CLEVELAND, July 31,
2024 /PRNewswire/ -- Preformed Line Products Company
(NASDAQ: PLPC) today reported financial results for its second
quarter of 2024.
Net sales in the second quarter of 2024 were $138.7 million compared to $181.8 million in the second quarter of 2023, a
24% decrease. The decrease in sales is a continuation of the
slowdown in spending in the communications end market.
Foreign currency translation reduced second quarter 2024 net sales
by $1.1 million.
Net income for the quarter ended June 30,
2024 was $9.4 million, or
$1.89 per diluted share, compared to
$20.5 million, or $4.08 per diluted share, for the comparable
period in 2023. The second quarter of 2024 net income was impacted
by decreased gross profit from lower sales levels, similar to our
Q1 2024 results, partially offset by lower period expenses, lower
interest expense and reduced income tax expense. Gross profit as a
percentage of net sales was 31.9% for the second quarter of 2024, a
decrease of 460 basis points versus the same quarter in
2023.
Net sales decreased 23% to $279.6
million for the first six months of 2024 compared to
$363.6 million for the first six
months of 2023. The year-over-year decline in sales is due
primarily to the slowdown in spending and inventory de-stocking
within the communications end market. Foreign currency translation
rates reduced net sales by $0.3
million for the six months ended June
30, 2024.
Net income for the six months ended June
30, 2024 was $19.0 million, or
$3.83 per diluted share, compared to
$41.9 million, or $8.35 per diluted share, for the comparable
period in 2023. YTD June 30,
2024 net income was impacted by decreased gross profit
resulting from the decrease in sales which was partially offset by
lower period expenses, lower interest expense and reduced income
tax expense.
Rob Ruhlman, Executive Chairman,
said, "The decline in net sales continues to be primarily related
to the softness in the communications end market, caused primarily
by a reduction in deployment due to higher borrowing costs, a delay
in BEAD stimulus funding and continued inventory de-stocking to
re-align customer inventory levels with current manufacturing lead
times. Our cost reduction activities implemented in 2023 have
helped us maintain solid financial results during this expected
temporary slow-down within our end markets. We remain
optimistic about the prospects of the markets that we serve and
will continue our investment in new product development,
streamlining our manufacturing operations and expanding our
customer service portfolio. These actions, along with our
continued strong liquidity, will allow us to take advantage of
favorable market conditions when they return. Our current
focus is unchanged: provide our customers with the
high-quality products and timely service they have come to expect
from PLP."
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 2023 Annual Report on Form 10-K filed
with the SEC on March 8, 2024 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
|
STATEMENTS OF
CONSOLIDATED INCOME
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
(Thousands of dollars, except per share data)
|
|
|
|
|
|
Net sales
|
$
138,720
|
|
$
181,813
|
|
$
279,625
|
|
$
363,637
|
Cost of products
sold
|
94,447
|
|
115,486
|
|
191,220
|
|
231,026
|
GROSS
PROFIT
|
44,273
|
|
66,327
|
|
88,405
|
|
132,611
|
Costs and
expenses
|
|
|
|
|
|
|
|
Selling
|
11,928
|
|
13,013
|
|
23,828
|
|
25,401
|
General and
administrative
|
15,250
|
|
18,220
|
|
31,858
|
|
36,830
|
Research and
engineering
|
5,358
|
|
5,760
|
|
10,789
|
|
10,953
|
Other operating
expense, net
|
445
|
|
1,186
|
|
(921)
|
|
2,298
|
|
32,981
|
|
38,179
|
|
65,554
|
|
75,482
|
OPERATING
INCOME
|
11,292
|
|
28,148
|
|
22,851
|
|
57,129
|
Other (expense)
income
|
|
|
|
|
|
|
|
Interest
income
|
346
|
|
419
|
|
1,318
|
|
723
|
Interest
expense
|
(568)
|
|
(1,134)
|
|
(1,276)
|
|
(2,199)
|
Other income,
net
|
91
|
|
108
|
|
126
|
|
147
|
|
(131)
|
|
(607)
|
|
168
|
|
(1,329)
|
INCOME BEFORE INCOME
TAXES
|
11,161
|
|
27,541
|
|
23,019
|
|
55,800
|
Income tax
expense
|
1,794
|
|
7,077
|
|
4,049
|
|
13,917
|
NET
INCOME
|
$
9,367
|
|
$
20,464
|
|
$
18,970
|
|
$
41,883
|
Net income attributable
to noncontrolling interests
|
(1)
|
|
8
|
|
(8)
|
|
(13)
|
NET INCOME
ATTRIBUTABLE TO PREFORMED LINE PRODUCTS
COMPANY SHAREHOLDERS
|
$
9,366
|
|
$
20,472
|
|
$
18,962
|
|
$
41,870
|
AVERAGE NUMBER OF
SHARES OF COMMON STOCK OUTSTANDING:
|
|
|
|
|
|
|
|
Basic
|
4,915
|
|
4,944
|
|
4,915
|
|
4,940
|
Diluted
|
4,964
|
|
5,024
|
|
4,955
|
|
5,013
|
EARNINGS PER SHARE
OF COMMON STOCK ATTRIBUTABLE TO PREFORMED
LINE PRODUCTS COMPANY SHAREHOLDERS:
|
|
|
|
|
|
|
|
Basic
|
$
1.91
|
|
$
4.14
|
|
$
3.86
|
|
$
8.48
|
Diluted
|
$
1.89
|
|
$
4.08
|
|
$
3.83
|
|
$
8.35
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share
|
$
0.20
|
|
$
0.20
|
|
$
0.40
|
|
$
0.40
|
PREFORMED LINE
PRODUCTS COMPANY
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
|
June 30,
2024
|
|
December 31,
2023
|
(Thousands of dollars, except share and per share data)
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Cash, cash equivalents
and restricted cash
|
|
$
47,424
|
|
$
53,607
|
Accounts receivable,
net
|
|
101,460
|
|
106,892
|
Inventories,
net
|
|
141,812
|
|
148,814
|
Prepaid
expenses
|
|
7,394
|
|
8,246
|
Other current
assets
|
|
6,983
|
|
7,256
|
TOTAL CURRENT
ASSETS
|
|
305,073
|
|
324,815
|
Property, plant and
equipment, net
|
|
200,441
|
|
207,892
|
Goodwill
|
|
27,901
|
|
29,497
|
Other intangible
assets, net
|
|
11,059
|
|
12,981
|
Deferred income
taxes
|
|
7,721
|
|
7,109
|
Other assets
|
|
20,392
|
|
20,857
|
TOTAL
ASSETS
|
|
$
572,587
|
|
$
603,151
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Trade accounts
payable
|
|
$
42,945
|
|
$
37,788
|
Notes payable to
banks
|
|
6,938
|
|
6,968
|
Current portion of
long-term debt
|
|
2,812
|
|
6,486
|
Accrued compensation
and other benefits
|
|
24,398
|
|
28,018
|
Accrued expenses and
other liabilities
|
|
26,891
|
|
32,057
|
TOTAL CURRENT
LIABILITIES
|
|
103,984
|
|
111,317
|
Long-term debt, less
current portion
|
|
28,820
|
|
48,796
|
Other noncurrent
liabilities and deferred income taxes
|
|
23,565
|
|
26,882
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Common shares – $2 par
value per share, 15,000,000 shares authorized, 4,913,496 and
4,908,413 issued and outstanding, at June 30, 2024 and December 31,
2023
|
|
13,711
|
|
13,607
|
Common shares issued to
rabbi trust, 238,787 and 243,118 shares at June 30, 2024 and
December 31, 2023, respectively
|
|
(10,233)
|
|
(10,183)
|
Deferred compensation
liability
|
|
10,233
|
|
10,183
|
Paid-in
capital
|
|
62,361
|
|
60,958
|
Retained
earnings
|
|
537,079
|
|
520,154
|
Treasury shares, at
cost, 1,941,690 and 1,894,419 shares at June 30, 2024 and
December
31, 2023, respectively
|
|
(124,269)
|
|
(118,249)
|
Accumulated other
comprehensive loss
|
|
(72,664)
|
|
(60,306)
|
TOTAL PREFORMED LINE
PRODUCTS COMPANY SHAREHOLDERS' EQUITY
|
|
416,218
|
|
416,164
|
Noncontrolling
interest
|
|
-
|
|
(8)
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
416,218
|
|
416,156
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
572,587
|
|
$
603,151
|
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SOURCE Preformed Line Products