Preformed Line Products Announces Third Quarter And First Nine Months Of 2019 Results

News provided by

Nov 01, 2019, 09:00 ET

MAYFIELD VILLAGE, Ohio, Nov. 1, 2019 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its third quarter and first nine months of 2019.

Net income for the quarter ended September 30, 2019 was $8.0 million, or $1.55 per diluted share, compared to $9.1 million, or $1.76 per diluted share, for the comparable period in 2018.

Net sales in the third quarter of 2019 increased 10% to $119.2 million compared to $108.4 million in the third quarter of 2018.

Net income for the nine months ended September 30, 2019 was $17.7 million, or $3.48 per diluted share, compared to $21.3 million, or $4.19 per diluted share, for the comparable period in 2018.

Net sales increased 5% to $331.2 million for the first nine months of 2019 compared to $315.5 million in the first nine months of 2018.

The Company's results for the third quarter and first nine months of 2018 benefitted from an adjustment to its 2017 estimated tax expense that it previously recorded associated with the U.S. Tax Cuts and Jobs Act in 2017. The Company also recorded a one-time tax savings in September 2018, due to a pension contribution made during the third quarter. Both events contributed to a lower effective tax rate and tax expense for the third quarter and first nine months of 2018 as compared to the same periods in 2019. As a result, the 43% increase in third quarter 2019 income before income taxes over the same period last year did not lead to higher net income.

Currency translation rates negatively impacted net sales by $3.3 million for the quarter ended September 30, 2019 and $12.7 million for the first nine months of 2019. Currency had no effect on net income for the quarter and a negative impact of $.2 million for the first nine months of 2019.

Rob Ruhlman, Chairman and Chief Executive Officer, said, "Once again, we achieved an all-time high in domestic sales for a quarter while we continued to grow at a double-digit pace across our international operations. Our focus on the efficient use of our global manufacturing capacity delivered consistent product margins and resulted in increased overall gross profit margin as compared to the same period last year."

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, England, France, Indonesia, Malaysia, Mexico, New Zealand, Poland, Russia, South Africa, Spain and Thailand.

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 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 2018 Annual Report on Form 10-K filed with the SEC on March 8, 2019 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
STATEMENTS OF CONSOLIDATED OPERATIONS


	(In thousands, except per share data)			Three Months Ended September 30		Nine Months Ended September 30
				2019	2018	2019	2018


	Net sales			$ 119,217	$ 108,413	$ 331,212	$ 315,467
	Cost of products sold			79,874	74,922	226,798	215,255
			GROSS PROFIT	39,343	33,491	104,414	100,212

	Costs and expenses
		Selling		9,410	8,965	26,868	27,297
		General and administrative		13,275	11,655	38,486	33,859
		Research and engineering		4,240	3,706	12,809	11,013
		Other operating expense - net		775	1,150	1,447	2,950
				27,700	25,476	79,610	75,119

			OPERATING INCOME	11,643	8,015	24,804	25,093

	Other income (expense)
		Interest income		211	111	613	340
		Interest expense		(735)	(364)	(1,688)	(992)
		Other income - net		138	94	306	267
				(386)	(159)	(769)	(385)

			INCOME BEFORE INCOME TAXES	11,257	7,856	24,035	24,708

	Income tax expense (benefit)			3,213	(1,198)	6,302	3,390

			NET INCOME	$ 8,044	$ 9,054	$ 17,733	$ 21,318
	Less: Net income attributable to noncontrolling interests			93	-	54	-

			NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS	$ 7,951	$ 9,054	$ 17,679	$ 21,318

	BASIC EARNINGS PER SHARE
			Net Income Attributable to Preformed Line Products Company Shareholders	$ 1.58	$ 1.80	$ 3.51	$ 4.23

	DILUTED EARNINGS PER SHARE
			Net Income Attributable to Preformed Line Products Company Shareholders	$ 1.55	$ 1.76	$ 3.48	$ 4.19

	Cash dividends declared per share			$ 0.20	$ 0.20	$ 0.60	$ 0.60

	Weighted-average number of shares outstanding - basic			5,024	5,025	5,039	5,038

	Weighted-average number of shares outstanding - diluted			5,119	5,138	5,077	5,088

PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS


			September 30,	December 31,
(Thousands of dollars, except share and per share data)			2019	2018

ASSETS
Cash and cash equivalents			$ 41,158	$ 43,609
Accounts receivable, less allowances of $3,845 ($3,178 in 2018)			85,842	73,139
Inventories - net			92,227	85,259
Prepaids			6,821	9,374
Other current assets			6,866	2,882
		TOTAL CURRENT ASSETS	232,914	214,263

Property, plant and equipment - net			117,697	102,955
Other intangibles - net			15,216	8,458
Goodwill			25,278	15,621
Deferred income taxes			8,220	6,900
Other assets			25,679	10,600

		TOTAL ASSETS	$ 425,004	$ 358,797

LIABILITIES AND SHAREHOLDERS' EQUITY

Trade accounts payable			$ 28,607	$ 26,414
Notes payable to banks			7,398	9,042
Current portion of long-term debt			2,719	1,448
Accrued compensation and amounts withheld from employees			14,957	11,153
Accrued expenses and other liabilities			29,801	21,430
		TOTAL CURRENT LIABILITIES	83,482	69,487

Long-term debt, less current portion			52,888	24,960
Other noncurrent liabilities and deferred income taxes			28,917	14,980

SHAREHOLDERS' EQUITY
Shareholders' equity:
	Common shares - $2 par value, 15,000,000 shares authorized, 5,016,293 and
	5,020,410 issued and outstanding, as of September 30, 2019 and December 31, 2018		12,825	12,662
	Common shares issued to rabbi trust, 267,641 and 269,630 shares at
	September 30, 2019 and December 31, 2018, respectively		(10,981)	(11,008)
	Deferred Compensation Liability		10,981	11,008
	Paid-in capital		37,642	34,401
	Retained earnings		348,710	334,170
	Treasury shares, at cost, 1,396,152 and 1,310,387 shares at
	September 30, 2019 and December 31, 2018, respectively		(76,781)	(72,280)
	Accumulated other comprehensive loss		(62,733)	(59,583)
		TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY	259,663	249,370
	Noncontrolling interest		54	-
		TOTAL SHAREHOLDERS' EQUITY	259,717	249,370
		TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 425,004	$ 358,797