CLEVELAND, Aug. 2, 2023
/PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC)
today reported financial results for its second quarter of
2023.
Q2 2023 Highlights:
- Net sales growth of 11% compared to Q2 2022, matching quarterly
record net sales levels achieved in Q1 2023
- Gross profit margin of 36.5%, consistent with Q1 2023
- Diluted EPS of $4.08, an increase
of 47% from Q2 2022
Net sales in the second quarter of 2023 were $181.8 million compared to $163.5 million in the second quarter of 2022, an
11% increase. Foreign currency translation reduced second quarter
2023 net sales by $2.5 million.
Net income for the quarter ended June 30,
2023 was $20.5 million, or
$4.08 per diluted share, compared to
$13.7 million, or $2.77 per diluted share, for the comparable
period in 2022. The second quarter of 2023 net income continued to
benefit from increased gross profit from incremental sales and
selling price increases offsetting the impact of inflation on
commodities and freight. Gross profit as a percentage of net sales
was 36.5% for the second quarter of 2023, an increase of 420 basis
points versus the same quarter in 2022. Currency translation
rates had an unfavorable effect on net income of $0.4 million.
Net sales increased 21% to $363.6
million for the first six months of 2023 compared to
$301.7 million for the first six
months of 2022. Currency translation rates reduced net sales
by $7.1 million for the six months
ended June 30, 2023.
Net income for the six months ended June
30, 2023 was $41.9 million, or
$8.35 per diluted share, compared to
$26.0 million, or $5.25 per diluted share, for the comparable
period in 2022. YTD June 30,
2023 net income benefited from the 21% YTD increase in net
sales with related fixed cost leverage as well as the realization
of price increases offsetting the impact of inflation on
commodities and freight. Currency translation rates had an
unfavorable effect on net income of $0.6
million.
Rob Ruhlman, Chairman and Chief
Executive Officer, said, "We continue to generate strong net sales
performance, matching the quarterly net sales record set earlier
this year. We also generated strong net income and earnings per
share, falling just short of our previous record earnings in Q1
2023. The strong quarterly results were made possible by the
PLP-USA, EMEA, and Asia-Pacific regions posting improved net
sales and pre-tax earnings versus Q2 2022 while the Americas fell
just short of besting their Q2 2022 results. During the first two
quarters of 2023, net sales have outpaced orders resulting in a 29%
decrease to backlog from the beginning of the year and an
improvement in production lead times, which is a positive for PLP
and its customers. We will continue to focus on the delivery of
high-quality products and timely service that our customers 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, political instability, exchange
rates and lingering effects of COVID-19, 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 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 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 2022 Annual Report on Form 10-K filed
with the SEC on March 3, 2023 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 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
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
(Thousands of dollars, except share and per share data)
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash
|
|
$
|
43,160
|
|
|
$
|
37,239
|
|
Accounts receivable,
less allowances of $6,709 ($5,600 in 2022)
|
|
|
144,593
|
|
|
|
125,261
|
|
Inventories,
net
|
|
|
148,481
|
|
|
|
147,458
|
|
Prepaid
expenses
|
|
|
8,749
|
|
|
|
13,283
|
|
Other current
assets
|
|
|
8,440
|
|
|
|
4,929
|
|
TOTAL CURRENT
ASSETS
|
|
|
353,423
|
|
|
|
328,170
|
|
Property, plant and
equipment, net
|
|
|
200,325
|
|
|
|
175,011
|
|
Goodwill
|
|
|
29,530
|
|
|
|
28,004
|
|
Other intangible
assets, net
|
|
|
13,682
|
|
|
|
14,082
|
|
Deferred income
taxes
|
|
|
6,415
|
|
|
|
5,320
|
|
Other assets
|
|
|
18,567
|
|
|
|
17,892
|
|
TOTAL
ASSETS
|
|
$
|
621,942
|
|
|
$
|
568,479
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
|
50,033
|
|
|
$
|
46,839
|
|
Notes payable to
banks
|
|
|
13,701
|
|
|
|
18,098
|
|
Current portion of
long-term debt
|
|
|
6,889
|
|
|
|
3,018
|
|
Accrued compensation
and other benefits
|
|
|
25,210
|
|
|
|
24,356
|
|
Accrued expenses and
other liabilities
|
|
|
30,937
|
|
|
|
23,024
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
126,770
|
|
|
|
115,335
|
|
Long-term debt, less
current portion
|
|
|
68,944
|
|
|
|
68,420
|
|
Other noncurrent
liabilities and deferred income taxes
|
|
|
27,779
|
|
|
|
26,100
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Common shares – $2 par
value per share, 15,000,000 shares
authorized, 4,917,501
and 4,917,020 issued and outstanding, at June
30, 2023 and December
31, 2022
|
|
|
13,509
|
|
|
|
13,351
|
|
Common shares issued to
rabbi trust, 241,343 and 245,386 shares at
June 30, 2023 and
December 31, 2022, respectively
|
|
|
(10,039)
|
|
|
|
(10,261)
|
|
Deferred compensation
liability
|
|
|
10,039
|
|
|
|
10,261
|
|
Paid-in
capital
|
|
|
56,943
|
|
|
|
53,646
|
|
Retained
earnings
|
|
|
500,726
|
|
|
|
460,930
|
|
Treasury shares, at
cost, 1,840,552 and 1,758,901 shares at June 30,
2023 and December 31,
2022, respectively
|
|
|
(109,143)
|
|
|
|
(99,303)
|
|
Accumulated other
comprehensive loss
|
|
|
(63,586)
|
|
|
|
(69,987)
|
|
TOTAL PREFORMED
LINE PRODUCTS COMPANY
SHAREHOLDERS'
EQUITY
|
|
|
398,449
|
|
|
|
358,637
|
|
Noncontrolling
interest
|
|
|
-
|
|
|
|
(13)
|
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
|
398,449
|
|
|
|
358,624
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
|
621,942
|
|
|
$
|
568,479
|
|
PREFORMED LINE
PRODUCTS COMPANY
STATEMENTS OF
CONSOLIDATED INCOME
(UNAUDITED)
|
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
(Thousands of dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
181,813
|
|
|
$
|
163,471
|
|
|
$
|
363,637
|
|
|
$
|
301,694
|
|
Cost of products
sold
|
|
115,486
|
|
|
|
110,765
|
|
|
|
231,026
|
|
|
|
207,037
|
|
GROSS
PROFIT
|
|
66,327
|
|
|
|
52,706
|
|
|
|
132,611
|
|
|
|
94,657
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
13,013
|
|
|
|
11,668
|
|
|
|
25,401
|
|
|
|
22,328
|
|
General and
administrative
|
|
18,220
|
|
|
|
16,948
|
|
|
|
36,830
|
|
|
|
33,256
|
|
Research and
engineering
|
|
5,760
|
|
|
|
5,363
|
|
|
|
10,953
|
|
|
|
10,137
|
|
Other operating
expense, net
|
|
1,186
|
|
|
|
778
|
|
|
|
2,298
|
|
|
|
1,536
|
|
|
|
38,179
|
|
|
|
34,757
|
|
|
|
75,482
|
|
|
|
67,257
|
|
OPERATING
INCOME
|
|
28,148
|
|
|
|
17,949
|
|
|
|
57,129
|
|
|
|
27,400
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
419
|
|
|
|
104
|
|
|
|
723
|
|
|
|
216
|
|
Interest
expense
|
|
(1,134)
|
|
|
|
(784)
|
|
|
|
(2,199)
|
|
|
|
(1,310)
|
|
Other income,
net
|
|
108
|
|
|
|
495
|
|
|
|
147
|
|
|
|
5,599
|
|
|
|
(607)
|
|
|
|
(185)
|
|
|
|
(1,329)
|
|
|
|
4,505
|
|
INCOME BEFORE
INCOME TAXES
|
|
27,541
|
|
|
|
17,764
|
|
|
|
55,800
|
|
|
|
31,905
|
|
Income tax
expense
|
|
7,077
|
|
|
|
4,043
|
|
|
|
13,917
|
|
|
|
5,883
|
|
NET
INCOME
|
$
|
20,464
|
|
|
$
|
13,721
|
|
|
$
|
41,883
|
|
|
$
|
26,022
|
|
Net loss (income)
attributable to noncontrolling interests
|
|
8
|
|
|
|
(9)
|
|
|
|
(13)
|
|
|
|
(25)
|
|
NET INCOME
ATTRIBUTABLE TO
PREFORMED LINE
PRODUCTS COMPANY
SHAREHOLDERS
|
$
|
20,472
|
|
|
$
|
13,712
|
|
|
$
|
41,870
|
|
|
$
|
25,997
|
|
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK
OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
4,944
|
|
|
|
4,940
|
|
|
|
4,940
|
|
|
|
4,934
|
|
Diluted
|
|
5,024
|
|
|
|
4,955
|
|
|
|
5,013
|
|
|
|
4,954
|
|
EARNINGS PER SHARE
OF COMMON STOCK
ATTRIBUTABLE TO
PREFORMED LINE
PRODUCTS COMPANY
SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
4.14
|
|
|
$
|
2.78
|
|
|
$
|
8.48
|
|
|
$
|
5.27
|
|
Diluted
|
$
|
4.08
|
|
|
$
|
2.77
|
|
|
$
|
8.35
|
|
|
$
|
5.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
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SOURCE Preformed Line Products