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Form 8-K PREFORMED LINE PRODUCTS For: Oct 28

October 28, 2021 4:17 PM EDT
Exhibit 99.1

Preformed Line Products Announces Third Quarter And First Nine Months Of 2021 Financial Results

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



CONTACT: MEDIA RELATIONS, JOSH NELSON, MANAGER, MARKETING COMMUNICATIONS, +1 440 473 9120, [email protected] or INVESTOR RELATIONS, ANDREW S. KLAUS, CHIEF FINANCIAL OFFICER, +1 440 473 9246, [email protected]



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