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 September 30, 2006
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 a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of  “accelerated and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o                         Accelerated filer þ                            Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).          Yes o    No þ

25,583,508

Outstanding shares of common stock as  of October 30, 2006

Index is located on page 2.

Total number of pages 36.

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 thirty-nine weeks ended September 30, 2006 and September 24, 2005		3
	Condensed Consolidated Balance Sheets as of September 30, 2006 and December 31, 2005		4
	Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended September 30, 2006 and September 24, 2005		5
	Notes to Condensed Consolidated Financial Statements		6-23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24-31
Item 3.	Quantitative and Qualitative Disclosure About Market Risk		31
Item 4.	Controls and Procedures		31
	PART II. OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		32
Item 5.	Other Information		32
Item 6.	Exhibits		32
Signatures			33

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						Thirty-nine Weeks Ended
	Sept 30, 2006			Sept. 24, 2005			Sept. 30, 2006			Sept. 24, 2005
Net sales	$	310,904		$	265,942		$	953,320		$	796,817
Cost of sales	230,234			196,332			711,895			597,953
Gross profit	80,670			69,610			241,425			198,864
Selling, general and administrative expenses	51,651			47,579			158,920			139,520
Operating income	29,019			22,031			82,505			59,344
Other income (deductions):
Interest expense	(4,328		)	(5,002		)	(12,815		)	(14,713		)
Interest income	549			408			1,497			1,237
Miscellaneous	113			(462		)	1,297			(577		)
	(3,666		)	(5,056		)	(10,021		)	(14,053		)
Earnings before income taxes, minority interest and equity in earnings (losses) of nonconsolidated subsidiaries	25,353			16,975			72,484			45,291
Income tax expense (benefit):
Current	9,636			8,239			33,629			15,980
Deferred	(2,141		)	(1,780		)	(9,969		)	748
	7,495			6,459			23,660			16,728
Earnings before minority interest and equity in earnings (losses) of nonconsolidated subsidiaries	17,858			10,516			48,824			28,563
Minority interest	(393		)	(480		)	(902		)	(1,142		)
Equity in earnings (losses) of nonconsolidated subsidiaries	(2,403		)	170			(2,490		)	38
Net earnings	$	15,062		$	10,206		$	45,432		$	27,459
Earnings per share—Basic	$	0.60		$	0.42		$	1.82		$	1.13
Earnings per share—Diluted	$	0.58		$	0.40		$	1.76		$	1.09
Cash dividends per share	$	0.095		$	0.085		$	0.275		$	0.250
Weighted average number of shares of common stock outstanding (000 omitted)	25,255			24,382			25,027			24,262
Weighted average number of shares of common stock outstanding plus dilutive potential common shares (000 omitted)	25,851			25,380			25,743			25,197

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)

	September 30, 2006				December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents		$	55,249			$	46,867
Receivables, net		219,744				180,969
Inventories		176,160				158,327
Prepaid expenses		11,438				7,643
Refundable and deferred income taxes		18,723				14,506
Total current assets		481,314				408,312
Property, plant and equipment, at cost		505,970				489,660
Less accumulated depreciation and amortization		316,164				294,984
Net property, plant and equipment		189,806				194,676
Goodwill		106,807				106,695
Other intangible assets, net		57,163				60,140
Other assets		36,095				32,219
Total assets		$	871,185			$	802,042
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt		$	18,254			$	13,583
Notes payable to banks		8,708				4,918
Accounts payable		99,502				90,674
Accrued expenses		80,411				67,869
Dividends payable		2,430				2,107
Total current liabilities		209,305				179,151
Deferred income taxes		36,863				43,199
Long-term debt, excluding current installments		205,880				218,757
Other noncurrent liabilities		27,868				24,889
Minority interest in consolidated subsidiaries		7,559				7,371
Shareholders’ equity:
Preferred stock		—				—
Common stock of $1 par value		27,900				27,900
Retained earnings		391,827				357,025
Accumulated other comprehensive income		1,246				(2,521		)
Treasury stock		(37,263		)		(50,067		)
Unearned restricted stock		—				(3,662		)
Total shareholders’ equity		383,710				328,675
Total liabilities and shareholders’ equity		$	871,185			$	802,042

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)

	Thirty-nine Weeks Ended
	Sept. 30, 2006			Sept. 24, 2005
Cash flows from operations:
Net earnings	$	45,432		$	27,459
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization	28,326			30,205
Stock based compensation	1,157			—
(Gain)Loss on sale of assets	(376		)	353
Equity in earnings (losses) in nonconsolidated subsidiaries	2,490			(38		)
Minority interest	902			1,142
Deferred income taxes	(9,969		)	748
Other adjustments	(339		)	427
Changes in assets and liabilities
Receivables	(36,102		)	4,117
Inventories	(16,936		)	19,804
Prepaid expenses	(5,256		)	(535		)
Accounts payable	11,920			(495		)
Accrued expenses	11,985			(248		)
Other noncurrent liabilities	326			1,244
Income taxes payable	(4,519		)	6,752
Net cash flows from operations	29,041			90,935
Cash flows from investing activities:
Purchase of property, plant & equipment	(18,789		)	(29,991		)
Investment in nonconsolidated subsidiary	(4,824		)	—
Proceeds from sale of assets	3,316			733
Dividends to minority interests	(377		)	(318		)
Other, net	(780		)	152
Net cash flows from investing activities	(21,454		)	(29,424		)
Cash flows from financing activities:
Net borrowings under short-term agreements	3,790			747
Proceeds from long-term borrowings	475			16,500
Principal payments on long-term obligations	(8,679		)	(75,513		)
Dividends paid	(6,658		)	(5,954		)
Proceeds from exercises under stock plans	26,543			9,441
Excess tax benefits from stock option exercises	16,102			—
Purchase of common treasury shares—stock plan exercises	(31,367		)	(2,717		)
Net cash flows from financing activities	206			(57,496		)
Effect of exchange rate changes on cash and cash equivalents	589			(284		)
Net change in cash and cash equivalents	8,382			3,731
Cash and cash equivalents—beginning of period	46,867			30,210
Cash and cash equivalents—end of period	$	55,249		$	33,941

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  September 30, 2006 and the Condensed Consolidated Statements of Operations for the thirteen and thirty-nine week periods ended September 30, 2006 and September 24, 2005 and the Condensed Consolidated Statements of Cash Flows for the thirty-nine 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 September 30, 2006 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 31, 2005. 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 31, 2005, except for the January 1, 2006 adoption of SFAS 123(R). The results of operations for the periods ended September 30, 2006 are not necessarily indicative of the operating results for the full year.

Cash overdrafts

Cash book overdrafts totaling $11,300 and $7,243 were classified as accounts payable at September 30, 2006 and December 31, 2005, respectively. The Company’s policy is to report the change in book overdrafts as an operating activity in the Condensed Consolidated Statement of Cash Flows.

Inventories

At September 30, 2006, approximately 53% 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 $37,700 and $29,100 at September 30, 2006 and December 31, 2005, respectively.

Inventories consisted of the following:

	September 30, 2006			December 31, 2005
Raw materials and purchased parts		$	118,009		$	97,606
Work-in-process		20,668			19,419
Finished goods and manufactured goods		75,198			70,377
Subtotal		213,875			187,402
LIFO reserve		37,715			29,075
Net inventory		$	176,160		$	158,327

6

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

Income Tax Expense

In the third quarter of 2006, the Company realized approximately $1.2 million in income tax benefits related to activities from prior tax years but were recognized in 2006 when the additional credits were taken on its income tax returns. Management had previously determined it was not probable that these tax benefits would be realized and therefore had not recognized these benefits in prior years.

Equity in Earnings (Losses) Nonconsolidated Subsidiaries

The Company realized a loss in its nonconsolidated subsidiary in the third quarter of 2006, due principally to losses in its 49% owned structures operation in Mexico. This loss mainly related to adjustment of receivable and inventory valuations, which reduced its share of earnings from this nonconsolidated subsidiary by $2.1 million, after tax. These valuation adjustments resulted from the Company’s due diligence reviews related to its planned purchase of the remaining 51% ownership interest in this subsidiary.

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, non-vested stock awards and bonuses of common stock. At September 30, 2006, 1,298,323 shares of common stock remained available for issuance under the plans. Shares and options issued and available for issuance 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. On January 1, 2006, the Company adopted SFAS No. 123 (revised 2004) (SFAS 123(R)), Shared Based Payment. The Company chose to apply the modified prospective transition method as permitted by SFAS 123(R) and therefore has not restated prior periods. Under this transition method, compensation cost associated with employee stock options recognized in the thirteen and thirty-nine weeks ended September 30, 2006 includes amortization related to the remaining unvested portion of stock option awards granted prior to December 31, 2005, and amortization related to new awards granted after January 1, 2006. Accordingly, the Company recorded $444 and $1,157 of compensation expense (included in selling, general and administrative expenses) for the thirteen and thirty-nine weeks ended September 30, 2006, respectively. The associated tax benefits recorded were $171 and $445, respectively. Prior to the adoption of SFAS 123(R), the Company accounted for these plans under APB Opinion 25, Accounting for Stock Issued to Employees, and related Interpretations. Under APB Opinion 25, no compensation cost associated with stock options was 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 for the thirteen and thirty-nine weeks ended September 24, 2005 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.

7

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

			Thirteen Weeks Ended			Thirty-nine Weeks Ended
			Sept. 24, 2005			Sept. 24, 2005
Net earnings as reported				$	10,206		$	27,459
Add:	Stock-based employee compensation expense included in reported net income, net of related tax effects			115			346
Deduct:	Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			190			1,003
Pro forma net earnings				$	10,131		$	26,802
Earnings per share
As reported:		Basic		$	0.42		$	1.13
		Diluted		$	0.40		$	1.09
Pro forma:		Basic		$	0.42		$	1.10
		Diluted		$	0.40		$	1.06

Recently Issued Accounting Pronouncements

On July 13, 2006, the FASB issued Interpretation 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No 109. FIN 48 provides a consistent recognition threshold and measurement attribute, as well as clear criteria for subsequently recognizing, derecognizing and measuring uncertain tax positions for financial statement purposes. The Interpretation also requires expanded disclosure with respect to uncertain income tax positions. FIN 48 will be effective at the beginning of the Company’s 2007 fiscal year. The Company is currently assessing the effect of this pronouncement on the consolidated financial statements.

In September 2006, the FASB issued Statement 157 (“SFAS 157”), Fair Value Measurements. This Statement establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. While SFAS 157 does not require any new fair value measurements, it may change the application of fair value measurements embodied in other accounting standards. SFAS 157 will be effective at the beginning of the Company’s 2008 fiscal year. The Company is currently assessing the effect of this pronouncement on the consolidated financial statements.

2. Goodwill and Intangible Assets

The Company’s annual impairment testing on its reporting units was performed during the third quarter of 2006. As a result of that testing, it was determined the goodwill on the Company’s Consolidated Balance Sheet was not impaired.  Non-amortized intangible assets were also tested for impairment and determined not to be impaired.

8

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

Amortized Intangible Assets

The components of amortized intangible assets at September 30, 2006 and December 31, 2005 were as follows:

	As of September 30, 2006
	Gross Carrying Amount		Accumulated Amortization			Weighted Average Life
Customer Relationships	$	48,133		$	10,008	18 years
Proprietary Software & Database	2,609			1,987		6 years
Patents & Proprietary Technology	2,839			467		14 years
Non-compete Agreements	331			148		5 years
	$	53,912		$	12,610

	As of December 31, 2005
	Gross Carrying Amount		Accumulated Amortization			Weighted Average Life
Customer Relationships	$	48,133		$	7,819	18 years
Proprietary Software & Database	2,609			1,802		6 years
Patents & Proprietary Technology	2,839			319		14 years
Non-compete Agreements	331			98		5 years
	$	53,912		$	10,038

Amortization expense for intangible assets for the thirteen weeks ended September 30, 2006 and September 24, 2005, was $756 and $901, respectively. Amortization expense for intangible assets for the thirty-nine weeks ended September 30, 2006, and September 24, 2005 was $2,572 and $2,704, respectively. Estimated amortization expense related to finite-lived intangible assets is as follows:

	Estimated Amortization Expense
2006		$	3,404
2007		3,321
2008		3,321
2009		3,289
2010		3,255

The useful lives assigned to finite-lived intangible assets included consideration of factors such as the Company’s past and expected experience related to customer retention rates, the remaining legal or contractual life of the underlying arrangement that resulted in the recognition of the intangible asset and the Company’s expected use of the intangible asset.

9

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

Non-amortized intangible assets

Under the provisions of SFAS 142, intangible assets with indefinite lives are not amortized. The carrying value of the PiRod and Newmark trade names are $4,750 and $11,111, as of September 30, 2006 and December 31, 2005. The Newmark trade name arose from the 2004 acquisition and the PiRod amount arose from the 2001 acquisition. The indefinite-lived intangible assets were tested for impairment separately from goodwill in the third quarter of 2006. 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 30, 2006.

In its determination of these intangible assets as indefinite-lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory, technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to maintain the value of the intangible asset. The Company has determined that these intangible assets are expected to maintain their value indefinitely and, therefore, these assets are not amortized.

In addition, the Company acquired the Sigma trade name as part of the acquisition of Sigma’s assets in 2004 and recorded an associated indefinite-lived intangible asset of $405. In the second quarter of 2006, the Company determined it would no longer use the Sigma trade name and, accordingly, a complete impairment of the $405 value assigned to the Sigma trade name was recorded in the second quarter of 2006.

Goodwill

The carrying amount of goodwill as of September 30, 2006 was as follows:

	Engineered Support Structures Segment			Utility Support Structures Segment			Coatings Segment		Irrigation Segment			Tubing Segment			Total
Balance December 31, 2005		$	19,760		$	42,628	$	42,192		$	1,853		$	262	$	106,695
Foreign currency translation		112			—		—			—			—		112
Balance September 30, 2006		$	19,872		$	42,628	$	42,192		$	1,853		$	262	$	106,807

Goodwill in the Company’s reporting units was tested in the third quarter of 2006 using a discounted cash flow methodology. Based on the evaluation, the Company concluded that goodwill was not impaired as of September 30, 2006.

10

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

3. 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 thirty-nine weeks ended were as follows:

	Sept. 30, 2006		Sept. 24, 2005
Interest	$	10,358	$	12,060
Income Taxes	22,306		8,156

4. 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 September 30, 2006:
Net earnings		$	15,062		—			$	15,062
Shares outstanding		25,255			596			25,851
Per share amount		$	0.59		(.01	)		$	0.58
Thirteen weeks ended September 24, 2005:
Net earnings		$	10,206		—			$	10,206
Shares outstanding		24,382			998			25,380
Per share amount		$	0.42		(.02	)		$	0.40
Thirty-nine weeks ended September 30, 2006:
Net earnings		$	45,432		—			$	45,432
Shares outstanding		25,027			716			25,743
Per share amount		$	1.82		(.06	)		$	1.76
Thirty-nine weeks ended September 24, 2005:
Net earnings		$	27,459		—			$	27,459
Shares outstanding		24,262			935			25,197
Per share amount		$	1.13		(.04	)		$	1.09

11

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

5. 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 thirty-nine weeks ended September 30, 2006 and September 24, 2005, respectively, were as follows:

	Thirteen Weeks Ended					Thirty-nine Weeks Ended
	Sept. 30, 2006			Sept. 24, 2005		Sept. 30, 2006		Sept. 24, 2005
Net earnings	$	15,062		$	10,206	$	45,432	$	27,459
Currency translation adjustment	(264		)	1,686		3,767		(3,124		)
Total comprehensive income	$	14,798		$	11,892	$	49,199	$	24,335

6.Stock Plans

On January 1, 2006, the Company adopted SFAS No. 123R, Shared Based Payment (SFAS 123R). The Company chose to apply the modified prospective transition method as permitted by SFAS 123R and therefore has not restated prior periods. Under this transition method, compensation cost associated with employee stock options recognized in the thirteen and thirty-nine weeks ended September 30, 2006 includes amortization related to the remaining unvested portion of stock options granted prior to December 31, 2005, and amortization related to stock options granted after January 1, 2006. At September 30, 2006, the amount of unrecognized stock option compensation cost, to be recognized over a weighted average period of 1.30 years, was approximately $2,000.

Upon adoption of SFAS 123R, the Company changed its method of valuation for share-based awards granted beginning in 2006 to a binomial option pricing model from the Black-Scholes-Merton option pricing model which was previously used for the Company’s pro forma information required under SFAS 123. The fair value of each option grant made in 2006 was estimated using the following assumptions:

Expected volatility	27	%
Risk-free interest rate	4.40	%
Expected life from vesting date	2.7 yrs.
Dividend yield	1.51	%

As a result of adopting SFAS 123R, earnings before income taxes included $444 and $1,157 of share-based compensation expense related to stock options, with associated tax benefit of $171 and $445 for the thirteen and thirty-nine weeks ended September 30, 2006, respectively. Prior to the adoption of SFAS 123R, the Company presented all benefits of tax deductions resulting from the exercise of stock options as operating cash flows in the Consolidated Statements of Cash Flows. SFAS 123R requires the cash flows resulting from tax deductions in excess of the compensation cost recognized for share-based payments (“excess tax benefits”) to be classified as financing cash flows. The excess tax benefit of $16,102 was classified as a financing cash flow for the thirty-nine weeks ended September 30, 2006.

12

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

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, non-vested stock awards and bonuses of common stock. At September 30, 2006, 1,298,323 shares of common stock remained available for issuance under the plans. Shares and options issued and available are subject to changes in capitalization. The Company’s policy is to issue shares upon exercise of stock options from treasury shares held by the Company.

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.

Following is a summary of the activity of the stock plans during the thirty-nine weeks ended September 30, 2006:

	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2005	2,670,094			$	20.76
Granted	40,500			51.87
Exercised	(1,403,255	)		(18.79		)
Forfeited	(45,998	)		(26.04		)
Outstanding at September 30, 2006	1,261,341			$	23.76
Options exercisable at September 30, 2006	823,717			$	19.89
Weighted average fair value of options granted during 2006				$	51.87

Following is a summary of the status of stock options outstanding at September 30, 2006:

Outstanding and Exercisable By Price Range
Options Outstanding										Options Exercisable
					Weighted Average		Weighted					Weighted
Exercise Price					Remaining		Average					Average
Range			Number		Contractual Life		Exercise Price			Number		Exercise Price
	$	13.91-19.97		453,298		4.10 years		$	17.29		453,298		$17.29
	20.53-24.78			561,614		6.70 years		23.33			355,490		22.99
	24.86-53.01			246,429		6.12 years		36.66			14,929		25.13
				1,261,341							823,717

In accordance with shareholder-approved plans, the Company grants stock under various stock-based compensation arrangements, including non-vested share awards and stock issued in lieu of cash bonuses. Under such arrangements, stock is issued without direct cost to the employee. In addition, the Company grants non-vested share units. The non-vested share units are settled in Company stock when the vesting period ends. Non-vested awards of 18,000 shares of Company common stock were issued to non-employee directors of the Company during the second quarter of 2006. There were no non-vested share units issued during the thirteen weeks ended September 30, 2006.

13

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

At September 30, 2006, there was $4,425 of unrecognized compensation expense related to these non-vested share awards, which is expected to be recognized over a weighted average period of approximately 4 years. The Company recorded expense of $331 and $915 in the thirteen and thirty-nine weeks ended September 30, 2006 (with associated tax benefits of $127 and $352, respectively), related to the amortization of non-vested shares and share units. Beginning January 1, 2006, the unamortized balance of the non-vested share awards is a component of retained earnings. Prior to January 1, 2006, this unamortized balance was shown as a separate component of shareholders’ equity.

7. Business Segments

The Company aggregates its operating segments into five reportable segments. Aggregation is based on similarity of operating segments as to economic characteristics, products, production processes, types or classes of customer and the methods of distribution. Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts and sales dollars.

Reportable segments are as follows:

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 the manufacture 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.

The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance of its business segments based upon operating income and invested capital. The Company does not allocate interest expense, non-operating income and deductions, or income taxes to its business segments.

14

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

	Thirteen Weeks Ended						Thirty- nine Weeks Ended
	Sept. 30, 2006			Sept. 24, 2005			Sept. 30 2006			Sept. 24, 2005
Sales:
Engineered Support Structures segment:
Lighting & Traffic	$	96,488		$	92,090		$	286,893		$	266,891
Specialty	26,203			27,079			79,097			68,772
Utility	10,577			6,211			20,440			18,961
	133,268			125,380			386,430			354,624
Utility Support Structures segment
Steel	51,622			36,380			154,782			109,485
Concrete	14,718			14,918			54,024			43,754
	66,340			51,298			208,806			153,239
Coatings segment	29,936			22,196			82,534			62,392
Irrigation segment	67,803			55,467			242,527			190,838
Tubing segment	22,997			20,386			70,134			65,196
Other	4,328			4,558			13,397			14,007
	324,672			279,285			1,003,828			840,296
Intersegment Sales:
Engineered Support Structures	2,222			4,754			17,624			16,829
Utility Support Structures	306			1,258			1,749			2,843
Coatings	6,172			3,511			16,258			10,662
Irrigation	29			3			46			14
Tubing	4,002			2,814			11,560			10,212
Other	1,037			1,003			3,271			2,919
	13,768			13,343			50,508			43,479
Net Sales
Engineered Support Structures	131,046			120,626			368,806			337,795
Utility Support Structures	66,034			50,040			207,057			150,396
Coatings	23,764			18,685			66,276			51,730
Irrigation	67,774			55,464			242,481			190,824
Tubing	18,995			17,572			58,574			54,984
Other	3,291			3,555			10,126			11,088
Consolidated Net Sales	$	310,904		$	265,942		$	953,320		$	796,817
Operating Income
Engineered Support Structures	$	14,469		$	13,160		$	32,547		$	29,492
Utility Support Structures	6,710			4,888			22,804			12,859
Coatings	5,917			2,584			13,180			5,458
Irrigation	5,583			4,870			27,867			19,614
Tubing	3,812			3,725			11,114			10,881
Other	(373		)	(532		)	(1,438		)	(1,948		)
Net corporate expense	(7,099		)	(6,664		)	(23,569		)	(17,012		)
Total Operating Income	$	29,019		$	22,031		$	82,505		$	59,344

15

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 the Company’s 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 September 30, 2006

	Parent			Guarantors				Non- Guarantors				Eliminations				Total
Net sales	$	191,740			$	52,635			$	87,953			$	(21,424	)	$	310,904
Cost of sales	146,183				39,165				66,468				(21,582		)	230,234
Gross profit	45,557				13,470				21,485				158			80,670
Selling, general and administrative expenses	28,884				8,168				14,599				—			51,651
Operating income	16,673				5,302				6,886				158			29,019
Other income (deductions):
Interest expense	(4,052		)		(2		)		(282		)		8			(4,328		)
Interest income	182				31				344				(8		)	549
Miscellaneous	(2		)		16				99				—			113
	(3,872		)		45				161				—			(3,666		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	12,801				5,347				7,047				158			25,353
Income tax expense:
Current	5,229				2,087				2,320				—			9,636
Deferred	(1,510		)		13				(644		)		—			(2,141		)
	3,719				2,100				1,676				—			7,495
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	9,082				3,247				5,371				158			17,858
Minority interest	—				—				(393		)		—			(393		)
Equity in earnings/(losses) of nonconsolidated subsidiaries	5,822				142				143				(8,510		)	(2,403		)
Net earnings	$	14,904			$	3,389			$	5,121			$	(8,352	)	$	15,062

16

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

For the Thirty-nine Weeks Ended September 30, 2006

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Net sales	$	592,035			$	167,942			$	251,959			$	(58,616	)	$	953,320
Cost of sales	453,916				128,973				187,731				(58,725		)	711,895
Gross profit	138,119				38,969				64,228				109			241,425
Selling, general and administrative expenses	89,573				24,409				44,938				—			158,920
Operating income	48,546				14,560				19,290				109			82,505
Other income (deductions):
Interest expense	(12,135		)		(6		)		(697		)		23			(12,815		)
Interest income	331				66				1,123				(23		)	1,497
Miscellaneous	1,113				41				143				—			1,297
	(10,691		)		101				569				—			(10,021		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	37,855				14,661				19,859				109			72,484
Income tax expense:
Current	21,246				6,338				6,045				—			33,629
Deferred	(7,746		)		(684		)		(1,539		)		—			(9,969		)
	13,500				5,654				4,506				—			23,660
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	24,355				9,007				15,353				109			48,824
Minority interest	—				—				(902		)		—			(902		)
Equity in earnings/(losses) of nonconsolidated subsidiaries	20,968				—				300				(23,758		)	(2,490		)
Net earnings	$	45,323			$	9,007			$	14,751			$	(23,649	)	$	45,432

17

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 September 24, 2005

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Net sales	$	155,688			$	49,176			$	78,348			$	(17,270	)	$	265,942
Cost of sales	116,698				38,268				58,424				(17,058		)	196,332
Gross profit	38,990				10,908				19,924				(212		)	69,610
Selling, general and administrative expenses	27,485				7,401				12,693				—			47,579
Operating income	11,505				3,507				7,231				(212		)	22,031
Other income (deductions):
Interest expense	(4,708		)		(3		)		(297		)		6			(5,002		)
Interest income	12				3				399				(6		)	408
Miscellaneous	2				13				(477		)		—			(462		)
	(4,694		)		13				(375		)		—			(5,056		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	6,811				3,520				6,856				(212		)	16,975
Income tax expense:
Current	4,791				1,157				2,291				—			8,239
Deferred	(1,750		)		331				(361		)		—			(1,780		)
	3,041				1,488				1,930				—			6,459
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	3,770				2,032				4,926				(212		)	10,516
Minority interest	—				—				(480		)		—			(480		)
Equity in earnings/(losses) of nonconsolidated subsidiaries	6,648				—				108				(6,586		)	170
Net earnings	$	10,418			$	2,032			$	4,554			$	(6,798	)	$	10,206

18

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

For the Thirty-nine Weeks Ended September 24, 2005

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Net sales	$	482,378			$	142,147			$	226,079			$	(53,787	)	$	796,817
Cost of sales	368,314				114,126				169,654				(54,141		)	597,953
Gross profit	114,064				28,021				56,425				354			198,864
Selling, general and administrative expenses	77,779				22,740				39,001				—			139,520
Operating income	36,285				5,281				17,424				354			59,344
Other income (deductions):
Interest expense	(14,124		)		(19		)		(619		)		49			(14,713		)
Interest income	67				15				1,204				(49		)	1,237
Miscellaneous	(139		)		27				(465		)		—			(577		)
	(14,196		)		23				120				—			(14,053		)
Earnings before income taxes, minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	22,089				5,304				17,544				354			45,291
Income tax expense:
Current	8,055				1,914				6,011				—			15,980
Deferred	977				338				(567		)		—			748
	9,032				2,252				5,444				—			16,728
Earnings before minority interest, and equity in earnings/(losses) of nonconsolidated subsidiaries	13,057				3,052				12,100				354			28,563
Minority interest	—				—				(1,142		)		—			(1,142		)
Equity in earnings/(losses) of nonconsolidated subsidiaries	14,048				—				87				(14,097		)	38
Net earnings	$	27,105			$	3,052			$	11,045			$	(13,743	)	$	27,459

19

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

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2006

	Parent			Guarantors			Non-Guarantors				Eliminations				Total
ASSETS
Current assets:
Cash and cash equivalents	$	21,793			$	1,340		$	32,116			—			$	55,249
Receivables, net	102,105				29,717			87,962				(40		)	219,744
Inventories	74,280				44,285			57,595				—			176,160
Prepaid expenses	2,764				368			8,306				—			11,438
Refundable and deferred income taxes	12,195				3,653			2,875				—			18,723
Total current assets	213,137				79,363			188,854				(40		)	481,314
Property, plant and equipment, at cost	328,719				71,636			105,615				—			505,970
Less accumulated depreciation and amortization	218,835				29,330			67,999				—			316,164
Net property, plant and equipment	109,884				42,306			37,616				—			189,806
Goodwill	20,370				73,375			13,062				—			106,807
Other intangible assets	738				54,210			2,215				—			57,163
Investment in subsidiaries and intercompany accounts	358,633				52,479			(2,917		)		(408,195		)	—
Other assets	26,422				7,572			2,701				(600		)	36,095
Total assets	$	729,184			$	309,305		$	241,531			$	(408,835	)	$	871,185
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	16,117			$	28		$	2,109			$	—		$	18,254
Notes payable to banks	—				—			8,708				—			8,708
Accounts payable	38,608				12,619			48,275				—			99,502
Accrued expenses	49,844				6,757			23,850				(40		)	80,411
Dividends payable	2,430				—			—				—			2,430
Total current liabilities	106,999				19,404			82,942				(40		)	209,305
Deferred income taxes	13,158				21,628			2,077				—			36,863
Long-term debt, excluding current installments	204,730				46			1,704				(600		)	205,880
Minority interest in consolidated subsidiaries	—				—			7,559				—			7,559
Other noncurrent liabilities	26,104				—			1,764				—			27,868
Shareholders’ equity:
Common stock of $1 par value	27,900				14,249			3,493				(17,742		)	27,900
Additional paid-in capital	—				159,082			67,055				(226,137		)	—
Retained earnings	387,556				94,896			73,691				(164,316		)	391,827
Accumulated other comprehensive loss	—				—			1,246				—			1,246
Treasury stock	(37,263		)		—			—				—			(37,263		)
Unearned restricted stock	—				—			—				—			—
Total shareholders’ equity	378,193				268,227			145,485				(408,195		)	383,710
Total liabilities and shareholders’ equity	$	729,184			$	309,305		$	241,531			$	(408,835	)	$	871,185

20

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

December 31, 2005

	Parent			Guarantors			Non-Guarantors				Eliminations				Total
ASSETS
Current assets:
Cash and cash equivalents	$	16,875			$	1,898		$	28,094			$	—		$	46,867
Receivables, net	74,397				36,496			70,094				(18		)	180,969
Inventories	66,111				42,540			49,676				—			158,327
Prepaid expenses	3,008				1,690			2,945				—			7,643
Refundable and deferred income taxes	8,931				3,406			2,169				—			14,506
Total current assets	169,322				86,030			152,978				(18		)	408,312
Property, plant and equipment, at cost	325,620				66,218			97,822				—			489,660
Less accumulated depreciation and amortization	208,862				23,207			62,915				—			294,984
Net property, plant and equipment	116,758				43,011			34,907				—			194,676
Goodwill	20,370				73,375			12,950				—			106,695
Other intangible assets	778				56,498			2,864				—			60,140
Investment in subsidiaries and intercompany accounts	319,473				41,560			(10,471		)		(350,562		)	—
Other assets	31,305				—			1,514				(600		)	32,219
Total assets	$	658,006			$	300,474		$	194,742			$	(351,180	)	$	802,042
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	11,624			$	26		$	1,933			$	—		$	13,583
Notes payable to banks	—				—			4,918				—			4,918
Accounts payable	38,109				11,281			41,284				—			90,674
Accrued expenses	42,608				7,357			17,922				(18		)	67,869
Dividends payable	2,107				—			—				—			2,107
Total current liabilities	94,448				18,664			66,057				(18		)	179,151
Deferred income taxes	18,224				22,066			2,909				—			43,199
Long-term debt, excluding current installments	217,592				68			1,697				(600		)	218,757
Other noncurrent liabilities	23,807				—			1,082				—			24,889
Minority interest in consolidated subsidiaries	—				—			7,371				—			7,371
Shareholders’ equity:
Common stock of $1 par value	27,900				14,249			10,343				(24,592		)	27,900
Additional paid-in capital	—				159,082			71,885				(230,967		)	—
Retained earnings	329,764				86,345			35,919				(95,003		)	357,025
Accumulated other comprehensive income	—				—			(2,521		)		—			(2,521		)
Treasury stock	(50,067		)		—			—				—			(50,067		)
Unearned restricted stock	(3,662		)		—			—				—			(3,662		)
Total shareholders’ equity	303,935				259,676			115,626				(350,562		)	328,675
Total liabilities and shareholders’ equity	$	658,006			$	300,474		$	194,742			$	(351,180	)	$	802,042

21

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 Thirty-nine Weeks Ended September 30, 2006

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Cash flows from operations:
Net earnings	$	45,323			$	9,007			$	14,751			$	(23,649	)	$	45,432
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization	15,342				7,028				5,956				—			28,326
Stock based compensation	1,157				—				—				—			1,157
(Gain)/ Loss on sale of property, plant and equipment	(533		)		(42		)		199				—			(376		)
Equity in (earnings)/losses of nonconsolidated subsidiaries	125				2,665				(300		)		—			2,490
Minority interest					—				902				—			902
Deferred income taxes	(7,746		)		(684		)		(1,539		)		—			(9,969		)
Other adjustments	—				—				(339		)		—			(339		)
Changes in assets and liabilities:
Receivables	(27,708		)		6,780				(15,214		)		40			(36,102		)
Inventories	(8,169		)		(1,746		)		(7,021		)		—			(16,936		)
Prepaid expenses	(1,557		)		1,322				(5,021		)		—			(5,256		)
Accounts payable	4,694				1,338				5,888				—			11,920
Accrued expenses	7,347				(601		)		5,279				(40		)	11,985
Other noncurrent liabilities	(355		)		—				681				—			326
Income taxes payable	(4,779		)		—				260				—			(4,519		)
Net cash flows from operations	23,141				25,067				4,482				(23,649		)	29,041
Cash flows from investing activities:
Purchase of property, plant and equipment	(7,696		)		(4,069		)		(7,024		)		—			(18,789		)
Investment in nonconsolidated subsidiary	(4,824		)		—				—				—			(4,824		)
Dividends to minority interests	—				—				(377		)		—			(377		)
Proceeds from sale of assets	3,057				77				182				—			3,316
Proceeds from minority interests	—				—				—				—			—
Other, net	(5,012		)		(21,613		)		2,196				23,649			(780		)
Net cash flows from investing activities	(14,475		)		(25,605		)		(5,023		)		23,649			(21,454		)
Cash flows from financing activities:
Net borrowings under short-term agreements	—				—				3,790				—			3,790
Proceeds from long-term borrowings	—								475				—			475
Principal payments on long-term obligations	(8,370		)		(20		)		(289		)		—			(8,679		)
Dividends paid	(6,658		)		—				—				—			(6,658		)
Proceeds from exercises under stock plans	26,543				—				—				—			26,543
Excess tax benefits from stock option exercises	16,102				—				—				—			16,102
Purchase of common treasury shares—stock plan exercises	(31,367		)		—				—				—			(31,367		)
Net cash flows from financing activities	(3,750		)		(20		)		3,976				—			206
Effect of exchange rate changes on cash and cash equivalents	—				—				589				—			589
Net change in cash and cash equivalents	4,916				(558		)		4,024				—			8,382
Cash and cash equivalents—beginning of year	16,875				1,898				28,094				—			46,867
Cash and cash equivalents—end of year	$	21,791			$	1,340			$	32,118			—			$	55,249

22

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

For the Thirty-nine Weeks Ended September 24, 2005

	Parent			Guarantors				Non-Guarantors				Eliminations				Total
Cash flows from operations:
Net earnings	$	27,105			$	3,052			$	11,045			$	(13,743	)	$	27,459
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization	16,829				7,766				5,610				—			30,205
(Gain)/ Loss on sale of property, plant and equipment	13				1				339				—			353
Equity in (earnings)/losses of nonconsolidated subsidiaries	49				—				(87		)		—			(38		)
Minority interest	—				—				1,142				—			1,142
Deferred income taxes	977				338				(567		)		—			748
Other adjustments	145				(2		)		284				—			427
Changes in assets and liabilities:
Receivables	3,782				(1,407		)		1,750				(8		)	4,117
Inventories	30,008				(5,855		)		(4,349		)		—			19,804
Prepaid expenses	(1,186		)		94				557				—			(535		)
Accounts payable	1,205				1,151				(2,851		)		—			(495		)
Accrued expenses	(1,057		)		508				293				8			(248		)
Other noncurrent liabilities	1,382				—				(138		)		—			1,244
Income taxes payable	6,577				—				175				—			6,752
Net cash flows from operations	85,829				5,646				13,203				(13,743		)	90,935
Cash flows from investing activities:
Purchase of property, plant and equipment	(24,073		)		(2,124		)		(3,794		)		—			(29,991		)
Proceeds from sale of assets	21				13				699				—			733
Proceeds from minority interests	—				—				(318		)		—			(318		)
Other, net	(5,602		)		(6,375		)		(314		)		12,443			152
Net cash flows from investing activities	(29,654		)		(8,486		)		(3,727		)		12,443			(29,424		)
Cash flows from financing activities:
Net borrowings under short-term agreements	—				—				747				—			747
Proceeds from long-term borrowings	16,500				—				—				—			16,500
Principal payments on long-term obligations	(73,965		)		(20		)		(2,828		)		1,300			(75,513		)
Dividends paid	(5,954		)		—				—				—			(5,954		)
Proceeds from exercises under stock plans	9,441				—				—				—			9,441
Purchase of common treasury shares—stock plan exercises	(2,717		)		—				—				—			(2,717		)
Net cash flows from financing activities	(56,695		)		(20		)		(2,081		)		1,300			(57,496		)
Effect of exchange rate changes on cash and cash equivalents	—				—				(284		)		—			(284		)
Net change in cash and cash equivalents	(520		)		(2,860		)		7,111				—			3,731
Cash and cash equivalents—beginning of year	966				3,694				25,550				—			30,210
Cash and cash equivalents—end of year	$	446			$	834			$	32,661			$	—		$	33,941

23

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 discussion 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 31, 2005. We aggregate our businesses as five reportable segments. See Note 7 to the Condensed Consolidated Financial Statements.

24

Results of Operations

Dollars in thousands, except per share amounts

	Thirteen Weeks Ended											Thirty-nine Weeks Ended
	September 30, 2006				September 24, 2005				% Incr. (Decr)			September 30, 2006				September 24, 2005				% Incr. (Decr)
Consolidated
Net sales		$	310,904			$	265,942			16.9	%		$	953,320			$	796,817			19.6	%
Gross profit		80,670				$	69,610			15.9	%		241,425				$	198,864			21.4	%
as a percent of sales		25.9		%		26.2		%					25.3		%		25.0		%
SG&A expense		51,651				47,579				8.6	%		158,920				139,520				13.9	%
as a percent of sales		16.6		%		17.9		%					16.7		%		17.5		%
Operating income		29,019				22,031				31.7	%		82,505				59,344				39.0	%
as a percent of sales		9.3		%		8.3		%					8.7		%		7.4		%
Net interest expense		3,779				4,594				-17.7	%		11,318				13,476				-16.0	%
Effective tax rate		29.6		%		38.1		%					32.6		%		36.9		%
Net earnings		15,062				10,206				47.6	%		45,432				27,459				65.5	%
Earnings per share - Diluted		0.58				0.40				45.0	%		1.76				1.09				61.5	%
Engineered Structures segment
Net sales		131,046				120,626				8.6	%		368,806				337,795				9.2	%
Gross profit		35,565				33,297				6.8	%		97,273				88,726				9.6	%
SG&A expense		21,096				20,137				4.8	%		64,726				59,234				9.3	%
Operating income		14,469				13,160				9.9	%		32,547				29,492				10.4	%
Utility Support Structures segment
Net sales		66,034				50,040				32.0	%		207,057				150,396				37.7	%
Gross profit		14,550				11,731				24.0	%		45,866				32,810				39.8	%
SG&A expense		7,840				6,843				14.6	%		23,062				19,951				15.6	%
Operating income		6,710				4,888				37.3	%		22,804				12,859				77.3	%
Coatings segment
Net sales		23,764				18,685				27.2	%		66,276				51,730				28.1	%
Gross profit		8,812				4,848				81.8	%		21,229				12,339				72.0	%
SG&A expense		2,895				2,264				27.9	%		8,049				6,881				17.0	%
Operating income		5,917				2,584				129.0	%		13,180				5,458				141.5	%
Irrigation segment
Net sales		67,774				55,464				22.2	%		242,481				190,824				27.1	%
Gross profit		15,738				13,508				16.5	%		58,636				46,223				26.9	%
SG&A expense		10,155				8,638				17.6	%		30,769				26,609				15.6	%
Operating income		5,583				4,870				14.6	%		27,867				19,614				42.1	%
Tubing segment
Net sales		18,995				17,572				8.1	%		58,574				54,984				6.5	%
Gross profit		5,270				5,235				0.7	%		15,647				15,693				-0.3	%
SG&A expense		1,458				1,510				-3.4	%		4,533				4,812				-5.8	%
Operating income		3,812				3,725				2.3	%		11,114				10,881				2.1	%
Other
Net sales		3,291				3,555				-7.4	%		10,126				11,088				-8.7	%
Gross profit		1,202				1,112				8.1	%		3,647				3,337				9.3	%
SG&A expense		1,575				1,644				-4.2	%		5,085				5,285				-3.8	%
Operating income (loss)		(373		)		(532		)		29.9	%		(1,438		)		(1,948		)		26.2	%
Net Corporate expense
Gross profit		(467		)		(121		)		NM			(873		)		(264		)		NM
SG&A expense		6,632				6,543				1.4	%		22,696				16,748				35.5	%
Operating income (loss)		(7,099		)		(6,664		)		-6.5	%		(23,569		)		(17,012		)		-38.5	%

NM = Not meaningful

25

Overview

Sales increased for the thirteen and thirty-nine week periods ended September 30, 2006, as compared with the same periods of 2005, reflecting improved sales volumes as well as sales price increases to recover increased material costs. On a segment basis, the sales volume increases in the third quarter of 2006, as compared with the same period in 2005, were mainly realized in the Utility Support Structures and Irrigation segments. All reportable segments contributed to the sales volume increase recorded for the year-to-date period ended September 30, 2006, as compared with the same period in 2005.

Gross margin (gross profit as a percent of sales) in the third quarter of 2006 was slightly lower than the same period in 2005. Lower gross profit margins in most of our reportable segments were offset to a degree by stronger gross profit margins in the Coatings segment. The gross profit margin improvement in the Coatings segment in the third quarter of 2006 was due in part to a $1.1 million gain on the sale of one of its operating facilities. On a year-to-date basis, gross margin in 2006 was slightly higher than 2005, as higher sales volumes across all of our reportable segments allowed us to achieve greater factory utilization and improved leverage of our fixed factory expenses.

Selling, general and administrative (SG&A) spending in the third quarter and year-to-date periods ended September 30, 2006 increased mainly as a result of higher employee incentives related to improved operating performance (approximately $1.4 million and $7.8 million, respectively), increased compensation costs (approximately $1.0 million and $3.7 million, respectively), higher sales commissions associated with the increased sales volumes (approximately $0.3 million and $1.3 million, respectively) and expenses related to stock options (approximately $0.3 million and $0.9 million, respectively) that was required to be recorded under the provisions of SFAS 123(R), which we adopted during the first quarter of 2006. In addition, the increase in SG&A spending for the thirty-nine week period ended September 30, 2006 over the same period in 2005 was also due in part to a $0.8 million reversal of a bad debt provision related to an international receivable in the second quarter of 2005. All reportable segments contributed to the improved operating income in 2006 for the thirteen and thirty-nine weeks ended September 30, 2006, as compared with the same periods in 2005.

Net interest expense decreased for the thirteen and thirty-nine weeks ended September 30, 2006, as compared with the same periods in 2005, primarily due to lower average borrowing levels this year. Average borrowing levels in the third quarter of 2006 were approximately $55 million lower than the third quarter of 2005, which resulted from operating cash inflows that were used to pay down our interest-bearing debt. The impact of lower borrowing levels on interest expense were somewhat offset by higher interest rates on our variable rate debt.

In the third quarter of 2006, we realized approximately $1.2 million in income tax benefits related to activities from prior tax years but were recognized in 2006 when the additional credits were taken on our income tax returns. We had previously determined it was not probable that these tax benefits would be realized and therefore had not recognized these benefits in prior years. In addition, we experienced an increase in the amount of our pre-tax earnings derived from foreign locations for both the quarter and year-to-date periods ended September 30, 2006, as compared with the same periods in 2005. These locations generally have lower statutory income tax rates than the U.S., resulting in an overall reduction of our overall effective tax rate, as compared with prior periods.

“Miscellaneous” income for the thirty-nine week period ended September 30, 2006 was higher than the same period in 2005, due to a $1.1 million settlement associated with a retirement plan of a former subsidiary in the first quarter of 2006. We realized a loss in our nonconsolidated subsidiaries in the third quarter of 2006, due principally to losses in our 49% owned structures operation in Mexico. The Mexican loss mainly related to adjustment of receivable and inventory valuations which reduced our share of earnings from this nonconsolidated subsidiary by $2.1 million, after tax. These valuation adjustments resulted from our due diligence reviews related to our planned purchase of the remaining 51% ownership interest in this subsidiary.

26

Our cash flows provided by operations were $29.0 million for the thirty-nine weeks ended September 30, 2006, as compared with $90.9 million of cash provided by operations for the same period in 2005. The lower operating cash flows in 2006 resulted from increased working capital required by the increased net sales realized in 2006 and a larger share of our income tax expense that was payable in cash, as opposed to being  deferred to later periods.

Engineered Support Structures (ESS) segment

The sales increases in the ESS segment for the thirteen and thirty-nine weeks ended September 30, 2006, as compared with the same periods in 2005, were due to improved sales in all geographic regions. In North America, lighting and traffic structure sales improved slightly over 2005 sales levels. In the transportation market, while sales are essentially flat as compared with 2005, higher sales order levels achieved after the passage of U.S. highway funding legislation in the third quarter of 2005 have resulted in an increased backlog in 2006. Commercial lighting sales volumes in 2006 were higher than 2005 levels, as improvements in the residential and commercial construction markets resulted in higher demand for street and area lighting structures. We are also realizing increased demand for decorative lighting structures. In Europe, lighting sales were higher than 2005 on both a quarterly and year-to-date basis, mainly due to new tramway and decorative lighting structures developed for the European market and improvement in economic conditions in our main market areas.

In the specialty structures product line, sales in the third quarter of 2006 were comparable to 2005, while year-to-date sales in 2006 were higher than 2005. In the third quarter, North American shipments of wireless communication and sign structures lagged 2005 levels. In the wireless communication market, sales demand for structures and components in 2006 was comparable to 2005. However, sales shipments in the third quarter of 2006 lagged 2005 levels, due mainly to delays in shipments requested by our customers. On a year-to-date basis, sales of wireless communication structures for the North American market were comparable to 2005. Sign structure sales in 2006 were lower than 2005 levels, on both a quarterly and year-to-date basis. Sales of wireless communication structures in China were improved in 2006 as compared with a relatively weak 2005, on a quarterly and year-to-date basis. The Chinese wireless communication carriers are continuing their investment in structures as part of their plans to improve their coverage and increase services provided to their customers.

The increased profitability of the ESS segment for the thirteen and thirty-nine weeks ended September 30, 2006, as compared with the same periods in 2005, was related to the sales growth in the North American and European lighting markets, growth in wireless communication structures sales in China and control of SG&A spending in light of higher sales volumes. Improvement in operating income was realized in all our main geographic regions. Lower sales volumes and operational difficulties in our North American locations that are dedicated to specialty structures negatively affected segment operating income on a quarterly and year-to-date basis by $1.1 million and $2.7 million, respectively. On a year-to-date basis, operating income in 2006 included an aggregate of approximately $1.1 million in expenses associated with a warranty claim from a sign structure customer in North America and production equipment disposals in Europe. The main reasons for the increases in SG&A expense for the thirteen and thirty-nine weeks ended September 30, 2006 as compared with the same periods in 2005 were increased compensation costs ($0.7 million and $1.6 million, respectively), commissions related to higher sales volumes (approximately $0.2 million and $0.7 million, respectively), increased international management expenses (approximately $0.4 million and $1.1 million, respectively) and the writeoff of the Sigma trade name of $0.4 million in the second quarter of 2006.

Utility Support Structures segment

In the Utility Support Structures segment, the sales increases for the thirteen and thirty-nine weeks ended September 30, 2006 as compared with the same periods of 2005 were due to improved demand for

27

steel and concrete electrical transmission, substation and distribution pole structures. Throughout 2005 and into 2006, our order rates for structures from utility companies and independent power producers were relatively strong, as increased emphasis on improving the electrical transmission and distribution infrastructure in the U.S. has resulted in increased demand for structures for those applications. We also believe that incentives in energy legislation enacted in 2005 have encouraged utility companies to invest in their transmission and distribution systems. The hurricanes that struck the Gulf Coast and Texas during the third quarter of 2005 resulted in shipping delays of our structures, as construction crews that normally install new structures were redeployed to restore electrical power to those affected by the hurricanes. We believe that these delays experienced in the third quarter of 2005 were a significant factor contributing to the sales increases experienced in 2006.

Gross profit increased at a slightly lower rate than sales in the third quarter of 2006, as compared with 2005, due to an unfavorable sales mix on some large sales orders that were at lower gross profit margins than normal. Gross profit margins in the third quarter were also affected by a larger share of our sales being in steel structures, which carry slightly lower gross profit margins than concrete structures. On a year-to-date basis, gross profit margins in 2006 were similar to 2005. The improved operating income for this segment as compared with 2006 on both a quarterly and year-to-date basis relate to the improved sales levels and the resulting operating leverage of our SG&A cost structure. The increases in SG&A spending for the thirteen and thirty-nine weeks ended September 30, 2006 as compared with the same periods in 2005 were related primarily to increased compensation and incentive costs related to higher business activity levels (approximately $0.6 million and $1.8 million, respectively) .

Coatings segment

The increases in coatings segment sales for the thirteen and thirty-nine week periods ended September 30, 2006 were mainly due to higher sales prices associated with higher zinc costs and increased demand for galvanizing services. In our galvanizing operations, third quarter and year-to-date sales volume increased approximately 5% and 8% over 2005 volumes, mainly due to generally stronger industrial economic conditions in our market areas and improved sales volumes to our other segments. In the third quarter of 2006, zinc prices, while at high levels, were somewhat more stable than in the first quarter, which helped us more successfully recover the increased cost of zinc in our sales prices than earlier in the year.

The increases in operating income for the thirteen and thirty-nine weeks ended September 30, 2006 as compared with the same periods in 2005 were principally due to higher production levels and improved production efficiencies related to our zinc utilization. Third quarter 2006 gross profit and operating income were also boosted by a $1.1 million gain associated with the sale of one of our production facilities. This facility represented excess capacity for us and this sale should not affect our ability to serve our markets. The increases in SG&A spending in the third quarter and year-to-date periods ended September 30, 2006, as compared with the periods in 2005 were primarily related to higher employee incentives associated with improved operating income.

Irrigation segment

For the thirteen and thirty-nine weeks ended September 30, 2006, the sales increases realized in the Irrigation segment, as compared with the same periods in 2005, were mainly due to higher sales volumes, although sales prices have also been increased to recover increased material costs. In North America, improving farm commodity prices and relatively dry growing conditions contributed to improved demand for irrigation machines in 2006, as compared with 2005, on both a quarterly and year-to-date basis. The increase in year-to-date sales of irrigation machines and service parts in 2006 also resulted from an increase of equipment damaged in winter storms, as compared with 2005. International sales in the third quarter and year-to-date periods of 2006 increased approximately 30% and 36%, respectively, over 2005,

28

mainly due to sales in newly-developed international markets and generally improved market conditions in most of our core markets over 2005, offset to an extent by continued weak market demand in Brazil.

Operating income for the thirteen and thirty-nine weeks ended September 30, 2006 increased over the same periods in 2005 as a result of improved sales volumes and effective control in SG&A spending. The increases in SG&A spending for the thirteen and thirty-nine weeks ended September 30, 2006, as compared with the same periods in 2005 were mainly attributable to increased employee incentives associated with improved operational performance ($0.5 million and $1.6 million, respectively) and increased bad debts provisions of $1.4 million for the thirty-nine weeks ended September 30, 2006. The increase in bad debts provision included a $0.8 million reversal of an international accounts receivable provision that was realized in the second quarter of 2005.

Tubing segment

The increases in Tubing sales for the third quarter and the year-to-date periods ended September 30, 2006 as compared with the same periods in 2005 were due to improved demand for tubing products. Despite higher sales volumes, operating income was negatively impacted in 2006 by recent steel price increases that have not yet been recovered in the marketplace through higher selling prices and a competitive pricing environment for certain commodity-type tubing products.

Other

This segment 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 improvement in operating income this year was some improvement in the profitability of our machine tool accessory business.

Net corporate expense

The increases in net corporate expenses for the thirteen and thirty-nine weeks ended September 30, 2006, as compared with the same periods in 2005, were mainly related to increased employee incentives due to improved earnings this year (approximately $0.7 million and $4.4 million, respectively) and approximately $0.4 million of expense incurred in the first quarter of 2006 related to the termination of our synthetic lease on the corporate headquarters building and release of the related residual value guarantee.

Liquidity and Capital Resources

Cash Flows

Working Capital and Operating Cash Flows—Net working capital was $274.5 million at September 30, 2006, as compared with $229.2 million at December 31, 2005. The ratio of current assets to current liabilities was 2.33:1 at September 30, 2006, as compared with 2.28:1 as of December 31, 2005. Operating cash flow was $29.0 million for the thirty-nine week period ended September 30, 2006, as compared with $90.9 million for the same period in 2005. The main reason for the lower operating cash flows of 2006, as compared with 2005, was increased working capital levels resulting from higher sales volumes this year. In 2005, we reduced our inventories from historically high levels in 2004, which contributed significantly to the higher operating cash flow in 2005.

Investing Cash Flows—Capital spending during the thirty-nine weeks ended September 30, 2006 was $18.8 million, as compared with $30.0 million for the same period in 2005. Our capital spending for the 2006 fiscal year is expected to be between $25 million and $30 million. In addition, we are planning to complete our purchases of an additional 20% of our Brazilian joint venture that is part of the Irrigation segment and the remaining 51% of our nonconsolidated subsidiary in Mexico by the end of the 2006 fiscal year. We estimate that these investments, in the aggregate, will require $10 to $15 million in cash.

29

Financing Cash Flows—Our total interest-bearing debt decreased from $237.3 million as of December 31, 2005 to $232.8 million as of September 30, 2006. The decrease in borrowings was related to normal scheduled debt repayments. In addition, the large volume of stock option exercises in 2006 resulted in excess tax benefits of $16.1 million, which was the income tax effect of tax deductions on these stock option exercises realized in excess of expense recorded for financial reporting purposes.

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 September 30, 2006, our long-term debt to invested capital ratio was 32.4%, as compared with 36.2% at December 31, 2005. 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. Subject to our level of acquisition activity and steel and zinc industry operating conditions (which could affect the levels of inventory we need to fulfill customer commitments), we plan to maintain this ratio below 40% in 2006.

Our debt financing at September 30, 2006 consisted primarily of long-term debt. We also maintain certain short-term bank lines of credit totaling $20.1 million, $18.0 million which was unused at September 30, 2006. 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 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 September 30, 2006, we had no outstanding balance under the revolving credit agreement. The revolving credit agreement has a termination date of May 4, 2009 and contains certain financial covenants that limit our additional borrowing capability under the agreement. At September 30, 2006, we had the ability to borrow an additional $145 million under this facility.

·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, and had an outstanding balance of $50.7 million at September 30, 2006. This loan requires quarterly principal payments through 2009. The annualized principal payments beginning in 2006 in millions are: $3.0, $10.4, $19.4, and $17.9. The effective interest rate on this loan was 6.125% per annum at September 30, 2006.

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 September 30, 2006 we were in compliance with all covenants related to these debt agreements.

Recently Issued Accounting Pronouncements

On July 13, 2006, the FASB issued Interpretation 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No 109. FIN 48 provides a consistent recognition threshold and measurement attribute, as well as clear criteria for subsequently recognizing, derecognizing and measuring uncertain tax positions for financial statement purposes. FIN 48 also requires expanded disclosure with

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respect to the uncertain income taxes positions. FIN 48 will be effective at the beginning of our 2007 fiscal year. We are currently assessing the effect of this pronouncement on the consolidated financial statements.

In September 2006, the FASB issued Statement 157 (“SFAS 157”), Fair Value Measurements. This Statement establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. While SFAS 157 does not require any new fair value measurements, it may change the application of fair value measurements embodied in other accounting standards. SFAS 157 will be effective at the beginning of our 2008 fiscal year. We are currently assessing the effect of this pronouncement on the consolidated financial statements.

Financial Obligations and Financial Commitments

There have been no material changes to our financial obligations and financial commitments as described on page 34 in our Form 10-K for the year ended December 31, 2005.

Off Balance Sheet Arrangements

On March 1, 2006, our corporate headquarters building complex was sold to a third party. As a result of the sale, our residual value guarantee to the former owner of the building complex was terminated. There have been no other material changes in our off balance sheet arrangements as described on pages 35-36 in our Form 10-K for the fiscal year ended December 31, 2005.

Critical Accounting Policies

There have been no changes in the Company’s critical accounting policies during the quarter ended September 30, 2006 other than our adoption of SFAS 123(R) related to the accounting for stock options. These policies are described on pages 37-40 in our Form 10-K for fiscal year ended December 31, 2005.

Item 3.Quantitative and Qualitative Disclosure about Market Risk

There were no material changes in the company’s market risk during the quarter ended April 1, 2006. For additional information, refer to the section “Risk Management” on pages 36-37 in our Form 10-K for the fiscal year ended December 31, 2005.

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 are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 is (1) accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. There have been no 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.

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PART II.OTHER INFORMATION

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

Issuer Purchases of Equity Securities

	(a)		(b)		(c)		(d)
					Total Number of		Maximum Number
					Shares Purchased as		of Shares that May
					Part of Publicly		Yet Be Purchased
	Total Number of		Average Price		Announced Plans or		Under the Plans or
Period	Shares Purchased		paid per share		Programs		Programs
July 2, 2006 to July 29, 2006		1,849	$	48.40		—		—
July 30, 2006 to September 2, 2006		23,400	$	50.59		—		—
September 3, 2006 to September 30, 2006		—		—		—		—
Total		25,249	$	50.43		0		0

During the third 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 July 24, 2006, the Company’s Board of Directors declared a quarterly cash dividend on common stock of 9.5 cents per share, which was paid on October 16, 2006, to stockholders of record September 29, 2006. The indicated annual dividend rate is 38 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

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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 8th day of November, 2006.

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