Valmont Industries, Inc. (VMI) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $70.06 million, or $ 3.10 a share in the quarter, against a net loss of $30.56 million, or $1.34 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $36.34 million, or $1.61 a share compared with $31.10 million or $1.35 a share, a year ago.
Revenue during the quarter grew 6.43 percent to $674.58 million from $633.83 million in the previous year period. Gross margin for the quarter expanded 408 basis points over the previous year period to 24.48 percent. Operating margin for the quarter period stood at positive 8.32 percent as compared to a negative 2.68 percent for the previous year period.
Operating income for the quarter was $56.09 million, compared with an operating loss of $17 million in the previous year period.
However, the adjusted operating income for the quarter stood at $63.43 million compared to $49.79 million in the prior year period. At the same time, adjusted operating margin improved 155 basis points in the quarter to 9.40 percent from 7.86 percent in the last year period.
"We are pleased with our revenue growth in the fourth quarter," said Mogens C. Bay, Valmont's chairman and chief executive officer. "Utility Support Structures Segment sales benefited from a stronger North American market. The Engineered Support Structures and Energy and Mining Segments had double-digit revenue gains. Coatings Segment sales equaled last year, as internal utility volumes offset lower external demand. Irrigation Segment sales were equivalent to last year, with modestly lower North American and improved international sales. "For the fourth quarter, GAAP operating income was 8.3% of sales, and 9.4% on an adjusted basis1. For the year, GAAP operating income was 9.7% of sales, and 10.1% on an adjusted basis1."
For fiscal year 2017, Valmont Industries, Inc. forecasts revenue to grow at 5 percent. The company expects diluted earnings per share to be $7.63 and projects diluted earnings per share to be $6.42 on adjusted basis.
Operating cash flow declines
Valmont Industries, Inc. has generated cash of $219.17 million from operating activities during the year, down 19.50 percent or $53.10 million, when compared with the last year.
The company has spent $53.05 million cash to meet investing activities during the year as against cash outgo of $48.17 million in the last year.
The company has spent $95.16 million cash to carry out financing activities during the year as against cash outgo of $220 million in the last year period.
Cash and cash equivalents stood at $399.95 million as on Dec. 31, 2016, up 14.57 percent or $50.87 million from $349.07 million on Dec. 26, 2015.
Working capital increases
Valmont Industries, Inc. has recorded an increase in the working capital over the last year. It stood at $903.37 million as at Dec. 31, 2016, up 5.01 percent or $43.07 million from $860.30 million on Dec. 26, 2015. Current ratio was at 3.58 as on Dec. 31, 2016, up from 3.35 on Dec. 26, 2015.
Debt remains almost stable
Total debt of Valmont Industries, Inc. remained almost stable for the quarter at $756.39 million, when compared with the last year period. Total debt was 31.63 percent of total assets as on Dec. 31, 2016, compared with 31.63 percent on Dec. 26, 2015. Debt to equity ratio was at 0.77 as on Dec. 31, 2016, down from 0.79 as on Dec. 26, 2015.
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