary effort.

Avner M. Applbaum: This quarter's accomplishments underscore the high performance culture, we're building one that drives market leadership and fosters innovation.

Avner M. Applbaum: We continue to live our core values passion integrity continuous improvement as we deliver results on our journey towards excellent excellent.

Avner M. Applbaum: I want to thank our team for their extraordinary efforts.

Avner M. Applbaum: Next is Return on Invested Capital. We are sharpening our focus on core competencies to enhance ROI. This ensures we are maintaining our competitive edge, allocating resources where they generate the highest returns for maximum value creation. Finally, sustainability is embedded in our operation and the innovative solutions we offer to our customers, and Infrastructure, as a trusted leader across our markets, we're advancing sustainable products that can endure. A Changing Climate, Conserve Resources, and Last Long Into the Future

Avner M. Applbaum: Next is return on invested capital.

Avner M. Applbaum: We are sharpening our focus on core competencies to enhance our ROIC.

Avner M. Applbaum: This ensures we are maintaining our competitive edge allocating resources, where they generate the highest returns for maximum value creation.

Avner M. Applbaum: Finally sustainability is embedded in our operation and the innovative solutions, we offer to our customers.

Avner M. Applbaum: And infrastructure as a trusted leader across our markets, we are advancing sustainable products that can endure.

Avner M. Applbaum: A changing climate conserve resources and last long into the future.

Avner M. Applbaum: Our Concrete Utility Pole Facility in Bristol, Indiana, demonstrates this commitment. It produces transmission and distribution poles using low-carbon processes and materials to support the growing needs of our utility customers while aligning with their own sustainability. A 500-kilowatt solar array with our award-winning solar trackers was built to fully offset the facility's annual electricity usage, highlighting our commitment to sustainable operation. Unknown Speaker Inagricult, Technology enhances efficiency on the farm by reducing inputs, increasing lab productivity, and lowering labor.

Avner M. Applbaum: Our concrete utility pole facility in Bristol, Indiana demonstrates this commitment.

Avner M. Applbaum: It produces transmission and distribution pole, using low carbon processes and materials to support the growing needs of our utility customers, while aligning with their own sustainability goals.

Avner M. Applbaum: Our 500 kilowatt solar rate with our award winning solar trackers was built to fully offset the facility's annual electricity usage, highlighting our commitment to sustainable operations.

Speaker Change: In agriculture takes.

Avner M. Applbaum: Technology enhances efficiency on the farm by reducing inputs, increasing lab productivity and lowering labor cost.

Avner M. Applbaum: Our fully integrated tech teams have developed a roadmap to deliver exceptional value to our customers. We are actively engaging our core engineering teams with AI and machine learning capabilities to embed predictive analytics into our products. This strategic integration positions Valley technology at the forefront of the industry, delivering a distinct competitive edge by enabling smarter, more efficient irrigation solutions. I'm very pleased with our progress and excited about our future. To summarize, we've had a strong start to 2024, delivering impressive results despite demand headwinds in some markets.

Avner M. Applbaum: Our fully integrated <unk> have developed a roadmap to deliver exceptional value to our customers.

Avner M. Applbaum: We are actively engaging our core engineering teams with AI and machine learning capability to embed predictive analytics into our products.

Avner M. Applbaum: This strategic integration positions valley technology at the forefront of the industry.

Avner M. Applbaum: <unk> distinct competitive edge by enabling smarter more efficient irrigation solution.

Avner M. Applbaum: I am very pleased with our progress and excited about our future.

Avner M. Applbaum: To summarize we had a strong start to 2024 delivering impressive results despite demand headwinds in some markets I.

Avner M. Applbaum: I am confident that our focus on operational excellence and value creation for our stakeholders will continue to drive positive outcomes. Now, I'll turn it over to Tim for our first quarter financial review and an updated 2024 outlook.

Avner M. Applbaum: I am confident that our focus on operational excellence and value creation for our stakeholders, we will continue to drive positive outcomes.

Avner M. Applbaum: Now I'll turn it over to Tim for our first quarter financial review and an updated 2024 outlets.

Timothy P. Francis: Thank you, Avner, and good morning, everyone. Turning to slide 9 and the first quarter results, net sales of $977.8 million decreased 8% year over year. Operating income increased 11% to $131.6 million, and Operating Margin improved meaningfully to 13.5%. Diluted earnings per share of $4.32 increased nearly 25% year-over-year.

Tim: Thank you avner and good morning, everyone.

Timothy P. Francis: Turning to slide nine and first quarter results net sales of $977 $8 million decreased 8% year over year.

Timothy P. Francis: Operating income increased 11% to $131 6 million and operating margins improved meaningfully to 13, 5%.

Timothy P. Francis: Diluted earnings per share up $4 32 increased nearly 25% year over year.

Timothy P. Francis: The steps we have taken to control expenses and reduce our cost structure are clearly having a favorable impact on our profits. Turning to the segments in slide 10, infrastructure sales of $723.6 million decreased 1.7% year-over-year. Higher volumes in GDNF and solar, supported by continued strong utility market demand and Favorable Pricing Across the Portfolio, were more than offset by significantly lower telecommunications volume. Operating income increased to $117.9 million, or 16.4% of net sales.

Timothy P. Francis: The steps, we have taken to control expenses and reduce our cost structure.

Timothy P. Francis: Clearly, having a favorable impact on our profitability.

Timothy P. Francis: Turning to the segments on slide 10 infrastructure sale of $723 $6 million decreased one 7% year over year.

Timothy P. Francis: Higher volumes in GDS in solar supported by continued strong utility market demand and.

Timothy P. Francis: And favorable pricing across the portfolio.

Timothy P. Francis: More than offset by significantly lower telecommunications volumes.

Timothy P. Francis: Operating income increased to $117 9 million or 16, 4% of net sales.

Timothy P. Francis: The improvement in operating margins was driven by successful commercial execution, including pricing strategies and deliberate actions to improve the cost of goods sold and lower SG&A expenses. We also realized benefits from strategic investments in our manufacturing facilities, enabling us to increase production of higher-margin products. Moving to slide 11, agriculture sales of $258.7 million decreased 22.1% year-over-year. In North America, irrigation equipment volumes were lower as the first quarter of 2023 benefited from the ongoing delivery of elevated backlogs.

Timothy P. Francis: The improvement in operating margins was driven by successful commercial execution.

Timothy P. Francis: Including pricing strategies deliver.

Timothy P. Francis: Deliberate actions to improve cost of goods sold.

Timothy P. Francis: Lower SG&A expenses.

Timothy P. Francis: We also realized benefits from strategic investments in our manufacturing facilities, enabling us to increase production of higher margin products.

Timothy P. Francis: Moving to slide 11 agriculture.

Timothy P. Francis: <unk> culture sales of $258 $7 million decreased 22, 1% year over year.

Timothy P. Francis: In North America irrigation equipment volumes were lower as the first quarter of 2023 benefited from the ongoing delivery of elevated backlog.

Timothy P. Francis: Average system selling prices were slightly lower compared to last year. International sales decreased, primarily driven by lower sales in Brazil, due to more normalized backlog levels as compared to the first quarter of 2023 and softer soybean prices impacting grower sentiment. Middle East project sales were also low.

Timothy P. Francis: Average system selling prices were slightly lower compared to last year.

Timothy P. Francis: International sales decreased primarily driven by lower sales in Brazil, due to more normalized backlog levels as compared to the first quarter.

Timothy P. Francis: 2023.

Timothy P. Francis: Softer soybean prices impacting grower sentiment.

Timothy P. Francis: Middle East project sales were also lower.

Timothy P. Francis: The sales contribution from the HR Products Acquisition partially offset the lower sales. However, operating income decreased to $41 million, or 15.9% of net sales. Improvement in gross profit margins and the benefit of lower SGA expenses were more than offset by the impact of lower volume. Turning to cash flows and liquidity on slide 12. First quarter operating cash flows were $23.3 million, and we ended the quarter with approximately $169 million in cash flows. We expect strong cash flow throughout 2024 through earnings growth and diligent working capital management. The total debt to Adjusted EBITDA of 1.82 times was within our desired range of 1.5 to 2.5 times.

Timothy P. Francis: The sales contribution from the HR products acquisition, partially offset the lower sales.

Timothy P. Francis: Operating income decreased to $41 million or 15, 9% of net sales.

Timothy P. Francis: Improvement in gross profit margins and the benefit of lower SG&A expenses were more than offset by the impact of lower volumes.

Timothy P. Francis: Turning to cash flows and liquidity on slide 12.

Timothy P. Francis: First quarter operating cash flows were $23 $3 million and we ended the quarter with approximately $169 million in cash.

Timothy P. Francis: We expect strong cash flow throughout 2024 through earnings growth and diligent working capital management.

Timothy P. Francis: Total debt to adjusted EBITDA of 182 times.

Timothy P. Francis: Our desired range of one five to two five times.

Timothy P. Francis: Our cash balances, available credit, and flexible balance sheet provide us with ample liquidity to execute our capital allocation strategy. Turning to slide 13 for a summary of first quarter capital deployment, capital spending was $15 million. Strategic CapEx spending is a cornerstone in elevating the performance and resilience of our businesses. A Standout Initiative, in response to rising customer demand, is increasing capacity at multiple sites for concrete, transmission, and distribution structures.

Timothy P. Francis: Our cash balances available credit and flexible balance sheet provides us with ample liquidity to execute our capital allocation strategy.

Timothy P. Francis: Turning to slide 13 for a summary of first quarter capital deployment.

Timothy P. Francis: Capital spending was $15 million.

Timothy P. Francis: Strategic Capex spending as a cornerstone in elevating the performance and resilience of our businesses.

Timothy P. Francis: Standout initiative in response to rising customer demand is.

Timothy P. Francis: He is increasing capacity and multiple sites for concrete transmission and distribution structures.

Timothy P. Francis: We have strategically increased the flexibility of our operations, leading to improved and more consistent performance across our products. Targeted investments underscore our dedication to maintaining a competitive edge and meeting our long-term financial goals. Our acquisition strategy this year is sharply focused on natural adjacency to our core capability that would enhance our portfolio or expand our addressable market. This targeted approach ensures that our investments strengthen our existing market presence and promote sustainable, profitable growth.

Timothy P. Francis: We have strategically increased the flexibility of our operations, leading to improved and more consistent performance across our product lines.

Timothy P. Francis: These targeted investments underscore our dedication to maintaining a competitive edge.

Timothy P. Francis: Meeting, our long term financial goals.

Timothy P. Francis: Our acquisition strategy. This year is sharply focused on natural adjacencies to our core capabilities that would enhance our portfolio or expand our addressable markets.

Timothy P. Francis: This targeted approach ensures that our investments strengthen our existing market presence and promote sustainable profitable growth.

Timothy P. Francis: Our capital deployment approach balances growth investments with returning cash to shareholders. This quarter, we returned approximately $12 million of capital to shareholders through dividends and completed the $120 million accelerated share repurchase program that commenced in the fourth quarter of 2020. I will now share our updated 2024 outlook, as shown on slide 14. We expect NAICS sales to be down 2% to up 0.5%, an improvement from our previous guidance of down 3% to flat. Turning to the segments, our outlook for infrastructure is unchanged.

Timothy P. Francis: Our capital deployment approach balances growth investments with returning cash to shareholders.

Timothy P. Francis: This quarter, we returned approximately $12 million of capital to shareholders through dividends and completed the $120 million.

Timothy P. Francis: <unk> share repurchase program that commenced in the fourth quarter of 2023.

Timothy P. Francis: I will now share our updated 2024 outlook as shown on slide 14.

Timothy P. Francis: We expect net sales to be down 2% to up half a percent.

Timothy P. Francis: Improvement from our previous guidance of down 3% to flat.

Timothy P. Francis: Turning to the segments our outlook for infrastructure is unchanged.

Timothy P. Francis: As we expect volume growth approaching mid-single digits this year, in agriculture, we expect continued market softness this year. Due to lower grain prices and current farm income projections. However, we now have better visibility into international projects and anticipate segment sales to be down between ten and twenty percent and 15% compared to the prior year, an improvement from our previous forecast of a 15 to 20 percent decline. We remain focused on targeted pricing strategies and increasing adoption of our technology solutions.

Timothy P. Francis: As we expect volume growth approaching mid single digits. This year.

Timothy P. Francis: In agriculture, we expect continued market softness this year.

Timothy P. Francis: Due to lower grain prices and current farm income projections.

Timothy P. Francis: However, we now have better visibility into international projects and anticipate segment sales to be down between 10 and.

Timothy P. Francis: 15% compared to prior year and.

Timothy P. Francis: An improvement from our previous forecast of a 15% to 20% decline.

Timothy P. Francis: We remain focused on targeted pricing strategies and increasing adoption of our technology solutions.

Timothy P. Francis: Our updated outlook expects diluted earnings per share to be in the range of $15.40 to $16. We also expect second quarter earnings per share to be slightly below first quarter 2024 results. Doing the math, this implies a lower quarterly EPS during the second half of this year. Let me walk you through the moving pieces, and Infrastructure.

Timothy P. Francis: Our updated outlook expects diluted earnings per share to be in the range.

Timothy P. Francis: $15 40.

Timothy P. Francis: $216 40.

Timothy P. Francis: We also expect second quarter earnings per share to be slightly below first quarter 2024 results.

Timothy P. Francis: Doing the math this implies a lower quarterly EPS during the second half of this year.

Timothy P. Francis: Let me walk you through the moving pieces.

Timothy P. Francis: The infrastructure.

Avner M. Applbaum: We anticipate full-year gross profit margins to be improved compared to full-year 2023, but likely not as high as the first quarter, which benefited from favorable product mix and an opportunistic steel purchaser. While we are always striving to drive margins higher, our guidance assumes these positive factors will not recur at the same level we experienced in the first quarter. In agriculture, a higher mix of international projects during the second half of the year is expected to pressure segment margins.

Timothy P. Francis: We anticipate full year gross profit margins to be improved compared to full year 2023.

Avner M. Applbaum: But likely not as high as the first quarter, which benefited from favorable product mix.

Avner M. Applbaum: And an opportunistic steel purchase.

Avner M. Applbaum: While we are always striving to drive margins higher our guidance assumes these positive factors will not recur at the same level, we experienced in first quarter.

Avner M. Applbaum: In agriculture higher mix of international projects during the second half of the year is expected to pressure segment margins.

Avner M. Applbaum: Although this will be partially mitigated by reduced SG&A expenses compared to last year, we expect second half segment operating margins to be similar to the fourth quarter of 2023, which was 10.3% on an adjusted basis. Our outlook also assumes consolidated SG&As as a percentage of net sales will be better than last year, reflecting meaningful process changes we've implemented to ensure effective cost management moving forward. With that, I will turn the call back over to Avner.

Avner M. Applbaum: Although this will be partially mitigated by reduced SG&A expenses compared to last year.

Avner M. Applbaum: We expect second half segment operating margins to be similar to the fourth quarter of 2023, which was 10, 3% on an adjusted basis.

Avner: Our outlook also assumes consolidated SG&A as a percentage of net sales will be better than last year.

Avner M. Applbaum: Reflecting meaningful process changes, we've implemented to ensure effective cost management moving forward.

Avner: With that I will turn the call back over to Amtrust.

Avner: Thank you Tim.

Renee L. Campbell: Turning to slide 15, in closing, I want to once again highlight the effectiveness of the Valmont team in navigating current market dynamics. We're actively managing what we can control through commercial excellence and focusing on our core competencies. We are proactively taking steps across our global operations, investing in our footprint to support growth, enhance productivity, and maximize returns while driving strong cash flow generation. This strength across our portfolio demonstrates a level of resilience and forward momentum that was not achieved in previous agricultural down cycles, demonstrating the progress we've made on creating a high-performance culture and positioning us for sustained financial success.

Avner: Turning to slide 15.

Avner: In closing I want to once again highlight the effectiveness of development team in navigating current market dynamics.

Renee L. Campbell: We're actively managing what we can control through commercial excellence and focusing on our core competency.

Renee L. Campbell: We are proactively taking steps across our global operations investing in our footprint to support growth enhance productivity and maximize returns while driving strong cash flow generation.

Renee L. Campbell: This strength across our portfolio demonstrate a level of resilience and for momentum that was not achieved in previous agriculture down cycles, demonstrating the progress we've made on creating a high performance culture and positioning us for sustained financial success.

Renee L. Campbell: With these ongoing actions, we are primed to further expand margins as volumes recover in the agriculture and telecom markets. Supported by long-term megatrends in infrastructure and agriculture, our diverse portfolio positions us well to meet our long-term financial target and deliver lasting value to our shareholders. I will now turn the call back over to Renee.

Renee L. Campbell: With these ongoing action, we are prime to further expand margin as volume recover in agriculture and telecom markets.

Renee: Wanted by long term, megatrends and infrastructure and agriculture, our diverse portfolio positions us well to meet our long term financial target and deliver lasting value to our shareholders I will now turn the call back over to Renaud.

Operator: Thank you, Avner. At this time, the operator will open up the call for questions.

Renee: Thank you out here at this time, the operator will open up the call for questions.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Renee: Thank you at this time, we will be conducting a question and answer session.

Operator: To allow for as many questions as possible, please limit yourselves to one question and one follow-up. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Chris Moore with CJS Securities. Please proceed with your question.

Operator: He would like to ask a question. Please press star one on your telephone keypad.

Christopher Paul Moore: Confirmation tone will indicate your line is in the question queue.

Operator: You May press Star two if you would like to remove your question from the queue.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Christopher Paul Moore: To allow for as many questions as possible. Please limit yourself to one question and one follow up.

Operator: One moment, please while we poll for questions.

Operator: Thank you. Our first question comes from the line of Chris Moore with CJS Securities. Please proceed with your question.

Christopher Paul Moore: Hey, good morning guys. Thanks for taking the time to answer a couple questions.

Christopher Paul Moore: Hey, good morning, guys. Thanks for taking a couple of questions.

Christopher Paul Moore: Maybe you start on the ag side. So Brazil was roughly, I think, 50% of international ag in 23. What's a reasonable estimate for 24? You know, it's. Are you looking at 24 as an anomaly, or is it fair to think that Brazil might be smaller in 25 as well?

Christopher Paul Moore: Maybe to start on <unk>.

Christopher Paul Moore: AG side, So Brazil was roughly I think 50% of international Peg in 'twenty, three what's a reasonable estimate for 'twenty four.

Christopher Paul Moore: And.

Christopher Paul Moore: Yes.

Christopher Paul Moore: Are you looking at 'twenty four is an anomaly or fair to think that Brazil might be smaller than 25 as well.

Timothy P. Francis: This is Tim. I will take that one. We typically don't comment on how much Brazil is as a percentage of the total segment. We do see it down as a percentage of the total. That's partially attributed to the fact that for the full year of 2024, we are expecting more project work in the international market. But, overall, from a long-term perspective, we're very bullish on Brazil. The main thing we're watching right now is soybean prices.

Christopher Paul Moore: This is Tim I will take that one.

Timothy P. Francis: We typically don't comment on how much Brazil is as a percentage of the total segment.

Timothy P. Francis: But.

Timothy P. Francis: We do see it down as a percentage of the total that's partially attributed to the fact that for the full year of 2024, we are expecting more project work in the international markets.

Timothy P. Francis: But overall from a long term perspective, we're very bullish on Brazil.

Timothy P. Francis: The main thing we're watching right there is soybean prices.

Timothy P. Francis: They're the item that correlates the best to the outlook for what we expect for sales in that market. And we'll continue to watch that. And as those prices improve, we'd expect the Brazilian market to rebound for us.

Timothy P. Francis: The item that correlates the best to the outlook for what we expect for sales in that market.

Timothy P. Francis: And we will continue to watch that and as those prices improve we would expect the Brazil market to rebound for us.

Speaker Change: Helpful. Thanks, Tim Yeah.

Avner M. Applbaum: [inaudible] Hey, Chris. Hey, this is Avner.

Speaker Change: Let me just add to that as well.

Avner M. Applbaum: Let me just add, you know, to that as well. You know, so for—actually, we're just coming off the Agra show now in Brazil, and we're three days into that show. So, you know, the initial indication is that we're actually seeing a lot of current and new customers at the booth, which is encouraging. And a lot of the feedback that we are getting from our customers at this point is that they're very impressed with the technology offering, the expertise around our knowledge, and the team there.

Avner: So far actually we're just coming off the agro show now in Brazil, and we're three days into that show.

Avner M. Applbaum: The initial indication or what should we think a lot of current and new customers at the booth, which is encouraging.

Avner M. Applbaum: And a lot of the feedback that we are getting from our customers. At this point is that the very impressed with the technology offering the expertise around our knowledge and the team there and maybe the biggest takeaway is the feedback that we're getting from our customers. They understand the ROI that they are getting from the pivot and the value that our products.

Avner M. Applbaum: And maybe the biggest takeaway is the feedback that we're getting from the customers; they understand the ROI that they are getting from the PIVOT and the value that our products bring to them. So, overall, when we look at the long term, we're very much encouraged by the opportunity in Brazil. There's a lot of land to be irrigated. The PIVOT has—there are great growing conditions there, and the PIVOT has a strong ROI.

Avner M. Applbaum: Two.

Avner M. Applbaum: We're getting about two of them. So overall when we look at the long term, we're very much encouraged by the opportunity in Brazil, but there's a lot of land to be irrigated the pivot create growing conditions, there and the pivotal has a strong ROI. So we will let's be softness this year based on what Tim just said soybeans has an impact on there.

Avner M. Applbaum: So, we will see softness this year based on what Tim just said, and the soybeans have an impact on their EBITDA margins coming off a year's backlog. But, overall, the long-term outlook for Brazil is very strong. Got it. Very helpful.

Avner M. Applbaum: EBITDA margins coming off of your backlog, but overall the long term outlook for Brazil is very strong for us.

Christopher Paul Moore: Maybe you stay with Ag. So Ag is expected to be down 10 to 15% at this point. How do you look at the parts in that equation? And as the parts are much different internationally versus North America.

Avner M. Applbaum: Got it very helpful.

Speaker Change: Maybe just stay with that so I expect it to be down 10% to 15% at this point.

Christopher Paul Moore: How do you look at parts and in in that equation.

Christopher Paul Moore: And as the part is much different than internationally versus.

Christopher Paul Moore: North America.

Christopher Paul Moore: Yeah, Chris, I'll continue on the line. So, at this point, I would say that North America would be at the lower end of the range, and then the international part would be at the higher end. So, North America closer to 10%, international overall at 15%, you know, and as we said early in the conversation, we're actually pleased to see that our orders are, [inaudible]

Tim: Yeah, Chris I'll I'll continue along those lines. So at this point I would say that the North America would be at the lower end of the range and then that the international part would be at the higher So North America closer to 10% International overall at 15% and as we said.

Christopher Paul Moore: Got it. On the specific, on the parts piece of that, is the revenue, parts revenue, is that going down less than the overall revenue, or how should I look at it?

Christopher Paul Moore: Early.

Christopher Paul Moore: Conversation is that.

Christopher Paul Moore: You know in North America overall.

Christopher Paul Moore: We're actually we're pleased to see that our orders are.

Christopher Paul Moore: Stronger than they've been than last year.

Christopher Paul Moore: And the market has underlying strong fundamentals around the North America market. So we'll continue to watch that.

Christopher Paul Moore: Crop prices clearly corn is at lower level.

Christopher Paul Moore: Keep wanting to watch the USDA projections, but we are encouraged by the order rates that we're seeing right now and we'll just keep us keep our pulse on the market.

Speaker Change: Got it.

Christopher Paul Moore: Specifically on the on the parts piece of that is the is the revenue parts revenues that going down less than the overall revenue or how should I look at that.

Christopher Paul Moore: I'd say that, overall, it's around the same. OK.

Christopher Paul Moore: Okay.

Christopher Paul Moore: Say that overall, it's around around around the space.

Christopher Paul Moore: Okay.

Christopher Paul Moore: All right. I appreciate it, guys. I'll jump back in line.

Speaker Change: Alright, I appreciate it guys I'll jump back in line.

Christopher Paul Moore: Okay.

Christopher Paul Moore: Okay.

Brent Edward Thielman: Our next question comes from the line of Brent Thielman with D.A. Davidson. Please proceed with your question.

Christopher Paul Moore: Our next question comes from the line of Brent Thielman with D. A Davidson. Please proceed with your question.

Brent Edward Thielman: Hey, thanks. Good morning, Avner, Tim, and Renee. I guess just I wondered if you could unpack the moving pieces on the infrastructure margin this quarter. How much did the opportunistic steel purchase sort of positively impact the margin versus favorable mix? And I guess I'm also wondering just around the mix, wouldn't a weaker telecom business be a net negative to margin in that segment?

Brent Edward Thielman: Hey, Thanks, Good morning, Tim I guess just.

Brent Edward Thielman: I guess I'm wondering if you could unpack the moving pieces on the infrastructure margin this quarter.

Brent Edward Thielman: How much did the opportunistic steel purchase.

Brent Edward Thielman: Positively impact the margin versus favorable mix.

Brent Edward Thielman: Guess I'm also wondering just around the mix wouldn't a weaker telecom business be a net negative to margin in that segment.

Brent Edward Thielman: Okay.

Timothy P. Francis: Brendan Stem, I'll take that one. First of all, we are very pleased with the first quarter infrastructure gross profit margin of 31.3%. In terms of ranking the two items, as it pertains to the first quarter, the opportunistic purchase of steel did have the most effect on the improvement in that margin. In terms of, you know, the second factor that drove the better gross profit margins, it's really a shift in product mix within TD&S.

Brent Edward Thielman: Brian It's Tim I'll take that one.

Timothy P. Francis: First of all we are very pleased with the first quarter infrastructure gross profit margin of 31, 3%.

Timothy P. Francis: In terms of force ranking two items.

Timothy P. Francis: As it pertains to first quarter the opportunistic purchase of steel did have the most effect on the improvement in that margin.

Timothy P. Francis: In terms of the.

Timothy P. Francis: The second factor that drove the better gross profit margins, it's really a shift in product mix within TD Ines.

Timothy P. Francis: We saw an acceleration of our strategy to be able to design and produce more distribution and substation structures, where we're seeing demand is strong and pricing is favorable right now. I'm very pleased with the work of all of our teams.

Brendan Stem: We saw an acceleration of our strategy to be able to design and produce more distribution and substation structures.

Timothy P. Francis: We're seeing demand is strong and pricing is favorable right now.

Timothy P. Francis: I'm very pleased with the work of all of our teams that required our engineering resources to modify some of their processes and of course, it and it required some strategic investments we've been making the last few years to add that flexibility in our manufacturing facilities.

Timothy P. Francis: That required our engineering resources to modify some of their processes, and, of course, it required some strategic investments we've been making the last few years to add that flexibility in our manufacturing facility. So, you are right in terms of history to say that our telecommunications product line is more favorable or helps adjust the total infrastructure segment margin. But what we saw here in the first quarter, that second factor, and we expect to see for the rest of the year, is this shift to more distribution of substation structures is going to help the margin profile of that sector.

Timothy P. Francis: So that that you are right in terms of history would say that our telecommunications product line.

Timothy P. Francis: Is more favorable or helps adjust up the total <unk>.

Timothy P. Francis: Restructure segment margin.

Timothy P. Francis: But what we saw here.

Timothy P. Francis: In the first quarter that second factor and we expect to see for the rest of the year is this shift to more.

Timothy P. Francis: Distribution substation structures is going to help the margin profile out of that segment.

Avner M. Applbaum: And, you know, this is Avner, if I just brought in, like Tim said, you're exactly right about telecom having a greater margin, but when you look at Valmont overall, when you look at agriculture down and telecom down, and the fact that we've been able to increase our earnings year over year is a testament to what we said earlier today, the strength of our portfolio and how it is able to execute against these market dynamics. So we're very pleased with our Q1 results.

Timothy P. Francis: This is Simon if I, just broaden it kind of.

Avner M. Applbaum: Like Tim said Youre exactly right about telecom has accretive margins, but when you look at Belmond overall, when you look at agriculture down and telecom down and the fact that we've been able to increase our earnings year over year is a testament to what we said earlier today is the strength of our portfolio are able to execute against these market.

Avner M. Applbaum: Dynamics.

Avner M. Applbaum: So we're very pleased with our Q1 results.

Avner M. Applbaum: Okay.

Brent Edward Thielman: Yep, impressive for sure. I guess the second question would just be back on agriculture. So you secured the new awards in the Middle East. Is the Better Outlook contingent on winning other project awards you may be pursuing, and maybe Avner, if you could just talk about the project pipeline out there and other opportunities to win new awards on the international stage.

Avner M. Applbaum: Yes.

Speaker Change: Pressing for sure I guess, the second question would just be back on.

Brent Edward Thielman: Agriculture.

Brent Edward Thielman: You secured the new awards in the Middle East.

Brent Edward Thielman: Is is the better outlook contingent on winning other project awards, you made pursuing BB pursuing and maybe if you could just talk about the <unk>.

Avner: Project pipeline out there and and other opportunities to book New Awards on the international.

Brent Edward Thielman: Yes.

Avner M. Applbaum: Absolutely. So overall, when I look at our project work, we continue to have a very strong pipeline, and we've been mentioning this over the last several quarters, and we were very pleased with the award of the $50 million project in that region, which shows or solidifies a strong position in that region, the compelling ROI of the pivot, and the focus on food security and sustainability in that region. But when I look specifically at your question, you know, there's always project timing; we don't need to bank on any additional large awards, it's just the normal course of business.

Brent Edward Thielman: Absolutely.

Avner: So overall when I look at our project work.

Avner M. Applbaum: We continue to have a very strong pipeline as we've been mentioning this over the last several quarter.

Avner M. Applbaum: And we were very pleased with the award of the.

Avner M. Applbaum: $50 million project in that region, which shows our solidifies our strong position in that region. The compelling ROI of the pivot and the focus on food security and sustainability of that region, but when I look specifically at your question Theres always project timing, we don't need to bank on any additional loss.

Avner M. Applbaum: <unk> Awards, it's just normal course of course of business.

Avner M. Applbaum: We're pleased with the fact that we continue our shipments on the Egypt project, and some of that could be pushed into 2025 at this point, but we factored that into our guidance. So we're comfortable with our overall guidance for agriculture of the 10 to 15 down, and very confident with our ability to execute on that forecast.

Avner M. Applbaum: We're pleased the fact that we continue our shipments on the Egypt project and some of that could be pushed into 2025 at this point.

Avner M. Applbaum: We factored that into our guidance. So we're comfortable with our overall guidance for agriculture, the 10 to 15 down.

Avner M. Applbaum: I'm very confident with our ability to execute on that on that forecast.

Brent Edward Thielman: Okay, very good. I'll pass it on.

Speaker Change: Okay very good I'll pass it on.

Brent Edward Thielman: Yes.

Operator: As a reminder, if you would like to ask a question, press star 1 on your telephone keypad. Our next question comes from the line of Brian Drab with William Blair. Please proceed with your question.

Speaker Change: As a reminder, if you would like to ask a question press star one on your telephone keypad.

Operator: Our next question comes from the line of Brian Drab with William Blair. Please proceed with your question.

Brian Paul Drab: Good morning. Thanks for taking my questions.

Brian Paul Drab: Hey, good morning, Thanks for taking my questions.

Brian Paul Drab: On the.

Brian Paul Drab: The margin dynamics for the year, I'm just wondering if you could put a finer point on this or maybe repeat some of what you said. 31.3% gross margin in the first quarter is the expectation that it sounded like that might step down slightly in the second quarter and then maybe we're down back into the 28% range in the second half of the year. And to the extent you can, can you put a finer point on what we should expect for gross margin for the year?

Brian Paul Drab: The margin dynamics for the year I'm, just wondering if you could put a finer point on this or maybe repeat.

Brian Paul Drab: Some of what you said so.

Brian Paul Drab: <unk> 31, 3% gross margin in the first quarter.

Brian Paul Drab: Is the expectation that it it sounded like that might step down slightly in the second quarter and then maybe were down back into what the 28% range in the second half of the year.

Brian Paul Drab: To the extent you can can you put a finer point on what we should expect for gross margin for the year.

Timothy P. Francis: Hi Brian. It's Tim. I'll take that one.

Brian Paul Drab: Hi, Brian It's Tim I'll take that one.

Tim: Yes. So in total we expect infrastructure segment to see an improvement in its full year gross profit margin when compared to the full year of 2023.

Timothy P. Francis: Yes. In total, we expect the infrastructure segment to see an improvement in its full-year gross profit margin when compared to the full year of 2023. So, what that means is the opportunistic purchase of steel that we saw in the first quarter, the effect of that is less in the second quarter, so we'll see a slightly reduced gross profit margin in Q2. And then we will see a slightly reduced gross profit margin in the second half of the year to make the math work for why the gross profit margin is better for the full year versus 2023.

Tim: What that means is.

Timothy P. Francis: The opportunistic purchase of steel that we saw in first quarter.

Timothy P. Francis: Doesn't the effect of that is less in the second quarter. So we will see a slightly reduced gross profit margin in Q2, and then we will see a slight.

Timothy P. Francis: Slightly reduced gross profit margin in the second half of the year to make the math work for why the gross profit margin is better for the full year versus 2023.

Brian Paul Drab: Okay. All right. Thanks.

Speaker Change: Okay, Alright, Thanks, and then.

Brian Paul Drab: You gave us some directional commentary on the volumes for <unk>.

Brian Paul Drab: And then, you know, you gave us some directional commentary on the volumes for TD&S, L&T, or I guess you gave TD&S, but you didn't give L&T. And can you, to the extent that you are willing to, can you tell us how much volume changed for some of these sub-segments and, you know, what L&T was? Because I'm looking at L&T, you know, up. We're sorry, that one was down. I think, you know, what, what. I have no idea how much pricing affects, you know, L&T. So I don't know what to think here with, you know, total revenue down 3% for the sub segment. What, what did volume do there?

Brian Paul Drab: Or I guess, you can keep T DNS, but you didnt give valenti and.

Brian Paul Drab: Can you.

Brian Paul Drab: I guess to the extent that you are willing to can you tell us how much volume change for some of these sub segments and.

Brian Paul Drab: What was LNG because I'm looking at <unk>.

Brian Paul Drab: Up.

Brian Paul Drab: We're sorry that one was down I think what I have no idea how much pricing affected LNP side I don't know what to think here with.

Brian Paul Drab: Total revenue down 3% for the sub segment.

Brian Paul Drab: Volume do there.

Timothy P. Francis: Sure. So, as it pertains to the first quarter for L&T, pricing was flat. We did have a little bit of unfavorable currency. That was about $2 million of the decrease. And then

Speaker Change: Sure so as it pertains to the first quarter for LNG pricing was flat we.

Timothy P. Francis: We did have a little bit of unfavorable currency that was about $2 million of the decrease.

Timothy P. Francis: And then.

Timothy P. Francis: We did have to do some very selective de-selection of some very small sub-product lines. That's really tied to Valmont being focused on profitable growth. That de-selection won't continue for the rest of the year, but really, that's the main driver of why volume was down slightly for the first quarter. As we look at some of our international markets, we chose to exit some very small product lines. Yeah, and let me just add a little bit more.

Timothy P. Francis: We did do some very selective deselection of some very small sub product lines, that's really types of dominant being focused on the profitable growth.

Timothy P. Francis: That deselection won't continue for the rest of the year, but really.

Timothy P. Francis: That's the main driver of why volume was down slightly from first quarter is as we look at some of our international markets.

Timothy P. Francis: We chose to.

Timothy P. Francis: <unk> exited some very small product lines.

Timothy P. Francis: Yeah, and let me just add a little bit more color to kind of overall our segment. So L&T specifically, it's following the macro trends that we're seeing in the market. So, if you look at the transportation trending in conjunction with the infrastructure road spans, we're seeing strength in that market. On the lighting side, we are seeing some areas where it's not growing at that level. We mentioned that also in the past, some of the residential construction does impact our business, and we track that, and we expected some softness in that space.

Timothy P. Francis: And.

Speaker Change: Let me just add a little bit more color to kind of overall our segments. So LNG specifically.

Timothy P. Francis: It's following them.

Timothy P. Francis: Macro trends that we're seeing in the market. So if you look at the transportation, it's trending in conjunction with the infrastructure road spend so we're seeing strength in that market.

Timothy P. Francis: On the lighting side, we are seeing some areas, where it's not occurring at that level. We mentioned that also in the past some of the.

Timothy P. Francis: Residential build it does impact our business and we track that we expected.

Timothy P. Francis: Some softness in that space, but overall the LNG has strong drivers.

Timothy P. Francis: But overall, the L&T has strong drivers and we expect that throughout throughout the year. Telecommunication, we addressed that as well. Telecom will be will be soft following some of the. We're going to continue to enhance our geographic reach, work with our partners such as Ericsson, our product offering, and again, the telecom market has, the long-term is very positive, if you just look at some of the stats, expecting 5G to cover over 85% of the population in the future, so telecom this year will be soft, L&T positive on the transportation side, so hopefully that gives you additional color, but overall, when you look at infrastructure, getting close to that, at that mid-single-digit range is where we're expecting that to.

Timothy P. Francis: We expect that through throughout the year.

Timothy P. Francis: Telecommunication.

Timothy P. Francis: <unk> addressed that as well, but telecom will be will be soft following some of the.

Timothy P. Francis: Our capex spending by the large carriers listen to both Verizon and AT&T they reduced their capex spend.

Timothy P. Francis: In Q1, just in their earnings 27, 28%, so they're going to go back to business as usual that's impacting our telecom business.

Timothy P. Francis: But we are going to control what we can control we continue to enhance our.

Timothy P. Francis: Geographic reach work with our partners such as Ericsson increase our product.

Timothy P. Francis: <unk> offerings.

Timothy P. Francis: Again, the telecom market has.

Timothy P. Francis: The long term is very positive if you just looked at some of the stats expecting five G to cover over 85% of the population in the future. So telecom this year will be soft.

Timothy P. Francis: <unk> positive on the transportation side.

Timothy P. Francis: So hopefully that gives you additional color, but overall when you look at infrastructure getting close to that.

Timothy P. Francis: At that mid single digit range.

Timothy P. Francis: We're expecting that to be.

Speaker Change: Okay. Thank you very much.

Operator: Our next question comes from the line of John Braatz with Kansas City Capital. Please proceed with your question. Good morning, everyone.

Timothy P. Francis: Our next question comes from the line of Jon Braatz with Kansas City Capital. Please proceed with your question.

Jonathan Paul Braatz: Good morning, everyone.

Jonathan Paul Braatz: Good morning. Good morning. Avner, you mentioned that, or maybe Tim mentioned that pricing was down a little bit in irrigation, and we're trying to get a better sense of how prices in Brazil versus North America are.

Jonathan Paul Braatz: Good morning, Tony Avner.

Jonathan Paul Braatz: You mentioned that or maybe Tim mentioned that pricing was down a little bit in irrigation and trying to get a better I better sense between pricing in Brazil versus North America.

Avner M. Applbaum: Okay, so when I look at the pricing in North America, what we're doing there, it's very strategic, it's in very few targeted markets that we're taking some action to maintain, you know, around our strategy to maintain our market share overall. So very strategic in North America. In Brazil, I would say, you know, the approach that we're taking is that the pricing is better in Brazil. But right now, you know, as you do more, larger-scale projects, that could just impact some of your mix, and you'll get less pricing per pivot there.

Jonathan Paul Braatz: Okay.

Tim: I'll take that question. So when I look at the pricing in North America, what we're doing there it's very strategic it's in very few targeted markets that were taking some actions.

Avner M. Applbaum: To maintain.

Avner M. Applbaum: Around our strategy to maintain our market share overall, so very strategic in North America.

Avner M. Applbaum: In Brazil, I would say.

Avner M. Applbaum: The approach that we're taking is the.

Avner M. Applbaum: The pricing is better in Brazil.

Avner M. Applbaum: But right now.

Avner M. Applbaum: Can you do more larger scale projects that could impact some of your mix.

Avner M. Applbaum: It will get less pricing for propel.

Avner M. Applbaum: Pivot there, but overall.

Avner M. Applbaum: That is the dynamics around the markets and like I said earlier, we're pleased with what we're seeing on the order intake.

Avner M. Applbaum: But overall, that is the dynamics around markets. And like I said earlier, we're pleased with what we're seeing on the order intake in both regions, and we'll continue monitoring. And as I said, the long term in both of these regions is very positive for us.

Avner M. Applbaum: Both both regions and.

Avner M. Applbaum: We'll continue monitoring and like I said, the long term on both of these regions.

Avner M. Applbaum: It's very positive for us.

Jonathan Paul Braatz: Avner, in this current market condition that's maybe a little bit tighter, are you seeing buyers purchase the full complement of technology solutions when they purchase a pivot?

Avner M. Applbaum: In this current market.

Jonathan Paul Braatz: Conditions, maybe being a little bit tighter.

Jonathan Paul Braatz: Are you seeing buyers.

Jonathan Paul Braatz: <unk> purchased a full complement of technology solutions.

Jonathan Paul Braatz: When the.

Jonathan Paul Braatz: When they purchase a pivot.

Avner M. Applbaum: Yeah, so when we look at it overall, I would say the answer to that is yes, I did. The tech actually is what gives the pivot a stronger value proposition, and our sophisticated buyers and dealers and growers see that, and we are selling the full suite of technology. Okay.

Avner: Yeah. So when we overall I would say the answer to that is yes take actually is what gives the pivot a stronger value proposition and our sophisticated buyers.

Avner M. Applbaum: Dealers and growers, they see that and we are selling.

Speaker Change: The full suite of technology, Okay and last question.

Jonathan Paul Braatz: Okay, last question. SG&A costs have been controlled nicely. How much of that goes beyond, maybe, what we saw, the actions that you took last year with Prospero? How much of it goes beyond the cost savings because of the actions you took with Prospero?

Jonathan Paul Braatz: SG&A costs.

Jonathan Paul Braatz: Controlled nicely and how.

Jonathan Paul Braatz: How much of that goes beyond maybe what we saw the actions that you took last year and from prosper or how much of it goes beyond.

Jonathan Paul Braatz: The cost savings are.

Jonathan Paul Braatz: Because of the actions you took with with cross borough.

Timothy P. Francis: Well, it was this Tim. Let me try answering that. It was beyond PROSPERA, right? It was We did a full realignment program that touched infrastructure, agriculture, and corporate. So, that was approximately $36 million in cost. What we're seeing right now is that our SG&A savings this year will be beyond that. And another way to think about it is that our SG&A as a percentage of sales will be lower this year than it was in fiscal year 2023 on a consolidated basis. All right. Let me just ask you something. Yeah.

Jonathan Paul Braatz: Well this is Tim let me try answering that.

Timothy P. Francis: Beyond <unk>, we did a full realignment program that touched infrastructure agriculture and corporate.

Timothy P. Francis: So so that was approximately $36 million cost what were seeing right now is that our SG&A savings this year will be beyond that.

Timothy P. Francis: Another way to think about it is our SG&A as a percentage of sales will be lower this year than it was in fiscal year 2023 on a consolidated basis. Okay. Alright, So let me just add.

Timothy P. Francis: I'll just add to that, we're very pleased with the SG&A savings, but another, what's very important here, or more important, is actually we have an organization that is leaner and we're being able to execute, and we see that in our Q1 results, that we have an organization that is very much focused on execution, driving our long-term strategy, so while we get, it's a double benefit, one, we get the reduction in the P&L, but we also get a more focused and lean organization and we're able to execute well on our strategy.

Speaker Change: Yeah, I'll just add to that we're very pleased with the SG&A savings, but another.

Timothy P. Francis: What's very important here are more important is actually we have a organization.

Timothy P. Francis: It is leaner and we're being able to execute and we see that in our Q1 results that we have an organization that is better.

Timothy P. Francis: Very much focused on execution driving our long term strategy, so while we get.

Timothy P. Francis: Double benefit when we get the reduction in the P&L, but we also get.

Speaker Change: A more focused on lean organization, and we were able to execute well on our strategy. Okay.

Speaker Change: Thank you Heather.

Timothy P. Francis: Okay.

Operator: Our next question comes from the line of Brian Drab with William Blair. Please proceed with your question.

Timothy P. Francis: Our next question comes from the line of Brian Drab with William Blair. Please proceed with your question.

Brian Paul Drab: I was wondering if I could just ask one follow-up question on the TD&S business. So, and again, sorry if I miss this.

Brian Paul Drab: I was just wondering if I could just ask one follow up on the Tds business.

Brian Paul Drab: And again, sorry, if I missed this I'm trying to take notes successor candidate total sales from TD NFS was up 3% and you said pricing was favorable.

Brian Paul Drab: I'm trying to take notes as fast as I can, but total sales for TD&S were up 3%, and you said pricing was favorable there. So, you know, how is this business, I would expect it to be one of your stronger, growing businesses in 2024, but if pricing's up, I mean, volume's up less than 3%. And then you also mentioned that this distribution and substation business is doing quite well. So just trying to get some insight into what we should be expecting for the, you know, the core large transmission structures business in 2024 in terms of volume and

Brian Paul Drab: Sure.

Brian Paul Drab: So.

Brian Paul Drab: How is I am trying to reconcile that this business had unexpected it was one of your stronger.

Brian Paul Drab: Businesses in 2024 financial pricings up volumes up less than 3% and then you also mentioned that this distribution and substation business doing quite well. So I'm just trying to get some insight into what we should be expecting for the.

Brian Paul Drab: You know the core large transmission structures business in 2024 in terms of volume and.

Brian Paul Drab: And pricing.

Timothy P. Francis: Sure. So, you're right, Brian, about what you heard.

Speaker Change: Sure so.

Speaker Change: You're right Brian.

Timothy P. Francis: What you heard.

Speaker Change: A couple of things there.

Timothy P. Francis: Because of the mix shift to the smaller structures that smaller transmission.

Timothy P. Francis: Structures as well as the distribution of substation, we saw favorable pricing mix from that.

Timothy P. Francis: A couple things there. Because of the mix shift to smaller structures, that is, smaller transmission structures, as well as the distribution and substation, we saw favorable pricing mix from that. But we also saw a negative impact on pricing from steel deflation tied to the steel index in the pricing contracts with our Alliance customers. So we were able to overcome that steel deflation and still see a higher price. As we continue through the year, we will see an increase in our volumes in TD&S.

Timothy P. Francis: But we also saw a negative on pricing from the steel deflation tied to the steel index in the pricing contracts with our alliance customers. So we were able to overcome that steel deflation.

Timothy P. Francis: You will see higher pricing.

Timothy P. Francis: As we continue through the year, we will see an increase in our volumes in Tds.

Timothy P. Francis: Again, we're very pleased with how quickly we were able to adjust and get more of the smaller structures produced, and we expect that to accelerate through the rest of the year while we still see good demand for the transmission structures as well. So, you know, a little bit more color, you know, and I'm actually glad you asked about TDNS.

Timothy P. Francis: Again, we're very pleased with how quickly we were able to adjust.

Timothy P. Francis: Get more of the smaller structures produced.

Timothy P. Francis: And we expect that to accelerate through the rest of the year, while we still see good demand for the transmission structures as well.

Timothy P. Francis: Yes.

Timothy P. Francis: A little bit more color.

Timothy P. Francis: And I'm actually glad you asked about TNF that that business is doing very well for us and we're seeing growth in all areas of that business transmission is growing nicely but.

Avner M. Applbaum: That business is doing very well for us, and we're seeing growth in all areas of that business. Transmission is growing nicely, but, you know, the focus has also been on distribution, growing our market share there, substations with all the data centers that are coming up, the use of AI, and very strong demand in that area. And we've been able to utilize our footprint and the flexibility to support the strong demand. And, you know, on top of that, with our product offering that there's no one else in the industry that can do, such as our steel structures, our concrete structures, basically giving the whole suite of products.

Avner M. Applbaum: The focus also been on distribution growing our market share there substations with all the data centers that are coming up the use of AI.

Avner M. Applbaum: Very strong demand in that area and we've been able to utilize our footprint and the flexibility to support the strong demand and then on top of that with our product offering that theres no one else in the industry that can do around our steel structures are concrete structures.

Avner M. Applbaum: Basically the whole suite of <unk>.

Avner M. Applbaum: Products.

Avner M. Applbaum: And we are supporting our customers and.

Avner M. Applbaum: And we are supporting our customers and very favorably in that market. And we're going to see that market continue to grow for us in the high single digits. And we're very excited about what we're seeing in that market.

Avner M. Applbaum: Very favorable in that market and we're going to see that that market continue to grow for us in the high single digits.

Avner M. Applbaum: We're very excited about what we're seeing in that market.

Brian Paul Drab: Okay, thanks for that detail. Can I, can I just ask that it sounded like there were a lot of moving parts here? So, for the larger structures in the first quarter, the larger transmission structures, pricing was down, but I guess volume was up in that business specifically. Is that fair to conclude?

Speaker Change: Okay. Thanks for that detail can I can I just ask it sounded theres a lot of moving parts here so for the larger structures in the first quarter the larger transmission structures pricing.

Brian Paul Drab: Pricing was down but I guess volume was up in that business, specifically is that fair to conclude.

Timothy P. Francis: We don't break that out. I mean, I will tell you that volume is up TGS in totality.

Speaker Change: We don't break that out I mean, I will tell you that our argument about TTS in totality, yes.

Timothy P. Francis: And, you know, the pricing specifically is around the pricing mechanism. I just want to make it clear, right, we're not reducing prices; we're pricing for the value that we provide to our customers, and there's significant value that we're providing there. So, it's all around the mechanism, around the pricing is what's pressuring. Yeah.

Timothy P. Francis: And then the pricing specifically is around the pricing mechanism.

Timothy P. Francis: So you're right we're not.

Timothy P. Francis: With recent pricing, we're pricing for the value that we provide to our customers and there is significant value that we're providing there. So it's all around the mechanism around the pricing pressure.

Brian Paul Drab: I understand about the de-escalators in the country. Okay, thanks for the detail.

Speaker Change: Pressuring understood about the DSD escalators in the in the country understood. Okay. Thanks for the detail.

Renee L. Campbell: Thank you. We have reached the end of the question and answer session, and I will now turn the call over to Renee Campbell for closing comments.

Brian Paul Drab: Thank you we have reached the end of the question and answer session and I will now turn the call over to Renee Campbell for closing comments.

Renee L. Campbell: Thank you for joining us today. As mentioned, today's call will be available for playback on our website or by phone for the next seven days. We look forward to speaking with you again next quarter.

Renee L. Campbell: Thank you for joining us today as mentioned today's call will be available for playback on our website or by phone for the next seven days.

Renee L. Campbell: Forward to speaking with you again next quarter.

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