MAYFIELD VILLAGE, Ohio,
July 29, 2021 /PRNewswire/
-- Preformed Line Products Company (NASDAQ: PLPC) today
reported financial results for its second quarter ended
June 30, 2021.
Net sales for the second quarter of 2021 were $133.0 million, an increase of 13.1%, compared to
$117.6 million in the second quarter
of 2020. Currency translation rates had a favorable impact on
2021 second quarter net sales of $6.2
million, or 5.3%.
The Company posted net income for the second quarter of 2021 of
$8.9 million, or $1.80 per diluted share, compared to $10.5 million, or $2.11 per diluted share, in the second quarter of
2020. Net income in the second quarter of 2021 was negatively
impacted by the decrease in gross profit due to significant
increases in raw material prices and transportation costs as well
as losses on foreign currency transactions. The timing of
announced price increases impacting future orders provided very
little benefit during the second quarter of 2021. Currency
translation rates had a favorable effect on net income of
$0.3 million for the quarter ended
June 30, 2021.
Net sales increased 13.7% to $250.6
million for the first six months of 2021 compared to
$220.5 million in the first six
months of 2020. Currency translation rates had a favorable
impact on net sales of $8.0 million
for the six months ended June 30,
2021.
Net income for the six months ended June
30, 2021 was $16.0 million, or
$3.25 per diluted share, compared to
$14.2 million, or $2.84 per diluted share, for the comparable
period in 2020. Net income for the six months ended
June 30, 2021 benefited from the
increase in margin from the higher sales base and was negatively
impacted by the significant increases in raw material prices and
transportation costs not yet mitigated by the announced price
increase as well as losses on foreign currency transactions.
Currency translation rates had a favorable effect on net income of
$0.3 million for the six months ended
June 30, 2021.
Rob Ruhlman, Chairman and Chief
Executive Officer, said, "We continue to be pleased with our net
sales growth and earnings generation for the first half of
2021. All regions reported a year over year increase in net
sales for the first half of 2021, however, our Asia-Pacific region continues to be negatively
impacted by the deferral of infrastructure projects due to
COVID-19. PLP USA continues
to lead the net sales increase driven by growth in the
communications product family. The growth in PLP USA net sales will require additional
investment to be made within our PLP USA facilities, both in the form operational
capacity as well as increased warehouse space. These investments in
our US operations will allow us to further enhance the service we
provide to our US customers. While raw material and transportation
cost inflation have negatively affected our earnings, the announced
price increase will soon begin to mitigate its impact. That said,
continued cost inflation in these areas through the second half of
the year may off-set these gains and require further price
adjustments going forward. Our geographic diversification continues
to de-risk our business model during these challenging economic
times. While the extent to which COVID-19 will impact our
future operations is unknown, we will continue to focus on the
safety and well-being of our employees, their families, our
customers and our valued suppliers while continuing to provide the
high-quality products and services our customers expect."
Founded in 1947, Preformed Line Products is an international
designer and manufacturer of products and systems employed in the
construction and maintenance of overhead and underground networks
for energy, communications, and broadband network companies.
Preformed's world headquarters are in Cleveland, Ohio, and the Company operates two
domestic manufacturing centers located in Rogers, Arkansas, and Albemarle, North
Carolina. The Company serves its worldwide market through
international operations in Argentina, Australia, Austria, Brazil, Canada, China, Colombia, Czech
Republic, France,
Great Britain, Indonesia, Malaysia, Mexico, New
Zealand, Poland,
Russia, South Africa, Spain, Thailand and Vietnam.
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 business conditions and economy due to COVID-19
including the severity and duration of business disruption caused
by the pandemic, the strength of the economy and demand 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 cost, availability and quality of raw materials
required for the manufacture of products, 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
2020 Annual Report on Form 10-K filed with the SEC on March 5, 2021 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.
PREFORMED LINE
PRODUCTS COMPANY
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
(Thousands of
dollars, except share and per share data)
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
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ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
$
33,454
|
|
$
45,175
|
Accounts receivable,
less allowances of $3,605 ($3,464 in 2020)
|
|
|
|
104,674
|
|
92,686
|
Inventories -
net
|
|
|
|
|
|
105,428
|
|
97,537
|
Prepaids
|
|
|
|
|
|
|
11,897
|
|
17,660
|
Other current
assets
|
|
|
|
|
|
3,149
|
|
3,256
|
|
|
TOTAL CURRENT
ASSETS
|
|
|
|
|
258,602
|
|
256,314
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment - net
|
|
|
|
|
148,511
|
|
125,965
|
Other intangibles -
net
|
|
|
|
|
|
13,655
|
|
14,443
|
Goodwill
|
|
|
|
|
|
|
29,316
|
|
29,508
|
Deferred income
taxes
|
|
|
|
|
|
9,191
|
|
10,863
|
Other
assets
|
|
|
|
|
|
24,134
|
|
23,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
|
|
$
483,409
|
|
$
461,087
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts
payable
|
|
|
|
|
|
$
38,737
|
|
$
31,646
|
Notes payable to
banks
|
|
|
|
|
|
14,661
|
|
17,428
|
Current portion of
long-term debt
|
|
|
|
|
6,717
|
|
5,216
|
Accrued compensation
and amounts withheld from employees
|
|
|
|
19,950
|
|
14,736
|
Accrued expenses and
other liabilities
|
|
|
|
|
27,381
|
|
34,748
|
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
|
|
107,446
|
|
103,774
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
|
|
|
42,066
|
|
33,333
|
Other noncurrent
liabilities and deferred income taxes
|
|
|
|
|
30,254
|
|
31,911
|
|
|
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|
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SHAREHOLDERS'
EQUITY
|
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Shareholders'
equity:
|
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|
|
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Common shares - $2
par value, 15,000,000 shares authorized, 4,906,559 and
|
|
|
|
|
|
4,902,233 issued and outstanding, as of June 30, 2021 and December
31, 2020, respectively
|
13,170
|
|
13,028
|
|
Common shares issued
to rabbi trust, 262,181 and 265,508 shares at
|
|
|
|
|
|
|
|
June 30, 2021 and December
31, 2020, respectively
|
|
|
|
(10,850)
|
|
(10,940)
|
|
Deferred Compensation
Liability
|
|
|
|
|
10,850
|
|
10,940
|
|
Paid-in
capital
|
|
|
|
|
|
45,564
|
|
43,134
|
|
Retained
earnings
|
|
|
|
|
|
393,032
|
|
379,035
|
|
Treasury shares, at
cost, 1,678,317 and 1,611,927 shares at
|
|
|
|
|
|
|
|
June 30, 2021 and December
31, 2020, respectively
|
|
|
|
(93,292)
|
|
(88,568)
|
|
Accumulated other
comprehensive loss
|
|
|
|
|
(54,842)
|
|
(54,551)
|
|
|
TOTAL PREFORMED
LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY
|
303,632
|
|
292,078
|
|
Noncontrolling
interest
|
|
|
|
|
11
|
|
(9)
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
|
|
|
|
303,643
|
|
292,069
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
$
483,409
|
|
$
461,087
|
PREFORMED LINE
PRODUCTS COMPANY
|
STATEMENTS OF
CONSOLIDATED OPERATIONS
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|
(In thousands,
except per share data)
|
|
Three Months Ended
June 30
|
|
Six Months Ended June
30
|
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
133,038
|
|
$
117,629
|
|
$
250,591
|
|
$
220,481
|
|
Cost of products
sold
|
|
89,999
|
|
78,063
|
|
167,360
|
|
148,005
|
|
|
|
GROSS
PROFIT
|
|
43,039
|
|
39,566
|
|
83,231
|
|
72,476
|
|
|
|
|
|
|
|
|
|
|
|
|
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Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
10,099
|
|
8,439
|
|
19,701
|
|
17,344
|
|
|
General and
administrative
|
|
13,770
|
|
12,432
|
|
28,164
|
|
25,865
|
|
|
Research and
engineering
|
|
4,763
|
|
4,113
|
|
9,374
|
|
8,408
|
|
|
Other operating
expense - net
|
|
1,669
|
|
(225)
|
|
2,486
|
|
1,408
|
|
|
|
|
|
30,301
|
|
24,759
|
|
59,725
|
|
53,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
12,738
|
|
14,807
|
|
23,506
|
|
19,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
26
|
|
79
|
|
47
|
|
190
|
|
|
Interest
expense
|
|
(457)
|
|
(719)
|
|
(920)
|
|
(1,428)
|
|
|
Other income -
net
|
|
270
|
|
(282)
|
|
498
|
|
776
|
|
|
|
|
|
(161)
|
|
(922)
|
|
(375)
|
|
(462)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAXES
|
|
12,577
|
|
13,885
|
|
23,131
|
|
18,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
3,686
|
|
3,397
|
|
7,063
|
|
4,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
8,891
|
|
$
10,488
|
|
$
16,068
|
|
$
14,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
(22)
|
|
(7)
|
|
(20)
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO PREFORMED LINE PRODUCTS
COMPANY SHAREHOLDERS
|
|
$
8,869
|
|
$
10,481
|
|
$
16,048
|
|
$
14,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE
OF COMMON STOCK ATTRIBUTABLE
|
|
|
|
|
|
|
|
|
|
TO PREFORMED LINE
PRODUCTS COMPANY SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.81
|
|
$
2.11
|
|
$
3.27
|
|
$
2.84
|
|
|
|
Diluted
|
|
$
1.80
|
|
$
2.11
|
|
$
3.25
|
|
$
2.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share
|
|
$
0.20
|
|
$
0.20
|
|
$
0.40
|
|
$
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding - basic
|
|
4,912
|
|
4,966
|
|
4,914
|
|
4,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding - diluted
|
|
4,930
|
|
4,973
|
|
4,935
|
|
4,994
|
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SOURCE Preformed Line Products