CLEVELAND, March 7,
2024 /PRNewswire/ -- Preformed Line Products Company
(NASDAQ: PLPC) today reported financial results for its fourth
quarter and full year ended December 31,
2023.
Full Year 2023 Highlights:
- Fifth consecutive year of record annual net sales; increased 5%
from 2022
- Record net income of $63.3
million
- Diluted EPS of $12.68, an
increase of 17% from 2022, a new annual record
- Net cash provided by operating activities of $107.7 million
Net sales in the fourth quarter of 2023 were $145.6 million compared to $169.9 million in the fourth quarter of 2022, a
14% decrease due primarily to a reduction in communication product
sales as the market remains soft and customers destock inventory
positions. Foreign currency translation increased fourth quarter
2023 net sales by $2.9 million.
Net income for the quarter ended December
31, 2023 was $6.3 million, or
$1.29 per diluted share, compared to
$16.5 million, or $3.28 per diluted share, for the comparable
period in 2022. The fourth quarter of 2023 net income was impacted
by decreased gross profit from lower net sales, partially offset by
selling price increases and a lower effective tax rate for the
period. Other discrete factors contributing to the decline in
quarterly net income included $2.3
million of outsized foreign currency transaction losses,
primarily due to the significant devaluation of the Argentine Peso
and customer-specific charges of $3.5
million to increase the allowance for doubtful accounts and
the excess and obsolete inventory reserve mainly caused by the
downturn in communications end market sales. Gross profit as a
percentage of net sales was 33.0% for the fourth quarter of
2023.
Net sales for the full year 2023 were $669.7 million, compared to $637.0 million in 2022. This is the fifth
consecutive year of record net sales and represents a 5% increase
versus prior year. Foreign currency translation increased full year
2023 net sales by $0.4 million.
Net income for the year ended December
31, 2023 was $63.3 million, or
$12.68 per diluted share, compared to
$54.4 million, or $10.88 per diluted share in 2022. Net income for
the full year 2023 was favorably impacted by the increase in margin
on incremental sales as well as the full year benefit of price
increases which helped offset inflationary increases of raw
material and freight costs. Gross profit as a percentage of
net sales was 35.1% for 2023.
Rob Ruhlman, Executive Chairman,
said, "Thanks to a strong first half of 2023, we experienced a
fifth consecutive year of record annual net sales and fourth
consecutive year of earnings per share growth. The second half of
the year was impacted by the pullback in spending among
communication network operators as well as customer destocking
efforts to reduce elevated inventory levels. We expect the
significance and diversity of our international operations to help
offset some of the pullback in communication product sales largely
impacting our USA results. We
remain excited about the future prospects for both our
communications and energy product end markets and remain well
positioned to achieve growth thanks to operational improvements,
new product introductions, and production capacity added over the
last three years as well as the significant government stimulus
programs that are expected to benefit our core markets. Our
continued commitment to manufacturing in the USA positions us well for the Build America,
Buy America Act ("BABAA") requirements of the Broadband Equity,
Access, and Deployment ("BEAD") Program, which we expect to drive
increased demand for communications products in late 2024/early
2025. We continue to invest capital in our global facilities
as necessary and we continue to seek the right opportunities for
inorganic growth. We are fully committed to providing
our customers with the high-quality products and service
they 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, international hostilities,
political instability, exchange rates and public health concerns,
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 impact of stimulus programs in driving demand, 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, and
implement appropriate internal controls in, 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
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
December 31,
|
|
|
2023
|
|
2022
|
(Thousands of dollars, except share and per share data)
|
|
|
|
|
ASSETS
|
|
|
|
|
Cash, cash equivalents
and restricted cash
|
|
$
53,607
|
|
$
37,239
|
Accounts receivable,
net
|
|
106,892
|
|
125,261
|
Inventories,
net
|
|
148,814
|
|
147,458
|
Prepaid
expenses
|
|
8,246
|
|
13,283
|
Other current
assets
|
|
7,256
|
|
4,929
|
TOTAL CURRENT
ASSETS
|
|
324,815
|
|
328,170
|
Property, plant and
equipment, net
|
|
207,892
|
|
175,011
|
Goodwill
|
|
29,497
|
|
28,004
|
Other intangible
assets, net
|
|
12,981
|
|
14,082
|
Deferred income
taxes
|
|
7,109
|
|
5,320
|
Other assets
|
|
20,857
|
|
17,892
|
TOTAL
ASSETS
|
|
$
603,151
|
|
$
568,479
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Trade accounts
payable
|
|
$
37,788
|
|
$
46,839
|
Notes payable to
banks
|
|
6,968
|
|
18,098
|
Current portion of
long-term debt
|
|
6,486
|
|
3,018
|
Accrued compensation
and other benefits
|
|
28,018
|
|
24,356
|
Accrued expenses and
other liabilities
|
|
32,057
|
|
23,024
|
TOTAL CURRENT
LIABILITIES
|
|
111,317
|
|
115,335
|
Long-term debt, less
current portion
|
|
48,796
|
|
68,420
|
Other noncurrent
liabilities and deferred income taxes
|
|
26,882
|
|
26,100
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Common shares – $2 par
value per share, 15,000,000 shares authorized, 4,908,413 and
4,917,020 issued and outstanding, at December 31, 2023 and
December 31, 2022, respectively
|
|
13,607
|
|
13,351
|
Common shares issued to
rabbi trust, 243,118 and 245,386 shares at December 31, 2023
and
December 31, 2022, respectively
|
|
(10,183)
|
|
(10,261)
|
Deferred compensation
liability
|
|
10,183
|
|
10,261
|
Paid-in
capital
|
|
60,958
|
|
53,646
|
Retained
earnings
|
|
520,154
|
|
460,930
|
Treasury shares, at
cost, 1,894,419 and 1,758,901 shares at December 31, 2023 and
December
31, 2022, respectively
|
|
(118,249)
|
|
(99,303)
|
Accumulated other
comprehensive loss
|
|
(60,306)
|
|
(69,987)
|
TOTAL PREFORMED LINE
PRODUCTS COMPANY SHAREHOLDERS' EQUITY
|
|
416,164
|
|
358,637
|
Noncontrolling
interest
|
|
(8)
|
|
(13)
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
416,156
|
|
358,624
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
603,151
|
|
$
568,479
|
|
|
|
|
|
See notes to
consolidated financial statements (unaudited).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREFORMED LINE
PRODUCTS COMPANY
|
STATEMENTS OF
CONSOLIDATED INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31
|
|
Twelve Months Ended
December 31
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(In thousands,
except per share data)
|
Net sales
|
|
$
145,603
|
|
$
169,924
|
|
$
669,679
|
|
$
637,021
|
Cost of products
sold
|
|
97,503
|
|
107,694
|
|
434,831
|
|
421,841
|
GROSS
PROFIT
|
|
48,100
|
|
62,230
|
|
234,848
|
|
215,180
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Selling
|
|
12,945
|
|
12,139
|
|
51,078
|
|
45,712
|
General and
administrative
|
|
20,019
|
|
19,593
|
|
74,643
|
|
70,317
|
Research and
engineering
|
|
5,688
|
|
4,783
|
|
22,481
|
|
19,661
|
Goodwill
impairment
|
|
—
|
|
—
|
|
—
|
|
6,529
|
Other operating
expense, net
|
|
2,502
|
|
1,128
|
|
2,492
|
|
3,600
|
|
|
41,154
|
|
37,643
|
|
150,694
|
|
145,819
|
OPERATING
INCOME
|
|
6,946
|
|
24,587
|
|
84,154
|
|
69,361
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Interest
income
|
|
610
|
|
272
|
|
1,811
|
|
631
|
Interest
expense
|
|
(707)
|
|
(1,085)
|
|
(3,905)
|
|
(3,214)
|
Other income,
net
|
|
119
|
|
429
|
|
284
|
|
6,926
|
|
|
22
|
|
(384)
|
|
(1,810)
|
|
4,343
|
INCOME BEFORE INCOME
TAXES
|
|
6,968
|
|
24,204
|
|
82,344
|
|
73,704
|
Income tax
expense
|
|
659
|
|
7,715
|
|
19,007
|
|
19,305
|
NET
INCOME
|
|
$
6,309
|
|
$
16,488
|
|
$
63,337
|
|
$
54,399
|
Net loss (income)
attributable to noncontrolling interests
|
|
23
|
|
23
|
|
(5)
|
|
(4)
|
NET INCOME
ATTRIBUTABLE TO PREFORMED LINE PRODUCTS
COMPANY SHAREHOLDERS
|
|
$
6,332
|
|
$
16,511
|
|
$
63,332
|
|
$
54,395
|
AVERAGE NUMBER OF
SHARES OF COMMON STOCK OUTSTANDING:
|
|
|
|
|
|
|
|
|
Basic
|
|
4,864
|
|
4,927
|
|
4,920
|
|
4,931
|
Diluted
|
|
4,902
|
|
5,032
|
|
4,997
|
|
4,999
|
EARNINGS PER SHARE
OF COMMON STOCK ATTRIBUTABLE TO PREFORMED
LINE PRODUCTS COMPANY SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.30
|
|
$
3.35
|
|
$
12.87
|
|
$
11.03
|
Diluted
|
|
$
1.29
|
|
$
3.28
|
|
$
12.68
|
|
$
10.88
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share
|
|
$
0.20
|
|
$
0.20
|
|
$
0.80
|
|
$
0.80
|
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SOURCE Preformed Line Products