Valmont Industries, Inc.

you please limit yourself to one question and one brief follow-up and return to the question queue. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Renee Campbell, Senior Vice President, Investor Relations, and Treasurer. Ms. Campbell, you may begin.

Thank you and good morning. Welcome to Valmont Industries' first quarter 2022 earnings call. With me today are Steve Koniewski, President and Chief Executive Officer, Aaron Schaper, Group President of Infrastructure, Abner Applebaum, Executive Vice President and Chief Financial Officer, and Tim Francis, Senior Vice President and Corporate Controller. This morning, Steve will provide a brief summary of our first quarter results, commenting on our markets and long-term business strategies. Erin will provide an overview of our new infrastructure segment, and Abner will review our financial performance and provide our outlook and indications for 2022 with closing remarks from Steve. This will be followed by Q&A. A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the Investors page at Belmont.com. A replay will be available on our website later this morning. Please note that this call is subject to our disclosure on forward-looking statements, which applies to today's discussion, is outlined on slide two of the presentation, and will be read in full at the end of today's call. I would now like to turn the call over to our President and Chief Executive Officer, Steve Konieski.

Thank you, Renee. Good morning, everyone, and thank you for joining us. We delivered record first quarter financial results driven by effective price management and strong demand across our portfolio. Our pricing actions were helped by our strong operational and quality performance. Our team's continued focus on pricing and our ability to meet our customers' expectations has led to a strong start to the year. Once again, our 11,000 Valmont employees around the world demonstrated diligence and dedication by serving our customers with innovative and essential products and services. Through an unwavering commitment to our core values, they continue to operate with passion and integrity, driving continuous improvement and delivering exceptional results. I am thankful for and proud of their success. Before reviewing our first quarter, I would like to acknowledge the devastating events that are happening in Ukraine. We recognize the profound effect these events are having on the world and everyone in the region whose lives have been disrupted and changed as a result. Historically, our sales to Russia and Ukraine represent less than 1% of our total revenue. Our thoughts are with those who are impacted by this growing humanitarian crisis. We wish for a quick resolution to this conflict and a return to peace in the region. Now, let me move to a brief first quarter overview as shown on slide four. Net sales of $980.8 million grew 27%, and adjusted operating income improved 28% year-over-year due to continued strong end-market demand and effective management of strategic pricing initiatives. Our Valmont culture and our core values empower a high-performance organization that drives us to execute and deliver results, even amid a very dynamic market environment. Because of this, we are building momentum into 2022, navigating supply chain volatility, continuing to implement pricing strategies, and realizing value for the innovation we bring to our customers. Our price leadership has allowed us to successfully manage inflationary costs, and we expect to continue to do so as the year goes forward. You will notice that we are now reporting our financial results in two segments. as we announced in our April 6th release. I will share more about the strategic rationale for this new segment structure in a few minutes. Moving to infrastructure, sales of $680.7 million grew 24% year-over-year, with double-digit sales growth in nearly all product lines, led by considerably higher pricing and strong underlying demand from continued investments in critical infrastructure globally. Ongoing investments in grid hardening and resiliency and renewable energy development in utility markets, along with cross-regional strength in lighting and transportation markets, are contributing to increasing revenue across the segment. Additionally, telecommunications markets remain strong as capital spending by the major carriers is driving macro tower investments, while 5G deployments continue to ramp. as evidenced by sales growth of more than 30% in this product line. Turning to agriculture, sales of $306.6 million grew 33% year-over-year due to higher average selling prices of irrigation equipment globally and higher technology sales. In North America, sales grew 54% led by considerable increases in pricing and higher volumes. International sales grew 8% year-over-year, led by higher pricing, partially offset by lower project sales, primarily related to the large Egypt project. As we mentioned last quarter, the pace of local infrastructure development for this project has slowed in recent months, and in response, we have aligned our shipments accordingly to match our customers' expectations. We also recognized another record quarter in Brazil, where sales grew more than 70%. In addition to the continued positive trends in farmer sentiment, grain commodity prices remain at elevated levels, fueled by strong global import demand and tightening stocks in major exporting countries. Further, the events in Ukraine have disrupted exports in that region, pushing grain prices higher. Technology sales grew more than 27% year over year, driven by growers' increasing demand for connected crop management and advanced analytics to reduce input costs, increase land productivity, and minimize farm labor costs. Turning to slide five, we released our 2022 sustainability report last month and held a dedicated conference call to discuss the report and answer questions. If you have not yet done so, I strongly encourage you to listen to the archived webcast on our website. In the report and on our call, we discuss the progress we have made on our ESG journey. For Valmont, our approach to sustainability begins with our tagline, conserving resources, improving life. It's at the core of everything we do. This year, we recommitted to reaching our 2025 environmental and diversity goals and identified and committed to four United Nations Sustainable Development Goals that the business naturally aligns with. I am proud of what we accomplished and excited about the trajectory of our ESG journey. As seen in the sustainability report, we have shared detailed case studies which demonstrate the value we add to customers in meeting their own ESG priorities and how we responsibly manage key resources. A recent example of this is the completion of a 3-megawatt ag solar project in Brazil. Brazil continues to be a strong market for our solar solutions, and new government legislation has enhanced ag solar opportunities in the region. This cotton gin farm and its complex engineering requirements showcase the value we add and the incredible execution of our teams in delivering sustainable solutions to our customers. Valmont's exclusive software monitors sustainability and return on investment in real time, allowing users to track power generation and efficiency of their solar installation. Our world-class dealer network is fully embracing our complementary solar products, which is leading to considerable growth in the region year over year. Valmont is truly paving the way for Ag Solar Solutions by offering unparalleled service and support while sustainably meeting customer needs and supporting ESG efforts globally. Earlier in this call, I referenced our new segment reporting structure. Turning to slide six, I would like to discuss this new framework within the context of our long-term strategy. As we stated in our April 6th press release, we are experiencing a transformative time in Valmont's history. Our goal as a company is to institute a culture of positive change that will foster collaboration, advance productivity, and optimize talent and technology to accelerate enterprise-wide innovation. Recalling our three strategic pillars that we introduced during our 2021 Investor Day, the new structure aligns with and supports the successful execution of each pillar. It also reflects how our businesses are managed. in a way that we have been moving towards organizationally for the past four years. During that time, we have been executing a transformation plan in our operations, accelerating lean standard work, and driving performance through improved productivity and quality metrics. Our commercial teams have leaned in on the voice of the customer, developing new products to drive solutions to some of the more critical problems. We've built pathways to growth, focusing on strategic technology investments to generate operating efficiency and increase revenue. This organizational structure allows us to further elevate our focus on capital allocation, technology development, and market growth strategies across our leadership teams. We are centralizing operations of all of our global manufacturing footprint across both segments to better focus on improving productivity increasing output, and driving a more efficient use of capital. We believe these actions position us to achieve our three- to five-year financial targets, including operating margins greater than 12%. Combining the previous utility support structures, engineered support structures, and coding segments into one infrastructure segment fosters a more efficient and collaborative environment across our global commercial markets, while enhancing operation excellence initiatives. I have asked Aaron Schaper, Group President of our new infrastructure segment, to join us today and discuss the benefits of this structure. I feel it is important to spend time on our earnings calls discussing relevant items that are critical to understanding our culture and strategy. and to hear directly from our team. Aaron's participation today is an excellent example of this, and we may look to highlight key topics with other members of our executive team on future calls. Before passing the call over to Aaron, I would like to comment briefly on agriculture. Agriculture has experienced a more subtle shift than infrastructure, as we are simply renaming the irrigation segment. recognizing the journey we have been on to expand our focus on product and technology solutions globally beyond irrigated acres. The name change captures the evolving nature of technology to include non-irrigated farmland and detection of anomalies such as pests and disease to help farmers reduce input costs while increasing land productivity, which is quickly becoming a priority across global markets. The agriculture sector continues to evolve globally, and we are evolving with it to best serve our customers. At this time, I will turn the call over to Aaron.