Valmont expects income of Delta segment to offset acquisition costs

By Jennifer Lanning Drey

Portland, Ore., July 16 - Valmont Industries, Inc. expects the full-year operating income of its Delta segment to largely offset the financing and deal expenses related to Valmont's May 12 acquisition of Delta plc, Mogens Bay, chief executive officer of Valmont, said during the company's second-quarter earnings conference call.

The Delta segment contributed $74.2 million to sales and $7.2 million to Valmont's operating income subsequent to its acquisition, the company also said Friday.

But company-wide, "lower volumes, particularly in the utility business, contributed to substantial deleverage of fixed costs and a 46% reduction in operating income for the company," Bay said.

Valmont reported second-quarter sales of $481.6 million, compared with sales of $498.8 million for the same period of 2009.

Valmont's long-term debt excluding current installments increased to $517.9 million at June 26 from $258.4 million a year earlier, reflecting borrowings for the Delta transaction, Bay said.

At the same time, the company's cash and cash equivalents increased to $314.4 million at June 26 from $96.3 million at June 27, 2009. The increase was due to the combined cash positions of Valmont and Delta, he said.

Valmont is an Omaha-based producer of fabricated metal products, pole and tower structures and mechanized irrigation systems.

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