Greetings and welcome to the Valmont Industries' First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] 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.

Thank you and good morning. Welcome to Valmont Industries' first quarter 2023 earnings call. With me today are Steve Kaniewski, President and Chief Executive Officer; Avner Applbaum, Executive Vice President and Chief Financial Officer; and Gene Padgett, Senior Vice President and Chief Accounting Officer. This morning, Steve will provide a brief summary of our first quarter results, commenting on our market and long-term business strategy. Avner will review our financial performance and provide our current outlook and indications for 2023 with closing remarks from Steve. This will be followed by Q&A. A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the investors site at valmont.com. A replay will be available on our website later this morning. Please note that this call is subject to our disclosure on forward-looking statements, which applies to today's discussion is outlined on slide two of the presentation and will be read in full at the end of today's call. Finally, if you would like to be notified when Valmont publishes news releases and other information, please sign up for e-mail alerts through our investors site. We also encourage investors and others interested in our company to follow Valmont and our brand on the social media channels listed on our website. I will now turn the call over to our President and Chief Executive Officer, Steve Kaniewski.

Thank you, Renee. Good morning everyone and thank you for joining us. We delivered another quarter of great results despite an economic environment that continues to be challenging. Our performance reflects the effective execution of our growth strategies and our deliberate actions to increase profitability. We have a great team and we are positioned to achieve another year of great results. Turning to slide four, there are a few highlights we want to share with you today. First, we've had a tremendous start to the year with record first quarter sales, operating income, and earnings per share. Net sales increased 8.3% with solid growth in both Infrastructure and Agriculture. Adjusted operating margin improved to 11.5%, reflecting benefits from strategic pricing, our ability to manage costs, and improved operational efficiencies that led to better factory performance. Adjusted earnings per share grew to $3.61. Avner will provide more details in a few moments, but I am extremely pleased with our results and proud of the entire Valmont team for these accomplishments. Demand for our products remains robust, and we are in markets and sectors that tend to be independent of the general economy and less correlated to macroeconomic cycles. Our participation in these markets is not by chance, but the result of a deliberate investment strategy. We have targeted expanding niche markets where we can add the greatest value through our recognized product leadership, flexible global footprint, and innovative technology to help solve customers' challenges. In both segments, our disciplined approach to strategic pricing helps ensure that we are capturing the value we deliver to our customers, while expanding margins. This helps offset inflationary pressures that are still present in our supply chain, notably the recent increases in steel costs. We remain vigilant in monitoring and responding to cost increases and we'll…

Thank you, Steve, and good morning, everyone. Turning to slide nine and first quarter results, my comments will focus on the adjusted results as outlined in the press release and in the Reg G disclosure in the presentation appendix. As mentioned last quarter, the divested offshore wind business is now being reported separately in other. My comments today will focus primarily on our two reportable segments; Infrastructure and Agriculture. First quarter total net sales of $1.1 billion grew 8.3%, driven by sustainable pricing and volume growth in both segments. Excluding the Other segment, sales grew 10.4% year-over-year. Operating income grew 23.4% to $122.1 million, with operating margins increasing to 11.5%, approaching our long-term goal of 12% and reflecting execution of our disciplined pricing strategy, higher volumes, and improved fixed cost leverage. Diluted earnings per share grew 17.6% to $3.61, attributable to higher operating income, partially offset by a higher tax expense due to a change in the geographic mix of earnings compared to last year. Turning to slide 10, Infrastructure net sales of $736.1 million grew 11.2% year-over-year with sales growth across all product lines, including a record quarter for TDNS and double-digit growth in solar, which is the renamed renewable energy product line. Segment sales growth was led by higher pricing and strong underlying market demand. We continue to realize the benefits of our strategic capacity expansion and have responded to this demand through new product innovation and footprint optimization to drive volume increases across the segment. Operating income increased to $94.4 million or 12.9% of sales, driven by sustained pricing and volume growth. Moving to slide 11. In Agriculture, net sales of $332.2 million grew 8.3% year-over-year, led by sustained pricing, volume growth and higher sales of technology solutions. Strong growth in international markets, including another record sales…

Thank you, Avner. Turning to slide 16 and expanding on Avner summary, the fundamental long-term drivers of our markets remain resilient. Our end markets have true multiyear and, in some cases, multi-decade tailwinds, that set us up for a long runway of growth. Our Infrastructure business is supporting the global energy transition, critical infrastructure to support transportation markets, and mobile network upgrades. In the Agriculture market, the combination of land productivity and resource conservation needs are driving investment globally. Additionally, both segments are experiencing technological transition and we are solving customer pain points by integrating value-added innovation that will continue to deepen our competitive advantage. In summary, on slide 17, I am extremely proud of our team's strategic execution and ability to deliver sustained outperformance through challenging market dynamics. Our growing sales and strong backlog demonstrate our market leadership and we will continue to develop capabilities and centers of excellence across the organization to build on our momentum. We are investing in innovation, technology, and digitization that will accelerate our growth beyond market rates. Our focus remains on controlling the things we can control to achieve our financial targets and deliver shareholder value. This is enabled by a strategic framework that positions Valmont for success now and in the future. Finally, I look forward to meeting with you next month at our Investor Day on May 23rd as we provide a more in-depth review of the company and business segments, including growth strategies, capital allocation priorities, and financial objectives. I will now turn the call back over to Renee.

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

Thank you. We will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Chris Moore with CJS Securities. Please proceed with your question.

Hey, good morning guys. Thanks for taking a couple of questions. Yes, maybe we can just -- you talked a lot about Brazil. Obviously, your remarks are very bullish. Kind of -- I've been hearing mixed messages about the strength of demand, things like election-related risks, things like that. Can you maybe just talk to it a little bit further kind of the Valmont business model within Brazil? Are you doing anything unique or just taking advantage of what you're seeing is to be kind of really strong growth there?

Good morning Chris. There has been a real deliberate effort over the past five years to increase our dealer network throughout the country of Brazil to add more local capacity so that we're not as subject to some of the import issues with inventory. To create aftermarket parts strategy, we're testing a lot of our technology down there even as a leading technology proof-of-concept. So, I think when you look at that in its totality, our efforts are paying off for us. I think the other big thing as compared to, let's say, North America or Europe is just the fact that you get two to three grow seasons. And you have corn really opening up in the West. And so because they're on a replenishing aquifer in the West, corn, because they now have a really robust cattle industry, the byproducts of some of the ethanol production from corn, it can be used to feed cattle, that's helping to drive business as well. And then obviously, FINAME has been very supportive in all growers participating in the market, which is why we see that if someone puts land in production, 40% of the time, they're going to put a pivot right on it right away. And that is significantly higher than you see in other parts of the world, including the North America market. So, Brazil is the market of the future and will really surpass our North American market in the not so distant future.

That is incredibly helpful. Maybe just one more on a bigger picture on agriculture. Over the next 12 to 18 months, is there -- when you look at the potential challenges, is there any difference by geography? I mean do you have more or less confidence in North America than international moving forward? And I guess, obviously, you ended by just saying how strong Brazil was so.

Yes, I mean, Brazil obviously, over the last three years, has doubled for us each of those last three years. So, we have a lot of confidence in Brazil. Even despite some of the government -- change of the government and other things, ag brings in, I think, 23% of GDP down there. So, it is a significant piece that they're not going to mess with. The Middle East, we've talked about. Eastern Europe is also strong regions for us and will remain so both food security and just pure population growth. Australia and New Zealand has been a market that for the last couple of years was affected by some pretty severe weather events. But overall, ag fundamentals, when you have soy at $14.60 or north, corn above $6, well above $6 most of the time, I think as farmers have kind of settled in after a record net farm income, just human psychology, what it is, you come off of the best earnings you've ever had, you want to stop and take a look before you start to reinvest. And I think as people now get emergence, they can lock in some of their forward contracting at very favorable rates. The soy markets of the world, obviously, Brazil being one of the biggest. With these kinds of soy prices, I think we'll go get back into the game very quickly because of the old, I don't like tax and I need my land productivity to keep my cost low. So, the fundamentals are there. But the past three seasons were not really indicative of what we would call a traditional ag market. It was COVID, then it was kind of hyperinflation in metals and supply chain issues, labor issues last year, so I think we are really starting to finally get back to a more normalized kind of ag market.

That’s perfect. Thanks Steve. I'll leave it there.

Thank you. Our next question comes from the line of Nathan Jones with Stifel. Please proceed with your question.

Good morning everyone.

Good morning Nathan.

I'll go on the domestic ag market. You guys said the revenue in the quarter was similar to last year. I'd assume you have a few points of pricing there. So volume was probably down a few points. Can you talk about the difference just in the seasonality? I know there was demand pulled forward earlier in the season last year. Does that account for all of the volume decline? Or is there a farmer sentiment in there? And how do you expect that to normalize as we go through the year? Should we expect maybe a better second quarter than you had last year demand shifting from one quarter to the other?

Nathan, it's -- there was definitely some pull forward and some negative farmer sentiment as we came into the year. I think that plus the fact that much of the, let's say, West of the Mississippi was abnormal weather conditions and people really late to get out to the fields, we expect that really the second half of the year will be more normalized. And that second quarter, we'll still have some pressures on it from the fact that -- particularly in the April timeframe, it is still -- we're just starting to see now a pickup of order rates, an increase in farmer sentiment literally week-by-week. We can talk to our dealers and growers. And so the confidence is just starting to build. And so that's why we've talked about the quarter kind of being the way it is. Avner, do you want to add in to kind of the way we're thinking about it?

Yes. So, when we kind of look at -- thank you, Steve. So, when you look at the actual quarters, we're kind of looking sequentially and really looking at kind of the North America volumes being pretty much flat Q1 -- Q2 to Q1, similar kind of sequential pricing as well. And then we do see the impact of the international markets kind of sequentially being 10% up, driven by kind of the comps year-over-year.

Okay. I know you guys have talked about -- and obviously, [Indiscernible] steel has gone up very rapidly again and you've talked about having needing to raise prices to cover those increased costs. Are farmers continuing to be able to bear those cost increases? Is that kind of having any impact on their outlook for irrigation spending? There's still a drought moving across the Midwest, how does that impact farmers need to go out buy irrigation? Just any more color you can give us around that.

Yes, I'd say, Nathan, this is probably -- the price increase we're talking about now is probably our smallest price increase that we've gone out with over the last couple of years. It really is just to take some of the edge off as it pertains to steel, some of the labor inflation and some of the other freight and oil and some other things like that. So, it's really just to kind of put it back to what I would say is a normal price increase representative of the market and our continued investment in technology that we're supporting. The pivot still has an incredible payback. And as you mentioned, some of the conditions that are out there, the need to get data off the field, to conserve water and to really ensure that there's a crop and particularly the large-scale farms, as we've mentioned before, if they have the rights, they're going to put a pivot in almost immediately. So, we don't think that this is going to push the market to any kind of elasticity problem. And we're just really getting ourselves back to a price cost ratio that we believe is indicative of where we would have been even back in, let's say, 2013 or 2014.

Great. Thanks very much for taking my questions.

Thank you. Our next question comes from the line of Brian Drab with William Blair. Please proceed with your question.

Good morning. Maybe I could just start by building on that last question around steel prices and just ask it more broadly. I mean, steel has just been on a roller coaster ride. And from last summer until where we are today, I mean it's gone down dramatically and then it's up like 80% year-to-date. So, what are you seeing in terms of the price change in your different segments over that time period, kind of if you look at this latest big dip in steel price from last summer to now, like where are we? And then also, how is that maybe that big swing -- recent swing affected businesses like irrigation? There was some thought that maybe some customers might be -- have been waiting for a price decrease and that paused the market somewhat. I don't know if that comment on -- is that dynamic real? And did you see that?

Yes. Thanks Brian. Our steel price and irrigation as a percentage of the cost of goods sold is not as significant as it would be in the utility business. That said, it uses more of the coil, which has been more volatile than the other forms of steel, which we use like plate and bar and angle. And so it can have a more dramatic impact to your cost to get sold in a quicker time period. We've done a good job of protecting our customers and ourselves through hedging programs, through some physical hedging as well as some inventory management programs that we've kicked in place. And so it was really tough for a while to kind of figure out where steel was from the price/cost perspective. And that's why I think we've seen it enough stability even with the movements down and up, where this can be just a nominal tweak, so to speak, to the pricing that we need to make sure we're capturing what we are. Recall that in particular our utility business, we have pass-throughs. And so in the second half of the year, we know that some of our revenue and utility will go down, not the margin, but the revenue because we give that back through the form of steel pricing. Now, that uptick with a 40-week lead-time won't show up until next year in terms of some revenue increases that will then come through the mechanisms. Plate steel has been pretty resilient through all of this, and that's because a lot of plate goes into infrastructure. And infrastructure, whether it's bridges in highway or like our own utility business, has remained pretty strong. And so the dichotomy of coil to plate is still there, albeit not as significant as it was during the peak, but that normalized kind of $100 a ton difference is not something we've seen for a long time. So, long-winded answer, but I would say to you that steel and the recent movement, we've accounted for well and I think we've done a good job of being able to protect both ourselves and the customers and really has not dampened demand. Yes, there are some people that wait on the sidelines that always happens. But I think in today's inflationary environment, there's other points of inflation that really no one should be expecting a price decrease anytime soon or anything that's got steel or aluminum or zinc or metals involved with it.

Great. Yes. Thanks. That's really helpful. And then can you, Steve, just comment on any big international projects that might be out there, just that dynamic? Is the pipeline still as strong as it's been? In the past, you mentioned that even in Egypt, you're seeing the potential for maybe some add-on projects there. I know you announced some like $85 million in opportunity in Africa. Can you just comment on that pipeline?

Yes, I'd say that the pipeline over the last couple of years has been that there's one very significant order per year like the $85 million award we've received and there is a good number of projects that are, say, $30 million and below that are coming through that we don't announce, but that we're being awarded and they're from those regions, whether it's Middle East, Africa, Eastern Europe, or Central Asia. And so the pipeline is still very good. Again, the market fundamentals around food and food production, food security, all the interruption with Ukraine, Russia still placed favorably to that pipeline. The long-term pipeline is Africa. They will definitely have development money that will flow into that area and just the pure need for political stability is foremost on government's minds.

Got it. Thank you very much.

Thank you. Our next question comes from the line of Ryan Connors with North Coast Research. Please proceed with your question.

Good morning. Thanks for taking my question. So, I wanted to come at the ag side from a bit of a different angle, Steve, and you talked a lot about the topline, the revenue outlook, demand outlook international versus North America. But in terms of the margin and the mix outlook, if we go under the assumption, as it seems like it's the tone that international is going to, at least in the short run, be more of the growth driver. That was the case in the quarter, balance of the year, probably. How does that impact the margin story and the mix in terms of the margin story and irrigation? And then -- and obviously, underlying that is what is the bidding environment looked like on some of those big projects you talked about, has it gotten more competitive, less competitive, stable? Any color you can add there would be helpful.

Good morning. I can start off with -- with the mix, as we look at the international ag businesses for us, actually, the margin has consistently been improving in our international businesses. Brazil specifically has a very strong margin profile. As we mentioned earlier, there are two to three growing seasons. The farmer there has ability to make some good profits and so Brazil has a really good margin profile. And then when you look internationally, as we embed technology into our solutions that increases the margins if you get more into the aftermarket business. So, as that business continues to grow and the margins continue to improve, the fact that that grows versus North America will have a less prominent impact on our margins going forward. It's not quite yet at the North America level, some of these projects just to the magnitude of those projects will have some lower margin profile. But overall, we shouldn't expect a significant change in margins. As we've seen in our first quarter, we had a very strong margin of 11.5%, which we're really proud of and on our way to our 12%. And we expect our kind of margins to continue to stay at those higher levels and improve throughout the year.

And relative to your question about bidding, obviously, when there's an award like an $85 million award, that's going to be very competitive. It brings in players from Saudi Arabia, from Europe, it's not just our US competitor base at that point. So, they have the ability to "utilizing" a global supply team. And thankfully, we've built a very strong global supply chain where we can source things throughout the world and bring it together in the project location and still make money that is favorable to the company at that point. But any time you're going to see a large project, it's going to be very competitive. But the projects that are more in that $30 million range, I'll say the midsized type projects not nearly as competitive. Usually, there's a lot more cultivation that went on with the deal, specification, maybe some land use work that was done ahead of time, pumping solution type of things. And I think you need to be able to bring together the entire package, if you want to be able to do these projects that have favorable margins to the company. And we've deliberately, over the years, set up a pumping solutions, engineering group. We've worked on land use. We help bring development money to our customers and all of that together is why we can pull off the projects, whether they're small scale or large scale and make good money.

Got it. Okay. And then my other one just was on the transmission side. Speaking of the supply chain you mentioned, Steve, any lead-time update there? I know you have been a constraint at one point, you'd indicated that lead-times have started to get better. We're holding around 40 weeks, I think, is what you mentioned. Any update there on lead-times in transmission, particularly?

We're still around and the market is still around that same 40-week lead-time. There's a few competitors that may be slightly below that. But as an industry, 36 weeks to 40 weeks depending on the construction is kind of holding at this moment. And that's with, as we mentioned earlier, the CapEx budgets being up a little bit more than we originally anticipated. We were thinking maybe 7%, 8%, more like 10% now. And so we've been able to keep our ship complete on time pretty strong at that level, but obviously looking for areas of growth from our operations team in ours. And if we can create the hours, we know that we'll be able to start to pull some of those lead-times down, which should be viewed favorably by the customer.

Got it. Thanks for your time.

Thank you. Our next question comes from the line of Brent Thielman with D.A. Davidson. Please proceed with your question.

Hey, thanks. Good morning. Steve or Avner, again, really impressive margin that this quarter investor has seen in years. I guess my questions, look, I mean, with the run-up in steel prices, you've seen so far this year, to what degree were those costs reflected in the first quarter? And then, I mean, shouldn't that have a more material impact on 2Q and 3Q margin just given the natural lag in pricing? I guess, where I'm confused because it sounds like you think your margins can sustain at these higher levels have been in the face of that.

Yes, thanks. I'll take that one. Good morning. So, overall, as you mentioned, we had strong margins in Q1, and we do expect those margins to continue throughout the year. Now, there is lagging between the steel increases and how that impacts our P&L as we buy inventory does impact our pricing, although eventually, they kind of net, there is some fluctuations you'll see throughout the year. So, the higher steel costs, we're not seeing it yet on our P&L. We're not seeing it yet in our back or that's going to lag definitely for several quarters. So, overall, we might see there is some lumpiness you might see throughout a certain quarter based on the increased deal. But we -- as Steve mentioned, we do a very really good job on managing those increases through some financial hedges, physical hedges, pricing. So, overall, it's not a concern for us. We just kind of manage it closely, and it can create some movements within quarters, but nothing that should impact our overall performance and margin profile.

Okay. Thanks Avner. I guess the follow-up would be on the Agriculture segment. I'd just be curious your sort of high-level thoughts how we ought to think about for this evolving lending agreement or the access to capital, liquidity for farmers? Is that a concern as being lenders sort of across the country, tightening credit here? How do we think about that in the context of that business?

Brent, it's a good question. We've seen it out there quite a bit. Farmers have one of the best abilities to pay back because they have an asset base that's there back up the loan. So, I think there's a lot of programs out there that have discounted or bought down points as it relates to machinery and equipment. As we've talked about many times, pivot is the second best payback on the farm compared to the tractor. And that three to four years is a typical payback. So, even with some of the elevated rates, probably in the 400, 500 basis point increases from the same time last year, that still works financially, particularly given the elevated crop prices. Soy being at $14.60, anytime you're close to $15 is an unbelievable soy type price. Yes, their inputs are up. But I think that those inputs as they look out going further have come down and stabilized. So, maybe they locked last year at a high rate this year. That's what has been kind of the -- as we went through the kind of first quarter that the farmer just really needed to sit down with their account and they kind of figure this all out. And -- because it's a new environment for them, it's a little uncertain. I think they're getting a lot more certain as things progress. And we've not seen it affect land at this point too heavily, more on the small grower side but not the big grower side. They're actually out hunting for land. And on the machinery equipment perspective, as I mentioned earlier, if it's a large-scale farm, they're going to put a pivot in and they're typically buying cash anyway. So, I think the overall environment, if kind of this is where it is, then the grower will digest it and make their decisions. And the answers are not very much different. It's still the track there. It's still land, it's still a pivot are all good investments for the grower. So, that's -- I think they should remain fairly positive even despite the rates.

Okay. Thanks for that Steve. Appreciate it.

Thank you. Our next question comes from the line of John Braatz with Kansas City Capital. Please proceed with your question.

Morning everyone.

Morning Jon.

Steve, in your commentary, you talked a little bit about the increased R&D spending in the agricultural area. And I'm wondering if you could tell us how much maybe your spending and what the trend is like going forward? And maybe some of the things that you're working on give us an idea of what the opportunities are?

Yes, we have been increasing R&D spend to the tune of, let's say, $4 million to $6 million per year kind of year-over-year. And that has gone to -- a big portion of that is to AgTech, Prospera and the Insights product being one of it. That's something that we're seeing very strong adoption rates, real good paybacks for the growers that are utilizing it. But we're not just working on pure AgTech. We've also been investing over the years, if you think about our drive, X-Tec is a continuous drive machine. So, there's only one other app in the marketplace that doesn't hydraulically, we can do it electrically. And so we can get around the field in two hours with that product. That took some significant investment to do that. We've now put icon panels on to our linear machines, that was something that we've been wanting to do for a number of years. So, it's a combination of upgrading both the pivot and the electronics around the pivot and the functionality of the pivot and also these newer agronomy type of services that we've done out there.

And I'll just jump in. Specifically to research and development, kind of the overall dollars that we spent last year, we're approaching $50 million and that's specifically R&D. Of course, we spend more on innovation and such, and we continue to increase. But just as a reference point, it was $46 million last year.

Okay. Thank you, Avner. And Steve, last thing, last week, you announced this partnership with Control Module and guide some reading on the technology and what's happening in that area. And it sounded very interesting, but can you tell us a little bit more about what you see for that technology and that market opportunity and maybe how your partnership with Control Module might work? Now, I understand it's small at this point, but is kind of move the needle down the road?

Yes, I think when you look at our data acquisition and the way that we get that in and process the data, we're looking at a series of technologies that are there to try and bring that forth. And that company gives us an element of that, that we wouldn't have otherwise. We've always said that we want to look at the ecosystem and decide where to invest and kind of own the technology versus where we want to partner with a company that already has done significant R&D and probably too big of a head start for us to get into there. So, it's -- our ecosystem of the way we're going to grow technology will be done through a lot of these kinds of partnerships. And so we're excited about them. It is something that down the line, our infrastructure technology, which we're going to talk a lot more about at our May 23rd Investor Day. So, we'll be able to give you a lot of good color as to how that ultimately fits in with the growth strategy and the transformation of our business into some more recurring revenue.

Okay. All right. Thank you Steve.

Thank you. Our final question comes from the line of Brian Wright with ROTH MKM. Please proceed with your question.

Thanks. Good morning. Just was wondering with the Farm Bill going through its process, are there any things that we should be watching for or that you're hearing about that they can have an impact on the ag part of the business?

Good morning Brian. The Farm Bill always goes through a lot of maturations and political wrangling. Usually, the food stamp issue can kind of blend into to some degree, but it's typically very bipartisan. The from a state that is very ag based. We don't expect any significant kinds of changes to that. There is sometimes -- and now is bleeding in more some of the environmental considerations that go with it and so those are things that we're watching. If there is more of a regulated kind of data to be provided that actually is good for our business because it's where our technology solutions are helping the growers today to meet their ESG needs. So, I think that's something we're watching, but we don't expect anything overly significant. The equip program, just to make a note of it, was re-upped for $850 million. And but it actually had expired. And so it's forced our growers -- and this is a little bit about first quarter, forced a lot of our growers to go back into the queue and restart the process. They didn't any of the applications. And that's a program that had been around since, I think, the mid-1990s. So, that was a major interruption. So, if they don't approve things, that's what we look at more as impacting our business than some of the little changes through the actual Farm Bill.

Great. Thank you so much for the answer.

Thank you. We have reached the end of our question-and-answer session. I'll now turn the call back over to Renee Campbell for any closing comments.

Thank you for joining us today. As mentioned, today's call will be available later this morning for playback on our website or by phone for the next seven days. We look forward to speaking with you again next quarter.

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 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 teleconference. You may disconnect your lines at this time. Thank you for your participation.