Q3 2025 Valmont Industries Inc Earnings Call

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. 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.

Operator: Greetings. Welcome to Valmont Industries Incorporated's Third Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A 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. 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, Investor Relations, and Treasurer. Ms. Campbell, you may begin.

Nate Campbell Senior Vice President Investor Relations and Treasurer, Ms. Campbell you may begin.

Good morning, everyone and thank you for joining us.

With me today are Abner, Apple Baum, President and Chief Executive Officer, and Tom Mccourt, <unk> Executive Vice President and Chief Financial Officer.

Earlier. This morning, we issued a press release announcing our third quarter 2025 results.

Both the release and the presentation for today's webcast are available on the investors page of our website at <unk> Dot com.

A replay of the webcast will be available later this morning.

To stay updated with Valmont latest news releases and information please sign up for email alerts on our investors site.

We will begin today's call with prepared remarks, and then open it up for questions. Please.

Renee Campbell: Good morning, everyone, and thank you for joining us. With me today are Avner Applbaum, President and Chief Executive Officer, and Tom Liguori, Executive Vice President and Chief Financial Officer. Earlier this morning, we issued a press release announcing our third quarter 2025 results. Both the release and the presentation for today's webcast are available on the investors' page of our website at valmont.com. A replay of the webcast will be available later this morning. To stay updated with Valmont's latest news releases and information, please sign up for email alerts on our investor site. We'll begin today's call with prepared remarks and then open it up for questions. Please note that this call is subject to our disclosure on forward-looking statements, which is outlined on slide two of the presentation and will be read in full after Q&A.

Please note that this call is subject to our disclosure on forward looking statements, which is outlined on slide two of the presentation and will be read in full after Q&A.

With that I'd now like to turn the call over to Avner.

Thank you Remy.

Good morning, everyone and thank you for joining us.

To start with third quarter highlights and key messages summarized on slide four.

This quarter's results reflect the continued strength of our diversified portfolio and disciplined execution by the global Belmond team.

We delivered net sales growth of two 5% with double digit growth in utility and telecom.

Operating margin improved 120 basis points and diluted earnings per share improved 21%.

Renee Campbell: With that, I'd now like to turn the call over to Avner.

With these results and the momentum across the organization, we are raising our full year earnings guidance, which Tom will discuss in more detail shortly.

Avner Applbaum: Thank you, Renee. Good morning, everyone, and thank you for joining us. I'd like to start with third quarter highlights and key messages summarized on slide four. This quarter's results reflect the continued strength of our diversified portfolio and disciplined execution by the global Valmont team. We delivered net sales growth of 2.5%, with double-digit growth in utility and telecom. Operating margin improved 120 basis points, and diluted earnings per share improved 21%. With these results and the momentum across the organization, we are raising our full-year earnings guidance, which Tom will discuss in more detail shortly. Our strategy continues to guide our decisions and deliver results. We've simplified the business, we're focusing where we lead, and we're directing resources to our best opportunities. United around our shared objectives and a customer-first vision, our teams are driving innovation and executing with greater precision.

Our.

<unk> continues to guide our decisions and deliver results.

We've simplified the business, we're focusing where we lead and we're directing resources to our best opportunities.

United around our share objectives, and a customer first vision or.

Our teams are driving innovation and executing with greater precision.

We operate in attractive markets, where our value proposition aligns with customer needs and positioning us to capture long term opportunities.

We have the right structure now in place and we have a strong foundation for sustained value creation.

Looking ahead, we remain committed to accelerating growth in.

Enhancing performance.

And investing in high return initiatives that strengthened our leadership and deepened customer impact.

Turning to slide five.

To provide a brief update on our 2025 critical objectives.

Belmont is positioned to lead the north American utility market through an unprecedented investment cycle.

Avner Applbaum: We operate in attractive markets where our value proposition aligns with customer needs, positioning us to capture long-term opportunities. We have the right structure now in place, and we have a strong foundation for sustained value creation. Looking ahead, we remain committed to accelerating growth, enhancing performance, and investing in high-return initiatives that strengthen our leadership and deepen customer impact. Turning to slide five, I'd like to provide a brief update on our 2025 critical objectives. Valmont is positioned to lead the North American utility market through an unprecedented investment cycle. We have a multi-pronged approach to growth, expanding capacity, and strengthening operating capabilities. Most of our growth CapEx is directed to brownfield utility expansions that increase, upgrade, or repurpose our existing facilities, enabling strong returns. We're also increasing throughput by addressing bottlenecks, improving material flow, and implementing new technologies.

We have a multi pronged approach to growth expanding capacity and strengthening operating capabilities.

We operate in our attractive markets, where our value proposition aligns with customer, needs positioning us to capture long-term opportunities.

Most of our growth Capex is directed to brownfield utility expansions that increase upgrade or repurpose, our existing facilities, enabling strong returns.

We have the right structure now in place, and we have a strong foundation for sustained value creation.

Looking ahead, we remain committed to accelerating growth.

Enhancing performance.

We're also increasing throughput by addressing bottlenecks improving material flow and implementing new technologies.

And investing in high-return initiatives that strengthen our leadership and deepen customer impact.

Turning to slide 5.

In agriculture, we are building a more resilient business to improve margins through the cycle.

I'd like to provide a brief update on our 2025 critical objectives.

We've aligned resources around key growth areas aftermarket parts.

Position to lead the North American utility Market through an unprecedented investment cycle.

Technology and international markets.

Aftermarket part sales grew year over year this quarter driven in part by our new E Commerce system, which all North American dealers now use to provide industry, leading service and sales.

We have a multi-prong approach to growth expanding capacity and strengthening operating capabilities.

Most of our growth capex is directed to brownfield utility expansions that increase, upgrade, or repurpose our existing facilities, enabling strong returns.

And international rollout is planned in the upcoming quarters.

These initiatives strengthen our leadership today and position us for faster growth and higher profitability ahead.

Avner Applbaum: In agriculture, we're building a more resilient business to improve margins through the cycle. We've aligned resources around key growth areas: aftermarket parts, technology, and international markets. Aftermarket part sales grew year over year this quarter, driven in part by our new e-commerce platform, which all North American dealers now use to provide industry-leading service and sales. An international rollout is planned in the upcoming quarters. These initiatives strengthen our leadership today and position us for faster growth and higher profitability ahead. Across the company, disciplined resource allocation, a relentless focus on safety, and the dedication of our team remain central to our success. I'm proud of how our employees continue to embrace change and drive momentum with a continuous improvement mindset. Now, turning to slide six for an infrastructure market update, starting with utility, our largest product line. This business continues to benefit from powerful long-term demand drivers.

We're also increasing throughput by addressing bottlenecks improving material flow and implementing new technologies.

Across the company disciplined resource allocation, a relentless focus on safety and the dedication of our team remains central to our success.

In agriculture, we're building a more resilient business to improve margins through the cycle.

We've aligned resources around key growth areas.

Aftermarket parts.

Technology.

And international markets.

I am proud of how our employees continue to embrace change and drive momentum with a continuous improvement mindset.

Now turning to slide six for an infrastructure market update starting with utility our largest product line.

Aftermarket, parts sales grew year-over-year. This quarter driven Empire by our new e-commerce system.

Which all North American dealers now use to provide industry-leading service and sales.

This business continues to benefit from powerful long term demand drivers data center expansion manufacturing onshoring major oil and gas projects and broader electrification are all contributing to significant load growth expectations.

An international rollout is planned in the upcoming quarters.

These initiatives, strengthen our leadership today and position us for faster growth and higher profitability ahead.

Rising energy consumption aging infrastructure and resiliency needs are driving multiyear increases in customer capital plans.

Across the company discipline, resource allocation, a relentless focus on safety, and the dedication of our team remain central to our success.

Market forecasts call for transmission Capex to grow at a 9% CAGR through 2029.

I'm proud of how our employees continue to embrace change and drive momentum with A continuous Improvement mindset.

Our customers continue to turn to <unk> to help them execute their multiyear plan across transmission distribution and substation as they expand and monitor modernize the grid.

Now, turning to slide 6 for an infrastructure market update, starting with utility, our largest product line.

Avner Applbaum: Data center expansion, manufacturing onshoring, major oil and gas projects, and broader electrification are all contributing to significant load growth expectations. Rising energy consumption, aging infrastructure, and resiliency needs are driving multi-year increases in customer capital plans. Market forecasts call for transmission CapEx to grow at a 9% CAGR through 2029. Our customers continue to turn to Valmont Industries to help them execute their multi-year plan across transmission, distribution, and substation as they expand and modernize the grid. We're winning projects because of the value we deliver through our scale, engineering expertise, and proven reliability. For example, we were recently awarded a $65 million extra high-voltage project from a leading engineering and construction firm in partnership with a large utility. This is one of several major wins that reflect Valmont Industries' trusted ability to execute complex, large-scale work with consistency and quality.

this business continues to benefit from powerful long-term demand drivers,

We are winning projects because of the value we deliver through our scale engineering expertise and proven reliability. For example, we were recently awarded a $65 million extra high voltage project from a leading engineering and construction firm in partnership with a large utility.

Data center expansion, manufacturing onshoring, major oil and gas projects, and broader electrification are all contributing to significant load growth expectations. Rising energy consumption, aging infrastructure, and resiliency needs are driving multi-year increases in customer capital plans.

This is one of several major wins that reflect developments trusted ability to execute complex large scale work with consistency and quality.

Market forecasts call for transmission capex to grow at a 9% CAGR through 2029.

Moving to lighting and transportation.

Asia Pacific market remains pressured alongside a softer lighting market in North America.

Our customers continue to turn to valman to help them execute their multi-year plan across transmission distribution and substation as they expand and modernize the grid.

Results were also impacted by operational factors. We know this business can perform better and we've simplified the structure better aligned operations and commercial teams and strengthened leadership.

The long term fundamentals of this business remains solid.

We're winning projects because of the value, we deliver through our scale engineering expertise and proven reliability. For example, we were recently awarded a 65 million extra high voltage project from a leading engineering and construction firm in partnership with a large utility.

And these actions are improving focus and accountability setting the stage for steadier performance ahead.

This is 1 of several major wins that reflect valmont's, trusted ability.

The rest of the infrastructure business is performing its performing as expected we're focused on what sets <unk> apart our scale.

To execute complex, large-scale work with consistency and quality.

Avner Applbaum: Moving to lighting and transportation, the Asia-Pacific market remains pressured alongside a softer lighting market in North America. Results were also impacted by operational factors. We know this business can perform better, and we've simplified the structure, better aligned operations and commercial teams, and strengthened leadership. The long-term fundamentals of this business remain solid, and these actions are improving focus and accountability, setting the stage for steadier performance ahead. The rest of the infrastructure business is performing as expected. We're focused on what sets Valmont Industries apart: our scale, deep engineering expertise, trusted customer partnership, and speed to market. Turning to slide seven for an update on agriculture. In North America, growth sentiment remains soft. As expected, record corn and soybean yields weigh on prices. The USDA expects 2025 crop receipts to decline about 2.5%, reflecting lower prices for both crops. In Brazil, the environment has turned more cautious.

Moving to lighting and transportation.

Deep engineering expertise trusted customer partnership and speed to market.

Market in North America.

Turning to slide seven for an update on agriculture.

Results were also impacted by operational factors.

In North America grower sentiment remains soft.

As expected record corn and soybean yields when prices.

We know this business can perform better, and we've simplified the structure, better aligned operations and commercial teams, and strengthened leadership.

The USDA expects 2025 crop receipts to decline about two 5%, reflecting lower prices for both crops.

The long-term fundamentals of this business remain solid.

And these actions are improving focus and accountability.

In Brazil, the environment has turned more cautious growers are facing tighter credit slower release of government financing and ongoing trade uncertainty leading to leading many to delete large capital purchases, including pivots.

Setting the stage for steadier performance ahead.

The rest of the infrastructure business is performing as expected. We're focused on what sets Valmont apart: our scale.

These near term pressures are part of the normal cycle. Following several strong years of farm profitability and investment.

Deep engineering expertise, trusted customer partnership, and speed to market.

Turning to slide 7 for an update on agriculture.

In North America, grower sentiment remained soft.

We know how to manage through cycles like this that's why we're staying focused on supporting grow as immediate needs, while continuing to deliver customer centric innovation for the future.

As expected record, corn and soybean yields, when prices.

And we're demonstrating that commitment in the field at.

The USDA expects 2025 crop receipts to decline about 2.5 percent, reflecting lower prices for both crops.

Our recent farm shows our valley team showcasing new technology, including the Icahn plus control panel a major addition to the Valley Tech suite.

Avner Applbaum: Growers are facing tighter credit, slower release of government financing, and ongoing trade uncertainty, leading many to delay large capital purchases, including pivots. These near-term pressures are part of the normal cycle following several strong years of farm profitability and investment. We know how to manage through cycles like this. That is why we're staying focused on supporting growers' immediate needs while continuing to deliver customer-centric innovation for the future. We're demonstrating that commitment in the field. At recent farm shows, our Valley team showcases new technology, including the Icon Plus control panel, a major addition to the Valley Tech Suite. It brings full Xsense 365 functionality to any pivot brand, allowing growers to easily connect older or competitive machines. This expands our addressable market and drives growth and recurring revenue. In Brazil, the long-term opportunity remains exceptional.

In Brazil, the environment has turned more cautious.

It brings full <unk> 365 functionality to any pivot brand, allowing grows to easily connect older or competitive machines.

Growers are facing tighter credit slower release of government, financing and ongoing trade uncertainty, leading to Leading many to delay. Large Capital purchases, including pivots

This expands our addressable market and drives growth and recurring revenue.

These near-term pressures are part of the normal cycle, following several strong years of farm, profitability and investment.

In Brazil, the long term opportunity remains exceptional farmers can grow two to three crops per year with mechanized irrigation and the return on investment from pivot is meaningful.

We know how to manage through Cycles like this. That's why we're staying focused on supporting Growers. Immediate needs while continuing to deliver customer Centric Innovation for the future.

With vast under irrigated farmland favorable growing conditions and strong quarter availability, Brazil will continue to be a key growth market.

And we're demonstrating that commitment in the field.

At recent farm shows, our Valley team showcased a new technology.

Including the Icon Plus control panel, a major addition to the Valley Tech Suite.

And our other international markets results reflect normal project timing <unk>.

Large middle East projects shipped earlier this year, while last year's activity was more backend loaded year.

It brings full access 365 functionality to any pivot brand, allowing Growers to easily connect older or competitive machines.

Year to date sales in the region are up double digits.

This expands our addressable market and drives growth and recurring revenue.

Project demand remains strong.

Government and corporate led initiatives.

Avner Applbaum: Farmers can grow two to three crops per year with mechanized irrigation, and the return on investment from pivot is meaningful. With vast under-irrigated farmland, favorable growing conditions, and strong water availability, Brazil will continue to be a key growth market. In our other international markets, results reflect normal project timing. Several large Middle East projects shipped earlier this year, while last year's activity was more back-end loaded. Year-to-date, sales in the region are up double digits. Project demand remains strong. Government and corporate-led initiatives are longer-term and less affected by short-term crop prices. We've invested in our presence and dealer capabilities to capture this growth. Overall, the long-term fundamentals in agriculture remain strong, and the business continues to deliver solid returns even in a more challenging period. We remain focused on disciplined execution, advancing innovation, and positioning us to lead as market conditions improve.

Our longer term and less affected by short term crop prices.

We've invested in our presence in dealer capabilities to capture this growth.

In Brazil, the long-term opportunity remains exceptional. Farmers can grow 2 to 3 crops per year with mechanized irrigation, and the return on investment from pivot irrigation is meaningful.

Overall, the long term fundamentals in agriculture remained strong and the business continues to deliver solid returns even in a more challenging period.

With vast, under irrigated Farmland, favorable growing conditions and strong water. Availability Brazil will continue to be a key growth Market.

We remain focused on disciplined execution, advancing innovation and positioning us to lead as market conditions improve.

In our other International markets results. Reflect normal project timing.

Several large Middle East projects shipped earlier this year, while last year's activity was more back and loaded.

In summary, our strategy is delivering results execution has been strong and decisive actions across our portfolio, our improving performance even in market facing near term macro pressures.

Year to date sales in the region are up double digits.

Project demand remains strong.

Government and corporate lead initiatives.

With momentum established and investment plans underway. Our team is energized by the opportunities ahead and confident in the long term fundamentals of the business.

are longer term and less affected by short-term crop prices.

We've invested in our presence and dealer capabilities to capture this growth.

Overall, the long-term fundamentals in agriculture remains strong.

I'll now turn the call over to Tom to discuss our third quarter financial results and updated outlook.

And the business continues to deliver solid returns even in a more challenging period.

Thank you avner good.

Good morning, everyone and thank you for joining us today.

Our results were slightly better than expected.

Avner Applbaum: In summary, our strategy is delivering results. Execution has been strong, and decisive actions across the portfolio are improving performance even in market-facing near-term macro pressures. With momentum established and investment plans underway, our team is energized by the opportunities ahead and confident in the long-term fundamentals of the business. I'll now turn the call over to Tom to discuss our third quarter financial results and updated outlook.

We remain focused on discipline execution, advancing Innovation, and positioning us to lead as market conditions improve.

Particularly the 21, 2% growth in earnings per share.

I wanted to thank our team for their execution in this quarter.

As well as the progress made advancing our value drivers.

In summary, our strategy is delivering results. Execution has been strong, and decisive actions across our portfolio are improving performance, even in the market facing near-term macro pressures.

The infrastructure wave positioning.

Positioning agriculture for growth.

And disciplined resource allocation.

We made progress in all three.

With momentum established and investment plans underway. Our team is energized by the opportunities ahead and confident in the long-term fundamentals of the business.

Turning to slide nine and our third quarter income statement.

Net sales of one point <unk> 5 billion increased two 5% year over year.

I'll now turn the call over to Tom to discuss our third quarter, Financial results and update it Outlook.

Tom Liguori: Thank you, Avner. Good morning, everyone, and thank you for joining us today. Our results are slightly better than expected, particularly the 21.2% growth in earnings per share. I want to thank our team for their execution this quarter, as well as the progress made advancing our value drivers: catching the infrastructure wave, positioning agriculture for growth, and disciplined resource allocation. We made progress in all three. Turning to slide nine, in our third quarter income statement, net sales of $1.05 billion increased 2.5% year over year. Sales growth in infrastructure, particularly utility, was partially offset by lower agriculture sales. Gross profit margin of 30.4% increased 80 basis points from last year, with improvements seen in both segments. SG&A expenses of $177 million were flat year over year. Operating income increased to $141 million, and operating margins of 13.5% improved 120 basis points, driven by improved infrastructure results.

Thank you, Abner.

Sales growth in infrastructure.

Good morning, everyone. And thank you for joining us today.

Particularly utility was partially offset by lower agriculture sales.

Our results are slightly better than expected.

Gross profit margin of 34% increased 80 basis points from last year.

Particularly the 21.2% growth in earnings per share.

And I want to thank our team for their execution of this quarter.

With improvements seen in both segments.

As well as the progress made advancing our value drivers.

SG&A expenses of $177 million were flat year over year.

Catching the information wave.

Positioning agriculture for growth.

Operating income increased to $141 million.

And disciplined resource allocation we made progress in all 3.

And operating margins of 13, 5% improved 120 basis points driven by improved infrastructure results.

Turning this slide 9 in our third quarter income statement.

Net sales of 1.05 billion increased 2.5% year-over-year.

Below the line interest expense decreased due to lower debt.

Our tax rate declined to 23, 1% due to a more favorable geographic mix of earnings.

Sales growth and infrastructure, particularly utility was, partially offset by lower agriculture sales.

Diluted earnings per share was $4 98.

Gross profit margin of 30.4% increased to 80 basis points from last year.

A notable step up compared to historical third quarter performance.

With improvements. Seen in both segments.

Moving to our segment results on slide 10.

Sgna expenses of 177, million were flat year-over-year.

Infrastructure sales of $808 3 million grew six 6% compared to last year.

And income increased to $141 million.

Utility sales increased 12, 3% driven.

And operating margins of 13.5% improved, 120 basis points driven by improved infrastructure results.

Driven by pricing and higher volumes.

Tom Liguori: Below the line, interest expense decreased due to lower debt. Our tax rate declined to 23.1% due to a more favorable geographic mix of earnings. Diluted earnings per share was $4.98, a notable step up compared to historical third-quarter performance. Moving through our segment results on slide 10, infrastructure sales of $808.3 million grew 6.6% compared to last year. Utility sales increased 12.3%, driven by pricing and higher volumes. Sales in lighting and transportation declined 3.4% due to continued weakness in the Asia-Pacific market, softer North American lighting demand, and production challenges that reduced output. Coating sales increased 9.7%, supported by healthy infrastructure demand. Telecommunications sales grew 37%. Growth was supported by our quick turnover strategy and the strong alignment of our wireless components business with carrier programs. Solar sales declined due to our decision to exit certain markets.

Sales in lighting and transportation declined three 4%.

Below the line interest expense decreased due to lower debt.

Due to continued weakness in the Asia Pacific market.

Our tax rate declined to 23.1%, due to a more favorable Geographic mix of earnings.

Saucer North American lighting demand.

And production challenges that reduced output.

Diluted earnings per share was 4.98.

Coating sales increased nine 7% supported by healthy infrastructure demand.

A notable step up compared to historical third-quarter performance.

Telecommunications sales grew 37%.

Moving to our segment results on slide 10.

Growth was supported by our quick turn order strategy.

Infrastructure sales of $8008.3 million grew 6.6% compared to last year.

And the strong alignment of our wireless component business with carrier programs.

Utility sales increased 12.3%.

Solar sales declined due to our decision to exit certain markets.

Driven by pricing and higher volumes.

Solar revenues are expected to be approximately 2% of total company revenues going forward.

Sales in lighting and transportation declined by 3.4%.

Due to continued weakness in the asia-pacific market.

And therefore, we anticipate consolidating solar into another product line for reporting purposes, starting in 2026.

Saucer North America, lighting demand.

And production challenges that reduce the output.

Operating income was $143 4 million or 17, 8% of net sales.

Coding sales increased 9.7% supported by healthy infrastructure demand.

Telecommunications sales grew 37%.

An increase of 150 basis points as a result of our pricing actions and.

Growth was supported by our quick turn order strategy.

Growth in high value offerings.

And the strong alignment of our wireless components business with carrier programs.

And an improved global cost structure.

Turning to slide 11.

Tom Liguori: Solar revenues are expected to be approximately 2% of total company revenues going forward, and therefore, we anticipate consolidating solar into another product line for reporting purposes starting in 2026. Operating income was $143.4 million, or 17.8% of net sales, an increase of 150 basis points as a result of our pricing actions, growth in high-value offerings, and an improved global cost structure. Turning to slide 11, third quarter agriculture sales decreased 9% year over year to $241.3 million. The North America market remains challenged, resulting in lower irrigation equipment volumes. International sales declined mostly due to the timing of Middle East project sales. In Brazil, while third quarter sales were steady, the economic environment weakened late in the quarter as farmers are facing significantly tighter credit. This also created some added pressure on customer payments.

Solar sales declined due to our decision to exit certain markets.

Third quarter, agriculture sales decreased 9% year over year to $241 3 million.

So solar revenues are expected to be approximately 2% of total company revenues going forward.

The North American market remains challenged resulting in lower irrigation equipment volumes.

And therefore we anticipate consolidating solar into another product line for reporting purposes starting in 2026.

International sales declined mostly due to the timing of Middle East project sales.

In Brazil, while third quarter sales were steady.

Operating income was 143.4 Million for a 17.8% of net sales.

Economic environment weakened late in the quarter.

An increase of 150 basis points.

As a result of our pricing actions.

As farmers are facing significantly tighter credit.

Growth in high-value offerings.

This also created some added pressure on customer payments.

And in improved global cost structure.

We conducted a review of the business.

Turning to slide 11.

And determined it was prudent to record additional reserves.

Including $11 million of bad debt expense.

In the third quarter, agriculture sales decreased 9% year-over-year to $241.3 million.

We continue to pursue collection of these accounts.

Both operating income and margins declined to $23 2 million or nine 7% of sales.

The North America Market remains challenged resulting in lower irrigation equipment volumes.

International sales declined, mostly due to the timing of Middle East project sales.

Primarily due to the higher bad debt expense.

Excluding that expense operating income was 14, 1% of sales.

In Brazil, while third quarter, sales were steady, the economic environment weakened late in the quarter?

While the agriculture segment had a challenging financial quarter.

As farmers are facing significantly tighter credit.

Tom Liguori: We conducted a review of the business and determined it was prudent to record additional reserves, including $11 million of bad debt expense. We continued to pursue collection of these accounts. Both operating income and margins declined to $23.2 million, or 9.7% of sales, primarily due to the higher bad debt expense. Excluding that expense, operating income was 14.1% of sales. While the agriculture segment had a challenging financial quarter, we continue to invest in aftermarket and technology projects as we believe the long-term prospects are favorable based on the need to improve farmer productivity, feed a growing global population, and food security. Moving to slide 12 for cash liquidity and capital allocation, we had another quarter of healthy operating cash flows generating $112.5 million. We ended the quarter with approximately $226 million of cash, and net debt leverage remains below one times.

We continue to invest in aftermarket and technology projects.

This also created some added pressure on customer payments.

We conducted a review of the business.

As we believe the long term prospects are favorable.

And determined it was prudent to record additional Reserves.

Based on the need to improve farmer productivity.

Including 11 million of bad debt expense.

Feed a growing global population and food security.

We continue to pursue collection of these accounts.

Moving to slide 12 for cash liquidity and capital allocation.

We had another quarter of healthy operating cash flows generating $112 5 million.

Both operating income and margins declined, to 23.2 million or 9.7% of sales.

Primarily due to the higher bad debt expense.

We ended the quarter with approximately $226 million of cash.

Excluding that expense operating income was 14.1% of sales.

And net debt leverage remains below one times.

During the quarter, we invested $42 million in Capex.

well, the agriculture segment had a challenging Financial quarter

Primarily for utility capacity expansion.

We continue to invest in aftermarket and Technology projects.

We returned $39 million to shareholders include.

As we believe the long-term prospects are favorable.

Including $13 million through dividends.

Based on the need to improve farmer productivity.

And approximately $26 million through share repurchases.

Feed a growing global population and food security.

At an average price of $374 and 33.

Moving to slide 13.

Last quarter, we provided a financial roadmap highlighting our key value drivers.

Moving to slide 12 for cash liquidity and capital allocation. We had another quarter of healthy, operating cash, flows, generated 112.5 million,

We remain sharply focused on execution.

We entered the quarter with approximately $226 million in cash.

To catch the infrastructure wave we continued.

Tom Liguori: During the quarter, we invested $42 million in CapEx, primarily for utility capacity expansion. We returned $39 million to shareholders, including $13 million through dividends and approximately $26 million through share repurchases at an average price of $374.33. Moving to slide 13, last quarter we provided a financial roadmap highlighting our key value drivers. We remain sharply focused on execution. To catch the infrastructure wave, we continue to invest in capacity and efficiency improvements and are starting to see the volume growth in our revenue. Through the third quarter, we've deployed $78 million of CapEx in our North America infrastructure businesses. Our team made significant progress in capacity expansion in our Brandon, Texas, Monterrey, Mexico, and other North American facilities. Through these actions, we've increased our annual revenue capacity and infrastructure by $95 million, with more coming online in the fourth quarter.

And net debt, leverage remains below 1 times.

To invest in capacity and efficiency improvements.

During the quarter, we invested 42 million in capex.

And are starting to see the volume growth and our revenue.

Primarily for utility capacity, expansion.

Through the third quarter, we have deployed $78 million of Capex in our North America infrastructure businesses.

We returned 39 million to shareholders.

Including 13 million, through dividends.

Our team made significant progress in capacity expansion.

And approximately 26 million through share repurchases.

Our Brenham, Texas, Monterrey, Mexico, and other North American facilities.

At an average price of 374 and 33 cents.

Moving to slide 13.

Through these actions, we've increased our annual revenue capacity and infrastructure by $95 million.

Last quarter, we provided a financial roadmap highlighting, our key value drivers.

With more coming online in the fourth quarter.

We remain sharply focused on execution.

To catch the infrastructure wave.

We're very pleased with the progress of our operations team and thank them for their efforts.

Capacity and efficiency improvements.

Our close monitoring of the industry capacity and the expansion plans of our peers.

In our start, we are starting to see the volume growth in our revenue.

Reinforces our view that demand will exceed supply and we're planning accordingly.

In agriculture, we have comprehensive growth plans and technology adoption aftermarket parts in international markets.

through the third quarter, we've deployed 78 million of cap backs in our North America infrastructure businesses. Our teammate significant progress, in capacity expansion in our brandom, Texas, Monterey Mexico and other North American facilities.

In the third quarter aftermarket parts grew 15% year over year.

Through these actions, we've increased our annual revenue capacity in the infrastructure by $95 million.

Approximately $52 million.

With more coming online in the fourth quarter.

Reflecting the continued success of our e-commerce platform.

Tom Liguori: We're very pleased with the progress of our operations team and thank them for their efforts. Our close monitoring of industry capacity and the expansion plans of our peers reinforces our view that demand will exceed supply, and we're planning accordingly. In agriculture, we have comprehensive growth plans in technology adoption, aftermarket parts, and international markets. In the third quarter, aftermarket parts grew 15% year over year to approximately $52 million, reflecting the continued success of our e-commerce platform. Accent 365 app revenues increased 8% year over year, largely due to the productivity benefits farmers are receiving from our technology tools to manage their irrigation. These initiatives are gaining traction, and we are beginning to see the benefits in our financials. Lastly, our disciplined resource allocation initiatives are progressing. Third quarter corporate expense declined 6.4% to $25.1 million, the lowest level in 13 quarters.

<unk> revenues increased 8% year over year.

We're very pleased with the progress of our operations team and thank them for their efforts.

Largely due to the productivity benefits farmers are receiving from our technology tools to manage their irrigation.

Our close monitoring of Industry capacity.

And the expansion plans of our peers.

These initiatives are gaining traction and we are beginning to see the benefits in our financials.

Reinforces our view that demand will exceed Supply, and we're planning accordingly.

Lastly, our disciplined resource allocation initiatives are progressing.

In agriculture, we have comprehensive growth plans, technology adoption, aftermarket parts, and international markets.

Third quarter corporate expense declined six 4% to $25 1 million.

The lowest level in 13 quarters.

In the third quarter, aftermarket parts, grew 15% year-over-year to approximately 52 million.

We benefited from the work to streamline the organization.

Reflecting the continued success of our e-commerce platform.

And we continue to pare back our outside service provider cost.

At the same time, we're investing in initiatives that will drive longer term benefits for.

Accents revenues, increased 8% year-over-year?

For example, we recently kicked off a project to simplify our legal entity structure.

Due to the productivity benefits farmers are receiving from our technology tools to manage their irrigation.

Which will improve internal efficiency reduce compliance burden and strength in treasury management.

These initiatives are gaining traction, and we are beginning to see the benefits in our financials.

Lastly.

On the capital allocation front, our share repurchase program continues.

Our discipline resource allocation initiatives are progressing.

With year to date repurchases of $125 8 million or approximately 427000 shares.

Third quarter corporate expenses to clients increased by 6.4% to $25.1 million.

Tom Liguori: We benefited from the work to streamline the organization, and we continue to pare back our outside service provider cost. At the same time, we're investing in initiatives that will drive longer-term benefits. For example, we recently kicked off a project to simplify our legal entity structure, which will improve internal efficiency, reduce compliance burden, and strengthen treasury management. On the capital allocation front, our share repurchase program continues with year-to-date repurchases of $125.8 million, or approximately 427,000 shares. Bringing it all together, we are making progress toward our path to deliver $500 to $700 million in revenue growth and $25 to $30 in EPS over the next three to four years. Turning to our updated 2025 outlook and slide 14, net sales are projected to be approximately $4.1 billion, which is the midpoint of the previous range.

The lowest level in 13 quarters.

Bringing it all together, we are making progress.

We benefited from the work to streamline the organization.

Towards our path to deliver $500 million to $700 million in revenue growth and $25 to $30 in EPS over the next three to four years.

And we continue to pair back or outside service provider cost.

At the same time, we're investing in initiatives that will drive longer term benefits.

Turning to our updated 2025 outlook on slide 14.

For example, we recently kicked off a project to simplify our legal entity structure.

Net sales are projected to be approximately $4 1 billion, which is the midpoint of the previous range.

Which will improve internal efficiency, reduce compliance burden, and strengthen treasury management.

We're raising our full year adjusted diluted earnings per share expectations.

On the capital allocation front, our share repurchase program continues.

To a range of $18 70.

To $19 50.

With the year-to-date repurchases of 125.8 million or approximately 427,000 shares.

Increasing the midpoint to $19 10.

Bringing it all together. We are making progress.

Before we close we.

We want to thank the entire belmond team for their focus on execution moving our value drivers forward.

Toward our path to deliver $500 to $700 million in revenue growth.

I also want to welcome Eric Johnson.

and $25 to $30 in EPS over the next 3 to 4 years,

As our new Chief Accounting Officer.

Turning to our updated 2025 outlook and slide 14.

Eric joined the team yesterday and brings a strong accounting and financial background and large scale manufacturing and project businesses.

Tom Liguori: We're raising our full-year adjusted diluted EPS expectations to a range of $18.70 to $19.50, increasing the midpoint to $19.10. Before we close, we want to thank the entire Valmont team for their focus on execution, moving our value drivers forward. I also want to welcome Eric Johnson as our new Chief Accounting Officer. Eric joined the team yesterday and brings a strong accounting and financial background in large-scale manufacturing and project businesses from his prior roles at ConAgra, Kiewit, and KPMG. We look forward to working with you, Eric. Tim Francis, who many of you know, accepted a position in our international infrastructure group. Tim, we wish you good fortune and much success in working with the international team in your new role. With that, we'll now turn the call over to Renee.

That's sales are projected to be a approximately 4.1 billion which is the midpoint of the previous range.

From his prior roles at Conagra keyword and KPMG.

We're raising our full year adjusted diluted earnings per share expectations.

We look forward to working with you Eric.

Tim Francis who many of you know accepted a position in our international infrastructure group.

To arrange of 18.70 to 19.50.

Increasing the midpoint to 1910 cents.

Before we close.

Tim We wish you good fortune and much success in working with the international team in your new role.

We want to thank the entire Valmont team for their focus on execution. Moving our value drivers forward.

With that I will now turn the call over to Rene.

I also want to welcome Eric Johnson.

Thank you Tom at this time, the operator will open up the call for questions.

As our new Chief accounting officer.

Thank you at this time, we'll be conducting a question and answer session as he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.

Eric joined the team yesterday and brings a strong accounting and financial background in large-scale manufacturing and project businesses.

From his prior roles at ConAgra.

T wit and KPMG.

We look forward to working with you, Eric.

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

Does allow for as many questions as possible. Please limit yourself to one question and one follow up one moment, while we poll for questions.

Tim Francis, who many of, you know, accepted a position in our International infrastructure group. Tim, we wish you good fortune and much success in working with the international team in your new role.

Renee Campbell: Thank you, Tom. At this time, the operator will open up the call for questions.

With that, we will now turn the call over to Renee.

Our first question is from Nathan Jones with Stifel. Please proceed.

Thank you, Tom. At this time, the operator will open up the call for questions.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two 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 keys. To allow for as many questions as possible, please limit yourself to one question and one follow-up. One moment while we pull for questions. Our first question is from Nathan Jones with Stifel. Please proceed.

Good morning, This is Adam Farley on for Nathan.

I wanted to start on the infrastructure margins various standout performer in the quarter at 17, 8% I.

And I believe that's an all time record.

I know you guys have had a number of ongoing margin improvement initiatives within the company over the last couple of years could you maybe talk about the most impactful of these initiatives and where the main opportunities remain.

So we continue to expand margins.

Sure Adam Thank you for the question. So if we if you go back the last two to three years the margin benefits had been a combination of pricing and cost pricing we are the market leader.

Thank you. At this time, we'll 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 a participant, choosing speaker equipment and may be necessary to pick up your handset. Before pressing, the star keys to allow for as many questions as possible. Please limit yourself to 1 question and 1 follow-up 1 moment while we pull up for questions.

Adam Farley: Good morning. This is Adam Farley on for Nathan. I wanted to start on the infrastructure margins. Very standout performer in the quarter at 17.8%, and I believe that's an all-time record. I know you guys have had a number of ongoing margin improvement initiatives within the company over the last couple of years. Could you maybe talk about the most impactful of these initiatives and where the main opportunities remain to continue to expand margins?

Good morning. This is Adam Farley on for Nathan.

To provide value added engineering on time delivery and scale and customers are willing customers value that cost <unk> took a number of cost actions and they have jobs through the bottom line. So that's why you see a good trend in our operating margins going forward.

From here onward, it really gets back to the value drivers in our utility expansions. We're very excited about that and every incremental revenue dollar contributes over well over 20% operating margin, but we also have good things going on in the Agriculture group we have the.

I wanted to start on the, uh, infrastructure margins. Uh, very standout performer in the quarter at 17.8%, and I believe that's an all-time record. Um, I know you guys have had a number of ongoing margin improvement initiatives within the company over the last couple of years. Could you maybe talk about the most impactful of these initiatives and where the main opportunities remain?

Uh, to continue to expand margins.

Avner Applbaum: Sure, Adam. Thank you for the question. If we go back the last two to three years, the margin benefits have been a combination of pricing and cost. Pricing, we are the market leader. We do provide value-added engineering, on-time delivery, and scale, and customers value that. Cost, when Avner started, he took a number of cost actions, and they have dropped through the bottom line. That's why you see a good trend in our operating margins going forward. From here onward, it really gets back to the value drivers. Our utility expansions, we're very excited about that, and every incremental revenue dollar contributes well over 20% of operating margin. We also have good things going on in the agriculture group.

<unk>.

Which is basically spare parts growing and thats because of the e-commerce.

And ease of ordering that we've allowed with the farmers and Thats had higher margin.

Product.

We also have our accident 365, which is a recurring revenue type model.

And so if you think about it it's really going forward higher mix higher.

Their margin mix of our revenue.

And in general when you look at the value drivers they are gaining traction, but it's early days I would say we're in the second innings of and really reaching the potential of those so I hope that answers your question Adam.

Avner Applbaum: We have the aftermarket, which is basically spare parts growing, and that's because of the e-commerce, and ease of ordering that we've allowed with the farmers, and that's that higher margin product. We also have our Accent 365 app, which is a recurring, revenue-type model. If you think about it, it's really going for a higher mix, higher margin mix of our revenue. In general, when you look at the value drivers, they are gaining traction, but it's the early days. I'd say we're in the second innings of really reaching the potential of those. I hope that answers your question, Adam.

Sure Adam uh thank you for the question. So if we if we go back the last 2 to 3 years, the margin benefits have been a combination of pricing and costs, you know, pricing, we are the market leader. We do provide evaluated engineering on time delivery and and scale and and customers are are ruling customers value that costs. You know, when avener started you took a number of cost actions and they have job through the bottom line. So that's why you see a, you know, a good Trend in our operating margins going forward. Um from here onward. It really gets back to the the value drivers. You know, our utility expansions, we're very excited about that and every incremental Revenue dollar contributes over well, over 20% of the operating margin but we also have good things going on in the agriculture group, you know, we have the aftermarket, um,

Thank you for that color, it's very helpful.

Maybe maybe we can talk a little bit about the capacity additions in utility.

Which is basically spare parts growing. And that's because of the e-commerce, uh, and ease of ordering that we've allowed with the farmers and that's at higher margin.

It looks like the business might be tracking.

No.

$100 million of additional revenue for every $100 million in capacity.

Uh product. Uh we also have our accents 365 which is a recurring uh Revenue type model.

So could you just talk about it.

If that's true and then maybe just if there's any potential upside to.

Capacity additions in utility.

Yeah, absolutely let me, let me take that question and I'd like to unpack that a little bit and just there's a lot of questions around capacity. So I'd like to give a bit of an overview to answer your question.

And so if you think about it, it's really going forward higher mix higher uh higher margin makes of of our revenue. And in general when you look at the the value drivers, they are gaining tracks but it's the early days, you know, I'd say we're in the the second Innings of a really reaching the potential of those. So I hope that answers your question. Adam.

Adam Farley: Yeah, thank you for that, Connor. It's very helpful. Maybe we can talk a little bit about the capacity additions in utility. It looks like the business might be tracking above the $100 million of additional revenue for every $100 million of capacity. Maybe could you just talk about if that's true, and then if there's any potential upside to the capacity additions in utility.

First of all yes, there is additional opportunity for us to drive.

Yeah, thank you for that call. It's very helpful. Um, you know, maybe if we're talk, maybe we can talk a little bit about the capacity, editions, and and utility,

<unk> growth and overall, while we gave a benchmark of $100 million. We are on track to exceed that number and invest over the next several years to drive increase.

Um, it looks like the business might be tracking, um, above, uh, the 00 million dollars of additional revenue for every hundred million dollars of capacity. Um,

Increased output, but let me just address the capacity for a moment when you look at our capacity I break it out to three layers right. There is the physical capacity, which is our plants are equipment available hours. There is the operational capacity, which is the efficiency of the flow and the supply chain performance.

so I'm going to do just talked about, uh,

if you're if that's true, um and then maybe just if there's any potential upside to the cap capacity missions and utility

Avner Applbaum: Yeah, absolutely. Let me take that question, and I'd like to unpack that a little bit. There's a lot of questions around capacity, so I'd like to give a bit of an overview. To answer your question, first of all, yes, there's additional opportunity for us to drive continuous growth. Overall, while we gave the benchmark of $100 million, we are on track to exceed that number and invest over the next several years to drive increased output. Let me just address the capacity for a moment. You know, when you look at our capacity, I'd break it out to three layers, right? There's the physical capacity, which is our plants, our equipment, available hours. There's the operational capacity, which is the efficiency of the flow and the supply chain performance. Then, of course, there's the commercial capacity. You talk about our ability to quote, engineer, and deliver quickly.

And then of course Theres the commercial capacity. So you talk about our ability to quote engineer and deliver quickly and it is not static it flexes everyday based on product and customer mix and we are operating at a high level of utilization levels, our plants are running efficiently.

But we maintain flexibility to manage mix changes respond quickly to surge in demand. So we never want to be completely full that you lose your agility.

And we continue to add capacity as the demand growth through our brownfield expansions through automation and process improvement.

So we can stay responsive to our customer needs.

Yeah, absolutely. Let me let me take that question, and I'd like to unpack that a little bit and just just, uh, there's a lot of questions around capacity. So I'd like to give a a bit of an overview. Well, to answer your question. Uh, first of all, yes, there's, there's additional opportunity for us to drive, uh, continuous growth and overall, uh, while we gave the Benchmark of a hundred million dollars. Uh, we are on track to exceed that number and invest over the next several years to drive, uh, increase output. But let me just address the capacity for, for a moment. You know, when you look at our capacity, I I bring it out to 3 layers, right? There's the physical capacity which is our plants, our equipments available hours. There's the operational capacity, which is the efficiency of the flow and the supply chain performance.

While we still maintain efficiency.

Avner Applbaum: It's not static. It flexes every day based on product and customer mix. We are operating at a high level of utilization levels. Our plants are running efficiently, but we maintain flexibility to manage mix changes, respond quickly to surge in demand. We never want to be completely full that you lose your agility. We continue to add to capacity as the demand grows through our brownfield utility expansions, through automation, process improvement, so we can stay responsive to our customer needs while we still maintain efficiency. The goal is to protect our delivery performance, but also we have to make sure that we could support our customers if they have storms or emergency or unexpected needs. To stay ahead, we're continuing to invest. We have plans to invest in 2025.

So with goal to protect our delivery performance, but also we have to make sure that we could support our customers that they have storms were emergency or unexpected needs. So.

And then of course there's a commercial capacity. So you talk about our ability to quote engineer and deliver quickly. And it's not static it flexes every day based on product and customer mix.

To stay ahead.

We're continuing to invest we have plans to invest in 2025, we are well on their weight for our investments to drive growth in 2026.

And beyond.

To continue to drive we've shown that there's strong demand in that area of around 9% in transmission and our goal is to keep investing in that space. So to sum it up capacity. It's a system. It's capital it's people it's technology. They all work together, we're running efficiency efficiently, we're scaling intelligently and we're positioning <unk>.

And we are operating at a, at a high level of utilization levels. Our plants are running efficiently, uh, but we maintain flexibility to manage mixed changes respond quickly, to Surge in demand. So we never want to be completely full that you lose your agility. Um and we continue to add to capacity as the demand grows through our Brownfield expansions through automation process Improvement.

So we can stay responsive to our customer needs.

Want to capture the infrastructure growth, while we maintain the agility that our customers depend on.

While we still maintain, uh, efficiency, um, so with go to, uh, protect our delivery performance. But also we have to make sure that we could support our customers if they have storms or emergencies or unexpected needs. So,

That's great color. Thank you for taking my questions.

Avner Applbaum: We're really well on our way for our investment to drive growth in 2026 and beyond, to continue to drive. We've shown that there's strong demand in that area of around 9% in transmission, and our goal is to keep investing in that space. To sum it up, capacity, it's a system. It's capital, it's people, it's technology. They all work together. We're running efficiently. We're scaling intelligently, and we're positioning Valmont Industries to capture the infrastructure growth while we maintain the agility that our customers depend on.

Our next question is from Chris Moore with CJS Securities. Please proceed with your question.

Hey, good morning, guys. Thanks for taking a couple.

Maybe just start on utility, obviously very strong 12, 2% growth.

Called out pricing and volume were they relatively equal contributors to that 12, 3%.

Yes, yes, and the pricing goes back to remember the tariff actions, we took in Q1 part of it.

Adam Farley: That's great, thank you for taking my questions.

But enabled us to be profit neutral from tariffs. This view is on pricing.

That's great, caller. Thank you for taking my questions.

Operator: Our next question is from Chris Moore with CJS Securities. Please proceed with your question.

Yes.

Orders were placed in Q1, there were shipping in Q3, so half of this is pricing and half of it is volume.

Our next question is from Chris Moore with CJs Securities. Please proceed with your question.

Tom Liguori: Hey, good morning, guys. Thanks for taking a couple. Maybe just start on utility. Obviously, very strong, 12.3% growth. Called out pricing and volume. Were they relatively equal contributors to that 12.3%?

Got it.

Okay.

Go ahead I'm sorry.

I was just saying that would continue into Q4.

Okay got it very helpful.

And SG&A was.

$16, 9% something like that.

Hey, good morning guys. Thanks for taking a couple. Uh yeah, may maybe you start on utility obviously very strong 4.3% growth. He called out pricing and volume were they relatively equal contributors to the to that 12.3%.

Tom Liguori: Yes, the pricing goes back to, remember the tariff actions we took in Q1? Part of what enabled us to be profit neutral from tariffs is due to pricing. Those orders were placed in Q1, and they were shipping in Q3. Half of this is pricing and half is volume.

Of our revenue in Q3 is that sub 17% is that a.

Is that a target moving forward or is that or is there.

Uh, yes. Yes, and the, you know, the price in goes back to remember the Tariff actions, we took in q1 part of the, um,

Realistic over.

Over the long term.

That's realistic and that's where we'd like to be I mean, there will be ups and downs in any given quarter, but yes, Chris that is realistic.

but enable those to be profit neutral from terrorists who was on pricing. So, you know, those orders were placed in q1, they were shipping in Q3, so half of this is pricing and half of his volume.

Tom Liguori: Got it.

Tom Liguori: That would continue.

Tom Liguori: Go ahead. I'm sorry.

Perfect.

Got it. And

I'll leave it there I appreciate it.

Tom Liguori: No, I was just saying that would continue into Q4.

Go ahead. I'm sorry.

Tom Liguori: Okay. Got it. Very helpful. For SG&A, it was 16.9%, something like that, of revenue in Q3. Is that sub-17%, is that a target moving forward? Is that a, is that a, you know, realistic, over the long term?

Yeah, I was just saying that would continue into Q4.

Our next question is from Brent Thielman with D. A Davidson. Please proceed.

Hey, great. Thanks, good morning, great quarter.

Just a question on the agriculture business. It looks like the backlog is is lower but I know the project business can be sort of episodic.

Okay, got it, very helpful. Um, and for for sgna was, uh, 16.9%, something like that of of of uh Revenue in Q3, is that sub? 17%? Is that a

Is that a Target moving forward? Is that a? Is that

Are you are you seeing sort of industry fundamentals right now impacting the project business pipeline in other words are those opportunities lighting should we read too much into this backlog just trying to get a sense for that.

You know, realistic, uh, over the long term.

Tom Liguori: That's realistic, and that's where we'd like to be. There will be ups and downs in any given quarter, but yes, Chris, that is realistic.

That's realistic, and that's where we'd like to be. I mean, there will be ups and downs in any given quarter, but yes, Chris, that is realistic.

Tom Liguori: Perfect. I will leave it there. I appreciate it.

Yeah. That's good question.

Perfect. Uh, I will leave it there. I appreciate it.

Operator: Our next question is from Brent Thielman with D.A. Davidson. Please proceed.

When you look at our project business, let me start off with like there is no change in the market environment the market environment continues to support.

Our next question is from Brent Zillman with D.A. Davidson. Please proceed.

Brent Thielman: Hey, great. Thanks. Good morning. Great quarter. I guess just a question on the agriculture business. It looks like the backlog is lower, but I know the project business can be sort of episodic. Are you seeing sort of industry fundamentals right now impacting the project business pipeline? In other words, are those opportunities sliding? Should we read too much into this backlog? Just trying to get a sense for that.

<unk>.

The need for food security really in that region and Thats the demand driver, which is different than what we've seen in like North America and in Brazil, which is more of the crop prices. So the market continues to be strength, our pipeline is strong and actually where we have a pretty good and diverse pipeline right. Now so it's not just middle east if not north of.

Africa, South Africa, it's a more broader pipeline.

Hey, great thanks. Uh, good morning, great quarter. Um, I guess just a, a question on the agriculture business it looks like the backlog is is lower, but I know the project business can be sort of episodic. Um, are you are you seeing sort of Industry fundamentals? Right now, impacting the project business pipeline? In other words, are those opportunities sliding? Should, we read too much into this backlog? Just trying to get a sense for that.

Avner Applbaum: Yeah, it's a good question. You know, when you look at our project business, let me start off with, there's no change in the market environment. The market environment continues to support the need for food security, really, in that region. That's the demand driver, which is different than what we've seen in North America and Brazil, which is more the crop prices. The market continues to be strength. Our pipeline is strong. Actually, we have a pretty good and diverse pipeline right now. It's not just Middle East. It's not North Africa. It's South Africa. It's a more broader pipeline. We're really pleased where it is, where it stands right now. We'll support our 2026 goals. What we always need to keep in mind, there's always project timing. Last year was more back-end loaded. This year was more front-end loaded. These things move overall. We're happy year to date.

We're really pleased where it is where it stands right now will support our 2026th Kohl's, we always need to keep in mind, There's always project timing last year. It was more backend loaded. This year was more front end loaded. So these things move overall, but we're happy year to date, we're up double digits and we're looking forward to another strong year.

Yeah, it's it's a good question. And um, you know, when you look at our uh project business, let me start off with like there. There there's no change in in the market environment but the market environment continues to support um,

And that in that part of the world.

Okay appreciate that avner <unk> I guess.

A lot of good things going on in the infrastructure segment, I guess I'll I'll pick on LNP, just a little bit I mean, when you look at year to year.

Backlog within the overall group and door sort of order trends and lighting transportation is there anything avner to point to which might suggest some stabilization on the horizon or you sort of expecting some softness to continue here.

Well, that's a fair question.

Avner Applbaum: We're up double digits, and we're looking forward to another strong year in that part of the world.

We've seen in the lighting and transportation continued softness in lighting, particularly in Asia Pac.

The need for, uh, food security, really in that region. And that's, that's the, uh, demand driver, which is different than, uh, what we've seen like North American and Brazil, which is more the the crop prices. So the, the market continues to be strength. Our pipeline is is strong. And actually, we have a pretty good and diverse pipeline right now. So, it's not just Middle East, it's not North Africa, it's South Africa. It's, it's a more broader pipeline. Um, we're really pleased where it is where, where it stands right now, will support our 2026 goals. Uh, we'll always need to keep in mind, there's always project timing. Last year was more uh, back and loaded this year, was more front-end loaded, so these things move overall, but you know, we're happy here today, we're we're up double digits and we're looking forward to another strong year, in that, in that in that part of the world.

As well as weaker construction activity.

Brent Thielman: Okay. Appreciate that, Avner. I guess, you know, a lot of good things going on in the infrastructure segment. I'll pick on L&T just a little bit. I mean, when you look at your backlog within the overall group and/or sort of order trends in lighting and transportation, is there anything, Avner, to point to which might suggest some stabilization on the horizon, or are you sort of expecting, you know, some softness to continue here?

North America again also lighting has been a little weak, but transportation continues to.

Steady driven by the need for critical infrastructure.

Okay, appreciate that Abner and I guess um you know a lot of good things going on in the infrastructure segment I guess I'll I'll pick on L&T just a little bit. I mean when you look at your

But the reality is that this business should perform better or we did have some operational issues.

But we've made meaningful progress on reshaping. This business, we have new leadership in place. We are a simpler structure, we have a strong alignment between our commercial and operations team.

Your backlog within the, the overall group Andor sort of order Trends and lighting transportation, is there anything Abner to point to which might suggest some stabilization on the horizon or you sort of expecting? You know, some softness to continue here?

Avner Applbaum: That's a fair question. We've seen continued softness in lighting and transportation, particularly in Asia-Pac, as well as weaker construction activity. In North America, lighting's been a little weak, but transportation continues to be steady, driven by the need for critical infrastructure. The reality is that this business should perform better. We did have some operational issues, but we've made meaningful progress on reshaping this business. We have new leadership in place. We have a simpler structure. We have a strong alignment between our commercial and operations team, and are focusing on our factory performance, delivery, and cost discipline. All of these areas are improving, and we're seeing early traction. Some of these elements are not going to be overnight, so some could take a little bit more time to play out. What matters is the foundation is solid.

And focusing on our factory performance delivery and cost discipline all of these areas are.

Improving and we're seeing early traction.

Some of these elements are they're not going to be overnight.

Some could take a little bit more time to play out but really what matters is the foundation is solid we have clear plans and we're confident in the direction and the momentum we're building.

So overall.

If I sum it up I think Pep transportation's healthy actions, we're taking to strengthen the business are in play and.

These and then we will see growth as these challenge as these changes take place.

Okay, great. Thank you.

Our next question is from Brian Drab with William Blair. Please proceed.

Well, that that's a fair question. Um, you know, we've seen in in the lighting and transportation continued softness and lighting particularly in Asia pack, um as well as weaker construction activity. Uh, in North America again, also lighting's been a little weak, but Transportation, uh, continues to, uh, Be steady uh, driven by, uh, the need for, for critical infrastructure. Uh, but but the reality is that this business should perform better. Uh, we did have some operational issues, um, but we've we've made meaningful progress on reshaping this business. We have new leadership in place. We have a simpler structure. We have a strong alignment between our commercial and operations team. Um, and focusing on our Factory performance delivery and cost discipline. All of these areas are uh improving. And we're seeing early traction, um some of these elements are they they're not going to be overnight.

Hi, Good morning, Thanks for taking my questions I did want to go back to utility just for a minute.

Avner Applbaum: We have clear plans, and we're confident in the direction and the momentum we're building. Overall, if I sum it up, I'd say transportation's healthy. Actions we're taking to strengthen the business are in play, and we will see growth as these challenges take place.

<unk>.

The reason is just that this is.

A topic of a lot of discussion right now for you given.

In part the history over the last.

One of the last booms and demand for utility resulted in too much capacity coming online than you really did a good job of addressing that today, but just wondering if we could talk a little bit more about.

Plans, and we're confident in the direction that and the momentum we're building. Um, so, overall, uh, if I sum it up, I'd say transportation's, healthy. Actions were taking to strengthen the business are in play, and, uh, these and then, we will see growth as these challenge as as these changes. Uh, take place

Brent Thielman: Okay. Great. Thank you.

Why is the expectation and why have you achieved.

Operator: Our next question is from Brian Drab with William Blair. Please proceed.

Tom said well over 20% incremental.

Our next question is from Brian job with William. Blair please proceed

Tom Liguori: Hi. Good morning. Thanks for taking my questions. I did want to go back to utility just for a minute. The reason is just that this is, obviously, a topic of a lot of discussion right now for you, given, in part, the history of what the last, you know, one of the last booms in demand for utility resulted in too much capacity coming online. You really did a good job of addressing that today. I was just wondering if we could talk a little bit more about why is the expectation and why have you achieved, as Tom said, well over 20% incremental operating margin on the utility capacity that's coming online? I maybe I should clarify, too, you are talking about operating margin. In the past, it's been much lower than that.

Margin operating margin on the utility capacity, that's coming online.

And.

Maybe I should clarify to you are talking about operating margin.

<unk>.

In the past it's been much lower than that so can you can you just talk a little bit about what why is the margin that high and in what youre seeing in little more detail across the industry that gives you confidence that people aren't bringing on too much capacity.

Perfect I'll take I'll take that and then Tom can.

Hi, good morning, thanks for taking my questions. I I did want to go back to utility just for a minute and um, you know, the reason is just that this is uh obviously a topic of a lot of discussion right now for you given um in part that you know the history of what what the last uh you know 1 of the last booms in demand for utility resulted in too, much capacity coming online and you really did a good job of addressing that today but I just wonder if we could talk a little bit more about

Share more information around the margins and I'm actually I'm glad you brought that up.

Since I spent already.

Uptime on the capacity, our internal capacity, but it is really important to understand the dynamics around the industry capacity, because we do get that question a lot.

You know, why? Why is the expectation and why, why have you achieved as Tom said? You know, well over 20% incremental, uh, margin operating margin on the utilities capacity that's coming online and

So the simple truth is it's it's a high bar approval driven industry.

Tom Liguori: Can you just talk a little bit about why is the margin that high and what you're seeing in a little more detail across the industry that gives you confidence that people aren't bringing on too much capacity?

It's not about building a plan, it's about decades of engineering Knowhow certified well procedures material science.

Um, I maybe should clarify too. You are talking about operating margin, and you know, in the past it's been much lower than that. So, you know, can you just talk a little bit about why? Why is the margin that high? And, you know, what you're seeing in a little more detail across the industry that gives you confidence that people aren't bringing on too much capacity?

Avner Applbaum: Perfect. I'll take that, and then Tom can share more information around the margins. I'm actually glad you brought that up, since I spent already time on the capacity, our internal capacity. It is really important to understand the dynamics around the industry capacity because we do get that question a lot. The simple truth is it's a high-bar approval-driven industry. It's not about building a plant. It's about decades of engineering know-how, certified weld procedures, material science, and the ability to design and deliver the safety-critical grid structures. Utilities don't add suppliers overnight. Every facility, every product line needs to be qualified and approved before they can supply one transmission or substation project. It takes time. You need proven field performance. You need deep customer relationships that, for us, build through thousands of on-time delivery and problem-solving in the field.

And the ability to design and deliver the safety critical grid structures.

And utility they don't add suppliers overnight every facility every product line need to be qualified and approved before they can supply one transmission or substation project.

It takes time.

And you've proven field performance and a deep customer relationship that build through fronts build through thousands of on time delivery and problem solving in the field.

Perfect. I I'll, I'll take, I'll take that. And then Tom can, uh, share more information around the, the margins and, and actually, I'm glad you brought that up. Um, since I, I spent already, uh, a Time on the capacity, our internal capacity but it is really important to understand the Dynamics around the industry capacity because we do get that question a lot. Uh, so the simple truth is it's it's a high bar approval driven industry.

And it's also an industry, where there is only a few players that have the financial strength <unk>.

It's not about building a plan, you know. It's about decades of engineering know-how.

Fly chain depth technical engineering capabilities to really meaningfully add capacity.

Certified. Well, procedures Material Science.

uh and the ability to design and deliver, you know, the safety critical grid structures

There are long lead high investment programs, you need capital to build you need people to execute.

And you need the customer trust.

And we're one of those few players and we are actually the leader in this space.

Um, and utilities they don't add suppliers overnight every facility, every product line need to be qualified and approved before they can supply 1 transmission or or substation project.

And as I, just mentioned right, we have our healthy utilization of capacity.

At this time so overall.

I'd say the barriers to entry here are real engineering capital manufacturing supply chain.

Um, it takes time. Um, you need to be proven in field performance. You need deep customer relationships that build through, for us, build through thousands of on-time deliveries and problem solving in the field.

Avner Applbaum: It's also an industry where there's only a few players that have the financial strength, supply chain depth, and technical engineering capabilities to really meaningfully add capacity. There are long-lead, high-investment programs. You need capital to build. You need people to execute. You need the customer trust. We're one of those few players, and we're actually the leader in this space. As I just mentioned, we have our healthy utilization of capacity at this time. Overall, I'd say that the barriers to entry here are real: engineering, capital, manufacturing, supply chain, and trust. We manage and we monitor the industry capacity very closely. We can see it's balanced today. Even if at some point the industry adds a little bit too much, demand will catch up quickly. Overall, we feel good about where we are.

Um, and it's also an industry where there's only a few players that have the financial strength.

And trust.

We manage and we monitor that the industry capacity very closely.

And we could see it's balanced today and even if at some point the industry adds a little bit too much demand will catch up quickly.

Supply chain depth, technical engineering capabilities to really meaningfully add capacity. They're long lead, high investment programs. You need capital to build; you need people to execute.

and you need the customer Trust.

So overall, we feel good of where we are we good on where the industry is right now.

And Morris in a strong position to maintain our leadership in this space. So that's how we kind of we look at the industry capacity and pumpkin.

I'll just share a little bit about the margin.

Sure Brian on the margin is very healthy margins from capacity expansion, we have good pricing for the region.

That Avenue, just said our engineering capability, our on time delivery our scale, but also keep in mind. These expansion projects are brownfield. So we're taking our existing plants and we're adding welding stations break presses and other capital equipment. So we're getting more throughput from existing plants. So we get the burner.

Avner Applbaum: We're good on where the industry is right now, and we're in a strong position to maintain our leadership in this space. That's how we look at the industry capacity. Tom can just share a little bit about the margins.

<unk>.

Basically better fixed cost absorption, so both pricing and for.

Um, and we're 1 of those few players, and we're actually the leader in this space. Um, and as I just mentioned, right, we have, we have, uh, our our healthy utilization, uh, of capacity but that this time time. So overall, um, I'd say the, the barriers to entry here are real, um, engineering Capitol, manufacturing supply chain. Um, and trust and you know, we we manage and we monitor that uh the industry capacity very closely. Um, and we could see its balance today, and even if at some point, you know, the industry adds a little bit too much demand will catch up quickly. Um, so overall, we we, we feel good of where we are. We we good on where the industry is right now, um, and we're in a strong position to maintain our leadership in this space. So that's how we kind of we look at.

Such a brownfield is why we get over 20% operating margin.

Tom Liguori: Sure. Brian, on the margins, very healthy margins from capacity expansion. We have good pricing for the reason that Avner just said, our engineering capability, our on-time delivery, our scale. Also, keep in mind, these expansion projects, they're brownfield. We're taking our existing plants, and we're adding welding stations, brake presses, and other capital equipment. We're getting more throughput from existing plants. We get the benefit of basically better fixed cost absorption. Both pricing and because they're brownfield is why we get over a 20% operating margin.

The industry capacity in time can, uh, just share a little bit about the margins.

Okay. Thank you and then for my follow up can you just.

Put a little bit of a finer point on what is driving current demand in utility across the different.

Sure. Um, Brian, on the margins—very healthy margins. Um, from capacity to expansion, we have good pricing for the reason.

Product lines in terms of maybe <unk>.

That avenue just said our engineering capability, our on-time delivery, our scale, but also keep in mind these expansions.

Large transmission structures.

Substations.

The other categories and.

Are you starting to see demand specifically related to the AI.

AI data center boom and tying those.

To the grid.

Yes, I think so we're seeing strong demand across the board Brian.

Projects their Brownfield. So we're taking our existing plants and we're adding welding, stations brake presses and other Capital Equipment. So again, more throughput from existing plants, so we get the benefit of, you know, basically better fixed costs absorption. So both pricing and for Professor Brownfield is why we get over 20% operating margin

Brian Drab: Okay. Thank you. For my follow-up, can you just put a little bit of a finer point on what is driving current demand in utility across the different product lines in terms of maybe large transmission structures, substations, and other categories? Are you starting to see demand specifically related to the AI data center boom and tying those to the grid?

First of all in all product lines transmission distribution substation large projects smaller projects.

All of these all of these mega trends are real.

Okay, thank you. And then uh for my follow-up can, can you just um, put a little bit of a finer point on what is driving current demand and utility across the different

About.

The electrification.

Grid connectivity resiliency.

Everything that we've been we've been talking about that the load growth that we haven't seen in a.

While and of course, AI and data centers are a key driver as well we know there are large.

Product lines in terms of maybe, you know, large transmission structures uh substations, you know, and other categories. And and uh, you know is is, are you start starting to see demand, you know, specifically related to the, you know, AI data center, boom, and tying those, um, to the grid

Consumer of.

Avner Applbaum: Yeah, thanks. We're seeing strong demand across the board, right? First of all, in all product lines—transmission, distribution, substations, large projects, smaller projects—all these megatrends are real. If you're talking about the electrification, AI, grid connectivity, resiliency, everything we've been talking about, the load growth that we haven't seen in a while, and of course, AI and data centers are a key driver as well. We know they're a large consumer of energy. We don't see slowness in any area. All of our customers are showing extremely strong demand. Our backlog is well into 2026. The good thing right now, it's not one single driver, and it's not one single customer, right? It's very broad, and all indications are that this will continue for a while on all the transmission, and then we'll add another leg to that when they're ready to focus more on hardening and reliability.

The energy so we don't see slowness in any area all of our customers are.

Showing extremely strong demand, where our backlog is willing to.

2026, and and the good thing right now it's not one single driver and it's not one single customer right, it's very broad.

And all indications are that this will continue for a while on all of the transmission and then you'll add another leg to that when theyre ready to focus more on hardening and reliability.

So overall to sum it up I mean, we are very excited around where the utility space is today with the strong drivers in our ability to execute based on our relationship with our customers our engineering manufacturing.

Yeah, thanks. So, we're, we're seeing strong demand across the board, right? Uh, and first of all, in all product, lines, transmission distribution substations, large projects, smaller projects, uh, all these all, these Mega Trends are real. You know, if you thought looking about, uh, the electrification, uh, AI, um, grid connectivity, resiliency, uh, you know, everything that we've been, we've been talking about the load growth that we, we haven't seen, uh, in a while. Um, and of course, Ai and and data centers are a key driver as well. We know, they're, they're a large, uh, consumer of, uh, of energy. So we we don't see slowness in, in any area, all of our customers are are, uh, showing extremely strong, uh, demand where our backlog is well into, um, 2026 and and the, the good thing, right?

That makes us a key partner to our customers. So overall feel very positive.

Great. Thanks, Thanks very much.

As a reminder, this star one on your telephone keypad, if he would like to ask a question.

Our next question is from Tomo Cassano with J P. Morgan. Please proceed.

Avner Applbaum: Overall, to sum it up, we are very excited around where the utility space is today with the strong drivers and our ability to execute, based on our relationship with our customers, our engineering, manufacturing, that makes us a key partner to our customers. Overall, feel very positive.

Good morning, everyone.

Good morning, good morning.

Thank you for taking my questions. My first question is utilities segment pricing.

You mentioned visa and favorable pricing in the utility segment Pan but could you provide more color on the outlook pricing trends, especially you talked about the three types of capacity expansions and and competitor is also expanding capacity going forward.

Right now it's not 1 single driver um and it's not 1 single uh, customer, right? It's, it's very broad. Um, and all indications are that this this will continue to for a while and all the transmission and then we'll add another legs to that when they're ready to focus, more on on hardening and reliability. And, um, so overall to to sum it up, I mean, uh, we are very excited about where the utility space is today with, with the strong, uh, drivers and our ability to execute, uh, based on our, um, relationship with our customers, our engineering manufacturing, um, that that makes us a key partner to our customers. So overall, uh, feel very positive.

Tom Liguori: Great, thanks. Thanks very much.

Great thanks. Thanks very much.

Hi.

Operator: As a reminder, just star one on your telephone keypad if you would like to ask a question. Our next question is from Tomohiko Osano with JP Morgan. Please proceed.

How do we think about the stepping up for that pricing trends for 2020 shakes are beyond could you.

Could we get more color on this place.

Yeah.

Tomohiko Osano: Good morning, everyone.

As a reminder to Star 1 on your telephone keypad, if you would like to ask a question. Our next question is from tommo Hico Sano with JP Morgan please proceed.

Yes, so the pricing the pricing in this quarter.

Avner Applbaum: Morning.

Good morning, the 1.

[Company Representative]: Morning.

Tomohiko Osano: Thank you for taking my questions. My first question is utility segment pricing. You mentioned recent favorable pricing in the utility segment, but could you provide more color on the outlook pricing trends, especially you talked about the three types of capacity expansions and competitors also expanding capacity going forward? How do we think about the stepping up for the pricing trends for 2026 or beyond? Could we get more color on this, please?

Morning. Morning morning.

Most of this because in the beginning of the year with our tariff mitigation plans and as both supply chain changes, but we pass it on pricing and there is a delay from when you bid and where these products shifts that we're seeing part of that.

Going forward.

That will continue.

Our head of utility often talks about the bid market the bid market is very strong.

Uh, thank you for taking my questions. Uh, my first question is, uh, utilities segment pricing, uh, you mentioned recent favorable pricing in the utility segment and but could you provide more color on the Outlook pricing Trends. Especially you talk about the 3 types of capacity expansions and and competitors also expanding capacity going forward. Um how uh like would we think about the

Demand.

<unk> remains tight.

We are quoting very healthy margins and winning projects. So.

Being up for the pricing trends for 2026 or Beyond. Uh could you uh could we get more color on this please?

Tom Liguori: Sure. The pricing in this quarter, most of it is because in the beginning of the year, with our tariff mitigation plans, it was both supply chain changes, but we passed it on in pricing. There's a delay from when you bid and when these products ship. We're seeing part of that. Going forward, that will continue. Our Head of Utility often talks about the bid market. The bid market is very strong. The demand supply remains tight. We are quoting very healthy margins and winning projects. I think pricing outlook remains strong for at least the foreseeable future, if not for some time.

I think pricing outlook remains strong for <unk>.

Sure. So, the pricing. Hi, Tommo, the pricing in this quarter.

At least the foreseeable future if not for some time.

Thank you Tom and my follow up question's on agricultural margins. Some regarding the decline in agriculture margin you mention it was due to lower sales and bad debt expense of $11 million do you expect these levels of bad debt expense to continue in the fourth quarter.

Most of it's because in the beginning of the year, um, with our tariff mitigation plans, you know, it was both supply chain changes, but we passed it on in pricing, and there's a delay from when you bid and when these products shipped. So, we're seeing um part of that going forward.

You know, that will continue.

And beyond.

Yes, so that's a really good question I'm glad you asked that so we worked with the Brazil team. This this quarter about exposures and we did we thought it was prudent to.

You know, our Head of Utility often talks about the bid market. The bid market is very strong; the demand-supply remains tight.

To book, the $11 million of receivable reserves, but we are still attempting to make those collections.

We are quoting, um, you know, very healthy margins and winning projects. So, uh, you know, I think pricing Outlook remains strong for for at least the foreseeable future, if not for some time,

Tomohiko Osano: Thank you, Tom. My follow-up question is on agriculture margins. Regarding the decline in agriculture margins, you mentioned it was due to lower sales and bad debt expense of $11 million. Do you expect these levels of bad debt expense to continue in the fourth quarter and beyond?

If we take that out.

The operating margins for AG or about 14.

Percent. So there are a few remaining issues that we're working to bring to resolution in the fourth quarter and that is reflected in our guidance and our whole intent here.

As to get to use exposures behind us financially and put in processes. So that they don't repeat and we feel very good about that so I think when you look at AG operating margins.

Thank you, Tom and my follow-up questions on agriculture margins. So regarding the decline, in agriculture margin you mentioned, it was due to lower sales and but that expense of 11 million, do you expect this levels of that expense to continue in the full quarter and Beyond?

Tom Liguori: Yeah, that's a really good question. I'm glad you asked that. We worked with the Brazil team this quarter about exposures. We thought it was prudent to book the $11 million of receivable reserves, but we are still attempting to make those collections. If we take that out, the operating margins for ag are about 14%. There are a few remaining issues that we're working to bring to resolution in the fourth quarter, and that is reflected in our guidance. Our whole intent here is to get these exposures behind us financially and put in processes so that they don't repeat. We feel very good about that. I think when you look at ag operating margins, Q4 could be another challenging quarter. When we get into Q1, we believe we'll have these issues behind us. Even with the current revenues, we had flat revenues in Q1.

Q4 could be another challenging quarter, but when we get into Q1. We believe we will have these issues behind us and even with the.

The current revenues, we had flat revenues in Q1, you would see a double digit operating margin and Thats, what we would expect.

Going forward.

Thanks, that's all I have and congrats on quarter.

Thank you Tom.

We have reached the end of our question and answer session I will now turn the call over to Renee Campbell for closing remarks.

Thank you for joining us today, a replay of this call will be available for playback on our website and by phone for the next seven days.

We look forward to speaking with you again next quarter.

These slides and the accompanying oral discussion contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.

Tom Liguori: You would see a double-digit operating margin, and that's what we would expect going forward.

These statements are based on assumptions made by management considering its experience in the industries, where valmont operates perceptions of historical trends current conditions expected future developments and other relevant factors. It is important to note that these statements are not guarantees of future performance or results.

Is to get these exposures behind us, financially and put in processes so that, you know, they don't repeat and we feel very good about that. So I think when you look at a operating margins, you know, Q4 could be another challenging quarter. But when we get into q1, uh, we believe we'll have these issues behind us and even with the the current revenues, we had flat revenues in q1. You would see a double digit operating margin and that's what we would expect. Uh, going forward.

Tomohiko Osano: Thanks. That's all I have. Congrats on the quarter.

Tom Liguori: Thank you, Tom.

I think that's all I have, and congrats on the quarter.

Avner Applbaum: Thank you.

Thank you, Tom.

Operator: We have reached the end of our question and answer session. I will now turn the call over to Renee Campbell for closing remarks.

We have reached the end of our question and answer session. I will now turn the call over to Renee Campbell for closing remarks.

Renee Campbell: Thank you for joining us today. A replay of this call will be available for playback on our website and by phone for the next seven days. We look forward to speaking with you again next quarter.

They involve risks uncertainties, some of which are beyond <unk> control and assumptions.

Management believes these forward looking statements are based on reasonable assumptions numerous factors could cause actual results to differ materially from those anticipated. These factors include among other things risks described in <unk> reports to the Securities and Exchange Commission SEC. The Companys actual cash flows and net income.

Thank you for joining us today. A replay of this call will be available for playback on our website and buy phone for the next 7 days. We look forward to speaking with you again, next quarter.

[Company Representative]: These slides and the accompanying oral discussion contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions made by management considering its experience in the industries where Valmont Industries operates, perceptions of historical trends, current conditions, expected future developments, and other relevant factors. It is important to note that these statements are not guarantees of future performance or results. They involve risks, uncertainties, some of which are beyond Valmont Industries' control, and assumptions. While management believes these forward-looking statements are based on reasonable assumptions, numerous factors could cause actual results to differ materially from those anticipated.

These slides and the accompanying oral discussion contained forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Economic and market circumstances industry conditions company performance and financial results operational efficiencies availability and price of raw materials availability and market acceptance of new products product pricing domestic and international competitive environments geopolitical risks and actions and Paul.

These statements are based on assumptions made by management, considering its experience in the industry, where development operates, perceptions of historical trends, current conditions, expected future developments, and other relevant factors. It is important to note that these statements are not guarantees of future performance or results.

the involve risks uncertainties, some of which are beyond valmont's, control, and assumptions,

It changes by domestic and foreign governments, including parents the company cautions that any forward looking statements. In this release are made as of its publication date and does not undertake to update these statements except as required by law.

[Company Representative]: These factors include, among other things, risks described in Valmont Industries' reports to the Securities and Exchange Commission, SEC, the company's actual cash flows and net income, future economic and market circumstances, industry conditions, company performance and financial results, operational efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, geopolitical risks, and actions and policy changes by domestic and foreign governments, including tariffs. The company cautions that any forward-looking statements in this release are made as of its publication date and does not undertake to update these statements except as required by law. The company's guidance includes certain non-GAAP financial measures, adjusted diluted EPS, and adjusted effective tax rate presented on a forward-looking basis.

The company's guidance includes certain non-GAAP financial measures adjusted diluted earnings per share and adjusted effective tax rate presented on a forward looking basis. These measures are typically calculated by excluding the impact of items, such as foreign exchange acquisitions divestitures realignment or restructuring expenses goodwill or.

Intangible asset impairment changes in tax laws or rates change in redemption value of redeemable noncontrolling interests and other nonrecurring items reconciliation.

While management believes these forward-looking statements are based on reasonable assumptions. Numerous factors could cause actual results to differ materially from those anticipated. These factors include among other things. Risks described in valmont's, reports to the Security and Exchange Commission SEC. The company's actual cash flows and net income future economic and market. Circumstances industry conditions, company performance and financial results. Operational efficiencies availability and price of raw materials, availability and Market acceptance of new products. Product pricing domestic and international competitive environments, geopolitical, risks and actions and policy changes by domestic and foreign governments including tariffs.

Reconciliations to the most directly comparable GAAP financial measures are not provided as the company cannot do so without unreasonable effort due to the inherent uncertainty and difficulty in predicting the timing and financial impact of such items for the same reasons. The company cannot assess the likely significance of unavailable information, which could be material to future.

The company, cautions that any forward-looking statements in, this release are made as of its publication date, and does not undertake to update these statements except as required by law.

[Company Representative]: These measures are typically calculated by excluding the impact of items such as foreign exchange, acquisitions, divestitures, realignment or restructuring expenses, goodwill or intangible asset impairment, changes in tax laws or rates, change in redemption value of redeemable non-controlling interests, and other non-recurring items. Reconciliations to the most directly comparable GAAP financial measures are not provided, as the company cannot do so without unreasonable effort due to the inherent uncertainty and difficulty in predicting the timing and financial impact of such items. For the same reasons, the company cannot assess the likely significance of unavailable information, which could be material to future results.

Oh.

This concludes today's conference you may disconnect your lines at this time and thank you for your participation.

The company's guidance includes certain non-GAAP financial measures: adjusted diluted earnings per share and adjusted effective tax rate presented on a forward-looking basis. These measures are typically calculated by excluding the impact of items such as foreign exchange, acquisitions, divestitures, realignment or restructuring expenses, goodwill or intangible asset impairment, changes in tax laws or rates, changes in the redemption value of redeemable non-controlling interests, and other non-recurring items.

Reconciliations to the most directly comparable GAAP financial measures are not provided, as the company cannot do so without unreasonable effort. Due to the inherent uncertainty and difficulty in predicting the timing and financial impact of such items, the company cannot assess the likely significance of unavailable information, which could be material to future results.

Operator: This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.