Valmont Industries, Inc.

Hello everybody and welcome to today's Valmont Industries second quarter 2022 earnings call. My name is Drew and I'll be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star 1 on your telephone keypad. If you change your mind, press star followed by 2. I'm now going to hand over to Ms. Campbell to begin. Please go ahead.

Thank you and good morning. Welcome to Valmont Industries second quarter 2022 earnings call. With me today are Steve Koniecki, President and Chief Executive Officer, Avner Appelbaum, 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 second quarter results, commenting on our market and long-term business strategy. Avner 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 investor's 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. Yesterday afternoon, we announced another record quarter of results, delivering on our commitments and growing both our top and bottom lines, as strong demand continued across our portfolio, driven by higher volumes and improved profitability. Despite ongoing supply chain volatility, we have continued to deliver products and solutions to our customers as they strive to meet robust demand across global infrastructure and agriculture markets. During these volatile times, we are taking specific steps to control what we can. For example, our procurement teams are partnering with engineering to identify and qualify alternative sources, reducing our dependency on single-source products to mitigate the impact of supply chain disruption. We have also leveraged our global footprint to expand manufacturing of certain key components in other facilities, such as Dubai and Brazil, often with the added benefits of localization. We're doing a good job of attracting and retaining the talent we have, maintaining stability in the workforce, and reducing costs. While our actions do not eliminate challenges, they have positioned us better to manage through the volatility that we face. Returning to our second quarter performance on slide four, sales grew 27% year-over-year due to continued strong end-market demand. Our team's focused efforts to increase volume across our footprint and continue pricing actions. This quarter marks the seventh consecutive quarter of double-digit year-over-year sales growth. Robust demand trends in infrastructure and agriculture markets show no signs of evading. as evidenced by our growing backlog, and we continue to deploy an operating model that drives improvements across the organization. In addition, we are committed to a disciplined and strategic pricing framework to ensure that we adequately capture the value we provide to our customers. I believe our results demonstrate that our strategy is working, and I am very proud of the performance of the Vermont team around the world. Turning to Poseidon. Infrastructure sales were 24% year-over-year with double-digit sales growth in all product lines, led by higher volumes, primarily in renewable energy, telecommunications, and TVNs, as well as favorable pricing globally. Ongoing electrification of power infrastructure continues to lead investments in the utility grid and in renewable energy sources. and recent announcements of funding for domestic solar panel production and applause on tariffs are driving demand well into next year. Additionally, we expect to begin seeing the benefits of the U.S. infrastructure bill in 2023. And with the addition of our newest acquisition, ConcealFab, which I will discuss in more detail shortly, we are well prepared for continued growth in the telecommunications market. offering industry-leading products and outstanding service to our valued customers. Turning to agriculture, sales grew 34% year-over-year with strength from all regions as global agricultural markets remained strong. We recognize double-digit volume growth in both North America and also in international markets, notably in Brazil and Western Europe, with strong demand for irrigation equipment and ag solar projects in those regions. Ag tech sales also improved year over year. Enhancing food security and strengthening local economies remains a priority for many nations and customers around the world. A recent World Bank study showed that global grain supplies, including corn and wheat, have tightened for the second year in a row, and the aggregate stock-to-use ratio is expected to drop for a third consecutive season. We are in a unique position like irrigation, solar, and technology solutions to improve land productivity and reduce input costs for the grower, with a global reach that provides us with a more resilient business model to adapt to these market dynamics and cycles. Despite current economic volatility, we believe our current demand environment will continue to be very positive. And with our aligned management structure and centralized operational framework, We are rising to the challenge to deliver results through a greater customer focus, improved productivity, and increased efficiency in our factories. We are a stronger organization today and have demonstrated that we are better positioned to navigate ongoing macroeconomic challenges. Turning to slide five, during the quarter, we acquired a majority interest in conceal fire. This exciting transaction aligns well with our strategy to invest in high-growth market sectors and enhances our portfolio of telecommunications solutions. ConcealPath is a fast-growing industry leader in 5G infrastructure and passive intermodulation, or PIM, mitigation. PIM interference arises when signals at the cell site are mixed, which can degrade system performance, and lead to unreliable coverage and spotty data streams. Concealed Cloud's portfolio of PIM solutions helps both identify these issues and solve the problem to improve performance. Joining the Belmont team provides immediate commercial benefits, as we are now able to accelerate expansion in telecom markets in partnership with the industry leader, Eric, who remains a minority owner of the business. This is a tremendous step toward enhancing our access to markets and carriers around the world. With our combined experience in the space and leveraging Belmont's engineering expertise and global manufacturing footprint, we are positioned to address critical pain points and further accelerate the delivery of 5G technology to the market. We are excited to welcome the Concealed Fat team to Belmont. Turning to slide six. and an update on our ESG initiatives. For Valmont, our force for sustainability begins with our tagline, conserving resources, improving lives. It's at the core of everything we do. It includes our commitment to our 2025 environmental and diversity goals and the four United Nations Sustainable Development Goals that naturally align with our vision. Today, I would like to share with you a couple of examples that exemplify our progress towards those goals. We recently opened a new spun concrete pole factory in Bristol, Indiana. This plant expands production of concrete utility products and gives us an important presence in the northern part of the U.S. The transmission poles manufactured here will be used by our customers to help build a more reliable and resilient electrical grid. At this site, we are in the early stages of installing a 500-kilowatt solar array using our single-axis tracker solution. This installation complements the production of highly engineered, low-carbon concrete transmission poles. We have also signed a net metering agreement with the local power provider that will allow us to net meter at retail price, demonstrating that ESG initiatives, when done right, are good for business. Upon completion, the solar field is expected to fully offset all of the site's electricity consumption, an example of a real zero-emissions plan. We worked with partners and formed agreements that make these capital investments compelling and enhance profitable growth, a true win-win. Elsewhere, Belmont was recently recognized by the Department of Energy for our Alternative Energy Mobile Source project. which successfully replaced 100 gasoline vehicles with electric vehicles at our Valley Nebraska campus. This has reduced the site's Scope 1 greenhouse gas emissions by more than 130 metric tons annually, with an associated annual fuel cost savings. For the project, we will present it with the Better Projects Award as a part of the DOE's Better Buildings Initiative. This annual award recognizes organizations for outstanding accomplishments in implementing industrial energy, water, and waste projects at individual facilities that improve efficiency or reduce emissions and waste. These efforts have led to the launch of our Green Fleet Initiative across all of Illinois, and we plan to use this project as a model to enhance sustainability throughout our global footprint. Before turning the call over to Abner, in summary, we performed well in the second quarter, achieving record revenue, EPS, and backlog. Our team is delivering innovative solutions for our customers. End market demand in both infrastructure and agricultural markets remains strong. As Abner will detail in a few minutes, we are also raising our 2022 outlook. Our financial strength enables us to support strategic growth initiatives while returning cash to our shareholders to further expand shareholder value. I am pleased with our results and excited about our future. With that, I will now turn the call over to Abner for our second quarter financial review and updated outlook.