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Preformed Line Products Announces Second Quarter And First Half 2021 Financial Results

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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.

Preformed Line Products - The connection you can count on. (PRNewsfoto/Preformed Line Products)
Preformed Line Products - The connection you can count on. (PRNewsfoto/Preformed Line Products)

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












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












SHAREHOLDERS' EQUITY








Shareholders' equity:










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


















(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














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

Cision
Cision

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SOURCE Preformed Line Products