Valmont Industries Inc (VMI) 2015 Q2 法說會逐字稿

Good morning. My name is Kayla and I will be your conference operator today. At this time, I would like to welcome everyone to the Valmont Industries Inc. second quarter earnings call.

(Operator Instructions)

I would now like to turn today's call over to Mr. Jeff Laudin, Manager Investor Relations. Please go ahead, Sir.

Thank you, Kayla. Welcome to the Valmont Industries second quarter 2015 earnings conference call. With me today, are Mogens Bay, Chairman and Chief Executive Officer; Mark Jaksich, Executive Vice President and Chief Financial Officer, and Tim Francis Vice President and Corporate Controller.

Before we begin, please note that this conference call is subject to our disclosure on forward-looking statements, which applies to today's discussion and will be read in full at the end of the call. The instructions for accessing a replay of the 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, everyone. Thank you for joining us and I trust you've all read the press release. Even though we are in cyclical businesses, Valmont has overtime benefited from the fact that our various businesses tend not to run in parallel cycles. In 2012 and 2013, that was not the case. Most of our businesses were in strong markets leading to record performances in our Utility and Irrigation segments and for the Company.

Currently, we are in a similar but quite different situation. We are in an environment where all of our businesses are facing headwinds. Depressed public spending for infrastructure, low agriculture commodity prices, a depressed mining industry, sharp below crude oil prices, and a significant increase in the value of the US dollar, present significant challenges to our businesses.

We do not anticipate any material improvement in this external environment for the foreseeable future. So in order for us to deliver improved earnings going forward, we must rely on the aspect of our businesses we do control.

A relentless focus on cost CAGR, operational improvements, optimizing our global footprint and significant controls of all discretionary spending is absolutely imperative. We are currently in the process of executing the restructuring actions we announced in April, to ensure that our cost basis entering 2016 will enable us to markedly increase our earnings without much help from the marketplace. Between now and the end of the year, we will be on a difficult but necessary journey.

Not only should these actions assist us in improving our earnings going forward, but by lowering our overall cost structure, we should see significant leverage opportunities when the cycles do change and our markets improve. We will have plenty of capacity to meet increased demand even after our restructuring, so significant capital spending will not be necessary for the foreseeable future. Encouraging is the fact that we deliver 10% operating profit as a percentage of sales in a most challenging environment.

Fundamentally and over the long-term, our businesses are solid and serving important markets. Products and services for infrastructure development and water saving technology for agricultural are essential to support economic growth and to feed an increasing world population demanding better diets. We are obviously not happy with current market conditions, but I am pleased with the internal efforts I see to improve our businesses and I am enthusiastic and confident in our long-term opportunities.

Now, let me turn to comments on the second quarter by segment. In the Engineered Infrastructure Products segment, the major reason for the revenue decline was currency translation followed by customer delays for large wind turbine structures, reduced demand and postponed deliveries for offshore products driven by the significant fall in oil prices, and continued weakness in Australia driven by the depressed mining industry. On a positive note, our North American lighting and traffic product lines showed gains in sales and profitability and the October 2014 Shakespeare acquisition, a composite structures company, made a meaningful contribution to our results.

Our Valmont SM subsidiary in Europe has a history of being able to leverage their unique manufacturing and engineering capabilities to enter new markets, and in view of the softness in oil and gas, they have stopped stepped up those effort with some success. One example is a cooperation between our European utility sales organization and Valmont SM to land a $10 million utility transmission project in Germany for large round structures. This project will deliver in 2016.

This is a good example of success in leveraging capabilities across business units. The acquisition of Valmont SM has brought significant capabilities for very large steel structures to Valmont.

I am also pleased that our China operations are delivering improved performance despite a general slowdown in the economic growth in that country. Mainly as a result of successes and serving the Chinese wireless carriers with structures. Restructuring in the Engineered Infrastructure Product segment during the quarter was focused on the consolidation of small access systems facilities in Australia and China. We also reduced SG&A overheads in Europe.

In the Irrigation segment, we experienced volume declines as a result of low commodity prices and declining farm income. And last year, sales included approximately $15 million in revenue from storm damage, an exceptional high-level that did not repeat. A similar amount of revenue from storm damage sales took place in last year's third quarter. This will also not repeat.

In this environment, we were pleased to see 17% operating income as a percentage of sales. Our Irrigation team has been very focused on delivering productivity improvements and controlling costs. We're also benefiting from pricing discipline in this market that is better than what we have seen in past down cycles.

International Irrigation revenue was negatively impacted by foreign exchange translation as result of the rapid strengthening of the US dollar, particularly as it relates to our Brazil operations. In Brazil, sales and local currency also declined substantially as a result of economic uncertainty as well as changes in government financing programs, which are aimed to encourage investment in agriculture equipment. The remaining international markets were mixed.

A highlight in the Irrigation segment is the rapid adoption by farmers of AgSense technology, a product for controlling and monitoring center pivots. You'll recall we bought a majority interest in this company during 2014. Since the acquisition, the installed number of AgSense units has increased by 60%. Another encouraging development for AgSense is the adoption in international markets where this product line has been very well received.

In the Coatings segment, sales to outside customers declined due to weak markets in Australia and some weakness in custom volumes in North America, particularly from customers serving the agriculture markets. Weak internal demand from the Irrigation and Utility segments also contributed to lower revenue. As part of the restructuring in the Coatings segment, we idled a plant in Australia and recorded a fixed asset impairment charges.

In the Utility Support Structure segment, we are not near-term expecting market growth. Recently however, our coating activity for large projects has increased. These larger projects have been mostly absent from the market over the past 18 months, so we are encouraged by this emergent development.

Pricing continues to be very competitive particularly in the market for smaller projects. We recently made the decision to raise our price when bidding small projects outside our alliance customers. Not surprisingly, our headway declined as we walked away from projects with unattractive margins. It is too early to gauge the markets longer-term response to our actions.

Let me now cover the actions taken and planned on the subject of utility capacity, cost controls and productivity improvements. Last year, we exited a lease facility and we just finished exiting our fairly large utility structure production facility in Brenham, Texas. This facility was on the campus mainly occupied by our Engineered Infrastructure Product segment, and we do expect that one of our other segments will occupy the building vacated by our Utility segment.

We also discontinued production at a small facility in California and we'll utilize that facility mainly as a distribution center serving our West Coast customers. We are moving equipment from these facilities to our lower cost facilities to consolidate production into fewer plants and to reduce overhead cost.

As we communicated with you earlier, we have transitioned our Utility plants from profit centers to cost centers. We are loading these plants centrally and have centralized purchasing of critical inputs such as steel. We continue to anticipate that these actions will add 200 basis points to profitability going into 2016, all else equal.

Turning to other financial measures, depreciation and amortization for the quarter was $23.8 million, capital expenditures was $6.9 million. For 2015, we expect depreciation and amortization of about $95 million and capital spending of approximately $55 million, as we invest in productivity improvements and maintenance projects.

We generated cash flow from operations of around $61 million during the quarter. We repurchased so far 48 million shares which completed our May 2014 authorization and we have 234 million remaining on our February 2015 authorization. Our ending cash balance was $317 million.

Before we take your questions, please note that beginning with next quarter's call, we look forward to introducing you to the segment Presidents in quarterly rotation. This will provide a forum for you to hear directly from the people running the businesses and get to know them better. At this time we will take your questions.

(Operator Instructions)

Craig Bibb, CJS Securities.

Hi. Mogens, you gave us a pretty good rundown of the restructuring steps that you've completed so far. Could you talk about what will be done by the end of the third quarter in year end and maybe some of the savings associated with those actions?

I think that when we announced the restructuring, we expect the savings in the range of $20 million of operating income and we expect to conclude all the restructuring that should deliver that improvement before the end of the year.

And then the overseas revenues in the May quarter were down 12%. I know your months don't line up and your overseas sales mix is different but that's a pretty big gap. Can you shed some light on that?

I talked about storm damage and when we compared we had two months of that storm damage declined. When you look at market shares in general, they do not change. I would say all of the number the last several years, they haven't moved 1% or 2% between the major players in North America. So I think storm damage is a major impact that we are going to see. Also in the third quarter when we have one month left of the storm damage compared to last year and it was a big month.

Okay, alright, thanks a lot.

Julian Mitchell, Credit Suisse.

Hey guys, this is Charlie for Julian. Just had a question in irrigation. Just impressive margins in the quarter and you guys have been holding the margins in that mid to high teens there even with sales coming off. I know you have a difficult sales compare in the third quarter but do you think you will be able to hold the margins in there as well? Or what's in the outlook I guess for the rest of the year there on profitability levels?

I can promise you that in the third quarter, which is always the weakest quarter and without storm damage, we will not have margins at that level.

Great, thanks.

Ryan Connors, Boenning & Scattergood.

Great, thank you. Wanted to talk a little bit about the Engineered Infrastructure Products, the highway business in particular. And Mogens, you site continued strength there in the press release, and I forget the term, I guess favorable market conditions. That's a little bit at odds with some of the feedback we've gotten elsewhere and some of the indicators on the outlook for that market. Can you just talk a little bit about what gives you the confidence in the highway budgets and that piece of the business?

You're talking about our North American lighting and traffic business?

That's correct.

Yes. Most of that business where we're seeing the improvement is actually to the commercial side of the business and we saw good improvement in the quarter. We still only have a five month's extension of the Federal Highway Bill and the last couple of days you've been reading about maybe some political consensus about getting trapped cash offshore back to the US and using some of that revenue for Highway Bill. I'm not counting on it but we are focusing on improving our business in the commercial side more than in the highway side. But we have also seen that some of the states instead of waiting for federal money have actually stepped up their own investments and we've gotten some benefits from that.

Okay. Now one of the issues recently is I know you do manufacture some end terminals for guardrails and I guess, that's your Ingal business is one of the larger competitors and that business is going through some legal issues and losing a lot of market share rapidly. Have you benefited at all from that?

No, because we have been using that last competitor's end terminals in Australia.

Okay, so you resell some of that. Okay, that's helpful. Thank you.

Thank you

David Rose, Wedbush Securities.

Good morning. Thank you for taking my call. Just a couple quick ones. If you could repeat the CapEx number and then just give me a sense of if that's actually a sustainable number for 2016, the run rate? Did I understand it was $50 million for the year?

Yes, so far this year -- for the year we expect about $55 million in capital expenditures and in the current environment, where we have excess capacity in most of our businesses, I would not expect that to increase significantly next year.

That's dramatically lower than where you've been and even lower than what I thought maintenance cap or pretty close to what maintenance cap was. I mean if you, I guess, go back to 2009, you were at roughly $44 million.

I would say our maintenance capital is still running about the $40 million.

Okay. That's helpful. If we could go back to the Utility support structure commentary about smaller projects, you're walking away from some of the smaller projects that are lower margin. So last quarter, you implied that you were at full capacity with the smaller products. Does that imply now that you have excess capacity even with smaller projects in the Utility support structure business?

Well, I think where we are is that on smaller projects, as I've said over several quarters, the profitability of the margin in those projects are unattractive and we are the largest player in this particular industry. And we decided that somebody has to do something so we went out and raised our prices and as a result, our head rate obviously declined and we will watch what goes on in the marketplace and make decisions based on that. But as I talked to you about capacity in general, we are closing down facilities to get rid of a lot of overhead but we are consolidating some of that capacity into the lower cost facilities. We are moving equipment from the facilities we closed to lower cost facilities. That doesn't mean that all that equipment will be put to use right away but it will be available depending on what we see in the marketplace.

So that I guess what I'm trying to get at is, is that you had some under absorption sequentially in fixed costs hence the decline in margins. Last quarter, you were hoping that maybe you hit a trough on the margins. When do we start to see the pickup?

Well, I would expect us to see the pickup as we go into 2016 because part of what you also see reflected is the numbers is expenses that doesn't necessarily get captured in restructuring. But as you close down plants and move people around and layoff people and try and refocus production in other facilities, that is usually not done super efficiently. But when it is done, we should see lower cost and more productivity. So I think this is something we're going to see here starting in the second quarter and see maybe towards through towards the end of the year.

So we could see a step down in margins in Q3 on the Utility support sequentially?

I can't predict exactly where it's going to land but I wouldn't expect in quarter three an improvement in margins in the utilities.

Okay. Great, thank you.

(Operator Instructions)

Josh Berman, William Blair.

Hi, good morning.

Good morning, Josh.

I guess first question, why do you think pricing and irrigation is held up in this softer period?

It's a good question. There's no -- I can't give you an answer that I can tell you is the absolute right answer. But when business declines, somebody is the first mover in lowering price and so far, we have seen pretty good discipline. And if I had to speculate, I'd say that the players in this market they know that if pricing -- if somebody starts lowering the prices, it will just lower the price for everybody and market share doesn't change. So I think maybe over the past sometimes people have think they can sneak up on market share or gain market share in a down market and it usually doesn't happen. So there's nothing to be gained from the industry lowering pricing. Having said that, you know I am pleasantly surprised the we haven't seen more downward pressure and I hope that will last.

Alright, thank you.

Brian Drab, William Blair.

Hey, good morning. With all the earnings releases --

Good morning, Brian.

Good morning. I'm jumping on late so I don't know what was asked already but I wanted to see if you could gave an update on Brazil, among other things, and the interest rate, the advantage in interest rate that we expected to change midyear? Have we seen a change in that? I can't find anything on this.

Yes. If you talk about Brazil, Brazil has over the last few years been a very strong market and long-term, should continue to be a very strong market. You all read in the newspapers everyday all the political problems and economic problems in Brazil. So that clearly has affected the mood of the farmers in Brazil. You also have a drastic devaluation of the Brazilian real compared to the US dollars. Also a big effect.

But I think the financing part you talk about, that's the financing that the government supports for agricultural equipment. Interest rates in that went up just a short while ago so I think 7.5% when it comes to irrigation equipment. Now that's up from about 4.5% if I recall correctly. It's a major increase but you have to put it in context of what interest rates in general runs in Brazil and it's much higher than that. So this is still a pretty discount to inflation and to local interest rates. So it may be a shock short-term, but long-term, it's still a very favorable interest rates for farmers to use.

Okay, thanks. And then Mogens, on the last call you mentioned that you're starting to see restrictions on water use in Brazil as well. Can you give us an update on what you're seeing there?

There's been less talk about that in the last quarter. I can't give you specifics as to what happened but we have not heard much talk about that. Most of the talk is around (inaudible) financing and the general political upheaval that you are seeing in Brazil currently.

Okay, thanks. There's a lot of cost cutting and productivity initiatives that you're undertaking and will be undertaking. I'm wondering if you could give us more of a sense as to where we are at this point on the, I think you used the term on the last call, lean journey, in the Utility segment specifically? I don't know if you could do this but I'm trying to -- I'd like to ask you to kind of rate the leanness or rate those operations in terms of how lean they are on a scale of 1 to 10 or whatever, ending year end, whatever analogy you want to use. Just so we get a sense for what the opportunity is.

I would say in general we may be about halfway through some of this restructuring. We'll see quite a bit more in the third and the fourth quarter. Specifically on utility, they're the ones that have the biggest change in how they operate their business and the plants they utilize. And by the end of the year, we should have that behind us and you may or may not have been on the call but I reaffirmed that I think that going into next year we will see the 200 basis points we've talked about before.

Okay and then; thanks for that. And then, did you give an update on consolidating from eight plants to four and did you talk about whether some of those are Coatings plants or is that really primarily just focused on the Webforge business?

We consolidated several Webforge plants in Australia. We idled one Coatings plant in Australia and in North American Utility, we were basically going into next year with three fewer plants than what we had in 2014.

Okay, thanks. I'll get back in line.

Nathan Jones, Stifel.

Good morning, everyone.

Good morning, Nathan.

Mogens, I think if I heard you correctly, you said that you had raised prices in the Utility business outside of your alliance customers?

No.

No?

No, it's the bit market. It's the smaller projects, not the alliance customers. With the alliance customers you have pricing mechanisms in place regardless of the size of the project.

Okay, so you raised prices outside of the alliance customers?

That's correct.

Can you talk about the thought process that goes into taking that step in an environment such as the one you're in now? Because that sounds like a fairly risky approach to take to the market at this point.

Well yes, whenever you raise prices in the market that's not too buoyant, it comes with the risk. But we may decide over time that that particular part of the business, the very low margins, that we don't want to reenter. On the other hand, if you start raising pricing, you may have other players in the market follow suit because some of the price levels we've seen, the pricing is not very attractive.

Have you seen anybody follow suit thus far and when did you actually go about doing this?

I would say probably around the first part of the second quarter. And it's too early to say how the market reacts but we have seen lead times moving out. And usually, when lead times move out, that would indicate that we may see some improvement in pricing. But as I said I think in my prepared remarks, it's too early to say what's happening.

Could you give us a little bit more color on how much lead times have stretched out? I know that's a good indicator for potential improvement in pricing.

Well I would say that you know when you talk about lead times, you see what happens in certain projects and some lead times from certain players have moved out maybe several weeks

All right. Thanks very much for the color. I appreciate it.

Kevin Bennett, Sterne Agee.

Good morning, guys.

Good morning, Kevin.

Mogens, going back to your comment on the utility business about increased quoting in large projects, I was wondering if you could provide a little bit more color on that and what may be driving that and kind of timeframe and are any of these starting to hit?

Over the last quarter or so, as we have talked about in the past, we have seen a switch in this market towards smaller projects. Some of that pendulum has been swinging a little bit back towards larger projects that none of them are for 2015 delivery. Some 2016, some 2017. But just the fact that it's happening is encouraging and you can speculate and it depends utility by utility how capital allocations are being made. Some utilities, as you know, have had to use capital closing down coal plants and some of that may be behind them and then more gets allocated to transmission. But in the aggregate, we have seen quoting activity pick up for larger projects and the larger the projects probably the fewer players can participate in that and we'll see what happens.

Got you. It's certainly encouraging. If I think about -- I know steel costs certainly hurt you in the utility business on the top line but all the rest of your business is thinking about the margin impact. Is there any way you can potentially quantify the impact of lower steel and lower other commodity prices?

I would say that in general, obviously, we have seen the steel price have a major impact on revenue in all of our structural businesses. Usually we try and not see a deterioration, but hopefully a pickup in margins as steel prices decline. At the same time, we've seen markets being weaker than they were in the past. But I would say in general, not in the utility business but in EIP in particular, margins in those businesses have been holding up well.

Okay, then last question on your buyback. I was wondering is there any timeframe for you guys to complete that. I think it was $234 million left or something like that?

It's an open-ended. Unlike the first $500 million, we don't have an end to it but we are active in the market nearly daily.

Okay. Thank you.

Jon Braatz, Kansas City Capital.

Good morning, Mogens.

Good morning, John.

In the Utility sector, have you seen any other players reduce capacity, consolidate plants during this year?

Yes, we have. I think Sable has reduced capacity and there's some anecdotal, if people don't announce it, it is mainly anecdotal. But in general, for sure we haven't seen capacity additions but we have seen some capacity consolidation.

Okay, good. Secondly, I think in the first quarter you indicated that maybe up to $60 million in restructuring cost during the year. How do you see that number at this point?

We indicated up to $60 million. We didn't say during the year. But that's still a fairly good number to keep in mind.

Okay. And then lastly, Mark, as it stands right now when you look at currency, would you anticipate the currency impact to be maybe greater or less than what we saw in this past quarter? I know things are going to fluctuate by the end of the quarter but as you see it sort of now?

So far this year, year-to-date we've had an impact of about $7.5 million negative on that. We'll see more of that in the second half although currency started to move towards the back end of the year. So that point-to-point impact should diminish. Right now, based on rates we see right now, we're looking at for the year something in the neighborhood of $14 million to $15 million impact on operating income; just doing translation.

Okay. Thanks, Mark.

Jose Garza, Gabelli.

Good morning, guys.

Good morning.

Maybe I missed this, but I was wondering if you could quantify the decline in North America on the utility structure side? Just how much was volume versus price and maybe steel?

I would say that it's about half and half, volume and price.

Okay. And then, just broadly thinking about the international side in that same business, what kind of outlook you have there for the rest of the year and looking out? I know you mentioned that the project in conjunction with SM.

I would say that, first of all, the International Utility business is insignificant in relationship to the overall business. I would say it's no more than 10%. And it is a lumpy business because it tends to be project business. So I would say that on balance, the revenues internationally have stayed pretty stable over the last few years and I don't see any reason for that to change. Because it is project related and it depends on how many projects will hit in any given quarter or year.

Okay, but no significant upturn of any kind?

I don't think so.

Okay, thank you very much.

Craig Bibb, CJS Securities.

Hi, could you give us a little bit of a early read on the irrigation market? I know some of the commodity prices have ticked up a little bit, acreage is down for some.

Well, first of all, yes, we've seen a little uptick in commodity prices as probably as a result of a wet spring and particularly here in the Midwest. But the fact of the matter is, that we still have high ending inventories of the major commodities. We are not experiencing any production problems of any significance around the world. So there's no indications up there that we are just about to see an increase sustainable in commodity prices. A lot will depend on the growing season now, for the rest of the summer here in North America. But I am not expecting any uptick in the general environment in our irrigation business in the foreseeable future.

Okay and then it looked like there's a late start to the soy planting. How does that impact you?

Soybean is also an important crop of for us but I think second only to corn. So it will have an impact. Soybean prices have also ticked up a little bit but this is probably the worst time to try and predict the fall season. But I would say I'm cautious and I didn't say cautiously optimistic.

Alright, thanks a lot.

Thank you.

Ryan Connors, Boenning & Scattergood.

Great, thank you. So just wanted to revisit this topic of pricing and irrigation. Walking the floors at some the big Ag Shows this year, it's immediately clear that there's a sharp increase in promotional rebates and other promotional activity by yourselves and others. That's very clear in the marketplace. So, how do we reconcile that with your stance that you're seeing absolutely no pricing pressure whatsoever? Is it that a rebate is not called a price increase per se or is it that your dealers are absorbing the entirety of that pain or is it something else? I'm trying to reconcile that.

Okay, first of all Ryan, I didn't say absolutely no effect on pricing. I said, we have not seen much and as you can see in our quality of earnings, they've been holding up pretty well. But every year, there are short-term programs in place for most competitors to try and drive equipment sales in one month or another. That has not changed but we haven't seen a broad program that lowers the pricing in the market price.

What you're seeing when you visit farm shows, is the typical short-term sometimes regional programs to try and entice farmers to come into the dealership at a time of the year were they really don't need to get into the dealership. So those things happen year in and year out. But a broad initiative on behalf of a player to really change the market dynamics we have not seen.

Okay. Just to be clear, we do tend to do that annually and it has been a pretty notable uptick. But just to be clear on how that works, so when there is a rebate program, will that be something that Valley offers on a corporate level or is that a dealer, something that the dealer is absorbing to drive his own business?

No, that's usually coming from our Valley irrigation business.

Okay, so those are corporate. Great. Thanks for your time.

Alright.

(Operator Instructions)

Brian Drab, William Blair.

Hi, Mogens. Can you summarize what your expectations are for the benefits from cost reduction initiatives in place. I know you said it on the last call $30 million spent recovering $19 million of that roughly. I guess you said recovering the cash portion of that which was $19 million over the 12 to 18 months. Can you summarize total expectations for cost reductions?

I think the number is still a good number to use going into 2016. But as I also said in my prepared remarks, we are taking a close look at all spending at all levels. Nothing is off the table because as I said, we do not see any significant change in the external environment in the foreseeable future. So we have to step up our efforts to cut out cost and we will do that starting at corporate and going through every aspect of the Corporation.

Okay, is the 200 basis points that you're talking about in the Utility segment though included in that $30 million and spend?

There's probably going to be some of it that's related to their direct restructuring but most of that 200 basis points should come from productivity improvements in that business beyond just taking overheads out when we consolidate plants.

Okay, thanks. I'll follow up more with Jeff later. Thank you.

There are no more questions at this time. I turn the call back over to you, Mr. Jeff Laudin.

Thank you, Kayla. This concludes our call and we thank you for joining us today. The 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, Kayla will read the forward-looking statements.

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, uncertainties, some of which are beyond Valmont's control and assumptions. Although management believes 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 statements 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 is the end of today's call. You may now disconnect your line.