Good morning. My name is Wes, and I will be your conference operator today. At this time I would like to welcome everyone to the Valmont Industries third quarter earnings conference call. (Operator Instructions) I will now turn the conference over to Jeff Laudin, Manager, Investor Relations. Please go ahead, sir.

Thank you, Wes. Welcome to the Valmont Industries third quarter 2009 earnings conference call. With me today are Mogens Bay, Chairman and Chief Executive Officer, Terry J. McClain, Senior Vice President and Chief Financial Officer, and Mark Jaksich, Vice President and Corporate Controller. Before we begin please note this discussion is subject to our disclosure on forward-looking statements, which applies to today's talk and will be read in full at the end of the call. The instructions for accessing a replay of this call can be found in our press release. I would like to now turn the floor over to Chairman and Chief Executive Officer, Mogens Bay.

Thank you, Jeff, and good morning, everyone. Thank you for joining us. Let me begin with some third quarter highlights. Net earnings rose 9.4% o $40.5 million, a record third quarter. Operating income increased 1.4% and was 14.5% of sales, an improvement of 2 percentage points. Utility Support Structures revenues rose 33% and operating income reached 26.8% of segment sales. Irrigation segment sales decreased 50% from the record 2008 levels and operating income declined 78%. Now I will turn to the quarter results by segment. The Utility Support Structures segment had sales of $151 million and operating income of $40.4 million. The improvement in operating income resulted from volume leverage of both fixed factory and selling, general and administrative expenses. Lower steel costs further contributed to margin expansion. This was another exceptional quarter for our North American utility business. We were able to leverage capacity in Valmont's pour facilities outside of our Utility business to expedite shipments of some large orders. In the fourth quarter we expect unfavorable comparisons in sales and operating income for the Utility Support Structures segment as most large projects were shipped during this year's first third quarters. Turning to the Engineered Support Structures segment, sales were 2% higher at $190 million. Operating income increased 12% to $18.2 million. The improvement in segment profitability resulted from better results in our international locations, the anticipated operational improvements in North America, and the positive impact of last year's acquisitions. In North America, lighting and traffic market sales were slightly higher, reflecting continued activity in the transportation market. Commercial lighting market sales were lower, primarily due to weakness in real estate markets. The specialty structures business weakened in North America due to a reduction in demand by wireless carriers, and in China sales of specialty structures were flat while…

(Operator Instructions) Your first question comes from Michael Coleman - Sterne, Agree & Leach. Michael Coleman - Sterne, Agree & Leach: I wanted to ask, you mentioned you're going to maintain a conservative financial position, but could you talk about potential acquisition opportunities you have perhaps in Latin America or other parts of the world that you would expect to see grow?

You mentioned Latin America, and I can tell you currently we are not looking at any acquisition in Latin America. But in general we are constantly looking at acquisitions. We have looked at a number of acquisitions this year. None of them came to fruition for one reason or another - valuation, strategic fit, whatever it may be. But we have a high level of effort looking at acquisitions that will click well into our businesses. As you can see, we have an extremely strong balance sheet, and we will at some point in time find good acquisitions to put some of that to work in. Michael Coleman - Sterne, Agree & Leach: And your comment regarding your backlog on the USS segment, could you put brackets around the word significant in terms of whether it would be down 25% or down more? When you say significant what do you actually mean by that?

We do give exact backlog numbers at the end of the year, but I would say that the backlog in the Utility business is down maybe about 25% compared to what it was last year same time.

Your next question comes from James Bank - Sidoti & Company. James Bank - Sidoti & Company: In the USS group in the press release and also, Mogens, you had referenced in your prepared remarks, the factory fixed cost, was that reduced at all or was this pure fixed cost utilization?

In the Utility business it was pure utilization, leverage from very busy plants. James Bank - Sidoti & Company: I'm a little confused then because sequentially, unless you got great pricing in the third quarter, sequentially it looks like the volume was down from the second quarter, yet the operating margin was up considerably. So I guess I'm trying to connect the dots with the fixed cost utilization. And then clearly raw material played a role in there, but I was wondering if you could help me out there.

Well, it's difficult to make quarter-by-quarter comparisons because it depends on what type of projects did go through, was it fixed price, did it adjust with steel costs? If it was a fixed price contract, maybe received much earlier, when steel prices were higher, we clearly got significant benefit from lower steel cost prices, so it's also what mix went through the plant and which plant. So it's difficult to say exactly the difference between the makeup of that operating income in the second quarter on the third quarter, but in total it was a combination of very good leverage in the plants, the mix of projects and contracts going through, and lower steel costs. James Bank - Sidoti & Company: And I didn't know if you touched on this; I might have missed it. The operational improvements in your Engineered Support Structure group, I was just wondering if you could just speak to that a little bit more just to elaborate on that.

Well, without putting any numbers on it, we had mentioned in several previous quarters that we were unhappy with some of the operational performance in some of our North American plants. Those were issues that we control. And we promised that we would correct those, and we have seen very good improvement in that segment in North America in how they operate their plants. James Bank - Sidoti & Company: And what was the amount of your revolver at the end of the quarter?

James, we were at $4.4 million at the end of the quarter. That is subsequently being paid off this month, so by the end of October we will be completely out of the revolver. James Bank - Sidoti & Company: So it's just then that long-term note?

Yes, pretty much. And there's some other small pieces of debt out there, but the sub debt is the lion's share of it. James Bank - Sidoti & Company: And last question - I'm sorry I'm going a little bit out of order here; back to the ESS group Mogens, you mentioned that I guess there was some enthusiasm with maybe it was the Build America bonds, maybe some of the stimulus stabilization that was going to some of the states, but none of this would give you better conviction despite the fact that the highway bill isn't here?

No. And I would say that the money that went directly into our type of infrastructure from the stimulus plan went to what they call shovel-ready projects, so it's repaving and really not anything that helped us. I just came back from spending two days in Washington this week trying to get a feel for how our representatives feel about a highway bill and, as you can imagine, all they want to talk about in Washington in health care. And I did not get a good feel that there are strong enough sentiments as to the importance and, more importantly, how to fund the next highway bill. So that's why I predict that we are going to see a continuation of short-term funding extensions like the one-month's extension we've already seen, and whereas that is very good it does not provide enough clarity to local and state governments to really embark on major projects.

Your next question comes from Steven Gambuzza - Longbow Capital.

Just coming back to the backlog in the transmission tower business, I believe on the last call you had commented on what your backlog was at the end of Q2. And I know that you provide your Q4 disclosure in your 10-K, but I was just wondering if you could just give us a sense for what happened sequentially with the transmission backlog.

Well, the transmission backlog from the beginning of this year has declined quarter by quarter as some of these large projects have been shipped. And I would repeat the answer I gave earlier in this conference call that I think roughly the current backlog compared to the same time last year, end of third quarter, is down about 25%.

What was the level at the end of the third quarter last year?

That we have not disclosed.

You mention in the press release that part of the benefit in the fantastic margin performance in steel structures this quarter was a benefit from lower steel prices. Would it be possible to give some quantification of what that might have been this quarter? And prospectively, does that cease being a tailwind or does it actually become a headwind?

It's difficult to give you a correct specific answer, but I think what you're trying to get at is over time what would the profitability levels be in that kind of business, and I have said on previous calls that over time we would expect the profitability in the Utility segment to be in the mid-teens, about 15% operating income. And clearly this year we have operated substantially above that. It is a combination of leverage of our plants and favorable pricing of steel.

Your next question comes from Michael Cox - Piper Jaffray.

You brought down inventory levels sharply here in the third quarter in particular as we look on a year-over-year basis. I was wondering if you could provide some color around this reduction specifically and perhaps what this could mean to margins should we do see steel prices continue to rise?

Well, I think the reduction in the inventories is in part due to pricing per pound, if you will, of materials, but also the pure actual physical units are down as well. Those figures are actually probably closer to where we would expect them to be normally because last year we had a pretty big uptick in inventories as pricing was going up and lead times got extended quite a bit. I think in general at this point in time we're pretty well positioned in relation to our backlog, and I think it still remains to be seen what really is going to happen with steel pricing going forward because there appears to be some disagreement amongst different people as far as where pricing is really going.

And on that second part of your question, we have enough evidence over the past when we try to predict where commodity prices are going and adjust inventory to that we are wrong as often as we are right, so we're kind of landing on let's run our businesses as efficiently as we can and adjust pricing in the marketplace to increase commodity prices.

And turning to the Irrigation segment, I was wondering if you could comment on pricing that you're seeing in that market?

I would say there haven't been any big pricing issues in the market. We have not seen pricing discipline in the industry kind of fall apart because of lower market or weakened market conditions, so that's not the issue in the Irrigation business. The issue in the Irrigation business is pure volume.

Your next question comes from Brent Thielman – D.A. Davidson. Brent Thielman – D.A. Davidson: Just a clarification question. You talked about unfavorable comparisons in the Utility business in Q4. Are you referring to relative to Q3 or Q4 of last year?

Q4 of last year.

And then on the Utility Support Structures segment, will you continue to execute on utility towers in that business during the quarter?

Yes, some, but as backlogs go down we will have less volume going through the traffic and lighting plants than we've seen in the past.

So I guess if you back that out would you have been at a law double-digit margin level for that business?

Probably.

And then just a clarification question. On the miscellaneous benefit, can you just explain to me what that was?

Brent, most of that shift is related to gains and losses in the assets that we have in our nonqualified deferred compensation plan that's on the balance sheet. So the gains and losses in the assets go through that particular line. The corresponding increase and decrease in the related liabilities to the employees goes to the operating income line. So this year, with the market improvement, we've got gains in those assets; last year we had losses. So that spread was about $1.8 - $1.9 million on the third quarter numbers. And the rest of it was just foreign currency transaction gains that were a little more favorable this year.

Your next question comes from Ned Borland - Next Generation Equity Research.

Just one quick one here on the Utility market. Mogens, in your opinion, as some of these projects have gotten deferred by the utilities, is there anything there on the regulatory front that needs to happen in order to get them to kick start some of these things?

I don't think so at the projects we are looking at. And the Utility business is maybe the business where we have the best visibility because these projects are in the preparatory stages for a long time, and I would say that at least what we hear from our Utility segment management is that a number of utilities are reacting to the current downturn in economic activity, and it gives them a breather. They have an opportunity to maybe postpone a few of those projects. But they are defined, so when we look at the transmission map of the U.S. and we see where the projects are, there are lots of large projects identified. The exact timing of when they'll come to fruition is what's a little bit up in the air.

And then what was the currency effect across some of these businesses?

Well, collectively, Ned, there was a small unfavorable impact on the income statement related to the currency. It wasn't very much. On the operating income side it was in the neighborhood of maybe about $1 million unfavorable, but it wasn't a very large impact one way or the other.

And the contribution of the acquisitions in ESS?

Our European acquisitions.

Okay. That was about $900,000 or so, so it wasn't a large influencer.

(Operator Instructions) Your next question comes from Jonathan Braatz - Kansas City Capital.

Most of my questions were answered, but one question. It looks like certainly the harvest is going to be delayed this year, and from your experience does a delayed harvest maybe aggravate or push back fourth quarter Irrigation sales a little bit into next year or is it really a negligible impact from what you've seen in the past?

Well, until you mentioned the word "negligible" - I'm not sure I can put a framework around the significance of it, but it's clear that the longer the farmers are in the field the less they spend with dealers and dealer representatives to talk about capital equipment. So the overall answer to your question is yes, if harvest is delayed it is likely that seasonal buying could be delayed also.

And one other question and I don't know, I guess maybe you answered this and maybe you didn't, but when you look at your Utility business and you talk about delays in orders, I guess how pervasive is that? Was there just one or two large potential orders that have been deferred or do you see sort of a systematic delay across the board from a lot of your utility customers?

Yes, I think it's more the utility industry as a result of lower economic activity and actually for the first time I think in many years lower electric consumption this year. That is giving the industry an opportunity to take a look at some of their projects. So it's not like this particular project is the one that's the reason.

Your next question comes from [Noel Biltz] - Stifel Nicolaus.

My first question, you guys called out having some benefit from lower raw material costs in the Utility business. Obviously, there's also a large sale component in the ESS business. Could you explain some of the factors that would contribute to you seeing more of the benefit from lower sale costs in Utility than in Engineered Support Structures?

Well, part of it is shorter lead times in the Engineered Support Structures business. So the time difference between taking an order and delivering it is shorter, and therefore you'll see a shorter swing in the steel prices based on the quotation time and what is actually happening at the delivery time. And as you know, in the Utility business some contracts are fixed price, some contracts have adjusters and depending on steel prices going up or down. But I would say when you look at the two groups, probably the relative length of their lead times is the main explanation.

And then just kind of getting back to the Utility projects being delayed, forgive me if I'm wrong but it was my understanding that back in the third quarter and fourth quarter of 2008 your Utility backlog built up in part because there was limited capacity to produce some of the structures for large projects, which you then kind of, when you used some of your Engineered Support Structures capacity to fill those orders you kind of got this boost in the first half of the year from working off that backlog. [Break in audio] kind of give us a sense of what you think the general market trend for transmission sending is outside of that factor, maybe looking at 2010 and then 2011?

I'm not so sure I quite understand your question, but let me take a shot at it anyhow. Our internal capacity really had nothing to do with the backlog size at the time. We were able to find the capacity to build whatever we had in the backlog at the time our customers required it, so therefore the change in backlog is not an internal - it doesn't have an internal affect. It is purely what happened in the marketplace. Very large projects were given out at the end of last year and in through the early part of this year, and we are now seeing some slowdown in the activity levels for those kinds of projects. But it really had nothing to do with our internal capacity.

And then just a housekeeping question. Could you give us a sense of the tax rate for the fourth quarter?

I think you asked for the tax rate. You're kind of not coming through clearly. Was that correct?

Yes.

Okay.

That would be in the neighborhood of probably 34%. I think our tax rate's been pretty stable over the last few quarters. That'd be a decent percentage to work with.

Your next question comes from Arnold Ursaner - CJS Securities.

My first question relates to the corporate expense line. That's a higher level than it's been for quite awhile, and I know when your stock has a sizeable movement the way you do your accounting internally that can affect your corporate expense line. Could you comment on that and any other factors that may have caused the sizeable jump there?

Well, Arnie, the majority of that change in the third quarter is the flip side of the increase in the other income. So when those deferred compensation assets go up, there's a corresponding liability that goes up, too, and that change goes through the SG&A line, which goes into corporate. That's most of it. The rest of it I think is not any one particular item.

But, again, you normally have a catch up on compensation driven by where your stock is. Is that something likely to hit Q4 assuming the stock stays -

Yes. There was some. Certainly if you compared it to second quarter there would be some uptick in that figure as well because the stock price went up during the third quarter, and those incentive accruals have to be adjusted. But as far as fourth quarter goes, I guess that remains to be seen.

Can you give us a sense of the cost of steel you have in the inventory currently versus market prices?

That's a good question. I'm not so sure I can give you a precise answer, but of course the fact that our inventories are way lower than they were at the beginning of the year, we are probably pretty average to what we've seen in the marketplace for the last quarter.

My final question, I know it's been talked about several times on this call, but everyone's focusing on backlog versus last year, which I frankly think is pretty misleading. Last year was an extraordinary upbeat period, an extraordinary positive period. In your last conference call you indicated you had about $200 million of backlog at the end of Q2. How does your backlog compare with that Q2 level?

At the current time -- and you are talking about Utility?

Yes.

It's down from the $200 million level.

So you had a relatively weak period of incoming orders in Q3, and you've basically chewed through the backlog you had. Is that a fair assessment?

Not the entire backlog but some of the backlog. We had more shipments that we had incoming orders in the third quarter, I think. Just expanding on it, I agree with you that '08 was an extraordinary year in the Utility business. And if you look at trend lines going back two or three years before that you see good growth, and I would expect us to stay on that trend line also going forward. But like we saw in Irrigation in '08, we had kind of an out-of-body experience in a couple of businesses two years in a row.

Staying on the topic again a little bit more, I've obviously been following your stock for years. I only went back five years, and Q4 over Q3 sequentially, at least in the five years I went back, has been up very strongly each of the last several years. Your guidance implies a 15% sequential decline versus Q3, which is, again, completely inconsistent with the seasonal pattern you've had over the last five years. I just want to make sure that in fact I'm understanding you correctly.

Are you talking revenue or earnings?

Revenue.

You're understanding us.

Wes, are there any more questions in queue?

Yes, sir. Your next question comes from Tim O'Toole - Delta Management.

We're maybe over analyzing the backlog movement; it's fairly straightforward. But it occurs to me that one other thing that may be being asked in the dollar - because you're looking at dollar volume of backlog - but if you were to look at it on a tons basis or a volumetric basis somehow on the USS backlog year-over-year, 25% would probably reduced because of the comparisons of high steel prices last year. Do you have any feel for what that number would be? Probably still directionally down but maybe not as deep as that rough 25% number you threw out there.

That's correct. Part of the decline is a decline in input costs, primarily steel, but also volume backlog is also down.

But would volume backlog be down 10% versus the 25% or something? In rough numbers; obviously you don't want to make it a science experiment.

Exactly. And I can't give you an exact number, but if I had to throw one out it'd be 50/50.

And then I'm wondering also whether pricing in that area - obviously in ESS I think pricing is going to be a little bit sharper and regional and all, but is pricing in USS getting sharper out there because the same capacity is kind of chasing fewer projects or something at this point versus a year ago, or do you look at the quoting environment as being reasonably stable and well behaved at this point?

No, you're correct in your assumption that currently pricing is, to use your expression, sharper than what we have seen in previous periods.

Or at least versus where it was last year?

Correct.

The other thing, too, no one's talked about it specifically and I don't track it very precisely, but the projects that are going on, obviously some big work and I know you guys are looking at it in Texas, has any of that started to cut loose yet and be placed, or is that kind of imminent? Where would you see all that work going?

Well, we are participating and have delivered substantial orders in Texas. I think you're referring to the consummation lines hooking up the wind farms in the northwest in Texas with the Dallas/Houston area, and we have already executed a number of contracts there. But if you look over the next few years there's going to be substantial consummation line work let in that part of the world.

What proportion of the overall sets of projects there do you think has already been let? In other words, what remains?

I can't give you a percentage. And also keep in mind that they're not all lines for monopole structures that we make. A number of the lines probably will end up being lattice-type lines. So also there it's a mix issue. But I think we'll see an increased activity. In other words, this is just the start of significant opportunities in Texas.

Well, right, and that's kind of what I'm looking at. Is funding and credit and capitalization and stuff all kind of in place, or is that where some of the stickiness of actually letting some of that work out or at least awarding it is?

I can't answer that question, but we can get back to you on it. If I attempted to answer that question I'd tell you more than I know.

That's always dangerous.

(Operator Instructions) Your next question comes from Steven Gambuzza - Longbow Capital.

I just wanted to make sure I understood the response to Brent's question on the ESS margins. I know that this year I think you mentioned that you've been able to use some of the excess or idle capacity in ESS to accommodate what has been a very robust run rate for the transmission towers business. Has that actually, using up that capacity, has that led to better absorption in ESS this year? The strong business fundamentals of the transmission towers, has that actually contributed to the improved margins in ESS to some degree in the first nine months of 2009?

I'd look at it this way. I'd say clearly the utility volume going through ESS plants has contributed to good absorption. It has contributed to margin dollars in that business but probably not to an increased percentage.

And at this time I'm showing no further questions. I'll turn the conference back to Mr. Laudin.

Thank you, Wes. This concludes our call, and we thank you for joining us today. This message will be available for playback on the Internet or by phone for the next week. We look forward to speaking to you again next quarter, and at this time Wes will read our forward-looking disclosure.

Included in this discussion are 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 Valmont 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. As you listen to and consider these comments, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties, some of which are beyond Valmont's control, and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Valmont's actual financial results and cause them to differ materially from those anticipated in the [break in audio] among other things risk factors described from time to time in Valmont'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 material, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments. The company cautions that any forward-looking statement included in this discussion is made as of the date of this discussion and the company does not undertake to update any forward-looking statements.