Greetings, and welcome to the Valmont Industries Fourth Quarter and Full Year 2018 Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Renee Campbell, Director of Investor Relations and Corporate Communications for Valmont Industries. Renee, please go ahead.

Thank you, Kevin. Good morning, and welcome to Valmont Industries Fourth Quarter and Full Year 2018 Earnings Call. With me today are Steve Kaniewski, President and Chief Executive Officer; Mark Jaksich, Executive Vice President and Chief Financial Officer; and Tim Francis, Senior Vice President and Corporate Controller. This morning, Steve will provide a summary of our fourth quarter and full year results. Mark will provide additional details on financial performance and our outlook for 2019. We will conclude with Steve discussing the Valmont-Prospera partnership we announced yesterday, followed by Q&A. A copy of our press release and slide presentation is on the Investors page at valmont.com. And an archive of today's call will be available for the next 7 days. Instructions for accessing the replay are included in the press release. Also, please note that this conference call is subject to our disclosure on forward-looking statements, which applies to today's discussion and will be read in full at the end of this call. I would now like to turn the call over to our President and Chief Executive Officer, Steve Kaniewski.

Thank you, Renee. Good morning, everyone, and thank you for joining us. I'd like to begin this morning by thanking our global team of over 10,000 associates for delivering another year of profitable growth in 2018. In what was a transformational year, we made great progress on our three year growth strategy that we announced last March at our Investor Day. With that, let me turn to a recap of our fourth quarter, summarized on Slide 3 of the presentation. Net sales of $697.4 million were 2.5% below last year. Excluding revenues from the Grinding Media business that was divested last April, fourth quarter sales were flat with 2017. Sales growth from pricing actions across all segments and higher volumes in the Engineered Support Structures and Coatings segments were offset by lower project sales in both International Irrigation and the Utility segment. Foreign currency translation negatively impacted revenues by $13 million. Turning to the full year summary on Slide 4, revenues of $2.8 billion were slightly ahead -- slightly higher than last year, with higher volumes in the Engineered Support Structures and Coatings segment contributing to sales growth. In the Irrigation segment, North America sales grew more than 4%. Lower volumes in International Irrigation were mainly due to 2017 projects in emerging markets that do not repeat this year. In the Utility segment, sales were impacted by lower volumes from continued demand for smaller structures and a competitive pricing environment in the North European offshore wind business. Moving to the operations side of the business on Slide 5 of the presentation. During 2018, we substantially completed our operations transformation, which was a major part of our strategy to simplify operations, improve efficiencies in our supply chain and optimize our global business model. These actions primarily impacted our ESS segment. Specifically, during the year, we closed five facilities, including 3 in China and are in the process of closing an additional two by the end of the second quarter, which led to the increase in pretax full year restructuring expenses from $27 million to $42 million. We brought our composite facilities under the central-led operations management team, continuing our commitment to operational excellence and lean deployment across our sites. We expanded our shared service model for back-office functions and finance procurement, logistics and supply chain, completing several actions to streamline cross-regional management teams. And we worked to drive additional lean and agile methodologies throughout our business, while streamlining and improving our internal process. These actions position us well to capitalize on global growth opportunities, enabling us to deploy capital more strategically and to more quickly integrate our acquisitions, all of which benefit our shareholders long term. I would now like to turn the call over to Mark.

Thank you, Steve, and good morning, everyone. My comments regarding the fourth quarter and full year 2018 are based on the adjusted results as outlined at the end of the press release. Turning to Slide 6. Despite fourth quarter sales decreasing 2.5% over 2017, operating income improved by 3.5% or 9.5% of sales. The improvement in the operating income was achieved despite a higher LIFO expense of $1.5 million over 2017 as a result of continued progress on pricing actions across our businesses and cost structure savings as a result of the restructuring actions taken earlier in 2018. Moving to full year results. Sales were slightly higher than 2017. The net impact of acquisitions and divestitures on sales was minimal, as the sales contribution from the 2018 acquisitions was essentially offset by lower sales in the Grinding Media business, which was sold in April 2018. Adjusted operating income of $269.4 million or 9.8% of sales was comparable to 2017. We are pleased that despite a very volatile steel cost environment this past year, we successfully recovered inflation over the year through effective supply chain, operational and pricing actions. Turning now to the cash flow highlights on Page 7. Operating cash flows through the end of 2018 were $153 million compared to $133.1 million last year and $68.1 million through the third quarter of 2018. The strong finish to the year in cash flows was driven by improvements in working capital and a more stable raw material pricing environment. Turning to capital deployment. A summary of our accomplishments is shown on Slide 8. Capital spending for the year was $72 million, up from $55 million in 2017, driven by investments in the new steel structures facility in Poland and expansion of our irrigation facility in the United Arab Emirates and a…

Thank you, Mark. Looking ahead to 2019, we have a positive outlook for sales and earnings growth in all segments. And general sentiment across our served markets is also positive. Turning to the segments. In Engineered Support Structures, growth is being led by continued government investments in infrastructure development, particularly lighting and traffic and 5G wireless communication site preparation. In North America, we are seeing solid demand in our transportation markets. We are encouraged to see lead times of 10 to 12 weeks, nearly double the average, supported by 50% higher backlog, which is the highest since 2014. We expect market demand in Europe and Australia to be similar to 2018. In the India market, we expect accelerated sales growth throughout the year, driven by improved wireless communications demand and general infrastructure growth. In China, wireless communication demand will remain challenged ahead of substantial 5G rollout. We expect sales to be similar to 2018. In Utility, we expect strong market demand from ongoing investments in grid hardening and record levels of U.S. investment in renewable energy sources. As we all know, project shifts can occur each quarter, but our current global backlog of approximately $370 million supports a positive outlook for 2019. First quarter profitability will be challenged by less favorable project mix compared to 2018 and a continued competitive pricing environment in the offshore wind business. With respect to the offshore wind business, we have a good backlog in terms of volume, but margins will continue to be pressured, and average selling prices are lower compared to prior years. Over the past several months, three major competitors in the northern European region have announced insolvency or have fallen under state ownership. In light of this change, we are continuing our strategic review in 2019 and will provide update each…

Thank you, Steve. At this time, Kevin, you may open up the call for questions.

[Operator Instructions]. Our first question today is coming from Craig Bibb from CJS Securities.

Our next question today is coming from Nathan Jones from Stifel.

Our next question is coming from Brian Drab from William Blair & Company.

Our next question is coming from Brent Thielman from D.A. Davidson.

Our next question today is coming from Jon Braatz from Kansas City Capital.

Our next question is a follow-up from Craig Bibb from CJS Securities.

Our next question is coming from Nathan Jones from Stifel.

[Operator Instructions]. Our next question is a follow-up from Brian Drab from William Blair.

We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thank you, Kevin. Thank you, everyone, for joining us today. As mentioned, today's call will be available for playback on our website or by phone for the next seven days. And we look forward to speaking with you, again, next quarter. Thank you.

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 of 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 forward-looking statements. These factors include, among other things, risk factors described from time to time in Valmont's reports to 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. This concludes today's teleconference. You may disconnect your lines at this time. We thank you for your participation today.