PLPC Preformed Line Products Company

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 7, 2024

 

 

Preformed Line Products Company

(Exact name of Registrant as Specified in Its Charter)

 

 

Ohio			0-31164	34-0676895
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
660 Beta Drive
Mayfield Village, Ohio				44143
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 440 461-5200

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common		PLPC		The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On March 7, 2024, Preformed Line Products Company issued a press release announcing earnings for the fourth quarter and full year ended December 31, 2023. A copy of the press release is attached hereto as Exhibit 99.1. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits The following exhibits are furnished or filed, as applicable, herewith:

 

Exhibit No.		Description
99.1		Press release dated March 7, 2024, announcing earnings for the fourth quarter and full year ended December 31, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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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 by the undersigned hereunto duly authorized.

			PREFORMED LINE PRODUCTS COMPANY
Date:	March 7, 2024	By:	/s/Andrew S. Klaus
			Andrew S. Klaus, CFO

 

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PREFORMED LINE PRODUCTS ANNOUNCES FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

CLEVELAND, OHIO – MARCH 7, 2024 - Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its fourth quarter and full year ended December 31, 2023.

Full Year 2023 Highlights:

Net sales in the fourth quarter of 2023 were $145.6 million compared to $169.9 million in the fourth quarter of 2022, a 14% decrease due primarily to a reduction in communication product sales as the market remains soft and customers destock inventory positions. Foreign currency translation increased fourth quarter 2023 net sales by $2.9 million.

Net income for the quarter ended December 31, 2023 was $6.3 million, or $1.29 per diluted share, compared to $16.5 million, or $3.28 per diluted share, for the comparable period in 2022. The fourth quarter of 2023 net income was impacted by decreased gross profit from lower net sales, partially offset by selling price increases and a lower effective tax rate for the period. Other discrete factors contributing to the decline in quarterly net income included $2.3 million of outsized foreign currency transaction losses, primarily due to the significant devaluation of the Argentine Peso and customer-specific charges of $3.5 million to increase the allowance for doubtful accounts and the excess and obsolete inventory reserve mainly caused by the downturn in communications end market sales. Gross profit as a percentage of net sales was 33.0% for the fourth quarter of 2023.

Net sales for the full year 2023 were $669.7 million, compared to $637.0 million in 2022. This is the fifth consecutive year of record net sales and represents a 5% increase versus prior year. Foreign currency translation increased full year 2023 net sales by $0.4 million.

Net income for the year ended December 31, 2023 was $63.3 million, or $12.68 per diluted share, compared to $54.4 million, or $10.88 per diluted share in 2022. Net income for the full year 2023 was favorably impacted by the increase in margin on incremental sales as well as the full year benefit of price increases which helped offset inflationary increases of raw material and freight costs. Gross profit as a percentage of net sales was 35.1% for 2023.

Rob Ruhlman, Executive Chairman, said, “Thanks to a strong first half of 2023, we experienced a fifth consecutive year of record annual net sales and fourth consecutive year of earnings per share growth. The second half of the year was impacted by the pullback in spending among communication network operators as well as customer destocking efforts to reduce elevated inventory levels. We expect the significance and diversity of our international operations to help offset some of the pullback in communication product sales largely impacting our USA results. We remain excited about the future prospects for both our communications and energy product end markets and remain well positioned to achieve growth thanks to operational improvements, new product introductions, and production capacity added over the last three

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years as well as the significant government stimulus programs that are expected to benefit our core markets. Our continued commitment to manufacturing in the USA positions us well for the Build America, Buy America Act (“BABAA”) requirements of the Broadband Equity, Access, and Deployment (“BEAD”) Program, which we expect to drive increased demand for communications products in late 2024/early 2025. We continue to invest capital in our global facilities as necessary and we continue to seek the right opportunities for inorganic growth. We are fully committed to providing our customers with the high-quality products and service they have come to expect from our dedicated workforce.”

 

 

FORWARD-LOOKING STATEMENTS

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the Company, including those statements regarding the Company’s and management’s beliefs and expectations concerning the Company’s future performance or anticipated financial results, among others. Except for historical information, the matters discussed in this release are forward-looking statements that involve risks and uncertainties which may cause results to differ materially from those set forth in those statements. Among other things, factors that could cause actual results to differ materially from those expressed in such forward-looking statements include the uncertainty in global business conditions and the economy due to factors such as inflation, rising interest rates, labor disruptions, military conflict, international hostilities, political instability, exchange rates and public health concerns, the strength of demand and availability of funding for the Company’s products and the mix of products sold, the relative degree of competitive and customer price pressure on the Company’s products, the impact of stimulus programs in driving demand, the cost, availability and quality of raw materials required for the manufacture of products, opportunities for business growth through acquisitions and the ability to successfully integrate, and implement appropriate internal controls in, any acquired businesses, changes in regulations and tax rates, security breaches, litigation and claims and the Company’s ability to continue to develop proprietary technology and maintain high-quality products and customer service to meet or exceed new industry performance standards and individual customer expectations, and other factors described under the headings “Forward-Looking Statements” and “Risk Factors” in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on March 8, 2024 and subsequent filings with the SEC. The Annual Report on Form 10-K and the Company’s other filings with the SEC can be found on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

 

 

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ABOUT PLP

 

PLP protects the world’s most critical connections by creating stronger and more reliable networks. The company’s precision-engineered solutions are trusted by energy and communications providers worldwide to perform better and last longer. With locations in 20 countries, PLP works as a united global corporation, delivering high-quality products and unparalleled service to customers around the world.

 

MEDIA RELATIONS INVESTOR RELATIONS
 

JOSH NELSON ANDREW S. KLAUS

MANAGER, MARKETING COMMUNICATIONS CHIEF FINANCIAL OFFICER

+1 440 473 9120 +1 440 473 9246

JOSH.NELSON@PLP.COM ANDY.KLAUS@PLP.COM

 

 

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PREFORMED LINE PRODUCTS COMPANY

CONSOLIDATED BALANCE SHEETS

		December 31,
		2023				2022
(Thousands of dollars, except share and per share data)
ASSETS
Cash, cash equivalents and restricted cash		$	53,607			$	37,239
Accounts receivable, net			106,892				125,261
Inventories, net			148,814				147,458
Prepaid expenses			8,246				13,283
Other current assets			7,256				4,929
TOTAL CURRENT ASSETS			324,815				328,170
Property, plant and equipment, net			207,892				175,011
Goodwill			29,497				28,004
Other intangible assets, net			12,981				14,082
Deferred income taxes			7,109				5,320
Other assets			20,857				17,892
TOTAL ASSETS		$	603,151			$	568,479
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable		$	37,788			$	46,839
Notes payable to banks			6,968				18,098
Current portion of long-term debt			6,486				3,018
Accrued compensation and other benefits			28,018				24,356
Accrued expenses and other liabilities			32,057				23,024
TOTAL CURRENT LIABILITIES			111,317				115,335
Long-term debt, less current portion			48,796				68,420
Other noncurrent liabilities and deferred income taxes			26,882				26,100
SHAREHOLDERS' EQUITY
Common shares – $2 par value per share, 15,000,000 shares authorized, 4,908,413 and 4,917,020 issued and outstanding, at December 31, 2023 and December 31, 2022, respectively			13,607				13,351
Common shares issued to rabbi trust, 243,118 and 245,386 shares at December 31, 2023 and December 31, 2022, respectively			(10,183	)			(10,261	)
Deferred compensation liability			10,183				10,261
Paid-in capital			60,958				53,646
Retained earnings			520,154				460,930
Treasury shares, at cost, 1,894,419 and 1,758,901 shares at December 31, 2023 and December 31, 2022, respectively			(118,249	)			(99,303	)
Accumulated other comprehensive loss			(60,306	)			(69,987	)
TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY			416,164				358,637
Noncontrolling interest			(8	)			(13	)
TOTAL SHAREHOLDERS' EQUITY			416,156				358,624
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	603,151			$	568,479

 

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PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED INCOME

		Three Months Ended December 31								Twelve Months Ended December 31
		2023				2022				2023				2022
		(In thousands, except per share data)
Net sales		$	145,603			$	169,924			$	669,679			$	637,021
Cost of products sold			97,503				107,694				434,831				421,841
GROSS PROFIT			48,100				62,230				234,848				215,180
Costs and expenses
Selling			12,945				12,139				51,078				45,712
General and administrative			20,019				19,593				74,643				70,317
Research and engineering			5,688				4,783				22,481				19,661
Goodwill impairment			—				—				—				6,529
Other operating expense, net			2,502				1,128				2,492				3,600
			41,154				37,643				150,694				145,819
OPERATING INCOME			6,946				24,587				84,154				69,361
Other income (expense)
Interest income			610				272				1,811				631
Interest expense			(707	)			(1,085	)			(3,905	)			(3,214	)
Other income, net			119				429				284				6,926
			22				(384	)			(1,810	)			4,343
INCOME BEFORE INCOME TAXES			6,968				24,204				82,344				73,704
Income tax expense			659				7,715				19,007				19,305
NET INCOME		$	6,309			$	16,488			$	63,337			$	54,399
Net loss (income) attributable to noncontrolling interests			23				23				(5	)			(4	)
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS		$	6,332			$	16,511			$	63,332			$	54,395
AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:
Basic			4,864				4,927				4,920				4,931
Diluted			4,902				5,032				4,997				4,999
EARNINGS PER SHARE OF COMMON STOCK ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS:
Basic		$	1.30			$	3.35			$	12.87			$	11.03
Diluted		$	1.29			$	3.28			$	12.68			$	10.88
Cash dividends declared per share		$	0.20			$	0.20			$	0.80			$	0.80

 

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v3.24.0.1

Document And Entity Information	Mar. 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Mar. 07, 2024
Entity Registrant Name	Preformed Line Products Company
Entity Central Index Key	0000080035
Entity Emerging Growth Company	false
Securities Act File Number	0-31164
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-0676895
Entity Address, Address Line One	660 Beta Drive
Entity Address, City or Town	Mayfield Village
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44143
City Area Code	440
Local Phone Number	461-5200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common
Trading Symbol	PLPC
Security Exchange Name	NASDAQ

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