Valmont Industries (VMI) Sees FY11 Earnings Topping Guidance

Valmont Industries, Inc. (NYSE: VMI) announced today that it has reorganized the legal entity structure of its Delta businesses acquired in May 2010. Under the new structure, Delta's U.S. entities will be consolidated into other Valmont U.S. entities. Delta's Asia Pacific entities will be organized directly under Valmont's Australian entities. The new simplified structure will result in certain operational benefits and enables Valmont to utilize certain tax-losses arising from the historic Delta businesses.

In the fourth quarter, the company will also record the following one-time items:

• During the fourth quarter, the Company will record an after-tax gain of $2.5 million related to an insurance settlement for fire and storm damages sustained to a galvanizing facility in Australia. This settlement will increase fourth quarter earnings per share by approximately $0.09.
  
• During the fourth quarter, the Company evaluated the future use of certain trade names. As a result the Company will reduce the carrying value of these trade names by $2.4 million after-tax, which will negatively impact earnings by $0.09 per share in the fourth quarter.
  
• During the quarter, the Company reorganized its pole operations in Europe and took action on reducing SG&A costs. As a result, one-time charges of $1.0 million after-tax will negatively impact earnings by approximately $0.04 per share in the fourth quarter.

The impact to fourth quarter earnings per-share, of all of these items is approximately a positive $2.66, assuming diluted shares outstanding of 26.6 million.

In October, when the Company last issued guidance, concerns about the spread of economic weakness in Europe to global economies, and continued margin pressure in certain businesses, led to an outlook for Valmont's 2011 earnings per share to be in the mid-to-low end of a $5.70-5.90 range. Subsequent to that time, the Company has experienced better than expected activity in the Irrigation, Utility Support Structures and Coatings Segments. As a result, the Company now believes that 2011 earnings per-share will modestly exceed the high end of that $5.70-$5.90 range, excluding the $2.66 per share one-time fourth quarter adjustments noted above. The Street is forecasting EPS of $5.81 for FY11 and $6.81 for FY12.

The Company will announce its fourth quarter 2011 earnings on February 14, 2012.

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