Boston, MA 05/16/2014 (wallstreetpr) – Valmont Industries, Inc. (NYSE:VMI) intends to return $500 million to shareholders after its board approved a buyback program. The latest development marks the end of a long wait by shareholders for stock repurchase. The move to buy back shares also signals the improving cash condition in the company. The approved buyback amount will be spent over the next 12 months.
In announcing a stock repurchase program, the company reveals a balance in cash allocation between continued investment and rewarding of shareholders.
Shares of Valmont Industries, Inc. (NYSE:VMI) are up 4.5 percent year-to-date and 1.16 percent in the past one year.
The latest buyback cash allocation would see the company reduce its outstanding shares by about 26.8 million. That move has double positive impact in that it will put back more money into the pockets of the investors while improving the value of remaining shares.
Strong cash position
Following a series of strong quarterly results, the company concluded 2013 in strong cash position, going into 1Q2014 with a cash reserve of $614 million. The company used up $100 million in 1Q on acquisitions. In intends to continue with its strategic acquisitions to support revenue growth. The company aims to spend about $340 million in capital investment between 2014 and 2016. The money will mainly be spent in the improvement of the company’s existing infrastructure.
More cash to shareholders
In addition to the stock repurchase, Valmont Industries, Inc. (NYSE:VMI) has good plans for its shareholders. The company just announced a 50 percent dividend hike, a move that will see the company pay 38 cents per share on a quarterly basis. It promised to make future increases as its cash position improves.
Valmont Industries, Inc. (NYSE:VMI) earned $2.08 per share in the latest quarter on revenue of $751.7 million. That compared with $2.89 per share on revenue of $819.6 million in the same quarter of 2013. The operating income in the quarter dropped to $98.8 million from $118.2 million in the same period of 2013.
