UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 25, 2005
	or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from            to

Commission file number: 1-31429

Valmont Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-0351813
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
One Valmont Plaza,	68154-5215
Omaha, Nebraska	(Zip Code)
(Address of principal executive offices)

(Registrant’s telephone number, including area code)
402-963-1000

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes þ  No o

24,413,509

Outstanding shares of common stock as of July 25, 2005

Index is located on page 2.

Total number of pages 33.

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

		Page No.
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Operations for the thirteen and twenty-six weeks ended June 25, 2005 and June 26, 2004	3
	Condensed Consolidated Balance Sheets as of June 25, 2005 and December 25, 2004	4
	Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended June 25, 2005 and June 26, 2004	5
	Notes to Condensed Consolidated Financial Statements	6-21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22-28
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	29
Item 4.	Controls and Procedures	29
	PART II. OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Signatures		31

2

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	June 25, 2005			June 26, 2004			June 25, 2005			June 26, 2004
Product sales	$	244,222		$	243,057		$	492,014		$	439,705
Services sales	20,912			22,956			38,861			42,205
Net sales	265,134			266,013			530,875			481,910
Product cost of sales	182,739			183,213			372,749			332,667
Services cost of sales	14,802			16,720			28,872			31,883
Cost of sales	197,541			199,933			401,621			364,550
Gross profit	67,593			66,080			129,254			117,360
Selling, general and administrative expenses	46,387			47,071			91,941			86,602
Operating income	21,206			19,009			37,313			30,758
Other income (deductions):
Interest expense	(4,884		)	(4,067		)	(9,711		)	(6,465		)
Interest income	592			419			829			695
Debt prepayment expenses	—			(9,860		)	—			(9,860		)
Miscellaneous	33			(274		)	(115		)	(260		)
	(4,259		)	(13,782		)	(8,997		)	(15,890		)
Earnings before income taxes, minority interest and equity in earnings (losses) of nonconsolidated subsidiaries	16,947			5,227			28,316			14,868
Income tax expense (benefit):
Current	5,129			6,081			7,741			11,926
Deferred	996			(4,154		)	2,528			(6,470		)
	6,125			1,927			10,269			5,456
Earnings before minority interest and equity in earnings (losses) of nonconsolidated subsidiaries	10,822			3,300			18,047			9,412
Minority interest	(313		)	(718		)	(662		)	(1,173		)
Equity in earnings (losses) of nonconsolidated subsidiaries	(66		)	230			(132		)	74
Net earnings	$	10,443		$	2,812		$	17,253		$	8,313
Earnings per share—Basic	$	0.43		$	0.12		$	0.71		$	0.35
Earnings per share—Diluted	$	0.42		$	0.12		$	0.69		$	0.34
Cash dividends per share	$	0.085		$	0.080		$	0.165		$	0.160
Weighted average number of shares of common stock outstanding (000 omitted)	24,292			23,866			24,201			23,856
Weighted average number of shares of common stock outstanding plus dilutive potential common shares (000 omitted)	25,035			24,413			25,042			24,466

See accompanying notes to condensed consolidated financial statements.

3

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)

	June 25, 2005				December 25, 2004
ASSETS
Current assets:
Cash and cash equivalents		$	39,827			$	30,210
Receivables, net		176,095				188,512
Inventories		172,914				186,988
Prepaid expenses		10,911				8,408
Refundable and deferred income taxes		12,377				14,387
Total current assets		412,124				428,505
Property, plant and equipment, at cost		510,807				493,997
Less accumulated depreciation and amortization		299,627				288,342
Net property, plant and equipment		211,180				205,655
Goodwill		105,435				106,022
Other intangible assets, net		61,534				63,337
Other assets		32,032				32,589
Total assets		$	822,305			$	836,108
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt		$	8,938			$	7,962
Notes payable to banks		6,364				4,682
Accounts payable		68,260				69,979
Accrued expenses		58,282				66,506
Dividends payable		2,077				1,932
Total current liabilities		143,921				151,061
Deferred income taxes		45,546				42,639
Long-term debt, excluding current installments		290,421				314,813
Minority interest in consolidated subsidiaries		10,262				10,107
Other noncurrent liabilities		23,476				22,833
Shareholders’ equity:
Preferred stock		—				—
Common stock of $1 par value		27,900				27,900
Retained earnings		339,329				324,748
Accumulated other comprehensive income		(1,311		)		3,499
Treasury stock		(55,155		)		(59,200		)
Unearned restricted stock		(2,084		)		(2,292		)
Total shareholders’ equity		308,679				294,655
Total liabilities and shareholders’ equity		$	822,305			$	836,108

See accompanying notes to condensed consolidated financial statements.

4

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, except per share amounts)

(Unaudited)

	Twenty-Six Weeks Ended
	June 25, 2005			June 26, 2004
Cash flows from operations:
Net earnings	$	17,253		$	8,313
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization	20,095			18,713
(Gain)/loss on sale of assets	376			(58		)
Equity in (earnings)/losses in nonconsolidated subsidiaries	132			(74		)
Minority interest	662			1,173
Deferred income taxes	2,528			(6,470		)
Other adjustments	(117		)	184
Changes in assets and liabilities, net of business acquisitions:
Receivables	9,210			(12,668		)
Inventories	10,050			(27,368		)
Prepaid expenses	(2,547		)	681
Accounts payable	(901		)	5,552
Accrued expenses	(6,945		)	4,075
Other noncurrent liabilities	644			(299		)
Income taxes payable	4,097			3,873
Net cash flows from operations	54,537			(4,373		)
Cash flows from investing activities:
Purchase of property, plant & equipment	(25,346		)	(6,188		)
Acquisitions, net of cash acquired	—			(119,562		)
Investment in nonconsolidated subsidiary	—			(2,450		)
Proceeds from sale of assets	1,422			872
Dividends to minority interests	(247		)	(720		)
Other, net	185			644
Net cash flows from investing activities	(23,986		)	(127,404		)
Cash flows from financing activities:
Net borrowings (payments) under short-term agreements	2,091			(12,021		)
Proceeds from long-term borrowings	16,500			239,000
Principal payments on long-term obligations	(39,908		)	(89,127		)
Dividends paid	(3,877		)	(3,830		)
Proceeds from exercises under stock plans	5,809			893
Debt issuance costs	—			(5,923		)
Purchase of common treasury shares—stock plan exercises	(552		)	(533		)
Net cash flows from financing activities	(19,937		)	128,459
Effect of exchange rate changes on cash and cash equivalents	(997		)	(328		)
Net change in cash and cash equivalents	9,617			(3,646		)
Cash and cash equivalents—beginning of period	30,210			33,345
Cash and cash equivalents—end of period	$	39,827		$	29,699

See accompanying notes to condensed consolidated financial statements.

5

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

1. Summary of Significant Accounting Policies

Condensed Consolidated Financial Statements

The Condensed Consolidated Balance Sheet as of June 25, 2005 and the Condensed Consolidated Statements of Operations for the thirteen and twenty-six week periods ended June 25, 2005 and June 26, 2004 and the Condensed Consolidated Statements of Cash Flows for the twenty-six week periods then ended have been prepared by the Company, without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of June 25, 2005 and for all periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2004. The accounting policies and methods of computation followed in these interim financial statements are the same as those followed in the financial statements for the year ended December 25, 2004. The results of operations for the periods ended June 25, 2005 are not necessarily indicative of the operating results for the full year.

Inventories

At June 25, 2005, approximately 51% of inventory is valued at the lower of cost, determined on the last-in, first-out (LIFO) method, or market. All other inventory is valued at the lower of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured finished goods. The excess of replacement cost of inventories over the LIFO value was approximately $28,200 and $30,700 at June 25, 2005 and December 25, 2004, respectively.

Inventories consisted of the following:

	June 25, 2005		December 25, 2004
Raw materials and purchased parts	$	107,176		$	121,484
Work-in-process	18,506			20,696
Finished goods and manufactured goods	75,429			75,526
Subtotal	201,111			217,706
LIFO reserve	28,197			30,718
Net inventory	$	172,914		$	186,988

Stock Plans

The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Compensation Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards and bonuses of common

6

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

stock. At June 25, 2005, 1,094,108 shares of common stock remained available for issuance under the plans. Shares and options issued and available are subject to changes in capitalization.

Under the plans, the exercise price of each option equals the market price at the time of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three to six years or on the fifth anniversary of the grant. Expiration of grants is from six to ten years from the date of grant.

The Company accounts for those plans under the recognition and measurement principles of APB Opinion 25, Accounting for Stock Issued to Employees, and related Interpretations. No compensation cost associated with stock options is reflected in net income, as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

			Thirteen Weeks Ended						Twenty-Six Weeks Ended
			June 25, 2005			June 26, 2004			June 25, 2005			June 26, 2004
Net earnings
Net earnings as reported				$	10,443		$	2,812		$	17,253		$	8,313
Add:	Stock-based employee compensation expense included in reported net income, net of related tax effects			122			38			231			103
Deduct:	Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			380			428			813			915
Pro forma net earnings				$	10,185		$	2,422		$	16,671		$	7,501
Earnings per share
As reported:		Basic		$	0.43		$	0.12		$	0.71		$	0.35
		Diluted		$	0.42		$	0.12		$	0.69		$	0.34
Pro forma:		Basic		$	0.42		$	0.10		$	0.69		$	0.31
		Diluted		$	0.41		$	0.10		$	0.67		$	0.31

Recently Issued Accounting Pronouncements

On December 16, 2004, the FASB issued Statement No. 123 (revised 2004) (“SFAS No. 123R”), Share-Based Payment. SFAS No. 123R will require the Company to measure the cost of all employee stock-based compensation awards based on the grant date fair value of those awards and to record that cost as compensation expense over the period during which the employee is required to perform service in exchange for the award (generally over the vesting period of the award). Excess tax benefits, as defined by this Statement, will be recognized as an addition to paid-in capital. SFAS No. 123R is effective at the beginning of the Company’s first quarter of fiscal 2006. The Company is currently evaluating the expected impact that the adoption of SFAS No. 123R will have on results of operations and cash flows.

7

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

2. Acquisitions

On April 16, 2004, the Company acquired all the outstanding shares of Newmark International, Inc. and the results of Newmark are included in the condensed consolidated financial statements of the Company since that date.

On May 24, 2004, the Company acquired all the outstanding shares of W.J. Whatley, Inc and Whatley’s operations are included in the Company’s condensed consolidated financial statements since the acquisition date.

On August 2, 2004, the Company acquired substantially all the net assets of Sigma Industries, Inc. and Sigma’s operations are included in the Company’s condensed consolidated financial statements since the acquisition date.

The Company’s summary proforma results of operations for the thirteen and twenty-six weeks ended June 26, 2004, assuming that these transactions occurred at the beginning of the periods presented are as follows:

	Thirteen Weeks Ended			Twenty-Six Weeks Ended
	June 26, 2004			June 26, 2004
Net sales		$	272,297		$	515,333
Net income		3,068			8,746
Earnings per share—diluted		$	0.13		$	0.36

8

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

3. Goodwill and Intangible Assets

Amortized Intangible Assets

The components of amortized intangible assets at June 25, 2005 and December 25, 2004 were as follows:

	As of June 25, 2005
	Gross Carrying Amount		Accumulated Amortization			Weighted Average Life
Customer Relationships	$	47,691		$	6,349	18 years
Proprietary Software & Database	2,609			1,568		6 years
Patents & Proprietary Technology	2,839			219		14 years
Non-compete Agreements	331			66		5 years
	$	53,470		$	8,202

	As of December 25, 2004
	Gross Carrying Amount		Accumulated Amortization			Weighted Average Life
Customer Relationships	$	47,691		$	4,911	18 years
Proprietary Software & Database	2,609			1,335		6 years
Patents & Proprietary Technology	2,839			120		14 years
Non-compete Agreements	331			33		5 years
	$	53,470		$	6,399

Amortization expense for intangible assets for the thirteen weeks ended June 25, 2005 and June 26, 2004, was $901 and $771, respectively. Amortization expense for intangible assets for the twenty-six weeks ended June 25, 2005, and June 26, 2004 was $1,803 and $1,093, respectively. Estimated amortization expense related to amortized intangible assets is as follows:

	Estimated Amortization Expense
2005		$	3,606
2006		3,359
2007		3,276
2008		3,276
2009		3,244
2010		3,210

Non-amortized intangible assets

Under the provisions of SFAS 142, intangible assets with indefinite lives are not amortized. The carrying value of the PiRod, Newmark, and Sigma trade names are $4,750, $11,111, and $405 respectively, as of June 25, 2005 and December 25, 2004.

9

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

The indefinite lived intangible assets were tested for impairment separately from goodwill in the third quarter of 2004. The values of the trade names were determined using the relief-from-royalty method. Based on this evaluation, the Company determined that its trade names were not impaired as of September 25, 2004.

Goodwill

The carrying amount of goodwill as of June 25, 2005 was as follows:

	Engineered Support Structures Segment				Utility Support Structures Segment			Coatings Segment		Irrigation Segment				Tubing Segment			Total
Balance December 25, 2004		$	19,959			$	42,628	$	42,192		$	981			$	262	$	106,022
Divestiture		—				—		—			(398		)		—		(398		)
Foreign currency translation		(189		)		—		—			—				—		(189		)
Balance June 25, 2005		$	19,770			$	42,628	$	42,192		$	583			$	262	$	105,435

In June 2005, the Company divested of its ownership in a retail operation located in Greeley, Colorado, resulting in a $398 reduction of goodwill in the Irrigation Segment.

4. Cash Flows

The Company considers all highly liquid temporary cash investments purchased with a maturity of three months or less to be cash equivalents. Cash payments for interest and income taxes (net of refunds) for the twenty-six weeks ended were as follows:

	June 25, 2005			June 26, 2004
Interest		$	9,793		$	5,417
Income Taxes		3,902			7,990

10

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

5. Earnings Per Share

The following table provides a reconciliation between Basic and Diluted earnings per share:

	Basic EPS			Dilutive Effect of Stock Options			Diluted EPS
Thirteen weeks ended June 25, 2005:
Net earnings		$	10,443		—			$	10,443
Shares outstanding		24,292			743			25,035
Per share amount		$	0.43		(.01	)		$	0.42
Thirteen weeks ended June 26, 2004:
Net earnings		$	2,812		—			$	2,812
Shares outstanding		23,866			547			24,413
Per share amount		$	0.12		—			$	0.12
Twenty-six weeks ended June 25, 2005:
Net earnings		$	17,253		—			$	17,253
Shares outstanding		24,201			841			25,042
Per share amount		$	0.71		(.02	)		$	0.69
Twenty-six weeks ended June 26, 2004:
Net earnings		$	8,313		—			$	8,313
Shares outstanding		23,856			610			24,466
Per share amount		$	0.35		(.01	)		$	0.34

6. Comprehensive Income

Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. The Company’s other comprehensive income for the thirteen and twenty-six weeks ended June 25, 2005 and June 26, 2004, respectively, were as follows:

	Thirteen Weeks Ended								Twenty-Six Weeks Ended
	June 25, 2005				June 26, 2004				June 25, 2005				June 26, 2004
Net earnings		$	10,443			$	2,812			$	17,253			$	8,313
Net derivative adjustment		(35		)		—				—				—
Currency translation adjustment		(2,039		)		(317		)		(4,810		)		(1,259		)
Total comprehensive income		$	8,369			$	2,495			$	12,443			$	7,054

11

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

7.Business Segments

The Company reports its businesses as five reportable segments:

Engineered Support Structures:   This segment consists of the manufacture of engineered metal structures and components for the lighting and traffic and wireless communication industries, certain international utility industries and for other specialty applications;

Utility Support Structures:   This segment consists of engineered steel and concrete structures primarily for the North American utility industry;

Coatings:   This segment consists of galvanizing, anodizing and powder coating services;

Irrigation:   This segment consists of the manufacture of agricultural irrigation equipment and related parts and services; and

Tubing:   This segment consists of the manufacture of tubular products for industrial customers.

In addition to these five reportable segments, the Company has other businesses that individually are not more than 10% of consolidated sales. These businesses, which include wind energy development, machine tool accessories and industrial fasteners, are reported in the “Other” category.

12

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

In the fourth quarter of fiscal 2004, the Company reorganized its management reporting structure to better serve the electrical utility structure market. The Company’s North American Utility business, formerly included within the Utility product line in the Engineered Support Structures segment, was combined with the Concrete Support Structures segment and is collectively referred to as the Utility Support Structures segment. Figures for 2004 have been reclassified to conform to the 2005 presentation.

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	June 25, 2005			June 26, 2004			June 25, 2005			June 26, 2004
Sales:
Engineered Support Structures segment:
Lighting & Traffic	$	86,954		$	77,829		$	174,801		$	146,088
Specialty	25,545			25,616			41,693			40,939
Utility	7,903			4,056			12,750			8,011
	120,402			107,501			229,244			195,038
Utility Support Structures segment
Steel	29,534			26,295			73,105			49,234
Concrete	13,374			12,134			28,836			12,134
	42,908			38,429			101,941			61,368
Coatings segment	21,202			23,568			40,196			46,224
Irrigation segment	65,425			87,582			135,371			167,681
Tubing segment	22,743			24,096			44,810			41,419
Other	4,631			4,503			9,449			8,863
	277,311			285,679			561,011			520,593
Intersegment Sales:
Engineered Support Structures	3,002			7,456			12,075			17,403
Utility Support Structures	1,068			1,821			1,585			2,914
Coatings	3,540			3,880			7,151			7,562
Irrigation	4			11			11			163
Tubing	3,588			5,351			7,398			8,666
Other	975			1,147			1,916			1,975
	12,177			19,666			30,136			38,683
Net Sales
Engineered Support Structures	117,400			100,045			217,169			177,635
Utility Support Structures	41,840			36,608			100,356			58,454
Coatings	17,662			19,688			33,045			38,662
Irrigation	65,421			87,571			135,360			167,518
Tubing	19,155			18,745			37,412			32,753
Other	3,656			3,356			7,533			6,888
Consolidated Net Sales	$	265,134		$	266,013		$	530,875		$	481,910
Operating Income
Engineered Support Structures	$	10,708		$	6,370		$	16,332		$	10,032
Utility Support Structures	3,583			1,352			7,971			(869		)
Coatings	2,108			2,601			2,874			3,067
Irrigation	7,523			12,008			14,744			23,853
Tubing	3,896			3,421			7,156			5,506
Other	(655		)	(593		)	(1,416		)	(1,085		)
Net corporate expense	(5,957		)	(6,150		)	(10,348		)	(9,746		)
Total Operating Income	$	21,206		$	19,009		$	37,313		$	30,758

13

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

8.Guarantor/ Non-Guarantor Financial Information

On May 4, 2004, the Company completed a $150,000,000 offering of 67¤8% Senior Subordinated Notes. The Notes are guaranteed, jointly, severally, fully and unconditionally, on a senior subordinated basis by certain of our current and future direct and indirect domestic subsidiaries (collectively the “Guarantors”), excluding its other current domestic and foreign subsidiaries which do not guarantee the debt (collectively referred to as the “Non-Guarantors”). All Guarantors are 100% owned by the parent company.

Condensed consolidated financial information for the Company (“Parent”), the Guarantor subsidiaries and the Non-Guarantor subsidiaries is as follows:

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Thirteen Weeks Ended June 25, 2005

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Product sales	$	147,311			$	34,254			$	74,326			$	(11,669	)	$	244,222
Service sales	13,299				8,261				2,891				(3,539		)	20,912
Net sales	160,610				42,515				77,217				(15,208		)	265,134
Product cost of sales	111,459				27,036				56,052				(11,808		)	182,739
Service cost of sales	10,264				6,460				1,617				(3,539		)	14,802
Cost of sales	121,723				33,496				57,669				(15,347		)	197,541
Gross profit	38,887				9,019				19,548				139			67,593
Selling, general and administrative expenses	25,486				7,389				13,512				—			46,387
Operating income	13,401				1,630				6,036				139			21,206
Other income (deductions):
Interest expense	(4,700		)		(5		)		(198		)		19			(4,884		)
Interest income	29				8				574				(19		)	592
Miscellaneous	(128		)		8				153				—			33
	(4,799		)		11				529				—			(4,259		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	8,602				1,641				6,565				139			16,947
Income tax expense:
Current	2,387				628				2,114				—			5,129
Deferred	839				98				59				—			996
	3,226				726				2,173				—			6,125
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	5,376				915				4,392				139			10,822
Minority interest	—				—				(313		)		—			(313		)
Equity in earnings/(losses) of nonconsolidated subsidiaries	4,928				—				61				(5,055		)	(66		)
Net earnings	$	10,304			$	915			$	4,140			$	(4,916	)	$	10,443

14

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

For the Twenty-Six Weeks Ended June 25, 2005

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Product sales	$	301,612			$	77,267			$	142,501			$	(29,366	)	$	492,014
Service sales	25,078				15,704				5,230				(7,151		)	38,861
Net sales	326,690				92,971				147,731				(36,517		)	530,875
Product cost of sales	231,754				63,052				107,875				(29,932		)	372,749
Service cost of sales	19,862				12,806				3,355				(7,151		)	28,872
Cost of sales	251,616				75,858				111,230				(37,083		)	401,621
Gross profit	75,074				17,113				36,501				566			129,254
Selling, general and administrative expenses	50,294				15,339				26,308				—			91,941
Operating income	24,780				1,774				10,193				566			37,313
Other income (deductions):
Interest expense	(9,416		)		(16		)		(322		)		43			(9,711		)
Interest income	55				12				805				(43		)	829
Miscellaneous	(141		)		14				12				—			(115		)
	(9,502		)		10				495				—			(8,997		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	15,278				1,784				10,688				566			28,316
Income tax expense:
Current	3,264				757				3,720				—			7,741
Deferred	2,727				7				(206		)		—			2,528
	5,991				764				3,514				—			10,269
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	9,287				1,020				7,174				566			18,047
Minority interest	—				—				(662		)		—			(662		)
Equity in earnings/(losses) of nonconsolidated subsidiaries	7,400				—				(21		)		(7,511		)	(132		)
Net earnings	$	16,687			$	1,020			$	6,491			$	(6,945	)	$	17,253

15

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

For the Thirteen Weeks Ended June 26, 2004

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Product sales	$	150,602			$	35,167			$	72,149			$	(14,861	)	$	243,057
Service sales	13,367				8,918				4,552				(3,881		)	22,956
Net sales	163,969				44,085				76,701				(18,742		)	266,013
Product cost of sales	117,001				27,386				53,672				(14,846		)	183,213
Service cost of sales	9,923				7,638				3,040				(3,881		)	16,720
Cost of sales	126,924				35,024				56,712				(18,727		)	199,933
Gross profit	37,045				9,061				19,989				(15		)	66,080
Selling, general and administrative expenses	26,462				6,613				13,996				—			47,071
Operating income	10,583				2,448				5,993				(15		)	19,009
Other income (deductions):
Interest expense	(3,827		)		(5		)		(271		)		36			(4,067		)
Interest income	41				—				414				(36		)	419
Debt prepayment expenses	(9,860		)		—				—				—			(9,860		)
Miscellaneous	(26		)		93				(341		)		—			(274		)
	(13,672		)		88				(198		)		—			(13,782		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	(3,089		)		2,536				5,795				(15		)	5,227
Income tax expense:
Current	3,156				804				2,121				—			6,081
Deferred	(4,330		)		238				(62		)		—			(4,154		)
	(1,174		)		1,042				2,059				—			1,927
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	(1,915		)		1,494				3,736				(15		)	3,300
Minority interest	—				—				(718		)		—			(718		)
Equity in earnings/(losses) of nonconsolidated subsidiaries	4,742				—				—				(4,512		)	230
Net earnings	$	2,827			$	1,494			$	3,018			$	(4,527	)	$	2,812

16

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

For the Twenty-Six Weeks Ended June 26, 2004

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Product sales	$	284,522			$	47,948			$	132,613			$	(25,378	)	$	439,705
Service sales	25,153				17,371				7,244				(7,563		)	42,205
Net sales	309,675				65,319				139,857				(32,941		)	481,910
Product cost of sales	220,503				38,596				98,999				(25,431		)	332,667
Service cost of sales	19,528				14,933				4,985				(7,563		)	31,883
Cost of sales	240,031				53,529				103,984				(32,994		)	364,550
Gross profit	69,644				11,790				35,873				53			117,360
Selling, general and administrative expenses	50,015				10,889				25,698				—			86,602
Operating income	19,629				901				10,175				53			30,758
Other income (deductions):
Interest expense	(6,030		)		(10		)		(504		)		79			(6,465		)
Interest income	84				1				689				(79		)	695
Debt prepayment expenses	(9,860		)		—				—				—			(9,860		)
Miscellaneous	(18		)		93				(335		)					(260		)
	(15,824		)		84				(150		)		—			(15,890		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	3,805				985				10,025				53			14,868
Income tax expense:
Current	7,969				(143		)		4,100				—			11,926
Deferred	(6,532		)		542				(480		)		—			(6,470		)
	1,437				399				3,620				—			5,456
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	2,368				586				6,405				53			9,412
Minority interest	—				—				(1,173		)		—			(1,173		)
Equity in (earnings)/losses of nonconsolidated subsidiaries	5,892				—				—				(5,818		)	74
Net earnings	$	8,260			$	586			$	5,232			$	(5,765	)	$	8,313

17

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

CONDENSED CONSOLIDATED BALANCE SHEETS
June 25, 2005

	Parent			Guarantors			Non-Guarantors				Eliminations				Total
ASSETS
Current assets:
Cash and cash equivalents	$	11,196			$	1,983		$	26,648			$	—		$	39,827
Receivables, net	73,308				23,076			79,753				(42		)	176,095
Inventories	72,190				43,097			57,627				—			172,914
Prepaid expenses	4,329				821			5,761				—			10,911
Refundable and deferred income taxes	7,039				3,199			2,139				—			12,377
Total current assets	168,062				72,176			171,928				(42		)	412,124
Property, plant and equipment, at cost	341,610				74,246			94,951				—			510,807
Less accumulated depreciation and amortization	210,767				28,023			60,837				—			299,627
Net property, plant and equipment	130,843				46,223			34,114				—			211,180
Goodwill	20,370				73,377			11,688				—			105,435
Other intangible assets	805				58,133			2,596				—			61,534
Investment in subsidiaries and intercompany accounts	341,469				40,487			(7,994		)		(373,962		)	—
Other assets	30,861				—			1,771				(600		)	32,032
Total assets	$	692,410			$	290,396		$	214,103			$	(374,604	)	$	822,305
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	6,751			$	26		$	2,161			$	—		$	8,938
Notes payable to banks	—				—			6,364				—			6,364
Accounts payable	21,138				8,177			38,945				—			68,260
Accrued expenses	34,471				5,804			18,049				(42		)	58,282
Dividends payable	2,077				—			—				—			2,077
Total current liabilities	64,437				14,007			65,519				(42		)	143,921
Deferred income taxes	19,658				21,774			4,114				—			45,546
Long-term debt, excluding current installments	289,173				81			1,767				(600		)	290,421
Minority interest in consolidated subsidiaries	—				—			10,262				—			10,262
Other noncurrent liabilities	22,382				—			1,094				—			23,476
Shareholders’ equity:
Common stock of $1 par value	27,900				14,248			10,344				(24,592		)	27,900
Additional paid-in capital	—				159,082			71,825				(230,907		)	—
Retained earnings	326,099				81,204			50,489				(118,463		)	339,329
Accumulated other comprehensive loss	—				—			(1,311		)		—			(1,311		)
Treasury stock	(55,155		)		—			—				—			(55,155		)
Unearned restricted stock	(2,084		)		—			—				—			(2,084		)
Total shareholders’ equity	296,760				254,534			131,347				(373,962		)	308,679
Total liabilities and shareholders’ equity	$	692,410			$	290,396		$	214,103			$	(374,604	)	$	822,305

18

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

December 25, 2004

	Parent			Guarantors			Non-Guarantors				Eliminations				Total
ASSETS
Current assets:
Cash and cash equivalents	$	966			$	3,694		$	25,550			$	—		$	30,210
Receivables, net	79,280				28,310			80,975				(53		)	188,512
Inventories	95,922				38,488			53,802				(1,224		)	186,988
Prepaid expenses	2,382				915			5,111				—			8,408
Refundable and deferred income taxes	9,389				3,042			1,956				—			14,387
Total current assets	187,939				74,449			167,394				(1,277		)	428,505
Property, plant and equipment, at cost	321,074				72,727			100,196				—			493,997
Less accumulated depreciation and amortization	201,559				24,403			62,380				—			288,342
Net property, plant and equipment	119,515				48,324			37,816				—			205,655
Goodwill	20,370				73,375			12,277				—			106,022
Other intangible assets	832				59,771			2,734				—			63,337
Investment in subsidiaries and intercompany accounts	352,291				35,367			(8,566		)		(379,092		)	—
Other assets	32,554				41			1,894				(1,900		)	32,589
Total assets	$	713,501			$	291,327		$	213,549			$	(382,269	)	$	836,108
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	4,860			$	26		$	3,076			$	—		$	7,962
Notes payable to banks	—				—			4,682				—			4,682
Accounts payable	21,382				10,312			38,285				—			69,979
Accrued expenses	41,692				5,771			19,096				(53		)	66,506
Dividends payable	1,932				—			—				—			1,932
Total current liabilities	69,866				16,109			65,139				(53		)	151,061
Deferred income taxes	16,854				21,610			4,175				—			42,639
Long-term debt, excluding current installments	313,368				94			3,251				(1,900		)	314,813
Minority interest in consolidated subsidiaries	—				—			10,107				—			10,107
Other noncurrent liabilities	21,600				—			1,233				—			22,833
Shareholders’ equity:
Common stock of $1 par value	27,900				14,248			10,344				(24,592		)	27,900
Additional paid-in capital	—				159,082			71,825				(230,907		)	—
Retained earnings	325,405				80,184			43,976				(124,817		)	324,748
Accumulated other comprehensive loss	—				—			3,499				—			3,499
Treasury stock	(59,200		)		—			—				—			(59,200		)
Unearned restricted stock	(2,292		)		—			—				—			(2,292		)
Total shareholders’ equity	291,813				253,514			129,644				(380,316		)	294,655
Total liabilities and shareholders’ equity	$	713,501			$	291,327		$	213,549			$	(382,269	)	$	836,108

19

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twenty-Six Weeks Ended June 25, 2005

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Cash flows from operations:
Net earnings	$	16,687			$	1,020			$	6,491			$	(6,945	)	$	17,253
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization	11,108				5,187				3,800				—			20,095
(Gain)/ Loss on sale of property, plant and equipment	19				(1		)		358				—			376
Equity in (earnings)/losses of nonconsolidated subsidiaries	111				—				21				—			132
Minority interest	—				—				662				—			662
Deferred income taxes	2,727				7				(206		)		—			2,528
Other adjustments	143				—				(260		)		—			(117		)
Changes in assets and liabilities:
Receivables	5,973				5,233				(1,989		)		(7		)	9,210
Inventories	23,732				(4,609		)		(9,073		)		—			10,050
Prepaid expenses	(1,947		)		95				(695		)		—			(2,547		)
Accounts payable	(1,655		)		(2,135		)		2,889				—			(901		)
Accrued expenses	(7,226		)		33				241				7			(6,945		)
Other noncurrent liabilities	782				—				(138		)		—			644
Income taxes payable	3,839				—				258				—			4,097
Net cash flows from operations	54,293				4,830				2,359				(6,945		)	54,537
Cash flows from investing activities:
Purchase of property, plant and equipment	(21,554		)		(1,458		)		(2,334		)		—			(25,346		)
Proceeds from sale of assets	750				8				664				—			1,422
Proceeds from minority interests	—				—				(247		)		—			(247		)
Other, net	(2,337		)		(5,078		)		1,955				5,645			185
Net cash flows from investing activities	(23,141		)		(6,528		)		38				5,645			(23,986		)
Cash flows from financing activities:
Net borrowings (repayments) under short-term agreements	—				—				2,091				—			2,091
Proceeds from long-term borrowings	16,500				—				—				—			16,500
Principal payments on long-term obligations	(38,803		)		(13		)		(2,392		)		1,300			(39,908		)
Dividends paid	(3,877		)		—				—				—			(3,877		)
Proceeds from exercises under stock plans	5,809				—				—				—			5,809
Purchase of common treasury shares—stock plan exercises	(552		)		—				—				—			(552		)
Net cash flows from financing activities	(20,923		)		(13		)		(301		)		1,300			(19,937		)
Effect of exchange rate changes on cash and cash equivalents	—				—				(997		)		—			(997		)
Net change in cash and cash equivalents	10,229				(1,711		)		1,099				—			9,617
Cash and cash equivalents—beginning of year	966				3,694				25,550				—			30,210
Cash and cash equivalents—end of year	$	11,195			$	1,983			$	26,649			$	—		$	39,827

20

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

For the Twenty-Six Weeks Ended June 26, 2004

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Cash flows from operations:
Net earnings	$	8,260			$	586			$	5,232			$	(5,765	)	$	8,313
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization	11,701				3,552				3,460				—			18,713
(Gain)/ Loss on sale of property, plant and equipment	(21		)		3				(40		)		—			(58		)
Equity in (earnings)/losses of nonconsolidated subsidiaries	(74		)		—				—				—			(74		)
Minority interest	—				—				1,173				—			1,173
Deferred income taxes	(6,532		)		542				(480		)		—			(6,470		)
Other adjustments	282				—				(98		)		—			184
Changes in assets and liabilities:
Receivables	(7,847		)		4,251				(9,150		)		78			(12,668		)
Inventories	(12,517		)		(5,644		)		(9,727		)		520			(27,368		)
Prepaid expenses	273				235				173				—			681
Accounts payable	3,735				(748		)		2,565				—			5,552
Accrued expenses	4,336				(1,685		)		1,501				(77		)	4,075
Other noncurrent liabilities	858				—				(1,157		)		—			(299		)
Income taxes payable	(1,533		)		3,610				1,796				—			3,873
Net cash flows from operations	921				4,702				(4,752		)		(5,244		)	(4,373		)
Cash flows from investing activities:
Purchase of property, plant and equipment	(3,612		)		(569		)		(2,007		)		—			(6,188		)
Acquisitions, net of cash acquired	(119,562		)		—				—				—			(119,562		)
Investment in nonconsolidated subsidiary	(2,450		)		—				—				—			(2,450		)
Proceeds from sale of property, plant and equipment	64				—				808				—			872
Proceeds from minority interests	—				—				(720		)		—			(720		)
Other, net	(20,786		)		10,573				7,113				3,744			644
Net cash flows from investing activities	(146,346		)		10,004				5,194				3,744			(127,404		)
Cash flows from financing activities:
Net repayments under short-term agreements	—				(8,675		)		(3,346		)		—			(12,021		)
Proceeds from long-term borrowings	239,000				—				—				—			239,000
Principal payments on long-term obligations	(84,593		)		(2,866		)		(3,168		)		1,500			(89,127		)
Dividends paid	(3,830		)		—				—				—			(3,830		)
Proceeds from exercises under stock plans	893				—				—				—			893
Debt issuance costs	(5,923		)		—				—				—			(5,923		)
Purchase of common treasury shares—stock plan exercises	(533		)		—				—				—			(533		)
Net cash flows from financing activities	145,014				(11,541		)		(6,514		)		1,500			128,459
Effect of exchange rate changes on cash and cash equivalents	—				—				(328		)		—			(328		)
Net change in cash and cash equivalents	(411		)		3,165				(6,400		)		—			(3,646		)
Cash and cash equivalents—beginning of year	1,982				612				30,751				—			33,345
Cash and cash equivalents—end of year	$	1,571			$	3,777			$	24,351			$	—		$	29,699

21

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

PART 1. FINANCIAL INFORMATION

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on assumptions that management has made in light of experience in the industries in which the Company operates, as well as management’s perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions. Many factors could affect the Company’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include, among other things, risk factors described from time to time in the Company’s reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments.

This discussions should be read in conjunction with the financial statements and the notes thereto, and the management’s discussion and analysis, included in the Company’s annual report on Form 10-K for the fiscal year ended December 25, 2004. We report our businesses as five reportable segments. See Note 7 to the Condensed Consolidated Financial Statements. In the fourth quarter of fiscal 2004, we reorganized our management reporting structure to better serve the electrical utility structure market. Our North American Utility business, formerly included within the Utility product line in the Engineered Support Structures segment, was combined with the Concrete Support Structures segment and is collectively referred to as the Utility Support Structures segment. Figures for 2004 have been reclassified to conform to the 2005 presentation.

22

Results of Operations

Dollars in thousands, except per share amounts

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	June 25, 2005		June 26, 2004		% Incr. (Decr.)		June 25, 2005		June 26, 2004		% Incr. (Decr)
Consolidated
Net sales	$265,134		$266,013		-0.3	%	$530,875		$481,910		10.2	%
Gross profit	67,593		$66,080		2.3	%	129,254		117,360		10.1	%
as a percent of sales	25.5	%	24.8	%			24.3	%	24.4	%
SG&A expense	46,387		47,071		-1.5	%	91,941		86,602		6.2	%
as a percent of sales	17.5	%	17.7	%			17.3	%	18.0	%
Operating income	21,206		19,009		11.6	%	37,313		30,758		21.3	%
as a percent of sales	8.0	%	7.1	%			7.0	%	6.4	%
Net interest expense	4,292		3,648		17.7	%	8,882		5,770		53.9	%
Effective tax rate	36.1	%	36.9	%			36.3	%	36.7	%
Net earnings	10,443		2,812		271.4	%	17,253		8,313		107.5	%
Earnings per share	0.42		0.12		250.0	%	0.69		0.34		102.9	%
Engineered Support Structures Segment
Net sales	117,400		100,045		17.3	%	217,169		177,635		22.3	%
Gross profit	30,709		26,181		17.3	%	55,429		47,166		17.5	%
SG&A expense	20,001		19,811		1.0	%	39,097		37,134		5.3	%
Operating income	10,708		6,370		68.1	%	16,332		10,032		62.8	%
Utility Support Structures segment
Net sales	41,840		36,608		14.3	%	100,356		58,454		71.7	%
Gross profit	9,939		7,015		41.7	%	21,079		8,869		137.7	%
SG&A expense	6,356		5,663		12.2	%	13,108		9,738		34.6	%
Operating income (loss)	3,583		1,352		165.0	%	7,971		(869	)	NM
Coatings segment
Net sales	17,662		19,688		-10.3	%	33,045		38,662		-14.5	%
Gross profit	4,478		5,004		-10.5	%	7,491		8,069		-7.2	%
SG&A expense	2,370		2,403		-1.4	%	4,617		5,002		-7.7	%
Operating income	2,108		2,601		-19.0	%	2,874		3,067		-6.3	%
Irrigation segment
Net sales	65,421		87,571		-25.3	%	135,360		167,518		-19.2	%
Gross profit	15,944		22,008		-27.6	%	32,715		43,248		-24.4	%
SG&A expense	8,421		10,000		-15.8	%	17,971		19,395		-7.3	%
Operating income	7,523		12,008		-37.4	%	14,744		23,853		-38.2	%
Tubing segment
Net sales	19,155		18,745		2.2	%	37,412		32,753		14.2	%
Gross profit	5,564		5,605		-0.7	%	10,458		9,092		15.0	%
SG&A expense	1,668		2,184		-23.6	%	3,302		3,586		-7.9	%
Operating income	3,896		3,421		13.9	%	7,156		5,506		30.0	%
Other
Net sales	3,656		3,356		8.9	%	7,533		6,888		9.4	%
Gross profit	1,097		1,122		-2.2	%	2,224		2,275		-2.2	%
SG&A expense	1,753		1,715		2.2	%	3,639		3,360		8.3	%
Operating income (loss)	(655	)	(593	)	-10.5	%	(1,416	)	(1,085	)	-30.5	%
Net Corporate expense
Gross profit	(139	)	(855	)	NM		(143	)	(1,359	)	NM
SG&A expense	5,818		5,295		9.9	%	10,207		8,387		21.7	%
Operating income (loss)	(5,957	)	(6,150	)	3.1	%	(10,348	)	(9,746	)	-6.2	%

NM = Not meaningful

23

Overview

In 2004, we completed the acquisition of Newmark International, Inc. (Newmark), a manufacturer of concrete and steel pole structures mainly for the utility industry, W.J. Whatley, Inc. (Whatley), a manufacturer of fiberglass poles principally for outdoor lighting applications and Sigma Industries, Inc. (Sigma), a manufacturer of overhead sign structures mainly serving the eastern United States. Newmark is reported as part of the Utility Support Structures segment and Whatley and Sigma are reported as part of the Engineered Support Structures (ESS) segment. The results of these operations were included in our consolidated results starting on the closing dates of the acquisitions. The Newmark and Whatley acquisitions were completed in the second quarter of 2004 and the Sigma acquisition was completed in the third quarter of 2004.

Consolidated net sales for the second quarter of fiscal 2005 were virtually unchanged as compared with 2004, as higher selling prices associated with higher steel costs and the impact of 2004 acquisitions (approximately $9 million) were essentially offset by lower sales volumes, particularly in the Irrigation and ESS segments in 2005. For the twenty-six weeks ended June 25, 2005, the increase in net sales as compared with the same period in 2004 resulted from acquisitions completed in 2004 (approximately $36 million) and higher selling  prices due to increased steel costs. In 2004, we experienced unprecedented increases in our cost of steel and steel-related products. In response to these conditions, we increased our selling prices where possible to recover as much of these cost increases as possible. In 2005, steel prices decreased somewhat, but not to the levels prior to the 2004 increases. Gross profit grew slightly, despite generally lower sales volumes. In 2004, sales price increases somewhat lagged the rapid rise in the cost of steel, which contributed to weaker gross profit margins in 2004, as compared with 2003. Steel prices have stabilized in 2005, which has allowed us to recover some gross profit in 2005. Gross profit as a percentage of sales in the second quarter of 2005 was slightly higher than 2004 and, on a year-to-date basis, was essentially unchanged between 2004 and 2005. Stronger gross profit margins in the Utility Support Structures segment were offset to an extent by weaker gross profit margins in the Irrigation segment. Selling, general and administrative (SG&A) spending in the second quarter of 2005 was slightly lower than 2004, primarily related to lower employee incentives. On a year-to-date basis, the increase in SG&A spending was principally due to the businesses acquired in 2004.

Interest expense in 2005 was higher than 2004, both on a quarterly and year-to-date basis. The increase in interest expense was mainly due to higher average borrowing levels in 2005, as compared with 2004. The higher average borrowing levels this year were primarily due to the impact of the 2004 acquisitions, all of which were funded through debt. The Newmark, Whatley and Sigma acquisitions were financed through $138.0 million of increased borrowings, which consisted of $125.4 million cash paid for these businesses and approximately $12.6 million in assumed debt. “Minority interest”expenses were lower in 2005 than 2004, both on a quarterly and a year-to-date basis. This reduction is related to lower earnings in our Irrigation segment operations in Brazil and South Africa, both of which are less than 100% owned. The increase in net earnings in 2005 is due in part to a $9.9 million pre-tax expense (approximately $6.1 million after taxes) associated with the restructuring of our long-term debt in the second quarter of 2004.

Engineered Support Structures (ESS) Segment

In the ESS segment, sales increased in 2005, as compared with 2004, on both a quarterly and year-to-date basis. The increases in sales for the second quarter and the year-to-date periods ended June 25, 2005 mainly were the result of the impact of 2004 acquisitions (approximately $6.0 and $10.2 million, respectively) and sales price increases in response to higher steel costs. On a regional basis, we realized sales increases in North America and Europe, offset somewhat by slightly lower sales in China.

In North America, lighting and traffic sales in the second quarter of 2005 increased as compared with 2004, due to price increases in response to steel prices, offset by an approximate 10% decrease in sales volume. Sales volumes for 2005 were similar to 2004 on a year-to-date basis. Orders and shipments relating

24

to lighting and traffic projects funded by government programs lagged behind 2004, due to continued delays in the enactment of new federal highway legislation. We believe that, without specific funding guidelines in place, projects are being delayed until such funding is legislated. We anticipate that such legislation will be enacted this year, which should result in improved market conditions. Commercial lighting sales in 2005 likewise lagged 2004 levels, as we believe that commercial construction spending is weaker due to higher costs of construction materials. In Europe, lighting sales were higher than 2004, on both a quarterly and year-to-date basis, due to a combination of higher selling prices to offset higher steel costs and some improvement in economic conditions in our main market areas.

Sales of Specialty Structures products increased as compared with 2004, as higher sales in North America were somewhat offset by lower sales in China. In North America, market conditions for sales of structures and components for the wireless communication market were similar to 2004. Sign structure sales for the thirteen and twenty-six weeks ended June 25, 2005 increased over the same periods in 2004, principally due to the Sigma acquisition (approximately $4.0 and $5.4 million, respectively). Sales of wireless communication poles in China were lower in 2005 as compared with 2004, both on a quarterly and year-to-date basis. The quarterly and year-to-date drop in sales was $2.9 million and $5.6 million, respectively. While sales were below record 2004 levels, demand has been steady and we believe China will continue to expand and improve its wireless networks to accommodate growing demand for wireless communication services. Stronger sales of utility structures in China partially offset the drop in wireless communication structure sales. We believe that, as China develops its electrical infrastructure, there will be a solid demand in the future for steel transmission, substation and distribution structures to help transport and distribute electrical power to users.

The increase in the profitability of the ESS segment for the thirteen and twenty-six weeks ended June 25, 2005 as compared with the same periods in 2004 was the result of stronger earnings in North America and Europe, offset to a degree by lower earnings in China. In North America, improved pricing in all product lines in light of steel cost increases contributed to the increase in earnings for the segment, as sales price increases implemented throughout 2004 generally lagged steel cost increases. In Europe, earnings improved by $2.0 and $4.3 million as compared with the second quarter and year-to-date of 2004, respectively. This profitability improvement was the result of cost structure reductions implemented in 2004 and improved sales volumes. In China, year-to-date earnings decreased $1.4 million as compared with 2004, while second quarter 2005 operating income was similar to 2004. The main reason for lower earnings so far this year in China was related to competitive pricing pressures that are not allowing us to fully recover our steel cost increases in the marketplace.

Utility Support Structures segment

This segment included the operations of Newmark since its acquisition on April 16, 2004 and the North American utility structure operations that were previously part of the ESS segment. The increase in sales in the second quarter of 2005, as compared with 2004, was due to a full year impact of Newmark (approximately $3 million) and increased selling prices in light of higher steel costs. While demand for electrical transmission, substation and distribution structures was improved over 2004, shipping volumes for the quarter ended June 25, 2005 was down approximately 6% as compared with 2004, due in part to timing issues as to when structures were requested to be shipped by our customers. Year-to-date sales volumes in this segment increased slightly in 2005 as compared with 2004. In the first half of 2004, we experienced low margins due to significant competitive pricing pressures that existed throughout most of 2003 and the beginning of 2004. The pricing environment improved thereafter, which resulted in improved gross margins for the segment in 2005. The improved earnings for this segment for the second quarter, as compared with 2004, relate to improved pricing and factory performance. On a year-to-date basis, the improved operating income for this segment was due to the acquisition of Newmark (approximately $2.3 million), improved pricing and sales volume increases. The increase in year-to-date SG&A spending was related primarily to the acquisition of Newmark in April 2004 (approximately $3.5 million).

25

Coatings Segment

The decrease in sales in the thirteen and twenty-six weeks ended June 25, 2005, as compared with the same periods in 2004, resulted from lower anodizing volumes. In the galvanizing operations, sales dollars were level with 2004, on both a quarterly and year-to-date basis, as price increases offset an approximate 6.5% decrease in pounds galvanized. The decrease in pounds galvanized included lower internal volumes from the Irrigation segment, whose sales volumes are down significantly this year. The decrease in second quarter operating income as compared with 2004 related mainly to lower sales volumes and increased natural gas and zinc costs that were not recovered by sales price increases. Spending reductions in our factories largely mitigated the impact of lower sales and higher natural gas and zinc prices on gross profit. Year-to-date SG&A spending was down in 2005 as compared with 2004, which mostly related to reduced compensation costs.

Irrigation Segment

Sales in 2005 were down on a quarterly and year-to-date basis as compared with the same periods in 2004, due to lower sales volumes in domestic and international markets, offset to an extent by higher selling prices to offset higher steel costs. Fiscal 2005 second quarter and year-to-date global volumes were down approximately 38% and 32%, respectively, as compared with the relatively strong 2004 sales volume levels. We believe lower farm commodity prices and higher farm input costs (especially energy and fertilizer) contributed to reduced demand for irrigation machines and related service parts in most of our key markets around the world. In our international markets, we believe the increased relative strength of foreign currencies in relation to the U.S. dollar has also negatively impacted markets in our key international regions, such as Brazil and South Africa.

The decreases in operating income for the thirteen and twenty-six weeks ended June 25, 2005 as compared with the same periods in 2004 were due to lower sales volumes and reduced factory utilization. While we have reduced factory spending, we were not able to reduce spending to completely offset the impact of lower volumes. The operating income impact of reduced factory utilization was approximately $1.9 million and $3.5 million for the second quarter and year-to-date 2005, respectively, as compared with 2004. The lower SG&A spending for the second quarter and year-to-date periods ended June 25, 2005, as compared with the same periods in 2004, related to reduced employee incentives (approximately $0.4 million), lower legal expenses (approximately $0.5 million) and the reversal of a $0.8 million doubtful account receivable provision for a receivable that was recovered in the second quarter of 2005. In light of the lower sales volumes this year, we reduced employment levels in the factory and administrative areas in the second quarter of 2005. We believe these actions will mitigate the impact of lower sales levels on segment profitability for the remainder of 2005.

Tubing Segment

The increases in Tubing sales for the thirteen and twenty-six weeks ended June 25, 2005, as compared with the same periods in 2004, were due to sales price increases associated with increased steel costs, offset somewhat by slightly lower unit sales volumes. We believe some of the strong sales volumes experienced in the first half of 2004 resulted from increased customer purchases related to steel shortages that were present in the marketplace in 2004. Operating income improved in the thirteen and twenty-six week periods ended June 25, 2005, as compared with the same periods in 2004, due to a generally favorable pricing environment and lower SG&A spending resulting from reduced employee incentives.

26

Other

This includes our industrial fastener business, our machine tool accessories operation in France and the development costs associated with our wind energy structure initiative. The main reason for the decrease in profitability this year was higher spending related to wind energy.

Net corporate expense

The increase in net corporate SG&A expense for the thirteen and twenty-six weeks ended June 25, 2005 as compared with the same period in 2004 related mainly to increased expenses related to the acquisition of a new corporate aircraft (approximately $0.5 million) and a reduction in certain tax incentives (approximately $0.5 million) this year.

Liquidity and Capital Resources

Cash Flows

Working Capital and Operating Cash Flows—Net working capital was $268.2 million at June 25, 2005, as compared with $277.4 million at December 25, 2004. The ratio of current assets to current liabilities was 2.86:1 at June 25, 2005, as compared with 2.84:1 at December 25, 2004. Operating cash flow was a net inflow of $54.5 million for the twenty-six week period ended June 25, 2005, as compared with a net outflow of $4.4 million for the same period in 2004. The main reasons for the improvement in operating cash flows from 2004 to 2005 were increased net earnings this year, increased depreciation and amortization expenses in 2005 (due mainly to fixed assets and finite-lived intangible assets recognized as part of the acquisitions completed in 2004) and lower working capital levels. Our inventories increased throughout most of 2004, which resulted from steel price increases and increased quantities of steel that were purchased due to shortages and extended lead times. Inventories peaked in the third quarter of 2004 and decreased somewhat in the fourth quarter of 2004. We further reduced inventory levels in the first two quarters of 2005 and plan to continue reducing inventories over the remainder of 2005. The speed of any future inventory reductions will be a function of factors such as market conditions in our businesses and the operating conditions in the steel industry.

Investing Cash Flows—Capital spending during the twenty-six weeks ended June 25, 2005 was $25.3 million, as compared with $6.2 million for the same period in 2004. The main reason for the increase in capital spending was the purchase of a corporate aircraft for approximately $16.5 million. Our existing aircraft is currently for sale and we believe the sale will be completed during the 2005 fiscal year. Our capital spending for the 2005 fiscal year is expected to be between $35 million and $40 million. In 2004, we spent $119.6 million related to the Newmark and Whatley acquisitions.

Financing Cash Flows—Our total interest-bearing debt decreased from $327.5 million as of December 25, 2004 to $305.7 million as of June 25, 2005. The decrease in borrowings was related to the operating cash flows generated during 2005, less capital expenditures.

Sources of Financing and Capital

We have historically funded our growth, capital spending and acquisitions through a combination of operating cash flows and debt financing. We have an internal long-term objective to maintain long-term debt as a percent of capital at or below 40%. At June 25, 2005, our long-term debt to invested capital ratio was 43.2%, as compared with 46.3% at December 25, 2004. Our internal objective of 40% is exceeded from time to time in order to take advantage of opportunities to grow and improve our businesses, such as the Newmark, Whatley and Sigma acquisitions that were completed in 2004. We believe these acquisitions were appropriate opportunities to expand our product offerings and market coverage and generate earnings growth. While our long-term debt to capital ratio exceeds our 40% objective at this time, this ratio

27

was reduced during the first half of 2005 and we believe our cash flows will enable us to reduce our debt level to 40% over the next 6 to 12 months. This estimate is dependent on our level of acquisition activity and steel industry operating conditions (which could affect the levels of inventory we need to fulfill customer commitments).

Our debt financing at June 25, 2005 consisted primarily of long-term debt. We also maintain certain short-term bank lines of credit totaling $22.7 million, $19.3 million which was unused at June 25, 2005. Our long-term debt principally consists of:

·$150 million of senior subordinated notes that bear interest at 6.875% per annum and are due in May 2014. We may repurchase the notes starting in May 2009 at specified prepayment premiums. These notes are guaranteed by certain of our U.S. subsidiaries.

·$150 million revolving credit agreement with a group of banks that accrues interest at our option at (a) the higher of the prime lending rate and the Federal Funds rate plus 50 basis points or (b) an interest rate spread over the LIBOR of 62.5 to 137.5 basis points (inclusive of facility fees), depending on our ratio of debt to earnings before taxes, interest, depreciation and amortization (EBITDA). In addition, this agreement provides that another $50 million may be added to the total credit agreement at our request at any time prior to May 31, 2007, subject to the group of banks increasing their current commitment. At June 25, 2005, we had $49.5 million outstanding under the revolving credit agreement at an interest rate of 4.0625% per annum. The revolving credit agreement contains certain financial covenants that limit our additional borrowing capability under the agreement. At June 25, 2005, we had the ability to borrow an additional $95 million under this facility.

·$75 million term loan with a group of banks that accrues interest at our option at (a) the higher of the prime lending rate and the Federal Funds rate plus 50 basis points or (b) LIBOR plus a spread of 62.5 to 137.5 basis points, depending on our debt to EBITDA ratio. This loan requires quarterly principal payments beginning in 2005 through 2009. The annualized principal payments beginning in 2005 in millions are: $3.8, $11.2, $18.8, $26.2, and $15.0. The effective interest rate on this loan at June 25, 2005 was 4.3125% per annum.

Under these debt agreements, we are obligated by covenants that require us to maintain certain coverage ratios and may limit us with respect to certain business activities. At June 25, 2005 we were in compliance with all covenants related to these debt agreements.

FINANCIAL OBLIGATIONS AND FINANCIAL COMMITMENTS

There have been no material changes to our financial obligations and financial commitments as described on page 31 in our Form 10-K for the year ended December 25, 2004.

Off Balance Sheet Arrangements

There have been no changes in our off balance sheet arrangements as described on pages 31-32 in our Form 10-K for the fiscal year ended December 25, 2004.

Critical Accounting Policies

There have been no changes in the Company’s critical accounting policies during the quarter ended June 25, 2005. These policies are described on pages 33-35 in our Form 10-K for the fiscal year ended December 25, 2004.

28

Item 3.     Quantitative and Qualitative Disclosure About Market Risk

There are no material changes in the Company’s market risk during the second quarter ended June 25, 2005. For additional information, refer to the section “Risk Management” on page 33 of our Form 10-K for the fiscal year ended December 25, 2004.

Item 4.     Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures provide reasonable assurance that such disclosure controls and procedures are effective in timely providing them with material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic Securities and Exchange Commission filings. There have been no significant changes in the Company’s internal controls over financial reporting during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, such internal controls.

29

PART II. OTHER INFORMATION

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

						(c)		(d)
						Total Number of		Maximum Number
						Shares Purchased as		of Shares that May
						Part of Publicly		Yet Be Purchased
	(a) Total Number of		(b) Average Price			Announced Plans or		Under the Plans or
Period	Shares Purchased		Paid per Share			Programs		Programs
March 27, 2005 to April 23, 2005		—		—			—		—
April 24, 2005 to May 28, 2005		13,559		$	23.70		—		—
May 29, 2005 to June 25, 2005		526		$	23.97		—		—
Total		14,085		$	23.71		—		—

During the second quarter, the only shares reflected above were those delivered to the Company by employees as part of stock option exercises, either to cover the purchase price of the option or the related taxes payable by the employee as part of the option exercise. The price paid per share was the market price at the date of exercise.

Item 5.   Other Information

On April 26, 2005, the Company’s Board of Directors declared a quarterly cash dividend on common stock of 8.5 cents per share, payable July 15, 2005, to stockholders of record June 24, 2005. The indicated annual dividend rate is 34 cents per share.

Item 6.Exhibits

(a) Exhibits

Exhibit No.	Description
31.1	Section 302 Certificate of Chief Executive Officer
31.2	Section 302 Certificate of Chief Financial Officer
32.1	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf and by the undersigned hereunto duly authorized.

VALMONT INDUSTRIES, INC.
(Registrant)

/s/ Terry J. McClain

Terry J. McClain
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

Dated this 1st day of August, 2005.

31