CLEVELAND, Oct. 28, 2021 /PRNewswire/ -- Preformed Line
Products Company (NASDAQ: PLPC) today reported financial
results for its third quarter ended September 30, 2021.
Net sales for the third quarter of 2021 were $135.4 million, an increase of 6.2%, compared to
$127.5 million in the third quarter
of 2020. Currency translation rates had a favorable impact on 2021
third quarter net sales of $2.0
million.
The Company posted net income for the third quarter of 2021 of
$10.7 million, or $2.15 per diluted share, compared to $13.0 million, or $2.59 per diluted share, in the third quarter of
2020. Net income in the third quarter of 2021 was impacted by the
decrease in gross profit due to the continued increase in raw
material prices and transportation costs. PLP-USA announced a price increase effective
June 1, 2021, but due to its elevated
order backlog, the price increase had only a moderate effect in
offsetting the increased costs incurred during the third quarter of
2021. Also contributing to the reduction of net income for the
third quarter of 2021 was increased employee compensation expense
and warranty expense. Currency translation rates had a favorable
effect on net income of $0.2 million
for the quarter ended September 30,
2021.
Net sales increased 11.0% to $386.0
million for the first nine months of 2021 compared to
$347.9 million in the first nine
months of 2020. Currency translation rates had a favorable impact
of $10.0 million for the first nine
months of 2021.
Net income for the nine months ended September 30, 2021 was $26.8 million, or $5.40 per diluted share, compared to $27.1 million, or $5.43 per diluted share, for the comparable
period in 2020. Net income for the nine months ended September 30, 2021 benefited from the increase in
margin from the higher sales base which more than offset the
significant increases in raw material prices and transportation
costs not yet mitigated by the announced price increase. In
connection with the increase in business activity, increased
selling, general and administrative, research and engineering
expenses as well as warranty expense resulted in a net reduction of
net income of $0.3 million for the
first nine months of 2021 versus the same period in 2020. Currency
translation rates had a favorable effect on net income of
$0.5 million for the nine months
ended September 30, 2021.
Rob Ruhlman, Chairman and Chief
Executive Officer, said, "The inflation on raw material commodities
as well as the significant increase in transportation costs have
created additional challenges for us to navigate in 2021. Due to
the significance and continuation of these inflationary increases,
PLP-USA announced a second price
increase effective October 15, 2021.
While cost inflation has negatively affected our earnings, we
expect both 2021 price increases will more substantially mitigate
the earnings impact in Q4 2021 and beyond. That said, continued
cost inflation may offset these gains and require further price
adjustments. PLP-USA continues to
lead the net sales increase driven by growth in the communications
product family. Our geographic diversification continues to
de-risk our business model during these challenging economic times
including the headwinds seen in the Asia-Pacific region from the deferral of
infrastructure projects due to COVID-19. 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."
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 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.
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 over 20 countries, PLP works as a united
global corporation, delivering high-quality products and
unparalleled service to customers around the world.
PREFORMED LINE
PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
|
|
(In thousands,
except per share data)
|
Three Months
Ended
September 30
|
|
Nine Months
Ended
September 30
|
|
2021
|
2020
|
|
2021
|
2020
|
Net sales
|
$
135,380
|
$
127,463
|
|
$
385,971
|
$
347,944
|
Cost of products
sold
|
92,217
|
82,549
|
|
259,577
|
230,554
|
GROSS
PROFIT
|
43,163
|
44,914
|
|
126,394
|
117,390
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
Selling
|
10,142
|
8,884
|
|
29,842
|
26,228
|
General and
administrative
|
14,741
|
14,037
|
|
42,905
|
39,903
|
Research and
engineering
|
4,861
|
4,541
|
|
14,235
|
12,950
|
Other operating
expense - net
|
341
|
562
|
|
2,828
|
1,969
|
|
30,085
|
28,024
|
|
89,810
|
81,050
|
|
|
|
|
|
|
OPERATING
INCOME
|
13,078
|
16,890
|
|
36,584
|
36,340
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
Interest
income
|
30
|
36
|
|
77
|
226
|
Interest
expense
|
(559)
|
(504)
|
|
(1,479)
|
(1,932)
|
Other income -
net
|
1,251
|
998
|
|
1,749
|
1,775
|
|
722
|
530
|
|
347
|
69
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAXES
|
13,800
|
17,420
|
|
36,931
|
36,409
|
|
|
|
|
|
|
Income
taxes
|
3,097
|
4,458
|
|
10,161
|
9,306
|
|
|
|
|
|
|
NET
INCOME
|
$
10,703
|
$
12,962
|
|
$
26,770
|
$
27,103
|
|
|
|
|
|
|
Less: Net loss (gain)
attributable
|
|
|
|
|
|
to noncontrolling
interests
|
5
|
(8)
|
|
(15)
|
30
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO PREFORMED
|
|
|
|
|
|
LINE PRODUCTS
COMPANY SHAREHOLDERS
|
$
10,708
|
$
12,954
|
|
$
26,755
|
$
27,133
|
|
|
|
|
|
|
AVERAGE NUMBER OF
SHARES
|
|
|
|
|
|
OF COMMON STOCK
OUTSTANDING:
|
|
|
|
|
|
Basic
|
4,900
|
4,917
|
|
4,909
|
4,963
|
Diluted
|
4,975
|
5,011
|
|
4,950
|
4,998
|
|
|
|
|
|
|
EARNINGS PER SHARE
OF COMMON STOCK
|
|
|
|
|
|
ATTRIBUTABLE TO
PREFORMED LINE
|
|
|
|
|
|
PRODUCTS COMPANY
SHAREHOLDERS:
|
|
|
|
|
|
Basic
|
$
2.19
|
$
2.63
|
|
$
5.45
|
$
5.47
|
Diluted
|
$
2.15
|
$
2.59
|
|
$
5.40
|
$
5.43
|
|
|
|
|
|
|
Cash dividends
declared per share
|
$
0.20
|
$
0.20
|
|
$
0.60
|
$
0.60
|
PREFORMED LINE
PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
|
|
|
September
30,
|
|
December
31,
|
(Thousands of
dollars, except share and per share data)
|
2021
|
|
2020
|
|
|
|
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
38,326
|
|
$
45,175
|
Accounts receivable,
less allowances of $3,758 ($3,464 in 2020)
|
108,034
|
|
92,686
|
Inventories -
net
|
108,603
|
|
97,537
|
Prepaids
|
13,050
|
|
17,660
|
Other current
assets
|
3,390
|
|
3,256
|
TOTAL CURRENT
ASSETS
|
271,403
|
|
256,314
|
|
|
|
|
Property, plant and
equipment - net
|
148,097
|
|
125,965
|
Goodwill
|
28,695
|
|
29,508
|
Other intangibles -
net
|
12,939
|
|
14,443
|
Deferred income
taxes
|
8,948
|
|
10,863
|
Other
assets
|
23,511
|
|
23,994
|
|
|
|
|
TOTAL
ASSETS
|
$
493,593
|
|
$
461,087
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Trade accounts
payable
|
$
38,501
|
|
$
31,646
|
Notes payable to
banks
|
17,697
|
|
17,428
|
Current portion of
long-term debt
|
3,114
|
|
5,216
|
Accrued
compensation
|
21,933
|
|
14,736
|
Accrued expenses and
other liabilities
|
33,111
|
|
34,748
|
TOTAL CURRENT
LIABILITIES
|
114,356
|
|
103,774
|
|
|
|
|
Long-term debt, less
current portion
|
42,424
|
|
33,333
|
Other noncurrent
liabilities and deferred income taxes
|
28,017
|
|
31,911
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common shares - $2 par
value, 15,000,000 shares authorized,
|
|
|
|
4,899,945 and
4,902,233 issued and outstanding,
|
|
|
|
as of September 30,
2021 and December 31, 2020, respectively
|
13,171
|
|
13,028
|
Common shares issued
to rabbi trust, 243,138 and 265,508 shares at
|
|
|
|
September 30, 2021 and
December 31, 2020, respectively
|
(10,102)
|
|
(10,940)
|
Deferred Compensation
Liability
|
10,102
|
|
10,940
|
Paid-in
capital
|
46,956
|
|
43,134
|
Retained
earnings
|
402,720
|
|
379,035
|
Treasury shares, at
cost, 1,685,387 and 1,611,927 shares at
|
|
|
|
September 30, 2021 and
December 31, 2020, respectively
|
(93,836)
|
|
(88,568)
|
Accumulated other
comprehensive loss
|
(60,221)
|
|
(54,551)
|
TOTAL PREFORMED
LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY
|
308,790
|
|
292,078
|
Noncontrolling
interest
|
6
|
|
(9)
|
TOTAL SHAREHOLDERS'
EQUITY
|
308,796
|
|
292,069
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
493,593
|
|
$
461,087
|
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SOURCE Preformed Line Products