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.
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PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
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(In thousands, except per share data)
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Three Months Ended
September 30
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Nine Months Ended
September 30
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2021
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2020
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2021
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2020
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Net sales
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$ 135,380
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$ 127,463
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$ 385,971
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$ 347,944
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Cost of products sold
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92,217
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82,549
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259,577
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230,554
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GROSS PROFIT
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43,163
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44,914
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126,394
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117,390
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Costs and expenses
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|
|
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Selling
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10,142
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8,884
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29,842
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26,228
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General and administrative
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14,741
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14,037
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42,905
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39,903
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Research and engineering
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4,861
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4,541
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14,235
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12,950
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Other operating expense - net
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341
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562
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2,828
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1,969
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30,085
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28,024
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89,810
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81,050
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|
|
|
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OPERATING INCOME
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13,078
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16,890
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|
36,584
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36,340
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|
|
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|
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Other income (expense)
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|
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Interest income
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30
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36
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|
77
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226
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Interest expense
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(559)
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(504)
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(1,479)
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(1,932)
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Other income - net
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1,251
|
998
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1,749
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1,775
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722
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530
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347
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69
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|
|
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INCOME BEFORE INCOME TAXES
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13,800
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17,420
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36,931
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36,409
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Income taxes
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3,097
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4,458
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10,161
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9,306
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NET INCOME
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$ 10,703
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$ 12,962
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$ 26,770
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$ 27,103
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Less: Net loss (gain) attributable
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to noncontrolling interests
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5
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(8)
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(15)
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30
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NET INCOME ATTRIBUTABLE TO PREFORMED
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|
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|
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LINE PRODUCTS COMPANY SHAREHOLDERS
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$ 10,708
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$ 12,954
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$ 26,755
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$ 27,133
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AVERAGE NUMBER OF SHARES
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OF COMMON STOCK OUTSTANDING:
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Basic
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4,900
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4,917
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4,909
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4,963
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Diluted
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4,975
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5,011
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4,950
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4,998
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EARNINGS PER SHARE OF COMMON STOCK
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ATTRIBUTABLE TO PREFORMED LINE
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PRODUCTS COMPANY SHAREHOLDERS:
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Basic
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$ 2.19
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$ 2.63
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$ 5.45
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$ 5.47
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Diluted
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$ 2.15
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$ 2.59
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$ 5.40
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$ 5.43
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Cash dividends declared per share
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$ 0.20
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$ 0.20
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$ 0.60
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$ 0.60
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PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
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September 30,
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December 31,
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(Thousands of dollars, except share and per share data)
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2021
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2020
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|
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ASSETS
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Cash and cash equivalents
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$ 38,326
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$ 45,175
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Accounts receivable, less allowances of $3,758 ($3,464 in 2020)
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108,034
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92,686
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Inventories - net
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108,603
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97,537
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Prepaids
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13,050
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17,660
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Other current assets
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3,390
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|
3,256
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TOTAL CURRENT ASSETS
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271,403
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256,314
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Property, plant and equipment - net
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148,097
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125,965
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Goodwill
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28,695
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29,508
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Other intangibles - net
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12,939
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14,443
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Deferred income taxes
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8,948
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10,863
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Other assets
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23,511
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23,994
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TOTAL ASSETS
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$ 493,593
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$ 461,087
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Trade accounts payable
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$ 38,501
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$ 31,646
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Notes payable to banks
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17,697
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17,428
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Current portion of long-term debt
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3,114
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5,216
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Accrued compensation
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21,933
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14,736
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Accrued expenses and other liabilities
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33,111
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34,748
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TOTAL CURRENT LIABILITIES
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114,356
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103,774
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Long-term debt, less current portion
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42,424
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33,333
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Other noncurrent liabilities and deferred income taxes
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28,017
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31,911
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SHAREHOLDERS' EQUITY
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Shareholders' equity:
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Common shares - $2 par value, 15,000,000 shares authorized,
|
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4,899,945 and 4,902,233 issued and outstanding,
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as of September 30, 2021 and December 31, 2020, respectively
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13,171
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|
13,028
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|
Common shares issued to rabbi trust, 243,138 and 265,508 shares at
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September 30, 2021 and December 31, 2020, respectively
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(10,102)
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(10,940)
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Deferred Compensation Liability
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10,102
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10,940
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Paid-in capital
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46,956
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43,134
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Retained earnings
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402,720
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379,035
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Treasury shares, at cost, 1,685,387 and 1,611,927 shares at
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September 30, 2021 and December 31, 2020, respectively
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(93,836)
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(88,568)
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Accumulated other comprehensive loss
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(60,221)
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(54,551)
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TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY
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308,790
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292,078
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Noncontrolling interest
|
6
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(9)
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TOTAL SHAREHOLDERS' EQUITY
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308,796
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|
292,069
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
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$ 493,593
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$ 461,087
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SOURCE Preformed Line Products
