PREFORMED LINE PRODUCTS ANNOUNCES SECOND QUARTER 2023 FINANCIAL RESULTS
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
