VMI 10-K & 10-Q changes, risk factors and insider trading
Valmont Industries Inc. · NYSE · Fabricated Structural Metal Products · CIK 102729 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our ability to effectively manage the procurement and inventory of key components and raw materials may be adversely affected by supply disruptions and demand volatility, which could reduce our profitability.”
New heading “Adverse economic conditions, particularly in certain international markets, could impair the collectability of our accounts receivable and adversely affect our operating results.”
New heading “Changes in the application and enforcement of U.S. trade and tariff laws, including Section 232 tariffs on steel and aluminum content, could increase our costs and adversely affect our results of operations.”
New heading “The use of artificial intelligence presents risks and challenges that may adversely impact our business and operating results.”
New heading “If our internal control over financial reporting is found to be ineffective, our operating results could be adversely affected.”
Largest changes
“Changes in the application and enforcement of U.S. trade and tariff laws, including Section 232 tariffs on steel and aluminum content, could increase our costs and adversely affect our results of operations.”see in full comparison
“Recent and ongoing tariff actions affecting steel, aluminum, and goods imported from Canada, China, and Mexico, have increased uncertainty regarding the cost and availability of raw materials and components critical to our manufacturing operations. These actions, as well as any future changes in tariffs, trade agreements, or the imposition of new protectionist or retaliatory measures, could increase our cost of goods sold, reduce margins, disrupt supply chains, or adversely affect our financial results.”see in full comparison
“Establishing new manufacturing capacity or expanding, reconfiguring, or restarting existing capacity involves significant vendor lead times, capital investments, and, in certain cases, customer approvals. These decisions are often made well in advance of firm customer orders and based on forecasts that may not ultimately reflect actual demand. …”see in full comparison
“The use of artificial intelligence presents risks and challenges that may adversely impact our business and operating results.”see in full comparison
“Adverse determinations could result in additional duties, interest, or penalties related to the entries under review and could require changes to our valuation methodology for future imports, which may increase our ongoing tariff costs. Although CBP has not indicated an intent to do so, it has the authority to review other import entries or initiate broader enforcement actions. Any such actions, or further changes in trade laws, tariff rates, exemptions, or enforcement practices, could adversely affect our results of operations, financial condition, or cash flows.”see in full comparison
“In addition, efforts to expand, modify, or rapidly ramp manufacturing capacity can increase operational complexity and elevate safety risks for our employees and contractors. Such activities may involve the installation of new equipment, changes to manufacturing processes, compressed production timelines, or the use of temporary or less-experienced labor. …”see in full comparison
Full comparison: every changed paragraph (52)
Our sales are sensitive to market conditions in the industries where the ultimate consumers of our products operate. In some cases, these industries have been highly cyclical and subject to substantial downturns. For example, a significant portion of our sales of support structures is to the electric utility industry. In fiscal 2024,2025, our sales to the U.S. electric utility industry were overapproximately $1.0$1.5 billion. Utilities may defer purchases of our products by reducing capital expenditures for reasons such as unfavorable regulatory environments, a slow U.S. economy, or financing constraints. If demand for utility structures weakens due to reduced or delayed spending on electrical generation and transmission projects, our sales and operating income are likely to decrease.
The end-users of our mechanized irrigation equipment are farmers. Economic changes within the agriculture industry, particularly fluctuations in farm income, can impact sales of these products. Lower levels of farm income have, at times, led to reduced demand for our mechanized irrigation and tubing products. Farm income decreases when commodity prices, acreage planted, crop yields, government subsidies, and export levels decline. Additionally, weather conditions—potentially worsened by climate change, such as extreme drought—can limit water availability for irrigation and influence farmers’ purchasing decisions. Higher energyinput costs for producing crops, including energy, seed, fertilizer, chemicals, labor, equipment, financing, and nitrogen-based fertilizer costs, driven by rising oil and natural gas prices,transportation, increase farmers’ operating expenses. Consequently, our Agriculture segment business has experienced peaks and troughs. For example, since fiscal 2022, net sales in the segment have leveled off after strong growth.
Furthermore, uncertainty regarding future government agricultural policies may lead to indecision among farmers. Changes in government farm support programs, financing aids, and irrigation water use policies can influence the demand for our irrigation equipment. In the U.S., certain regions are considering policies that may restrict water use for irrigation. These factors could prompt farmers to delay capital expenditures for farm equipment, potentially slowing or even reversing growth in irrigation equipment and tubing sales. In February 2025, the U.S. Department of Agriculture forecasted U.S. net farm income for 2025 to be $180.1 billion, an increase of $41.0 billion (or 29.5%) compared to 2024. This rise is primarily due to an increase in direct government support payments, partially offset by lower cash receipts from corn and soybeans.
Hot-rolled steel coil and other carbon steel products have historically constitutedrepresented approximatelya one-thirdsubstantial portion of the cost ofto manufacturingmanufacture our products. We also use large quantities of aluminum for lighting structures and zinc for galvanizing most of our steel products. Our facilities consume large amounts of natural gas for heating and processing tanks in our galvanizing operations. Additionally, we use gasoline and diesel fuel to transport raw materials to our locations and deliver finished goods to our customers. The markets for these commodities can be volatile. The following factors increase the cost and reduce the availability of these commodities:
Rising steel prices, as seen in the first half of fiscal 2021 and the first quarter of fiscal 2023,prices can put pressure on gross profit margins, especially in our Infrastructure segment product lines. The time between the release of a customer’s purchase order and the manufacturing of the product can span several months. Since some sales in the Infrastructure segment are fixed-price contracts, rapid increases in steel costs likely result in lower operating income. Steel prices for both hot-rolled coil and plate can also decrease substantially in a given period, as occurred in the fourth quarter of fiscal 2021 and much of fiscal 2022.period. Steel is particularly significant for our Utility product line, where the cost of steel has accounted for approximately 50% of net sales on average. Assuming a similar sales mix, a hypothetical 20% change in the price of steel would have affected our net sales in this product line by approximately $110.0 million for the fiscal year ended December 28,27, 2024.2025.
WeVolatility believein recentsteel volatilityprices stemscan result from increasedchanges in global steel productionproduction, trade policies, and shifting consumption patterns, particularly in fast-growing economies like China and India.patterns. The speed with which steel suppliers impose price increases on us may prevent us from fully recovering these price increases, particularly in our L&T and Utility businesses. Similarly, rapid decreases in steel prices can result in reduced operating margins in our Utility businesses due to long production lead times.
Our ability to effectively manage the procurement and inventory of key components and raw materials may be adversely affected by supply disruptions and demand volatility, which could reduce our profitability.
Our Agriculture and Infrastructure businesses are subject to pronounced business cycles and, at times, sudden changes in customer demand. Our operating results depend in part on our ability to accurately forecast demand and procure inventories that align with production schedules and customer delivery requirements. In recent years, global supply chain disruptions and availability constraints for certain components and raw materials have adversely affected our ability to manage inventory efficiently.
To mitigate the risk of supply disruptions, we may increase inventory levels for certain components or materials. While this strategy may support continuity of operations, it also increases the risk that inventories may become excess or obsolete if customer demand weakens, forecasts fail to materialize, or customers delay or cancel orders due to adverse conditions in their end markets.
If we determine that inventory is excess or obsolete, we would be required to record inventory reserve charges or write-offs, which could adversely affect our gross margins, operating results, and financial condition. These risks may be exacerbated during periods of economic uncertainty or rapid changes in market conditions.
We sell our products in many countries worldwide, with approximately 30%28% of our fiscal 20242025 net sales occurring outside the U.S. These sales are often conducted in foreign currencies, primarily the Australian dollar, Brazilian real, Chinese renminbi, euro, and euro.Indian rupee. Because our Consolidated Financial Statements are denominated in U.S. dollars, fluctuations in exchange rates between the U.S. dollar and these currencies will continue to impact our reported earnings. A weaker U.S. dollar enhances our reported earnings by increasing the value of foreign revenues, whereas a stronger U.S. dollar has the opposite effect. Currency fluctuations have affected our financial performance in the past and may continue to do so in future periods. Additionally, when local currencies strengthen, the cost of imported goods decreases, potentially affecting our ability to compete profitably in domestic markets.
Adverse economic conditions, particularly in certain international markets, could impair the collectability of our accounts receivable and adversely affect our operating results.
Adverse economic conditions in certain international regions, most notably Brazil, may increase our exposure to credit losses resulting from financial distress, insolvency, or potential bankruptcy of our Agriculture or Infrastructure customers. Under these conditions, customers may delay payments or be unable to meet their obligations to us.
Our accounts receivable are stated at net estimated realizable value, and our allowance for credit losses is based on management’s judgment and estimates, including receivable aging, the creditworthiness of significant individual customers, historical loss experience, and current and forecasted economic conditions. These estimates may not accurately predict actual future credit losses, particularly during periods of heightened economic uncertainty or rapid deterioration in customer financial conditions.
If our assumptions regarding customer credit risk or economic conditions prove inaccurate, or if adverse conditions persist or worsen, we may be required to record additional provisions for credit losses, which could adversely affect our operating results, financial condition, and cash flows.
Our operations are subject to trade policies, tariffs, and trade agreements, and any further changes could adversely affect our business, potentially leadingreducing tosales, aincreasing declinecosts, or resulting in sales and profits or the loss of certain foreign investments.
As a global manufacturing company, we operate over 80 manufacturing plantsfacilities across six continents.continents In fiscal 2024,and approximately 30%28% of our fiscal 2025 net sales camewere from marketsgenerated outside of the U.S. DemandOur fordemand, ourcost productsstructure, and our profitability are influenced by global trade relations. We maintain a significant manufacturing presenceoperations in Australia, Brazil, Europe, and Mexico—regions that may be affected by changes in U.S. and foreign trade policies, including tariffs on a broad range of imports,imports as well asand retaliatory measures fromimposed by foreign governments, particularlysuch as China.
Recent and ongoing tariff actions affecting steel, aluminum, and goods imported from Canada, China, and Mexico, have increased uncertainty regarding the cost and availability of raw materials and components critical to our manufacturing operations. These actions, as well as any future changes in tariffs, trade agreements, or the imposition of new protectionist or retaliatory measures, could increase our cost of goods sold, reduce margins, disrupt supply chains, or adversely affect our financial results.
In addition, retaliatory trade actions by China, such as tariffs on imported U.S. soybeans, may continue to pressure U.S. farm income. Because reduced farm income can directly affect growers’ purchasing decisions, including for mechanized irrigation equipment, these trade dynamics may negatively impact demand for our products in the U.S. agricultural market.
Several of our international operations are located in regions experiencing political or economic instability. In particular, certain countries within our Caribbean and Latin America (“CALA”) region, such as Brazil and Argentina, continue to face economic volatility, inflationary pressures, and uncertain regulatory environments, all of which can affect demand, foreign currency cash flows, and financial results. We also operate in areas with heightened geopolitical risk, such as the Middle East.
Recently proposed trade policies and tariffs could increase the cost of goods that we and our suppliers purchase from Canada, China, and Mexico, which would increase our cost of goods sold. Additionally, our Mexican operations play a vital role in our Infrastructure segment, exporting approximately $230.0 million of steel structures to the U.S. in fiscal 2024. Moreover, indirect effects of trade restrictions, such as China’s tariffs on imported soybeans impacting U.S. farm income, can reduce demand for our products.
On February 3, 2025, U.S. President Trump announced a one-month delay in imposing tariffs on imports from Mexico. Then, on February 10, 2025, he announced a 25% tariff on all steel and aluminum imports into the U.S., set to take effect on March 4, 2025. These actions, along with any future legislation or measures by the U.S. federal government that restrict trade, such as additional tariffs, trade barriers, or other protectionist or retaliatory measures, could adversely impact our financial results, depending on their timing and duration.
Some of our international operations are in regions with political instability, such as the Middle East, or economic uncertainty, such as Western Europe. Managing operations across diverse geographic markets also requires hiring, training, and retaining skilled local management, which impacts bothaffects operational performance and financial reporting.
We expectAs international sales to continue representingremain a significant portion of our net sales. Consequently,business, our foreign business operations, sales, and profits will continue to be subject to the following risks:
Changes in the application and enforcement of U.S. trade and tariff laws, including Section 232 tariffs on steel and aluminum content, could increase our costs and adversely affect our results of operations.
We manufacture Utility structures in Mexico and ship them to customers in the U.S. While most of the structures we sell to U.S. customers are manufactured domestically, we imported approximately $220.0 million of fabricated steel structures from Mexico into the U.S. during fiscal 2025.
We are subject to U.S. and foreign trade laws and tariffs, including Section 232 tariffs applicable to certain steel and aluminum products and derivative articles. As of June 4, 2025, a 50% tariff is assessed on the steel and aluminum content of certain steel and aluminum imports into the U.S. Although an exemption exists for fabricated structures produced using steel that was melted and poured in the U.S., and the structures produced at our Mexico facility are U.S.-Mexico-Canada Agreement-compliant, changes in the interpretation, application, or availability of these tariffs or exemptions could increase our costs or adversely affect the competitiveness of products manufactured outside the U.S.
In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act were invalid, but the decision did not affect existing Section 232 tariffs on steel and aluminum. As a result, there may be increased reliance on, expansion of, or changes to Section 232 tariffs or other trade measures, which could increase our tariff exposure and adversely affect our costs, results of operations, or cash flows. We are continuing to monitor legal developments, potential replacement measures, and related regulatory actions, including newly announced global tariffs on certain foreign goods, and we may be required to adjust our sourcing, pricing, or compliance practices in response to such changes.
U.S. Customs and Border Protection (“CBP”) has increased scrutiny of how Section 232 duties apply to imported products, including the valuation methodologies used to calculate such duties. In February 2026, we received CBP inquiries relating to the valuation methodology applied to historical import entries. These inquiries are ongoing, and no final determinations have been made. While we believe our valuation methodologies have complied with CBP guidance, CBP may ultimately disagree with our position.
Adverse determinations could result in additional duties, interest, or penalties related to the entries under review and could require changes to our valuation methodology for future imports, which may increase our ongoing tariff costs. Although CBP has not indicated an intent to do so, it has the authority to review other import entries or initiate broader enforcement actions. Any such actions, or further changes in trade laws, tariff rates, exemptions, or enforcement practices, could adversely affect our results of operations, financial condition, or cash flows.
Some of our facilities have operated for many years, during which we, and prior operators, have generated, used, handled, and disposed of hazardous materials. Contaminants have been detected at certain current and former sites, primarily linked to historical operations. Additionally, we have occasionally been identified as a potentially responsible party under Superfund or similar state laws. While we are not aware of any contaminated sites not accounted for in our Consolidated Financial Statements for known obligations, unforeseen contamination discoveries or additional cleanup requirements could result in liabilities beyond our current provisions.
Although we have recorded all known environmental obligations in our Consolidated Financial Statements, the discovery of previously unidentified contamination or the need for additional remediation could result in liabilities exceeding our existing provisions. These risks may be heightened at certain galvanizing facilities in the Asia-Pacific region due to the nature of galvanizing processes and the complexity and evolving requirements of local environmental regulations.
From time to time, we face disputes, with and without merit, that may result in significant costs and divert management’s focus and resources, even if the dispute does not proceed to litigation. The outcomes of complex legal proceedings are inherently uncertain. Additionally, complaints filed against us may not specify the damages sought, making it challenging to estimate a potential range of liabilities. Even when we can estimate losses, the actual amounts may be materially higher than expected. Resolving litigation or threatened litigation could result in substantial payments or agreements that limit our business operations. Even if we are liable in future lawsuits, the costs of defending such actions may be significant and could exceed the coverage limits or remain uncovered by our insurance policies.
As required by accounting principles generally accepted in the U.S., we establish reserves when legal matters become probable and reasonably estimable. As of December 27, 2025, we have reserved, in aggregate, approximately $24.2 million related to these matters. Subsequent developments may impact our assessment of probability or change our previous estimate of certain loss contingencies and require us to make payments in excess of our reserves, which could have an adverse effect on our financial condition or results of operations.
Some of our foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety products primarily for non-U.S. markets and license certain guardrail design patents to third parties. Currently, U.S. product liability lawsuits have been filed against companies that manufacture and install specific guardrail products, some of which involve a foreign subsidiary due to its design patent. This litigation could decrease demand for these products or affect government approvals for their use, both domestically and internationally. It may also increase litigation risks for our foreign subsidiaries, negatively impacting their sales and licensing revenue.
As of December 28,27, 2024,2025, we had a total of $757.9$829.5 million in outstanding indebtedness, of which $2.9$65.6 million matures within the next five fiscal years. Additionally, as of December 28,27, 2024,2025, we had $799.8$734.8 million in additional borrowing capacity under our revolving credit facility. We occasionally borrow funds for business acquisitions and share repurchases. At times, our borrowings have been significant, with the majority of our interest‑bearing debt incurred by U.S. entities. Rising interest rates have increased our borrowing costs.
Delta Ltd. sponsors a U.K. defined benefit pension plan (the “Plan”), which, as of December 28,27, 2024,2025, covered approximately 5,1505,000 former employees, either inactive or retired. The Plan has no active employee members. The funded status measures the difference between the projected benefit obligation and the fair value of the plan assets as of fiscal year end. As of December 28,27, 2024,2025, the Plan was overfunded by approximately £37.029.4 million ($46.5$39.7 million) for accounting purposes. Under the current agreement with the Plan trustees, we are obligated to provide annual funding of approximately £13.14.0 million ($16.7$5.2 million) todepending addresson the Plan’s funding shortfall at the time of acquisition,levels, along with an additional approximately £1.92.4 million ($2.5$3.2 million) for administrative expenses. Although this funding obligation was factored into the acquisition price of Delta, the Plan’s funding status may still have adverse effects on the combined company, including:
We experience competitive pressures from various companies across all our markets. Our competitors include both companies offering similar technologies and those providing alternative solutions, such as drip irrigation.solutions. These competitors range from international and national manufacturers to local ones, some of which may have greater financial, manufacturing, marketing, and technical resources, or deeper penetration and familiarity with specific geographic markets.
To remain competitive, we must invest in manufacturing,our manufacturing capabilities, product development, customer service, and customerour service.information Attechnology times,systems weand maynetworks, needincluding toartificial adjustintelligence. pricing,Ineffective particularlyimplementation, forintegration, customersor inadoption strugglingof industries.these However,technologies wewithin cannotour guaranteebusiness operations and decision-making processes could reduce productivity, widen talent gaps, and diminish our competitive position in all markets.position.
At times, we may need to adjust pricing, particularly for customers in struggling industries. However, we cannot guarantee our competitive position in all markets.
The use of artificial intelligence presents risks and challenges that may adversely impact our business and operating results.
We may adopt and integrate generative artificial intelligence and machine learning (collectively, “AI”) tools into our operations to enhance efficiencies and streamline existing systems. However, the development, implementation, and maintenance of AI tools may entail substantial risks. While these tools hold promise in optimizing processes and improving productivity, they may also produce inaccurate or biased outputs, infringe upon or misappropriate intellectual property, or expose us to data privacy, cybersecurity, and regulatory compliance risks. In addition, evolving legal, regulatory, and ethical standards governing the use of AI may increase compliance costs or limit our ability to deploy these technologies effectively. If we are unable to manage these risks, our business, financial condition, or results of operations could be adversely affected.
Ongoing debates about the presence and scope of climate change, along with increasing legislative and regulatory attention, are expectedlikely to continue. Our production processes and the market for our products are influenced by such laws and regulations. Compliance with these measures may result in higher costs for raw materials and transportation. Non-compliance could damage our reputation and further expose our operations and customers to significant risks.
We may encounter challengesChallenges in quickly adjusting ourmanaging manufacturing capacity toand respondresponding to sudden shifts in demand forvolatility Infrastructurecould products.adversely affect our business.
Producing large engineered structures for Infrastructure customers requires significant machinery and often necessitates operating our manufacturing facilities at or near full capacity to achieve optimal utilization. As a result, if demand for specific structure types in the Utility marketor Infrastructure markets changes unexpectedly, our ability to adjust manufacturing capacity in the near term may be limited.
Establishing new manufacturing capacity or expanding, reconfiguring, or restarting existing capacity involves significant vendor lead times, capital investments, and, in certain cases, customer approvals. These decisions are often made well in advance of firm customer orders and based on forecasts that may not ultimately reflect actual demand. If actual demand does not develop as anticipated, or declines after we have expanded capacity or increased our fixed cost structure, our manufacturing facilities may operate below optimal utilization, which could result in higher per-unit manufacturing costs, elevated inventory levels, reduced margins, asset impairments, restructuring charges, or lower profitability. Conversely, if actual demand exceeds our forecasts, we may be required to extend customer lead times or may be unable to satisfy customer demand, which could lead to customer dissatisfaction, the loss of market share to competitors, increased overtime and expediting costs, and reputational harm.
In addition, efforts to expand, modify, or rapidly ramp manufacturing capacity can increase operational complexity and elevate safety risks for our employees and contractors. Such activities may involve the installation of new equipment, changes to manufacturing processes, compressed production timelines, or the use of temporary or less-experienced labor. Workplace accidents, safety incidents, or regulatory actions arising from these conditions could disrupt operations, delay production, result in litigation or regulatory scrutiny, increase insurance or self-insurance costs, and adversely affect our reputation and financial performance. Although we maintain insurance coverage and safety programs designed to mitigate these risks, such measures may not be sufficient to prevent or fully offset the impact of all incidents or liabilities.
If we are unable to effectively manage manufacturing capacity, respond to changes in demand, or safely execute capacity expansions and production ramp-ups, our business, financial condition, operating results, and reputation could be adversely affected.
If our internal control over financial reporting is found to be ineffective, our operating results could be adversely affected.
Our internal control over financial reporting is subject to inherent limitations, including human error, the circumvention or override of controls, and fraud. Even effective internal controls can provide only reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles.
The complexity of our business, including diversified product lines across multiple jurisdictions, the use of multiple enterprise resource planning systems, and complex revenue recognition requirements, further increases the challenge of maintaining effective internal controls. If we fail to maintain our internal control over financial reporting, or if we experience deficiencies or delays in implementing necessary improvements, it could have a negative impact on our operating results and damage our reputation.
Establishing new manufacturing capacity or expanding existing capacity involves significant vendor lead times, capital investments, and customer approvals, all of which further delay our ability to respond to unexpected increases in demand. These limitations could lead to delays in order fulfillment, customer dissatisfaction, potential business loss, inventory imbalances, increased labor and material costs, reduced productivity, lower profit margins, reputational harm, and a weakened market position. If we are unable to effectively address these challenges, it could have a material adverse impact on our business, financial condition, and operating results.
Management's Discussion & Analysis (MD&A)
New heading “Other Income / Expenses”
New heading “KEY FACTORS AFFECTING FINANCIAL RESULTS”
New heading “Return on Invested Capital”
New heading “Adjusted EBITDA and Leverage Ratio”
Removed heading “Reportable Segments”
Removed heading “Other Income / Expenses (Including Gain (Loss) on Deferred Compensation Investments)”
Largest changes
“The discount rate is a key assumption in our goodwill impairment analyses, as it reflects management’s assessment of the time value of money and the risks inherent in each reporting unit’s projected cash flows. Based on the results of our fiscal 2025 annual impairment testing, the estimated fair value of each reporting unit exceeded its carrying value. …”see in full comparison
“Leverage Ratio – The leverage ratio is calculated by taking the sum of interest-bearing debt, minus unrestricted cash in excess of $50.0 million (but not exceeding $500.0 million), and dividing it by Adjusted EBITDA. This ratio is a key component of the covenants in our major debt agreements, which stipulate that the ratio must not exceed 3.50 (or 3.75 after certain material acquisitions), calculated on a rolling four-fiscal-quarter basis. If we violate these covenants, we could face increased financing costs or be required to repay debt before its maturity date. …”see in full comparison
see in full comparisonMany of ourOur reporting unitsservearecyclicalcyclical,markets,andwhich can cause fluctuations intheir sales andprofitability.profitability may fluctuate from year to year. For ourSolarAPAC Highway Safety andInternationalEMEAIrrigationStructures reporting units,which havewith a combined goodwill of approximately$130.0$43.6 million, the amount of cushion or excess fair value above their carrying values was less than15%.orDespiteapproximatelythis,15%weas of the most recent impairment test. In addition, our Access Systems reporting unit, with goodwill of approximately $9.5 million, had zero excess fair value over its carrying value following a goodwill impairment recorded during the second quarter of fiscal 2025. We believe these reporting units will generate positive cash flowsabovethat meet or exceed their current carryingvaluesvalues, and we will continue to monitor theirperformancegrowth prospects andgrowthopportunitiesprospects.for continuous improvement.
“Agriculture segment operating income increased in fiscal 2024, as compared to fiscal 2023, primarily due to a $137.3 million impairment of certain goodwill and other intangible assets in fiscal 2023. This increase was partially offset by lower sales volumes and decreased gross profit. Furthermore, in fiscal 2023, we incurred $9.1 million in severance costs within the Agriculture segment related to the Realignment Program.”see in full comparison
“3 The Company does not include adjustments for the Prospera subsidiary non-cash expenses for fiscal 2023 or going forward, as these amounts are no longer financially significant after the third quarter of fiscal 2023 impairment of goodwill and other intangible assets and realignment activities completed during the fourth quarter of fiscal 2023.”see in full comparison
“Our effective income tax rate in fiscal 2024 and fiscal 2023 was 25.2% and 38.1%, respectively. In fiscal 2024, the effective tax rate was the result of changes in the geographical mix of earnings. In fiscal 2023, the higher effective tax rate was the result of goodwill impairment charges for which no tax benefits were recorded.”see in full comparison
Full comparison: every changed paragraph (117)
On a consolidated basis, net sales increased by 0.7% in fiscal 2025, as compared to fiscal 2024, primarily driven by higher net sales in the Infrastructure segment, partially offset by lower net sales in the Agriculture segment. Growth in the Infrastructure segment was mainly attributable to improved pricing and mix, particularly within the Utility product line. This increase was partially offset by reduced net sales resulting from the divestitures of George Industries in the Coatings product line ($5.5 million) and our extractive business in the Lighting and Transportation (“L&T”) product line ($7.4 million). The decline in the Agriculture segment was driven by lower sales volumes in North America.
OnConsolidated agross consolidated basis, net salesprofit decreased by 0.1% in fiscal 2024,2025, as compared to fiscal 2023,2024. The decline was primarily dueattributable to lower netsales volumes in North America within the Agriculture segment and reduced sales volumes in the AgricultureL&T segment,and whileSolar netproduct lines within the Infrastructure segment. These impacts were partially offset by higher sales volumes and improved pricing in the Utility and Telecommunications products lines within the Infrastructure segment remained relatively flat.segment.
On a consolidated basis, both gross profit and gross profit as a percentage of net sales increased in fiscal 2024, as compared to fiscal 2023. This growth was driven by higher gross profit in the Infrastructure segment, partially offset by a decline in the Agriculture segment. Favorable factors in the Infrastructure segment, including steel deflation, strong commercial execution, and effective pricing strategies, were partially offset by lower volumes and pricing in the Agriculture segment, particularly in Brazil.
During the third quarter of fiscal 2023, management initiated a plan to streamline segment support across the Company and reduce costs through an organizational realignment program (the “Realignment Program”). The Realignment Program provided for a reduction in force through a voluntary early retirement program and other headcount reduction actions, which were completed by the end of fiscal 2023. The Board of Directors authorized the incurrence of cash charges up to $36.0 million in connection with the Realignment Program of which $35.2 million were incurred in fiscal 2023. Severance and other employee benefit costs totaled approximately $17.3 million within the Infrastructure segment, $9.1 million within the Agriculture segment, and $8.8 million within Corporate expense.
Consolidated selling, general, and administrative expenses (“SG&A”) decreasedexpenses increased by 0.1% in fiscal 2024,2025, as compared to fiscal 2023,2024, primarily drivendue to $24.2 million of legal contingency reserves and $23.8 million of expected credit losses in Brazil. These increases were partially offset by lower compensation and incentive costs, largelydriven attributablein topart by our strategic realignment, as well as reduced research and development costs primarily as a result from the Realignmentexit Programof inour fiscalProspera 2023.business.
In fiscal 2023, SG&A in the Agriculture segment included $4.9 million in amortization of identified intangible assets and $7.1 million in stock-based compensation expense from the Prospera subsidiary acquired in fiscal 2021. In fiscal 2024, Prospera intangible asset amortization was $0.4 million and stock-based compensation expense was $4.1 million.
Consolidated operating income increaseddecreased by 20.8% in fiscal 2024,2025, as compared to fiscal 2023,2024, primarily due to the impairment of certain goodwill and intangiblelong-lived assets totaling $140.8$91.3 million andmillion, realignment charges totalingof $35.2$15.4 millionmillion, inand fiscalslightly 2023. The increase was further supported by lowerhigher SG&A resulting from the Realignment Program and increased gross profit.expenses.
Consolidated net interest expense decreased by 37.2% in fiscal 2025, as compared to fiscal 2024, due to a decrease in average outstanding borrowings on the revolving line of credit along with lower average interest rates.
Other Income / Expenses
Amounts in “Gain on deferred compensation investments” on the Consolidated Statements of Earnings reflected changes in the market value of deferred compensation investments, which were fully offset by corresponding changes in the valuation of deferred compensation liabilities recorded in SG&A. Other components of “Other income (expenses)” included pension expense of $1.1 million and $0.6 million in fiscal 2025 and 2024, respectively, and foreign currency revaluation losses of approximately $8.4 million resulting from depreciation of the Argentine peso against the U.S. dollar in fiscal 2025.
Our effective income tax rate in fiscal 2025 and fiscal 2024 was 6.3% and 25.2%, respectively. In fiscal 2025, the reduction in the effective tax rate was the result of a tax benefit recognized for a worthless securities deduction of $73.8 million, the release of previously recorded valuation allowances on certain foreign tax credits of $13.4 million, and changes in the geographical mix of earnings. The worthless securities deduction was the result of the exit of our Prospera business.
Infrastructure segment sales increased by 3.0% in fiscal 2025, as compared to fiscal 2024, driven primarily by higher sales volumes in the Utility and Telecommunications product lines, which more than offset declines in L&T and Solar product lines.
Regionally, Infrastructure segment sales grew in North America in fiscal 2025, as compared to fiscal 2024, while sales declined in international markets during the same period.
Utility product line sales increased by 10.4% in fiscal 2025, as compared to fiscal 2024, reflecting favorable market pricing and higher volumes. Demand remained strong, supported by increased electrical energy consumption and utility investment to expand and reinforce grid capacity, including to serve growing power demand from data centers and other load growth.
L&T product line sales decreased by 6.1% in fiscal 2025, as compared to fiscal 2024, driven by lower volumes in the Asia-Pacific region and softer market demand in North America. The decline was further impacted by the divestiture of the extractive business in the fourth quarter of fiscal 2024.
Coatings product line sales increased by 2.4% in fiscal 2025, as compared to fiscal 2024, benefiting from healthy infrastructure demand. The increase was partially offset by the divestiture of George Industries in the fourth quarter of fiscal 2024.
Telecommunications product line sales increased by 25.2% in fiscal 2025, as compared to fiscal 2024, driven by increased carrier spending in the North American market, supported by our quick-turn order strategy and alignment with carrier spending programs.
Solar product line sales decreased by 46.2% in fiscal 2025, as compared to fiscal 2024, primarily due to lower volumes resulting from our strategic decision to exit select regional markets in the second quarter of fiscal 2025.
Infrastructure segment gross profit increased by 2.4% in fiscal 2025, as compared to fiscal 2024, primarily due to higher volumes in the Utility and Telecommunications product lines, partially offset by lower Solar volumes. In connection with lower anticipated volumes, we also recorded approximately $6.9 million of inventory reserves associated with our Solar businesses in fiscal 2025.
Infrastructure segment SG&A decreased by 2.0% in fiscal 2025, as compared to fiscal 2024, driven by lower incentive costs and research and development costs, partially offset by higher expected credit losses of approximately $14.3 million, primarily within the Solar product line.
Infrastructure segment operating income decreased by 13.5% in fiscal 2025, as compared to fiscal 2024, primarily due to impairment charges of $89.4 million related to certain long-lived assets primarily in the Solar and Access Systems reporting units, realignment charges of $7.6 million, and lower volumes in the L&T and Solar product lines.
In North America, Agriculture segment sales decreased by 11.3% in fiscal 2025, as compared to fiscal 2024, primarily due to lower irrigation equipment sales volumes, reflecting continued softness in the agriculture market. Contributing factors included lower grain prices, uncertainty surrounding trade policy, and the timing of government funding. The decrease was also impacted by lower replacement irrigation equipment sales following severe weather events in fiscal 2024.
In international markets, Agriculture segment sales increased by 0.2% in fiscal 2025, as compared to fiscal 2024, driven by sales growth in the Europe, Middle East, and Africa (“EMEA”) region. This increase was partially offset by lower sales in South America, where normalizing backlog levels, higher credit costs, and lower grain prices impacted growers’ purchasing decisions. The decline was further exacerbated by unfavorable foreign currency translation effects of $7.7 million.
The Agriculture business remains cyclical and is influenced by factors such as net farm income, commodity prices, weather volatility, geopolitical events, and farmer sentiment regarding future economic conditions. We actively monitor these variables across our key markets. In the U.S., we consider net farm income estimates published by the U.S. Department of Agriculture as a key indicator of grower purchasing capacity. In Brazil, we monitor grain prices, projected farm input costs, interest rates, and net farm income trends, which collectively influence grower liquidity, credit conditions, and purchasing behavior. Looking ahead, we remain focused on navigating evolving market conditions and positioning the Agriculture business for long-term growth across both domestic and international markets.
Agriculture segment gross profit decreased 6.9% in fiscal 2025, as compared to fiscal 2024, primarily due to lower sales volumes, particularly in North America and South America, which more than offset volume gains in the EMEA region. In fiscal 2025, we also increased inventory reserves by $8.5 million as a result of our slow-moving and obsolete inventory in response to continued softness within the agricultural market.
Agriculture segment SG&A increased by 9.1% in fiscal 2025, as compared to fiscal 2024, primarily due to $24.2 million of legal contingency reserves and $23.8 million of expected credit losses in Brazil, partially offset by lower compensation and incentive costs.
Agriculture segment operating income decreased by 33.4% in fiscal 2025, as compared to fiscal 2024. The decline was primarily driven by lower sales volumes in North America, charges related to the agriculture solar business totaling $5.9 million, and realignment charges of $2.9 million.
Corporate SG&A decreased by 8.2% in fiscal 2025, as compared to fiscal 2024, primarily due to lower compensation and incentive costs. This decrease was partially offset by higher professional services fees, insurance expenses, and technology costs. In addition, during fiscal 2025, we incurred $4.9 million in realignment charges within Corporate expense.
KEY FACTORS AFFECTING FINANCIAL RESULTS
Acquisitions
In the third quarter of fiscal 2023, we acquired HR Products, a leading wholesale supplier of irrigation parts in Australia, for $37.3 million, included in the Agriculture segment.
Divestitures
In the second quarter of fiscal 2023, we divested Torrent Engineering and Equipment Company, LLC, an Indiana-based integrator of prepackaged pump stations previously included in the Agriculture segment, resulting in a gain of $3.0 million recorded in “Other income (expenses)” in the Consolidated Statements of Earnings.
We manufacture Utility structures in Mexico and ship them to customers in the U.S. In fiscal 2024, we imported approximately $230.0 million worth of fabricated steel structures from Mexico into the U.S. On February 10, 2025, President Trump announced a 25% tariff on all steel and aluminum imports into the U.S., effective March 4, 2025. The U.S.-Mexico tariff situation remains highly fluid, and we are assessing the duration and scope of this presidential order. At this time, we cannot predict whether additional tariffs will be imposed. Any U.S. tariffs on fabricated steel structures we produce are expected to apply to transfer prices from Mexico. These potential tariffs, along with possible retaliatory measures from Mexico, could have a material adverse impact on our future cost of goods sold and operating income. The ultimate effect will depend on the magnitude and duration of the tariffs, and we are actively assessing options to mitigate any potential impact.
We continue to actively monitor othera range of macroeconomic and geopolitical uncertainties that have impactedaffected, orand may impactcontinue to affect, our business,business includingoperations and financial performance. These include volatility in the global economic and trade environment, inflationary cost pressures, supply chain disruptions, foreign currency fluctuations againstrelative to the U.S. dollar, changing interest rates, ongoing international conflicts, and labor shortages. These factors couldmay impactinfluence our operational costs, revenue,revenue streams, and overall financial stability. As conditions evolve, we are proactively adaptingadjusting our business strategies to mitigate riskspotential risks, maintain financial resilience, and ensure sufficient liquidity.liquidity to support ongoing operations and strategic initiatives.
Reportable Segments
In addition to our two reportable segments, we had a business and related activities in fiscal 2022 that did not exceed 10% of consolidated sales, operating income, or assets. This included the offshore wind energy structures business, which was reported in the Other segment until its divestiture in the fourth quarter of fiscal 2022. For additional information, see Note 20 in our Consolidated Financial Statements.
As of December 28,27, 2024,2025, the consolidated backlog of unshipped orders was approximately $1.4$1.7 billion, as compared to approximately $1.5$1.4 billion as of December 30,28, 2023.2024. This decreaseincrease is attributed to slightan decreasesincrease in both the Infrastructure andsegment partially offset by a decrease in the Agriculture segments.segment.
Consolidated net interest expense increased in fiscal 2024, as compared to fiscal 2023, due to the increase in average outstanding borrowings on the revolving line of credit along with higher average interest rates.
Other Income / Expenses (Including Gain (Loss) on Deferred Compensation Investments)
Amounts in “Gain (loss) on deferred compensation investments” included changes in the market value of deferred compensation assets which were offset by an equal opposite amount included in SG&A for the corresponding change in the valuation of deferred compensation liabilities. Other items included in “Other income (expenses)” were pension expenses along with losses related to the sales of George Industries and the extractive business in the fourth quarter of fiscal 2024 totaling approximately $4.5 million. Pension expense was $0.6 million and $0.2 million in fiscal 2024 and 2023, respectively.
Our effective income tax rate in fiscal 2024 and fiscal 2023 was 25.2% and 38.1%, respectively. In fiscal 2024, the effective tax rate was the result of changes in the geographical mix of earnings. In fiscal 2023, the higher effective tax rate was the result of goodwill impairment charges for which no tax benefits were recorded.
Infrastructure segment sales in fiscal 2024 were comparable to those in fiscal 2023. A significant decline in Solar product line volumes was offset by higher volumes in the Utility product line and increased average selling prices, particularly in the Utility product line. Regionally, Infrastructure segment sales grew in North America in fiscal 2024, as compared to fiscal 2023, but declined in international markets during the same period.
Sales in the Utility product line increased in fiscal 2024, as compared to fiscal 2023, driven by a continued focus on commercial excellence and a favorable product mix, including higher volumes of distribution and substation products. These factors more than offset the impact of steel index deflation on average selling prices. The overall product line growth occurred amid strong demand in the utility market, fueled by ongoing investments in the global energy transition and grid hardening efforts.
Lighting and Transportation product line sales decreased in fiscal 2024, as compared to fiscal 2023. This decline was due to lower sales volumes caused by continued softness in the lighting market, the timing of transportation projects, and an unfavorable currency translation effect totaling approximately $1.9 million.
Coatings product line sales decreased slightly in fiscal 2024, as compared to fiscal 2023, primarily due to lower sales volumes in international markets. These declines were partially offset by increased average selling prices.
Telecommunications product line sales decreased in fiscal 2024, as compared to fiscal 2023, driven by lower sales volumes in the first half of fiscal 2024. However, sales volumes rebounded in the second half of fiscal 2024, supported by increased carrier spending amid a stabilizing North American market environment.
Solar product line sales decreased significantly in fiscal 2024, as compared to fiscal 2023. This decline was attributed to the non-recurrence of a large utility-scale project from fiscal 2023, a strategic decision in the second quarter of fiscal 2024 to exit certain low-margin projects, and an unfavorable foreign currency translation effect totaling approximately $1.4 million.
Infrastructure segment gross profit and gross profit as a percentage of net sales increased in fiscal 2024, as compared to fiscal 2023. These improvements were driven by a favorable product mix and commercial excellence, which resulted in higher average selling prices that more than offset the impact of steel index deflation.
Infrastructure segment SG&A decreased in fiscal 2024, as compared to fiscal 2023. This reduction was primarily due to lower compensation costs as a result of the Realignment Program.
Infrastructure segment operating income increased in fiscal 2024, as compared to fiscal 2023. This improvement was driven by higher gross profit and lower SG&A. In addition, we incurred severance costs totaling $17.3 million within the Infrastructure segment in fiscal 2023 related to the Realignment Program.
In North America, Agriculture segment sales declined in fiscal 2024, as compared to fiscal 2023. This decrease was primarily driven by lower tubular steel product sales, reflecting weakness in the North American agriculture market. Although sales of replacement irrigation equipment increased due to severe weather events earlier in fiscal 2024, these gains were partially offset by continued softness in the agriculture market, influenced by lower grain prices. Additionally, average selling prices for irrigation equipment were slightly lower compared to the prior year.
In international markets, Agriculture segment sales decreased in fiscal 2024, as compared to fiscal 2023. This was driven by significantly lower sales in Brazil, where normalizing backlog levels and lower grain prices impacted growers’ purchasing decisions. The decline was further exacerbated by unfavorable foreign currency translation effects of $12.6 million. However, sales growth in the Europe, Middle East, and Africa region, along with incremental sales from the HR Products acquisition in fiscal 2023, partially offset these declines.
Sales of Technology Products and Services decreased in fiscal 2024, as compared to fiscal 2023, primarily due to lower hardware sales volumes.
Our Agriculture business remains cyclical and is influenced by factors such as changes in net farm income, commodity prices, weather volatility, geopolitical events, and farmer sentiment regarding future economic conditions. We closely monitor these variables to assess their potential impacts on our financial performance, including estimated U.S. net farm income data released by the U.S. Department of Agriculture. In Brazil, we actively track fluctuations in grain prices and projected farm input costs to evaluate grower sentiment. Looking ahead, Irrigation Equipment and Parts sales in North America are expected to remain muted for fiscal 2025.
Agriculture segment gross profit decreased in fiscal 2024, as compared to fiscal 2023, primarily due to lower sales volumes, particularly in North America and Brazil, as well as an unfavorable geographic sales mix.
Agriculture segment SG&A decreased in fiscal 2024, as compared to fiscal 2023, primarily due to lower compensation costs, largely driven by the Realignment Program. Additionally, intangible asset amortization expenses declined as a result of the third quarter of fiscal 2023 impairment of certain Prospera amortizing proprietary technology.
Agriculture segment operating income increased in fiscal 2024, as compared to fiscal 2023, primarily due to a $137.3 million impairment of certain goodwill and other intangible assets in fiscal 2023. This increase was partially offset by lower sales volumes and decreased gross profit. Furthermore, in fiscal 2023, we incurred $9.1 million in severance costs within the Agriculture segment related to the Realignment Program.
Corporate
Corporate SG&A decreased in fiscal 2024, as compared to fiscal 2023, primarily due to lower compensation costs resulting from the Realignment Program in fiscal 2023, as well as reduced incentive expenses. These reductions were partially offset by higher insurance expenses and increased technology costs.
What changed in the latest 10-Q
Risk Factors
There were no material changes in the Company’s risk factors during the twenty-six weeks ended June 27, 2026. For additional information on the Company’s risk factors, refer to Part I, Item 1A of the Company’s Annual Report on Form 10‑K for the fiscal year ended December 27, 2025.
Full comparison: every changed paragraph (1)
There were no material changes in the Company’s risk factors during the thirteentwenty-six weeks ended MarchJune 28,27, 2026. For additional information on the Company’s risk factors, refer to Part I, Item 1A of the Company’s Annual Report on Form 10‑K for the fiscal year ended December 27, 2025.
Management's Discussion & Analysis (MD&A)
New heading “NM = not meaningful”
New heading “CRITICAL ACCOUNTING ESTIMATES”
New heading “Impairment of Goodwill and Other Intangible Assets”
Largest changes
“Impairment of Goodwill and Other Intangible Assets”see in full comparison
“In connection with this reorganization, we performed goodwill impairment assessments immediately before and after the reorganization and concluded that no impairment existed. This assessment reflected improved cash flow forecasts relative to the prior annual impairment test, primarily due to restructuring actions undertaken in the fourth quarter of fiscal 2023.”see in full comparison
“During fiscal 2025, management elected to abandon the use of Prospera’s proprietary technology and initiated actions to exit the business. Management performed a qualitative assessment and concluded that no triggering event existed, as the decision did not materially affect the expected future cash flows of the reporting units and no indicators were present that it was more likely than not that the fair value of any reporting unit was below its carrying amount prior to the annual impairment test. …”see in full comparison
“The accounting policies described below involve significant judgments and estimates that are used in preparing our Consolidated Financial Statements. Management exercises substantial judgment in determining these estimates, which are essential to our financial reporting. The key areas that involve such estimates include impairments of goodwill and other intangible assets, income taxes, revenue recognition for our Infrastructure product lines recognized over time, and inventory obsolescence. …”see in full comparison
“In the fourth quarter of fiscal 2025, we completed a legal entity reorganization that resulted in a deemed liquidation of the Prospera business. Because the fiscal 2025 annual goodwill impairment test had already excluded Prospera-related cash flows, management concluded that the subsequent decision by the Board of Directors to formally exit the business and abandon its technology did not represent a change in the assumptions used in the annual impairment test. …”see in full comparison
see in full comparisonOn February 28, 2026, the United States and Israel commenced military strikes against Iran, which has prompted Iranian retaliatory attacks throughout the broaderThe Middle Eastregion.continued to experience military conflict and related geopolitical instability during the second quarter of fiscal 2026. We have agriculture operations headquartered in Dubai, United Arab Emirates, with business activitiesconducted inthroughout theMiddle East.region. Theongoingconflicthasand broader regional instability have affected, andmaycould continue to adversely affect, our regional operations through disruptions to logistics networks and transportation infrastructure,increases inincreased energy costs, and volatility in regional currency and financial markets. Certainof ourcustomers and suppliers in the regionmayhavealsobeen,beand could continue to be, negativelyimpactedaffected by theseevents.developments. We continue to actively monitor theevolvingsituation andtakeareappropriatetakingactionsactions, as appropriate, to mitigatethepotentialimpactimpacts on our operations, financial results, and liquidity.
Full comparison: every changed paragraph (56)
NM = not meaningful
Consolidated net sales increased by $59.9$68.1 million or 6.2%6.5% in the second quarter of fiscal 2026 and increased $128.0 million or 6.3% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The increaseincreases waswere primarily driven by higher net sales in the Infrastructure segment, particularly within the North America Utility product line, partially offset by lower net sales in the Agriculture segment.segment, primarily from international markets.
Consolidated gross profit increased by $25.8$19.7 million or 8.9%6.1% in the second quarter of fiscal 2026 and increased $45.4 million or 7.4% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The increaseincreases waswere largelyprimarily attributable to favorable pricing and higher sales volumes in the Infrastructure segment, particularly within the North America Utility product line, as well as higher average selling prices in North America in the Agriculture segment.line. These improvements were partially offset by lower sales volumes in the Agriculture segment, largelyprimarily in the Middle East and Brazil.East.
Consolidated selling, general, and administrative (“SG&A”) expenses decreased $17.0 million or 8.9% in the second quarter of fiscal 2026 and decreased $18.5 million or 5.2% in the first half of fiscal 2026, as compared to the same periods of fiscal 2025. In the second quarter of fiscal 2025, the Company recognized $7.0 million of expenses associated with software licenses that were no longer expected to be used, in addition to a $3.2 million write-off related to the Company’s exit from the agriculture solar market in Brazil. The remaining decreases were primarily driven by lower expected credit losses, in part due to certain recoveries within our Agriculture segment operations in Brazil.
Consolidated selling, general, and administrative (“SG&A”) expenses decreased by $1.5 million or 0.9% in the first quarter of fiscal 2026, as compared to the same period of fiscal 2025, driven mainly by lower compensation costs from reduced employee headcount, partially offset by increased incentive compensation resulting from improved performance in the North America Utility product line.
Consolidated operating income increased by $27.3$136.8 million or 21.3%467.4% in the second quarter of fiscal 2026 and increased $164.1 million or 104.2% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The increaseincreases waswere primarily dueattributable to improvedthe pricingimpairment charges on certain long-lived assets of $91.3 million and higherrealignment salescharges volumesof $8.9 million recognized in the Infrastructuresecond segment,quarter partiallyof offsetfiscal by2025, as well as lower salesSG&A volumesexpenses in thefiscal Agriculture segment.2026.
Our effective income tax rate in the second quarter and first quarterhalf of fiscal 2026 was 25.6%,25.8%, and 25.7%, respectively, as compared to 26.1%117.2% and 38.7% in the same periodperiods of fiscal 2025. The decreasedecreases in the effective tax rate waswere primarily attributable to agoodwill moreimpairment favorablecharges geographicrecognized mixduring the second quarter of earnings.fiscal 2025 for which no tax benefit was recorded.
Infrastructure segment sales increased by $99.7$113.4 million or 14.1%14.8% in the second quarter of fiscal 2026 and increased $213.1 million or 14.5% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The increaseincreases waswere driven by favorable pricing and higher sales volumes in the North America Utility product line, as well as increasedhigher sales volumes in the North America Coatings product line. These increases more than offset declineslower sales volumes in the North America Lighting and Transportation (“L&T”) and North America Telecommunications product lines.line. Foreign currency translation favorably impacted results by approximately $7.4 million in the firstsecond quarter of fiscal 2026 resultsand by$19.4 approximatelymillion $12.0the million.first half of fiscal 2026.
North America Utility product line sales increased by $91.3$115.6 million or 27.4%33.9% in the second quarter of fiscal 2026 and increased $206.9 million or 30.7% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025, reflecting favorable pricing and higher sales volumes. Demand remained strong, supported by increased electrical energy consumption and continued utility investment to expand and reinforce grid capacity, including investments to serve growing power demand from data centers and other sources of load growth.
North America L&TLighting and Transportation product line sales decreased by $5.5$3.3 million or 4.4%2.4% in the second quarter of fiscal 2026 and decreased $8.7 million or 3.4% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025, drivenprimarily bydue to lower sales volumes resulting from certain operational challenges, partially offset by favorable pricing.
North America Coatings product line sales increased by $7.4$9.9 million or 13.3%16.6% in the second quarter of fiscal 2026 and increased $17.3 million or 15.0% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025, driven by favorable pricing and higher volumes,sales benefitingvolumes resulting from continued strength in infrastructure-related and data center demand.
North America Telecommunications product line sales decreased by $2.5$20.2 million or 3.9%26.1% in the second quarter of fiscal 2026 and decreased $22.6 million or 16.0% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025, primarily due to lower sales volumes associated with slightly lowerreduced carrier spending.
International Infrastructure and Solar product line sales increased by $8.9$11.4 million or 6.9%7.4% in the second quarter of fiscal 2026 and increased $20.3 million or 7.2% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025,2025. The increases were largely dueattributable to favorable foreign currency translation impacts totalingof approximately $11.3$7.0 million,million partiallyin offsetthe bysecond lowerquarter telecommunicationsof salesfiscal volumes.2026 and $18.3 million in the first half of fiscal 2026.
Infrastructure segment gross profit increased by $31.3$36.8 million or 14.7%16.1% in the second quarter of fiscal 2026 and increased $68.1 million or 15.4% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025, primarily due to favorable pricing and higher sales volumes in the North America Utility and the North America Coatings product lines.
Infrastructure segment SG&A expenses increaseddecreased by $5.5$0.9 million or 5.8%0.8% in the second quarter of fiscal 2026 and increased $4.6 million or 2.2% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The second-quarter decrease was primarily driven by lower expected credit losses, partially offset by higher compensation costs. The increase in the first half of fiscal 2026 was primarily driven by higher compensation and incentivesincentive costs.costs, partially offset by lower expected credit losses.
Infrastructure segment operating income increased by $25.8$128.5 million or 22.0%495.7% in the second quarter of fiscal 2026 and increased $154.3 million or 107.8% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The increaseincreases waswere primarily attributable to higherthe impairment charges of $89.4 million related to certain long-lived assets, primarily in the Solar and Access Systems reporting units, and realignment charges of $1.4 million recorded during the second quarter of fiscal 2025. The increases also reflected favorable pricing and higher sales volumes, alongpartially withoffset anby improvedhigher globalinput cost structure.costs.
In North America, Agriculture segment sales increaseddecreased by $2.1$3.3 million or 1.5%2.3% in the second quarter of fiscal 2026 and decreased $1.2 million or 0.4% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The increasedecreases waswere primarily attributable to higher average selling prices, partially offset by lower irrigation equipment sales volumes,volumes reflecting continued softness in the agricultureagricultural market.market, partially offset by higher average selling prices. This softness was driven by lower grain prices, uncertainty surrounding trade policy, and the timing of government funding.
In international markets, Agriculture segment sales decreased by $42.4 million or 32.7%28.9% in the second quarter of fiscal 2026 and decreased $84.8 million or 30.6% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The declinedeclines waswere primarily driven by operational disruptions related to the ongoing Middle East conflict, as well as slightly lower sales volumes in Brazil. These impacts were partially offset by favorable foreign currency translationimpacts of approximately $5.1$6.8 million and $11.8 million during the second quarter and first quarterhalf of fiscal 2026.2026, respectively.
The Agriculture business is cyclical and influenced by factors including net farm income, commodity prices, weather volatility, geopolitical events, and farmer sentiment regarding future economic conditions. We closely monitor these variables across our key markets. In the U.S., net farm income estimates published by the U.S. Department of Agriculture are a key indicator of grower purchasing capacity. In Brazil, we monitor grain prices, projected farm input costs, interest rates, and net farm income trends, which collectively influence grower liquidity, credit availability, and purchasing behavior. Looking ahead, weWe remain focused on managing through evolving market conditions and positioning the Agriculture business for long-term growth across both domestic and international markets.
Agriculture segment gross profit decreased by $5.5$17.1 million or 7.1%18.3% in the second quarter of fiscal 2026 and decreased $22.6 million or 13.2% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The decreasedecreases were primarily reflectedattributable to lower sales volumes asresulting a result offrom the ongoing Middle East conflict and continued market softness in North America, partially offset by higher average selling prices in North America. Additionally, as of March 28, 2026, our manufacturing facility in Dubai has remained idle leading to abnormal manufacturing variances in the first quarter of fiscal 2026.
Agriculture segment SG&A decreased by $2.8$16.1 million or 6.7%30.7% in the second quarter of fiscal 2026 and decreased $18.9 million or 20.0% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The decreasedecreases were primarily reflecteddriven by lower compensationexpected costs.credit losses, which included $3.8 million of recoveries of previously aged accounts receivable in Brazil.
Agriculture segment operating income decreasedincreased by $2.7$3.8 million or 7.5%10.6% in the second quarter of fiscal 2026 and increased $1.1 million or 1.5% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025. The declineincreases waswere primarily attributable to favorable pricing and lower salesSG&A volumes,expenses, partially offset by reducedlower SG&Asales expenses.volumes. Results for the second quarter of fiscal 2025 were also impacted by impairment and other non-recurring charges of $5.9 million related to the agriculture solar business and realignment charges of $2.9 million.
Corporate SG&A expenses increased by 0.1% in the second quarter of fiscal 2026 and decreased by $4.2 million or 16.8%7.9% in the first quarterhalf of fiscal 2026, as compared to the same periodperiods of fiscal 2025,2025. The second-quarter increase was primarily due to higher professional service fees, partially offset by lower compensation and incentive costs resulting from lower headcount. The first-half decrease was primarily due to lower compensation and technology costs, partially offset by higher incentiveprofessional costs.service fees.
On February 28, 2026, the United States and Israel commenced military strikes against Iran, which has prompted Iranian retaliatory attacks throughout the broaderThe Middle East region.continued to experience military conflict and related geopolitical instability during the second quarter of fiscal 2026. We have agriculture operations headquartered in Dubai, United Arab Emirates, with business activities conducted inthroughout the Middle East.region. The ongoing conflict hasand broader regional instability have affected, and maycould continue to adversely affect, our regional operations through disruptions to logistics networks and transportation infrastructure, increases inincreased energy costs, and volatility in regional currency and financial markets. Certain of our customers and suppliers in the region mayhave alsobeen, beand could continue to be, negatively impactedaffected by these events.developments. We continue to actively monitor the evolving situation and takeare appropriatetaking actionsactions, as appropriate, to mitigate thepotential impactimpacts on our operations, financial results, and liquidity.
On April 2, 2026, a proclamation was issued modifying Section 232 tariffs on steel, aluminum, and certain derivative articles, effective April 6, 2026. Under the proclamation, tariffs on certain steel products, including utility poles, are determined based on sourcing requirements, with a 10% ad valorem rate applicable to products in which at least 95% of steel content was melted and poured in the U.S. Products that do not meet these requirements are subject to higher tariff rates, including up to 50% on full value. On June 1, 2026, a subsequent proclamation further adjusted the tariff framework by lowering the U.S.-content threshold for preferential rate eligibility from 95% to 85%. During fiscal 2025, we imported approximately $220.0 million of fabricated steel structures from Mexico into the U.S., which represents the primary category of products affected by these modifications. Based on our current assessment, we believe that the majority of our steel poles produced at our Mexico facility will qualify for the 10% tariff rate, as those structures are produced using U.S. melted and poured steel. Management has interpreted the requirements of the proclamation based on its current understanding and available guidance. Regulatory interpretations may evolve, and authorities could reach conclusions that differ from management’s interpretation. If such differing interpretations were to occur, the Company may be required to modify its practices, which could result in increased costs or changes to reported results.
In February 2025, the Board of Directors increased the authorized capacity under our share repurchase program by $700.0 million, bringing the total authorization to $2.1 billion, with no stated expiration date. We are not obligated to make repurchases and may discontinue the program at any time. Any purchases will be funded through available liquidity and ongoing cash flows, and will be made subject to prevailing market and economic conditions. As of MarchJune 28,27, 2026, we had approximately $510.6$450.6 million of remaining capacity under the share repurchase program. Since the program’s inception in May 2014, we have repurchased approximately 9.09.1 million shares for a total of $1.6 billion.
We have established a supplier finance program with a financial institution, allowing qualifying suppliers the option to sell their receivables from us to the financial institution under independently negotiated terms. Participation in the program is entirely voluntary for suppliers and does not affect our payment terms, amounts, timing, or liquidity. We have no economic interest in a supplier’s decision to participate. As of MarchJune 28,27, 2026 and December 27, 2025, our accounts payable in the Condensed Consolidated Balance Sheets included $56.4$38.8 million and $56.3 million, respectively, related to the obligations under this program.
As of MarchJune 28,27, 2026, our available debt financing primarily included senior unsecured notes and a revolving credit facility.
As of MarchJune 28,27, 2026, our senior unsecured notes consisted of:
As of MarchJune 28,27, 20262026, andwe had no outstanding borrowings under this facility. As of December 27, 2025, we had outstanding borrowings of $60.0$65.0 million and $65.0 million, respectively, under this facility. The facility includes a financial covenant that may limit additional borrowing. As of MarchJune 28,27, 2026, we could borrow $739.8$799.8 million under the facility, after accounting for $0.2 million in standby letters of credit related to certain insurance obligations. Additionally, we maintain short‑term bank lines of credit totaling $9.8$5.7 million, all of which were unused as of MarchJune 28,27, 2026.
As of MarchJune 28,27, 2026, we were in compliance with all covenants related to these debt agreements. For detailed calculations of Adjusted EBITDA and the leverage ratio, please refer to the “Selected Financial Measures” section.
As of MarchJune 28,27, 2026, we held $160.2$139.1 million in cash, including $132.3$110.9 million in non-U.S. subsidiaries. Distributions of this foreign cash would incur tax liabilities. As of MarchJune 28,27, 2026, we had liabilities of $2.5$1.6 million for foreign withholding taxes and $0.2 million for U.S. state income taxes.
The table below summarizes our cash flow information for the thirteentwenty-six weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025:
Operating Cash Flows and Working Capital – Cash provided by operating activities totaled $103.5$251.6 million in the first quarterhalf of fiscal 2026, as compared to $65.1$232.7 million in the same period of fiscal 2025. The change in operating cash flows reflects higher operatingnet earnings and lower cash income tax payments, partially offset by unfavorable changes in additionworking capital, including increases in receivables, inventories, and the $20.3 million settlement payment associated with our litigation matters in Brazil. The lower cash tax payments were a result of the worthless securities deduction that was recorded in the fourth quarter of fiscal 2025 that gave rise to a lowerfederal incentivetax compensationreceivable bonusthat payoutwas inused to reduce estimated tax payments through the first half of fiscal 2026 relative to fiscal 2025.2026.
Investing Cash Flows – Cash used in investing activities totaled $43.3$76.6 million in the first quarterhalf of fiscal 2026, as compared to $30.2$64.3 million in the same period of fiscal 2025. Investing activities in the first quarterhalf of fiscal 2026 primarily included capital spending of $34.6$70.5 million and the acquisition of RMDS Innovations,Innovation, Inc., net of cash acquired, of $11.2$11.5 million. Investing activities in the first quarterhalf of fiscal 2025 primarily included capital spending of $30.3$62.3 million.
Financing Cash Flows – Cash used in financing activities totaled $87.2$223.7 million in the first quarterhalf of fiscal 2026, as compared to $17.0$131.2 million in the same period of fiscal 2025. Our total interest-bearing debt was $815.0$755.2 million as of MarchJune 28,27, 2026 and $829.5 million as of December 27, 2025. Financing activities in the first quarterhalf of fiscal 2026 primarily consisted of borrowings on the revolving credit facility of $50.0$65.2 million offset by payments of $55.6$130.6 million, dividends paid of $13.3$28.2 million, stock repurchases of $57.6$117.5 million, and the purchase of a redeemable noncontrolling interest of $8.9 million, and the net activity from stock option and incentive plans, including the associated withholding payments, of $1.9 million. Financing activities in the first quarterhalf of fiscal 2025 primarily consisted of borrowings on the revolving credit facility and short-term notes of $62.8$132.8 million, offset by principal payments on our long-term debt and short-term borrowings of $64.6$134.9 million, dividends paid of $12.0$25.7 million, and the net activity from stock option and incentive plans, including the associated withholding payments,repurchases of $3.5$100.0 million.
The combined financial information for the thirteen and twenty-six weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 was as follows:
The combined financial information as of MarchJune 28,27, 2026 and December 27, 2025 was as follows:
As of MarchJune 28,27, 2026 and December 27, 2025, non-current assets included a receivable from non-guarantor subsidiaries of $77,603$67,171 and $83,641, respectively. As of MarchJune 28,27, 2026 and December 27, 2025, non-current liabilities included a payable to non-guarantor subsidiaries of $368,414$409,258 and $325,225, respectively.
The calculation of Adjusted EBITDA for the four fiscal quarters ended MarchJune 28,27, 2026 was as follows:
The calculation of the leverage ratio as of MarchJune 28,27, 2026 was as follows:
There were no material changes in the Company’s financial obligations and commitments during the thirteentwenty-six weeks ended MarchJune 28,27, 2026. For additional information on the Company’s financial obligations and commitments, refer to the “Cash Uses” section in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025.
CRITICAL ACCOUNTING ESTIMATES
The accounting policies described below involve significant judgments and estimates that are used in preparing our Consolidated Financial Statements. Management exercises substantial judgment in determining these estimates, which are essential to our financial reporting. The key areas that involve such estimates include impairments of goodwill and other intangible assets, income taxes, revenue recognition for our Infrastructure product lines recognized over time, and inventory obsolescence. These estimates are based on our past experiences and other assumptions that we believe to be reasonable given the circumstances.
We continually re-evaluate these estimates as circumstances evolve, understanding that actual results may differ due to changes in assumptions or conditions. To ensure accuracy and transparency in our financial reporting, the selection and application of our critical accounting policies are reviewed annually by our Audit Committee.
Other than the below, there were no material changes in the Company’s critical accounting estimates during the twenty-six weeks ended June 27, 2026. For additional information on the Company’s critical accounting estimates, refer to the “Critical Accounting Estimates” section in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025.
Impairment of Goodwill and Other Intangible Assets
In fiscal 2025, there were no changes to the composition of our reporting units. However, the number of reporting units with recorded goodwill decreased from twelve to eleven during fiscal 2025 as a result of the full impairment of goodwill associated with our Solar reporting unit in the second quarter.
We periodically reassess our reporting unit structure based on changes in how the business is managed, including changes in organizational structure, leadership, and the manner in which financial information is reviewed by segment management. Determining reporting units requires judgment, including evaluating the level at which discrete financial information is available and regularly reviewed by segment management, how components of the business are organized and managed, and whether components of the business share similar economic characteristics.
These same considerations directly inform how acquired assets, liabilities, and goodwill are assigned or reallocated to reporting units. Specifically, items are assigned based on how the underlying operations are organized and how financial results are reviewed by segment management, including whether assets and liabilities are specifically identifiable to a reporting unit or are shared across reporting units.
In the first quarter of fiscal 2024, we reorganized certain operations within our Agriculture reportable segment. Specifically, the former Agriculture Technology reporting unit was integrated into the North America Irrigation and International Irrigation reporting units. This reorganization was driven by changes in senior leadership and a strategic determination that technology offerings are integral to the underlying irrigation equipment business rather than a separate independent line of business, which also resulted in a change to the manner in which discrete financial information is reviewed by segment management. Accordingly, management concluded that the Agriculture Technology operations no longer constituted a separate reporting unit.
In connection with this reorganization, we performed goodwill impairment assessments immediately before and after the reorganization and concluded that no impairment existed. This assessment reflected improved cash flow forecasts relative to the prior annual impairment test, primarily due to restructuring actions undertaken in the fourth quarter of fiscal 2023.
The assets and liabilities (excluding goodwill) of the former Agriculture Technology reporting unit were reassigned to the North America Irrigation and International Irrigation reporting units in a manner consistent with how the underlying operations and financial information are managed and reviewed by segment management following the reorganization. Assets and liabilities that were specifically identifiable to a reporting unit were directly assigned. For assets and liabilities that were not specifically identifiable, amounts were reallocated based on the reorganization of the business and the revised internal reporting structure used by segment management.
Goodwill of approximately $168.0 million, which includes the goodwill associated with our former Prospera business, was then allocated to these reporting units using a relative fair value approach in accordance with ASC 350-20-35-45. This approach was used because goodwill does not represent separately identifiable assets and must be reallocated based on the relative fair values of the reporting units expected to benefit from the reorganization. The estimated fair values were derived from projected revenues and cash flows of the respective reporting units. Accordingly, goodwill associated with the former Prospera business is included within these reporting units.
During fiscal 2025, management elected to abandon the use of Prospera’s proprietary technology and initiated actions to exit the business. Management performed a qualitative assessment and concluded that no triggering event existed, as the decision did not materially affect the expected future cash flows of the reporting units and no indicators were present that it was more likely than not that the fair value of any reporting unit was below its carrying amount prior to the annual impairment test. Accordingly, no after-tax cash flows associated with Prospera were included in the projected cash flows used in our fiscal 2025 annual goodwill impairment test, reflecting management’s expectation at the time of the annual test that Prospera would not contribute to the future operating performance of the reporting units.
In the fourth quarter of fiscal 2025, we completed a legal entity reorganization that resulted in a deemed liquidation of the Prospera business. Because the fiscal 2025 annual goodwill impairment test had already excluded Prospera-related cash flows, management concluded that the subsequent decision by the Board of Directors to formally exit the business and abandon its technology did not represent a change in the assumptions used in the annual impairment test. Accordingly, this event did not constitute a triggering event requiring an interim goodwill impairment assessment under ASC 350-20-35-30.
VMI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 208 shares, about $101.1K) and open-market sales in 4 filings (3 insiders, 3 trade dates, 19,124 shares, about $9.4M). Net open-market shares: -18,916 (purchases minus sales); net value about -$9.3M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-08 | Hickey Toni |
Grant/award | 310 | — | — |
| 2026-08-17 | Campbell Renee L |
Shares withheld for tax | 601 | $501.85 | $301.6K |
| 2026-08-17 | Campbell Renee L |
Option exercise | 838 | $252.89 | $211.9K |
| 2026-07-31 | Applbaum Avner M |
Shares withheld for tax | 162 | $481.70 | $78.0K |
| 2026-07-31 | Applbaum Avner M |
Shares withheld for tax | 162 | $481.70 | $78.0K |
| 2026-07-29 | Schwietz John L |
Shares withheld for tax | 24 | $456.29 | $11.0K |
| 2026-07-27 | Freye Theodor Werner |
Open-market sale | 800 | $495.00 | $396.0K |
| 2026-07-23 | Schwietz John L |
Open-market purchase | 208 | $486.15 | $101.1K |
| 2026-05-06 | Campbell Renee L |
Open-market sale | 412 | $522.45 | $215.2K |
| 2026-05-06 | Campbell Renee L |
Open-market sale | 412 | $522.45 | $215.2K |
| 2026-04-27 | Robinson-Berry Joan |
Grant/award | 341 | — | — |
| 2026-04-27 | Paglia Catherine James |
Grant/award | 341 | — | — |
| 2026-04-27 | Neary Daniel P |
Grant/award | 341 | — | — |
| 2026-04-27 | Milliken James B. |
Grant/award | 341 | — | — |
| 2026-04-27 | Maass Paul T |
Grant/award | 341 | — | — |
| 2026-04-27 | Lanoha Richard Andrew |
Grant/award | 341 | — | — |
| 2026-04-27 | Freye Theodor Werner |
Grant/award | 341 | — | — |
| 2026-04-27 | Favre Ritu |
Grant/award | 341 | — | — |
| 2026-04-27 | Caplan Deborah H |
Grant/award | 341 | — | — |
| 2026-04-27 | Bay Mogens C |
Grant/award | 341 | — | — |
| 2026-04-24 | Bay Mogens C |
Open-market sale | 7,550 | $491.48 | $3.7M |
| 2026-04-24 | Bay Mogens C |
Open-market sale | 1,450 | $493.97 | $716.3K |
| 2026-04-24 | Bay Mogens C |
Open-market sale | 1,500 | $492.45 | $738.7K |
| 2026-04-24 | Bay Mogens C |
Open-market sale | 5,000 | $494.07 | $2.5M |
| 2026-04-24 | Bay Mogens C |
Open-market sale | 2,000 | $490.00 | $980.0K |
Well-known investors holding VMI (13F)
None of the 59 investors we track reported a position in their latest 13F.