Valmont Industries Inc (VMI) 2011 Q1 法說會逐字稿

Good morning. My name is Alicia and I will be your conference Operator today. At this time, I would like to welcome everyone to the Valmont Industries first quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. (Operator Instructions) Thank you.

Mr. Jeff Laudin, Manager of Investor Relations, you may begin your conference.

Thank you, Alicia, and welcome to the Valmont Industries first quarter 2011 earnings conference call. With me today are Mogens Bay, Chairman and Chief Executive Officer, and Terry McClain, Senior Vice President and Chief Financial Officer, and Mark Jaksich, Vice President and Corporate Controller.

Before we begin, please note, this discussion is subject to our disclosure on forward-looking statements which applies to today's talk and will be read in full at the end of the call. The instructions for accessing a replay of this call can be found in our press release.

I would now like to turn the floor over to our Chairman and Chief Executive Officer, Mogens Bay.

Thank you, Jeff, and good morning, everybody and thank you for joining us. And I trust that you have all read the press release so I'll focus on some of the highlights. The main drivers of first quarter results were substantial improvement in the irrigation segment sales and profitability, the contribution of the Delta acquisition, and the positive impact of higher volumes in the coatings segment. In the utility support structures and engineered infrastructure product segments, performance was mixed. Sales improved but operating income was lower, pressured by rising costs and weak pricing.

When we lost spoke with you in mid February we told you we were dealing with a number of short-term issues in the first quarter which would put pressure on earnings. Severe winter weather in North America and Europe affected shipments in those regions. And widespread flooding in Queensland, Australia temporarily disrupted the economy there and would affect our Delta businesses. We were also hit with rapidly increasing steel prices leading to margin pressure as we shipped out our backlog.

The greatest challenge of the quarter was struggling to recover these sharply higher steel costs. Too much capacity chasing too little business, especially in our lighting and traffic businesses, inevitably led to a very challenging pricing environment. The irrigation segment continued the positive trends established last fall. Tight global grain supplies have led to higher crop prices and farm income. This has increased the optimism of our farm customers, further boosted by the prospects of record farm income in 2011. Farmers around the world are accelerating their investments in productivity improvements. They recognize that irrigation equipment will increase yields and conserve limited water resources. As our equipment insures moisture at the right time and in the right quantity, farmers can with confidence invest in the best seeds, fertilizers and other inputs.

In the utility support structure segment, North America volumes were up substantially. Higher steel costs offset the positive impact of volumes on operating income. As steel costs increased rapidly, they were not fully protected in our backlog. International sales were lower than last year due to less project business in some emerging markets. Last fall when the economy started to improve, we believe our utility customers resumed projects that had been deferred. This has lead to an increase in bid and proposal activity which should lead to better capacity utilization in the industry and, therefore, hopefully opportunities to improve margins.

In the engineered infrastructure product segment, the inclusion of the Delta businesses was the main reason for higher revenues. The Delta businesses in Australia -- pole structures, highway safety products and access systems -- performed well below plan early in the quarter mainly because of business interruptions as a result of the extensive flooding. By March though, these businesses were performing at planned levels.

Other major geographic regions in this segment faced different challenges in the market. In North America, the lack of a multi-year highway bill and state and local budget pressures continue to dampen sales. In Europe, there were some pockets of increased demand from stimulus spending, but for the most part European economies are still struggling to recover. In China, telecom was stronger as bidding for projects started earlier in the year. In summary, generally weak demand and competitive pricing combined with cost inflation negatively impacted operating income in this segment.

Our North American coatings business benefited from improved demand. And the international results were affected by the flooding in Australia early in the quarter which disrupted activity for our customers.

Turning to other financial measures, movement in the balance sheet mostly reflect the addition of the Delta accounts, inventory increase compared to last year due to increased activity levels in irrigation and the impact of Delta. Depreciation and amortization for the quarter was $17.2 million. And capital expenditures were $12.6 million. At the current time, we are expecting 2011 capital spending of around $60 million to $70 million which includes our new pole plant in India. Inflation in our costs led to a $7 million increase in LIFO expense in those operations that report inventory on a LIFO basis. This is the equivalent of about $0.17 a share.

Looking toward the rest of the year, the main drivers of results were the anticipated improved utility demand and our expectation for continued positive comparison in the irrigation business. For the utility support structure segment, we are encouraged that demand will strengthen, capacity has tightened, and the competitive environment may improve in the second half of this year. This could set the stage for a stronger year in 2012. In the irrigation business, the global environment for investing in agriculture remains very strong, presenting us with good opportunities to continue to grow our businesses. Our international growth strategy, regional manufacturing, and expanding geographic markets has helped us establish a broad footprint around the world. The outlook for the coatings segment is for continued solid activity levels.

In our engineered infrastructure product segment, we expect significant improvement already in the second quarter and for the remainder of the year. We do not, however, expect this segment to deliver a double digit operating income percent without renewed government spending around the world. A new highway bill in this country would be very helpful but I'm not holding out much hope short-term. So we have to continue to focus on what we can do which is improve productivity and take out costs. For the consolidated enterprise, we now expect earnings per share to improve at the high end of the range of our previous guidance or an improvement of about 45% compared to 2010. Because of our diversification, we currently benefit from the positive conditions in our irrigation, utility and coatings businesses, and good exposure to the Asian and Australian economies to overcome the near term challenges of inflation, competitive pricing and reduced government spending for infrastructure.

And that concludes my prepared remarks and we will now be ready to take your questions.

Alicia, we'll take the question and answer queue now.

(Operator Instructions) Chase Becker, Credit Suisse.

I was wondering if you could possibly quantify the non-recurring expenses that you mentioned in the EIP segment, please?

I'll turn that over to Mark Jaksich.

Yes, Chase. The non-recurring expenses were roughly $1 million. A majority of that were some employee termination costs that were incurred in Europe in the structures business.

Okay, thank you. Shifting gears, I'm wondering if you could just provide a little bit more color on the utilities business. It sounds like you're incrementally more positive on the order book and was wondering if you could potentially speak to the book-to-bill you're seeing in the quarter, as well as are you still expecting that you see some pricing improvement in the back half of the year? Thank you.

Last time, we spoke in mid February, I talked about the fact that we don't put orders that we know we are going to get in our backlog until we have release dates and we know exactly when they are going to ship. And I think I mentioned that at the time we had about $100 million worth of orders that were not yet in the backlog. And since then, that number has probably doubled. So we are seeing more activity in this business. I would not say that we have seen a lot of improvement in the pricing area but I don't think we can expect that until capacities have been more committed in the industry. And it's tough to know exactly when that's going to happen. But we are mostly encouraged by the increased activity levels.

In the past I've said that in a good year in the utility business, not an exceptional year but in a good year, we should expect operating income in the mid teens. And as you've seen over the last 4 or 5 quarters, that business has managed to deliver low double digit operating income even in a very tough environment. So I would expect, as the business continues to improve, that we'll see the operating income percentage to improve, as well. Now, I want to point out that since 2009 isn't that long ago, that we all remember the profitability levels in the utility business at that time. I do not expect us to revert to that, even in a strong year. That was a perfect storm where you had a lot of demand, limited capacity, and you had the situation where a lot of the fixed price projects were earned in late 2008 when steel prices were peaking and delivered in 2009 when steel prices had dropped significantly. So I'm not saying that couldn't happen again but that part of the picture we certainly can't count on.

Arnie Ursaner, CJS Securities.

I want to focus on the EIS portion again. Roughly it's about a third of the revenues of the Company and ex-ing Delta operated at a loss in North America of almost $118 million of sales. You gave us the non-recurring expenses in Europe of $1 million. You quantified the LIFO expense. If we adjust those back, would the adjusted margin be closer to 4.6%? Is that the right way to think of it?

First of all, the LIFO number I gave you was not all in the engineered infrastructure products so I'm not sure you can say that. But I did mention in my prepared remarks that we expect a significant improvement in the profitability level. In other words, in the quality of the earnings in that segment already in the second quarter. Not only did we have the one-time issues, I hope, that we talked about in the first quarter, but also the first quarter is usually a very weak quarter in this business because of the kind of products we produce.

You mentioned you don't expect double digit. Are you expecting high single digit? Are we likely to recover to that type of level?

I would hope we would get to high single digit, yes.

My final question is we've seen very rapid increases in steel costs. And you've always said that you can deal with rising steel prices as long as it's in an orderly manner. But yet this was about as unprecedented as it gets. And you've highlighted multiple times in your prepared remarks and on the call that you're seeing competitive pressures. How are you thinking about margins in your various businesses as you are trying to recover these steel costs on a go forward basis?

You're right. I always say that I really don't care where steel prices are, as long as they get there in an orderly fashion. And not only this time was it very disruptive but that happened also a couple years ago, and 4 and 5 years ago. So maybe it's how the industry works these days. But it usually takes us a time to get the price increases put in place. Now, last time it happened, a couple of years ago, the markets were much stronger than they are today which makes it easier to do it, and we tried to get up front. This time around it has been very difficult because even though you have increased input cost and you deserve to get better pricing in the marketplace, if the market isn't there and the capacity is there, and people are chasing a small sized market, it just becomes very difficult to get the price increases. So I think this time around, it's going to take a while longer.

Ned Borland, Hudson Securities.

Just comment, if you could, on irrigation, any differences between the domestic market and the international market?

I would say that the general positive environment is universal around the world, and I wouldn't single out one region over another. Now, the largest market we have is the North American market still, so therefore, we get the most benefits there. But I would say mostly commodity prices are global and we continue to have very good opportunities around the world.

Okay. So you had similar growth in both international and domestic?

I don't have the exact number but I would say probably approximately. The problem internationally is -- or not the problem but the characteristics of international businesses is that often there are some larger projects that can swing from quarter to quarter. But the environment is the same around the world as we see in North America.

Okay. And then as a follow-up, I notice that the level of sales of irrigation surpassed even the first quarter of 2008 which was a banner year in irrigation. If you can maybe compare and contrast your capacity now versus then?

I would say that this time around, we were able to respond faster to an increased demand. That happened fairly rapidly, both in 2008 and this time around. So I think we are better prepared and we will work more efficiently in the environment we have today. And yes, that's the situation.

Brent Thielman, DA Davidson.

A question on the coatings business. It looks like there's a pretty big difference between VMI's core coatings business and what Delta did for the quarter. Do you think going forward Delta's coatings business can get up to the level that VMI is operating at?

It's a good question, and it's not really a question between our traditional businesses and Delta's businesses. It has a lot to go with the geography they're in and what the local pricing conditions are. We have enjoyed good pricing in the areas where our legacy facilities are. The Southeast US market, where the Delta businesses in North America are residing, may be a little more competitive than in some of our other markets. And the Asia Pacific galvanizers are operating under totally different pricing conditions. But all of them should have solid double digit operating income. And, of course, it's our hope that over time as we share more and more best practices that we may be able to improve profitability in these businesses in a relative sense.

Okay, and then it was my understanding that looking at corporate spending for the quarter, I thought that was going to come in a little bit more. Any commentary around that and what we should expect going forward?

Yes, this is Mark Jaksich. For the quarter, there was a couple of things going on, if you compare it to last year. Last year, we had about $2.2 million of Delta related acquisition costs that largely did not re-occur this year. We still have a few expenses going on but not nearly to that level. Plus the impact of the Delta businesses, as well, which includes their administration in the Asia Pacific region, and some ongoing costs at the London office which was in operation for a majority of the quarter, and the pension plan which is continuing on. So all of those things together more or less compile all of that. But I say, to some extent, other than that, the big difference, there wasn't any particular change with what we expected other than maybe incentives.

Okay, so as a follow-up is this the run rate you'd expect for the rest of the year?

Yes, it would be, to some degree. It might diminish a little bit as some of the London related expenses go away, but there still will be some ongoing administration just to manage what's left over there.

Jeff Beach, Stifel Nicolaus.

A couple of questions on the Delta results for the quarter and the outlook. Can you quantify in some fashion the impact of the flooding on Delta in the first quarter? It sounds like it was meaningful. And then can you talk about plans that you have to expand Delta business in Australia and Southeast Asia? And maybe specific plans to improve margins of businesses. And then I see that you still have the manganese operations. I think you've been hopeful you could sell those, and you still have them but can you just talk just generally about Delta?

Yes. As I mentioned in my prepared remarks, the first couple of months were difficult in the biggest market of the Delta businesses which is Australia. But we were very encouraged that already by the month of March they were operating on planned levels. And they have traditionally operated at good double digit operating income in those businesses. They get affected a little bit by purchase accounting, which I think is running about $7 million a year, or $8 million a year. But if you ignore that, then they continue to operate at the levels of profitability we expected.

At the time of the Delta acquisition, we mentioned that we like the fact that they are in the fast growing economies in Southeast Asia. And the resource-rich driven economy of Australia. We have beefed up local management in the Asia Pacific region. We've added a President for Asia Pacific that will office in Sydney, Australia. He started in early January, and he and his team are getting their arms around the growth opportunities in that particular region. And we continue to expect good level of organic growth in those businesses. Now, we also mentioned at the time that we got into two businesses we had not been in before. One was highway safety products where Delta has a good footprint in Australia. And the access systems under the brand name Webforge where Delta had a good footprint both in Southeast Asia and in Australia. Those two platforms we are now spending time looking at the global marketplace for those product lines and see where we can find opportunities to grow. That will probably take more time.

You mentioned the manganese business in South Africa. This was a business that was already in the process of being divested of at the time we acquired Delta. I told you on several occasions that we did not put a value as we valued the overall Delta group on the manganese business. Now, for accounting purposes, when we acquired Delta, we had to put some value on it in South Africa. But those businesses are, at the current time, operating at about a breakeven level because of the strength of the South African land. They're selling in dollars, they're producing in lands, and that is compression on margins and, therefore, the timing of selling our 56% ownership in that business may not be the very best right now. So we are looking for the best time to exit that business but it's not a business that has a big impact on our overall profitability.

Brian Drab, William Blair.

I think most of my questions have been answered. But specifically on the Delta business and the Don Head business in the mining industry, can you talk a little bit about, first of all, how material is that business within the overall Delta operation in terms of size and specifically how that performed in the quarter?

That business now sits in the other segment, together with our tubing business and that ought to give you some indication of size. The profitability in the first quarter was, I think, negatively affected by the overall situation in Australia. But the prospects for that business in Australia, because of the significant investment that's going to happen in the mining industry in that country, continues to be very promising.

Okay. And then in terms of just thinking about new acquisitions going forward, do you still have a good pipeline of acquisitions that you're looking at or do you feel like at this point that Delta has you with your hands full?

No, I would say that the Delta integration has gone well. And you will recall that when we acquired Delta, we made it clear that this was not a question of counting on a number of synergies. This was a business that was well run, and in that geographic area that is complementary to where we have had most of our strengths. So, of course, it takes more effort but it's not slowing down our look at opportunities in the various industries we are focused on. And we continue to have a good pipeline of acquisitions. But as you know, the timing of acquisitions and whether they will happen is very difficult to predict.

On Don Head, also, I'd just expand on the fact that on Don Head we only own 60% of the business. So we have a 40% partner on that business.

Schon Williams, BB&T Capital Markets.

I wondered if you could maybe just talk about where we are in the game with the restructuring within engineered structures. Are we in the fifth or sixth inning on that? Where do you see that playing out in the next couple months?

I would say that I think over the next couple of months, there's not going to be any restructuring in that business. I think we continue to take cost out. We continue to find ways to improve productivity but it is not a business that inherently is going to be a shrinking business. It's a business that right now is faced with some headwinds because of budgetary issues that you are all very aware of. But the fact of the matter is, that at some point in time, the world has to start reinvesting in infrastructure. You can not grow the global economy without investing in infrastructure. This country is no different. But the climate in this country currently is not one that gives me much hope that we'll get a new highway bill any time soon. But I think we are hunkered down and we'll continue to do that, but we can't take actions that will prevent us to be able to respond when this business comes back. This has always been a very good business for Valmont. It has always been a growth business and I have no doubt that it will again.

Would you say that you're happy with the current size of that business, though? You'll continue to look for ways to save money but you're happy with the people and the infrastructure the way we are as of the end of the quarter?

That's correct.

Okay. And maybe just one other follow-up. Could you talk a little bit, we talked a little bit about weather in Australia but were there some delays in shipments out of Nebraska because of snow in the early part of this year?

Yes, you had some delays because of the various snowstorms that moved through North America. It affected our traffic and lighting business and it also affected our utility business.

Okay, any way to quantify that?

Yes, but I'm not going to.

Okay. That's it for me then, thank you.

(Operator Instructions) Brett Levy, Jefferies & Co.

Thank you. Are you guys seeing steel prices finally starting to stabilize, obviously, as some of the raw materials out of Queensland start to become more available? And approximately what do you think is the lag? Is it one month? Is it several weeks to get to caught up with the run up in steel prices?

On the first half of your question, our people that take care of steel purchases, and we have a strong corporate office managing that, expect steel prices to level out in the second half of the year. And that is still their opinion as of just a couple days ago.

On the second half of your question, how long does it take to get the rising steel prices through in your business, it's a complicated answer because, on one hand, you know what you have in the backlog. That's the easy part. The difficult part is what opportunities do you have to raise prices in the marketplace? The stronger the markets are the better the opportunities. So the opportunities to raise price in the traffic and lighting business in North America, or maybe even in Europe currently, are not that great, so we have to deal with that. As capacity gets filled up in the utility business, I think we'll see opportunities to raise prices to reflect increased steel costs. But it's not a clear situation because the markets are weak at the same time as you have inflationary pressure on input.

And then a couple easy ones. What's the notional amount of the CapEx on the Indian pole plant, and then the timing around that one? And also with respect to your 2014 maturity, are you looking at refinancing that? It looks like the capital markets are pretty open and interest rates are pretty low.

On the first part of your question, the investment in India is about $20 million. It includes a pole plant and a galvanizing facility, to support the pole plant and to generate a galvanizing business in that country. And on your question on our bonds coming due in '14, I'll hand that over to Terry.

Yes. We are obviously evaluating that, particularly as the premium reduces in May. And it's a matter of looking at interest rate reduction, the economics of refinancing (inaudible) bond issue, and how we would do it for maturity. So we are actively looking at that in terms of what we might recommend to the Board.

Brent Thielman, DA Davidson.

Hi. Mogens, I apologize, but I think it was one of the first callers regarding the question around utility, and I think you mentioned, was it utility backlog that's doubled? Can you just clarify that comment?

Let me start by saying that we don't put orders in backlog until we know when they're going to ship. But I did mention in February that we had orders we knew we were going to get of approximately $100 million that had not yet been put in the backlog. That volume of business has approximately doubled since the middle of February. We still don't put them in the backlog but we know we have been awarded those orders.

Michael Coleman, Sterne, Agee.

On a prior question, you'd indicated that you felt that you've responded faster to the improvement in demand from the irrigation. And I think your primary competitor would say the same. So my question comes from, in the quarter, your $150 million in irrigation revenues was about 15% above the first quarter of 2008. So is the market strong enough today where, if you've actually been able to process more orders and respond quicker to the demand, that the seasonal pattern changes from the first quarter to the second quarter? Or is the market strong enough to maintain that type of normal seasonal uptick, which in the first quarter 2008 to the second quarter was a 20% improvement?

Good question.

Let me make just a comment on the difference you were trying to get at whether the seasonal pattern will remain the same. We mentioned, I think, in our last call that the situation last fall was more or less perfect for farmers as far as the harvest. They were able to get in and get out of the field. So we thought actually the season started a little bit earlier. That could be an impact, so I don't know that you can draw the conclusion that you're going to have exactly the same seasonal pattern that you had in '08, or, for that matter, any other year in the past. Capacity wise -- and Mogens can comment on this too -- but capacity wise, I think through our improvement over the years, we have good solid capacity. There is a limit always that you have to consider in this business. It's not only suppliers because there are a lot of purchased parts in this business. So it's ramping up suppliers who may have been hurt over the past few years by various business conditions. And also the capacity of the dealer organizations to install. Those things are somewhat variable, and those are things that you don't see when you ask the question about manufacturing capacity but we have to deal with ultimate capacity to deliver the product.

I'd also add that if you look at last year, first and second quarter volume was approximately the same in the irrigation business. And the environment we have going into the second quarter now is very strong. Now, at some point in time, this season is going to come to an end. If you have a very strong market, it can be delayed a little bit but at some point in time you can't get in the field and install new equipment. Then you move into the whole summer storm season which can be a major impact one way or another. If you have a lot of storm damage, that will further extend the season. And I guess what we are saying is we are better prepared to address whatever the market throws at us this time around than we were the last time. Also, a whole new season will start in September, and in this business, a lot can happen. But if you had to look at it currently, I would say it looks like we're going to be off to another strong season starting in September. But three years ago, the environment was very strong and then you had the global financial collapse which threw a curve on this business. And those kinds of issues, like we've seen the Middle East disruption, we don't know what's going to happen with oil prices. If you have outside influences that can disrupt the global economy, it will also affect this business because it will affect the psychology of the farmers. So it's difficult to predict but in the current environment, it continues to look very positive.

Okay, thank you. One follow-up with respect to irrigation. Are you hearing or have you heard from your people in Washington in terms of any potential impact on policy changes either with respect to the current budget or what's going on in Washington?

No. And actually, you were talking specifically on the irrigation business?

Correct.

Yes, and I think that's good news. The less we have to depend on anything out of Washington in this business the better. And I think what you're seeing today in the activity level is a pure reflection of market dynamics and commodity prices without much influence as to what the current farm bill says.

(Operator Instructions) Arnie Ursaner, CJS Securities.

Can you comment on the operating rates you're seeing currently in China given the strength in that economy? The reason I'm asking the question is I think you have minimal exposure directly in Japan but I believe your facilities in China are authorized to provide products into Japan. And I'm trying to get a sense of if you're getting inquiries related to the tragedy that's occurred in that country.

We have very little business in Japan. We have very little activity as a result of the tragedy in Japan. There's no doubt there's going to be some major investments in infrastructure in Japan. But the Japanese economy has been very good at keeping imports out. And even though we are qualified, and we are a qualified supplier to Tokyo Electric, I am not counting on additional volume out of our China plant as a result of what has to happen in Japan. If it comes, we have the capacity in China to participate. But I think, at least our history has shown, that being qualified is one thing, getting orders is another thing.

And could you comment on the operating rates you are seeing now in China?

China is doing better this year than they did last year. They are not operating at the levels we saw the year before that and I'm not actually thinking that they will. The markets in China will continue to become more and more competitive. It's a good business for us. It operates at double digit operating income. It should continue to provide growth opportunities and it should continue to be a good vehicle for export out of China. And I think we may see additional opportunities now as the result of a renewed focus on Southeast Asia as a result of the Delta acquisition, and the more management resources we are putting into that region that could benefit the China plant.

Very quick question for Terry. Terry, do you have the percent of your revenues that are international at this point?

I don't, Arnie. I think it's approximately 40%.

Arnie, this is Mark. That number, without actually going to the details, my sense is it's somewhere between 40% and 45%.

Alicia, if there's no more questions, we can conclude the call.

Brian Drab, William Blair.

Just one more quick clarifying question. Mogens, you talked about the new orders that aren't in backlog about doubling since we last spoke. Have you commented today on the actual level of backlog, at least directionally, from the $170 million roughly that you ended 2010 in the utility business with?

No, we've not commented on the size of the backlog, and we only give the backlogs at year-end. But directionally, the backlog is going up.

And can you give us any idea, can you quantify that in any way roughly?

I qualified it in the sense that I told you that orders waiting to get into the backlog is approximately $100 million higher than they were in the middle of February.

Right. But the orders that actually have gone into backlog were at a backlog level that's higher than that $170 million that you ended the year at though? Is that correct?

I don't have the backlog level right now. And the way I look at backlog, I look at not only what's in the backlog because we have shipments information on it. I look at what orders have we earned that I know will go into the backlog and that's what I'll be talking about.

We have no further questions at this time. Mr. Laudin, I turn the call back over to you.

Thank you, Alicia. This concludes our call. We thank you for joining us today. This message will be available for playback on the Internet or by phone for the next week. We look forward to speaking to you again next quarter. And at this time, Alicia, will read our statement on forward-looking disclosures.

Included in this discussion are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which Valmont operates, as well as management's perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. As you listen to and consider these comments, you should understand that these statements are not guarantees of performance or results. They involve risks and uncertainties, some of which are beyond Valmont's control and assumptions.

Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Valmont's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include, among other things, risk factors described from time to time in Valmont's reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, Company performance and financial results, operating efficiencies, availability and price of raw material, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments. The Company cautions that any forward-looking statement included in this discussion is made as of the date of this discussion, and the Company does not undertake to update any forward-looking statements.

This concludes today's conference call. You may disconnect your lines.