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Valmont (VMI) Wraps Up Redemption of Senior Notes Due 2020

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Valmont Industries, Inc. (VMI - Free Report) has completed the previously announced redemption of all $250.2 million of outstanding 6.625% senior notes due Apr 20, 2020.

Per the company, the notes were redeemed at a price of roughly $266 million and around $3.6 million of accrued and unpaid interest on the notes from Apr 20, 2018 to, but not including the redemption date. Notably, the move will result in an after-tax charge in the company’s third quarter earnings of around $11 million or 49 cents per share.

Valmont funded the redemption available cash, net proceeds from an issuance of $55 million total principal amount of 5.25% senior notes due 2054 and $200 million total principal amount of 5% senior notes due 2044. The offering of 2054 and 2044 notes were closed on Jun 19.

The company’s shares have gained 9.7% over the past three months compared with the industry’s 7.2% rise.


Valmont ended first-quarter 2018 with cash balance of $479.7 million, up roughly 12.8% year over year. Long-term debt at the end of the quarter was $753.6 million, down around 0.1% from the year-ago quarter.

The company, in April, raised its adjusted earnings per share guidance in the range of $8.00-$8.10 that includes restructuring charges worth $10 million.

For 2018, Valmont expects signs of stronger economic growth in many regions, which is expected to contribute to favorable sales across most of its businesses. Although weakness in the U.S. farm economy continues to prevail and the uncertainty surrounding tariffs affects customer demand, the company’s diversified base will help to offset these impacts.

Zacks Rank & Stocks to Consider

Valmont currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are KMG Chemicals, Inc. , Methanex Corporation (MEOH - Free Report) and BHP Billiton Limited (BHP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 51.8% in a year.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 67.5% in a year.

BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained 33% in a year.

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